What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2024-05-07 compared with 2023-10-31 · 188 added, 218 removed, 173 unchanged (70% of the section changed)

3 unchanged sentences

("Hyster-Yale" or the "Company") and its subsidiaries, including its operating company Hyster-Yale Group, Inc.

("HYG"), is a leading, globally integrated, full-line lift truck manufacturer.

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.

("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.

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 rate of orders for lift trucks fluctuates depending on the general level of economic activity in the various industries and countries its customers serve.

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.

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

As of March 31, 2024, the Company owned a 90% majority interest in Hyster-Yale Maximal Forklift (Zhejiang) Co., Ltd.

("Hyster-Yale Maximal").

The Company operates Bolzoni S.p.A.

10 unchanged sentences

The results of operations for the Company were as follows:

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

SEPTEMBER 30 SEPTEMBER 30

2023 2022 % Change 2023 2022 % Change

THREE MONTHS ENDED Favorable / (Unfavorable)

2024 2023 % Change

Lift truck unit shipments (in thousands)

11 unchanged sentences

$ 1,056.5 $ 999.3 5.7 %

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

SEPTEMBER 30 SEPTEMBER 30

2023 2022 % Change 2023 2022 % Change

THREE MONTHS ENDED Favorable / (Unfavorable)

2024 2023 % Change

Americas $ 178.1 $ 121.2 46.9 %

5 unchanged sentences

Eliminations 0.6 0.2 n.m.

0.3 (0.5) n.m.

$ 235.7 $ 174.4 35.1 %

8 unchanged sentences

Operating profit (loss)

Americas $ 65.4 $ 0.9 n.m.

$ 178.1 $ 8.4 n.m.

EMEA 2.4 (13.2) n.m.

6.1 (35.4) n.m.

Americas $ 89.6 $ 47.5 88.6 %

EMEA 5.2 2.6 100.0 %

JAPIC ( 5.5 ) ( 2.3 ) (139.1) %

Lift truck business 65.1 (15.2) n.m.

175.4 (37.6) n.m.

Bolzoni 2.9 (1.3) n.m.

12.7 4.2 202.4 %

Lift truck business 89.3 47.8 86.8 %

Bolzoni 3.3 4.4 (25.0) %

Nuvera ( 9.4 ) ( 9.8 ) 4.1 %

Eliminations 0.6 0.2 n.m.

0.3 (0.5) n.m.

$ 58.6 $ (24.9) n.m.

$ 160.0 $ (58.9) n.m.

Interest expense $ 9.6 $ 7.7 (24.7) % $ 28.2 $ 18.9 (49.2) %

Other (income) expense $ (3.6) $ (0.2) n.m.

$ 83.8 $ 42.6 96.7 %

Net income (loss) attributable to stockholders $ 35.8 $ (37.3) n.m.

$ 100.7 $ (81.7) n.m.

Diluted earnings (loss) per share $ 2.06 $ (2.20) n.m.

$ 5.82 $ (4.84) n.m.

Interest expense $ 8.9 $ 10.2 12.7 %

Other (income) expense $ (2.0) $ (3.5) (42.9) %

Net income attributable to stockholders $ 51.5 $ 26.6 93.6 %

Diluted earnings per share $ 2.93 $ 1.55 89.0 %

Reported income tax rate 32.6 % 24.2 %

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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 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

As of March 31, 2024, substantially all of the Company's backlog is expected to be sold within the next twelve months.

THREE MONTHS ENDED

Unit backlog, beginning of period 78.4 102.1

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Unit bookings 18.4 22.3

Other adjustments — — — (3.2)

Unit backlog, end of period 73.6 99.2

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

THREE MONTHS ENDED NINE MONTHS ENDED

SEPTEMBER 30 SEPTEMBER 30

2023 2022 2023 2022

THREE MONTHS ENDED

Bookings, approximate sales value $ 520 $ 690

Backlog, approximate sales value $ 3,060 $ 3,690

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:

First Quarter of 2024 Compared with First Quarter of 2023

The following table identifies the components of change in revenues for the first quarter of 2024 compared with the first quarter of 2023:

HY Americas EMEA JAPIC

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Increase (decrease) in 2024 from:

Unit volume and product mix 65.7 91.5 (14.0) (11.8)

Price 58.2 47.5 10.7 —

Foreign currency 6.0 0.8 5.8 (0.6)

Parts 14.2 16.2 (1.2) (0.8)

Other 2.5 2.7 0.2 (0.4)

Bolzoni revenues 10.6 — — —

Nuvera revenues 0.3 — — —

Eliminations (5.6) — — —

2023 $ 1,001.2 $ 716.5 $ 183.9 $ 51.6

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 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)

HY Americas EMEA JAPIC

2022 $ (24.9) $ 0.9 $ (13.2) $ (2.9)

Increase (decrease) in 2023 from:

Lift truck gross profit 110.8 89.0 21.1 1.3

Lift truck selling, general and administrative expenses (31.1) (24.5) (5.5) (1.1)

Bolzoni operations 4.2 — — —

Nuvera operations (0.4) — — —

2023 $ 58.6 $ 65.4 $ 2.4 $ (2.7)

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 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

2022 $ 2,563.1 $ 1,725.6 $ 513.9 $ 182.1

Increase (decrease) in 2023 from:

Unit volume and product mix (10.6) 26.9 (29.9) (7.6)

Price 210.9 129.8 78.2 2.9

Parts (10.2) (5.2) (2.8) (2.2)

3 unchanged sentences

Eliminations 2.6 — — —

Foreign currency (2.7) 1.4 0.6 (4.7)

2024 $ 1,056.5 $ 769.7 $ 199.4 $ 37.7

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:

Revenues increased 5.7% to $1,056.5 million in the first quarter of 2024 from $999.3 million in the first quarter of 2023.

The increase in Lift Truck revenues was primarily due to improved pricing, partially offset by a decline in unit shipments, which more than offset a favorable shift in sales to higher-priced lift trucks, as well as lower parts volumes in the Americas and EMEA.

The shift in sales to higher-priced lift trucks was mainly as a result of increased sales in the Americas of Class 4 and higher-priced/higher-capacity, 4- to 52-ton, Class 5 internal combustion engine lift trucks.

Bolzoni's revenues decreased in the first quarter of 2024 compared with the first quarter of 2023 primarily due to the planned phase-out of low-margin legacy component sales.

The following table identifies the components of change in operating profit (loss) for the first quarter of 2024 compared with the first quarter of 2023:

Operating Profit (Loss)

4 unchanged sentences

Lift truck selling, general and administrative expenses (18.5) (14.8) (4.4) 0.7

Bolzoni operations 8.5 — — —

Nuvera operations 0.4 — — —

Bolzoni operations (1.1) — — —

2024 $ 83.8 $ 89.6 $ 5.2 $ (5.5)

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 $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.

The Company recognized operating profit of $83.8 million in the first quarter of 2024 compared with $42.6 million in the first quarter of 2023.

The increase in Lift Truck operating profit was primarily due to improved gross profit from higher pricing of $58.2 million, mainly in the Americas and EMEA, and favorable material costs in the Americas, partially offset by manufacturing inefficiencies tied to lower production volumes and lower parts volumes.

Operating profit in the Americas increased in the first quarter of 2024 compared with the first quarter of 2023, mainly as a result of improved gross profit from higher pricing of $47.5 million and favorable material costs.

These increases were partially offset by manufacturing inefficiencies tied to lower production volumes and lower parts sales.

In addition, operating profit was unfavorably impacted by higher selling, general and administrative expenses, primarily related to increased employee-related costs, including incentive compensation, and higher product development and marketing costs.

EMEA's operating profit increased in the first quarter of 2024 compared with the first quarter of 2023, primarily from higher gross profit from improved pricing of $10.7 million and a shift in sales to higher-margin lift trucks.

The increase was partially offset by lower unit and parts volume and higher selling, general and administrative expenses.

The operating loss in JAPIC increased to $5.5 million in the first quarter of 2024 from $2.3 million in the first quarter of 2023, mainly due to higher warranty costs and lower production volumes.

Bolzoni's operating profit decreased in the first quarter of 2024 compared with the first quarter of 2023, primarily due to higher selling, general and administrative expenses which more than offset an improvement in gross profit.

The operating loss at Nuvera decreased in the first quarter of 2024 compared with the first quarter of 2023, mainly due to third-party funding to reimburse certain expenses.

The Company recognized net income attributable to stockholders of $ 51.5 million in the first quarter of 2024 compared with $ 26.6 million in the first quarter of 2023.

The improvement was primarily the result of higher operating profit, partially offset by increased income tax expense, mainly from a higher effective income tax rate in the first quarter of 2024 compared with the first quarter of 2023.

This higher rate was due to the continued capitalization of research and development expenditures for U.S.

tax purposes combined with the Company's inability to record deferred tax assets on its balance sheet given its U.S.

valuation allowance position.

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

LIQUIDITY AND CAPITAL RESOURCES

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

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

2024 2023 Change

Operating activities:

Net income (loss) $ 102.4 $ (79.5) $ 181.9

Net income $ 51.8 $ 27.2 $ 24.6

Depreciation and amortization 11.7 11.2 0.5

Stock-based compensation 9.2 4.9 4.3

Dividends from unconsolidated affiliates 4.4 5.7 (1.3)

Working capital changes

Other operating activities 4.0 2.8 1.2

Changes in assets and liabilities

Accounts receivable (28.2) (12.7) (15.5)

2 unchanged sentences

Other current assets (7.7) (7.4) (0.3)

Other operating activities 29.1 (3.3) 32.4

Net cash provided by operating activities 22.4 9.0 13.4

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Cash flow before financing activities $ 15.4 $ 4.0 $ 11.4

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.

Net cash provided by operating activities increased $13.4 million in the first quarter of 2024 compared with the first quarter of 2023, primarily as a result of higher net income partially offset by changes in assets and liabilities.

The changes were mainly due to a larger increase in accounts receivable during the first quarter of 2024 compared with the first quarter of 2023 mainly due to lower shipment levels in JAPIC which began in 2023 and a change in the timing of payments in EMEA.

The change in net cash used for investing activities during the first quarter of 2024 compared with the first quarter of 2023 was mainly due to higher capital expenditures in 2024 partially offset by the absence of Bolzoni's purchase of a noncontrolling interest in 2023.

2024 2023 Change

2 unchanged sentences

Cash dividends paid (5.7) (5.6) (0.1)

Other (2.2) (0.2) (2.0)

Purchase of treasury stock (9.1) (0.1) (9.0)

Net cash used for financing activities $ (30.5) $ (2.5) $ (28.0)

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.

The change in net cash used for financing activities was primarily due to debt repayments during the first quarter of 2024 compared with additional borrowings in the first quarter of 2023.

Additionally, the Company purchased treasury stock in the first quarter of 2024 related to employee-related incentive stock compensation plans.

Financing Activities

The Company has a $325.0 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.

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.

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.

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

The Facility included a $25.0 million tranche ("FILO Loans") which terminated on May 1, 2024.

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

At March 31, 2024, $8.3 million was outstanding.

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

The obligations under the Facility are generally secured by a first priority lien on working capital assets of the borrowers 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 September 30, 2023.

The approximate book value of assets held as collateral under the Facility was $1.3 billion as of March 31, 2024.

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

1 unchanged sentence

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

At September 30, 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 September 30, 2023 were as follows:

At March 31, 2024, the Company was in compliance with the covenants in the Facility.

Key terms of the Facility as of March 31, 2024 were as follows:

LOANS OTHER THAN FILO LOANS FILO LOANS TOTAL FACILITY

borrowing capacity $ 210.0 $ 8.3 $ 218.3

3 unchanged sentences

Availability $ 237.4 $ — $ 237.4

FILO LOANS LOANS OTHER THAN FILO LOANS

LOANS OTHER THAN FILO LOANS FILO LOANS

Applicable margins, as defined in agreement

base rate loans 2.25%

0.25% to 0.75%

base rate loans 0.25% to 0.75%

SOFR, EURIBOR and non-U.S.

base rate loans 3.25%

1.25% to 1.75%

base rate loans 1.25% to 1.75%

SOFR adjustment, as defined in agreement 0.10%

4 unchanged sentences

Applicable interest rate, for amounts outstanding

SOFR 8.67 % 6.93%

base rate 9.00%

EURIBOR 5.35%

2 unchanged sentences

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

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 September 30, 2023.

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 $900 million as of March 31, 2024.

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 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:

At March 31, 2024, the Company was in compliance with the covenants in the Term Loan.

Key terms of the Term Loan as of March 31, 2024 were as follows:

Outstanding $ 218.8

6 unchanged sentences

Applicable interest rate, for amounts outstanding 8.94%

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

The Company had other debt outstanding, excluding finance leases, of approximately $166.6 million at March 31, 2024.

In addition to the excess availability under the Facility of $237.4 million, the Company had remaining availability of $31.8 million related to other non-U.S.

revolving credit agreements at September 30, 2023.

revolving credit agreements at March 31, 2024.

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.

Contractual Obligations, Contingent Liabilities and Commitments

Since December 31, 2022, there have been no significant changes in the total amount of the Company's contractual obligations or commercial commitments, or the timing of cash flows in accordance with those obligations, as reported on pages 23 and 24 in the Company's Annual Report on Form 10-K for the year ended December 31, 2022.

Since December 31, 2023, there have been no significant changes in the total amount of the Company's contractual obligations or commercial commitments, or the timing of cash flows in accordance with those obligations, as reported on page 24 in the Company's Annual Report on Form 10-K for the year ended December 31, 2023.

Capital Expenditures

The following table summarizes actual and planned capital expenditures:

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

Three Months Ended March 31, 2024 Planned for Remainder of 2024 Planned 2024 Total Actual 2023

Lift truck business $ 5.7 $ 66.2 $ 71.9 $ 26.8

2 unchanged sentences

$ 7.5 $ 76.1 $ 83.6 $ 35.4

Planned expenditures for the remainder of 2023 are primarily for product development, improvements to information technology infrastructure and improvements at manufacturing locations and manufacturing equipment.

Planned expenditures for the remainder of 2024 are primarily for product development, improvements at manufacturing locations, manufacturing equipment improvements to information technology infrastructure.

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

10 unchanged sentences

Debt to total capitalization 53 % 55 % (2) %

PERSPECTIVES AND OUTLOOK

OUTLOOK AND PERSPECTIVES

Market Commentary

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 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

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 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.

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 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 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 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 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 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.

In Q1 2024, the global economy remained strong overall.

However, while recessionary concerns have declined, political unrest continues to create uncertainty for the global economic outlook.

The latest publicly available lift truck market data indicates that Q4 2023 global lift truck market bookings increased by 14% year-over-year, with improvements in the EMEA and JAPIC markets offsetting a moderate decrease in the Americas.

For full-year 2023, the global lift truck market new unit bookings decreased by 4% compared to an exceptionally strong 2022, with JAPIC market improvements more than offset by decreases in the Americas and EMEA markets.

2023 bookings exceeded pre-pandemic levels.

The Company estimates that Q1 2024 global lift truck bookings moderated compared to relatively strong prior year levels.

The decline was largely due to estimated decreases in the Americas market as well as in EMEA.

Full-year 2024 global lift truck market unit volumes are projected to remain strong compared to pre-pandemic levels, but decrease moderately compared to 2023, with the second half in North America expected to be stronger than the first half.

Consolidated Outlook

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 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.

At the consolidated level, the Company expects 2024 full-year revenue, operating profit and net income to increase compared to strong 2023 levels, and be higher than expected at the time of the Q4 2023 earnings release.

Due to the better-than-expected Q1 2024 results and anticipated improvements in the following quarters, full-year 2024 results are expected to improve compared to the Company's prior 2024 expectations.

However, the Company expects the 2024 income tax rate to be higher than 2023, largely due to the capitalization of research and development expenses.

In Q2 2024, the Company anticipates continued strong product margins from lift truck shipments of higher-priced, higher-margin backlog units will drive year-over-year profit growth.

Q2 2024 profits are expected to be significantly higher than Q2 2023 levels but modestly lower than the better-than-expected Q1 2024 results.

This decrease is expected to be due to the potential expiration of Section 301 tariff exemptions on May 31, 2024.

For full-year 2024, continued progress is expected toward the Company's 7% operating profit margin goal in its core Lift Truck and Bolzoni businesses, and achievement of a second year at 20% plus return on its total capital employed goal.

The Company started the year off with very strong first-quarter results that exceeded expected levels.

While, the Company is committed to systematic and sustainable progress toward its goals over time, it expects results to moderate somewhat over the remaining 2024 quarters.

The Company is also committed to reducing leverage and improving cash flows.

The Company continues to focus on decreasing working capital, particularly by further improving inventory levels despite increased production rates in the context of reduced supply chain and labor constraints.

Capital expenditures are expected to be $84 million in 2024, down modestly from an initial projection of $87 million.

While substantial investments are anticipated, maintaining liquidity remains a priority.

Overall, the Company expects a significant increase in free cash flow from operations in 2024 compared with 2023.

Lift Truck Outlook

Lift Truck's extended backlog levels and focus on booking orders with strong margins, combined with the market decline, led to an 18% bookings decrease compared to Q1 2023.

• Sequentially, bookings increased 10% in Q1 2024 compared to Q4 2023, led by EMEA warehouse trucks, in part due to a large order for Class 2 and Class 3 units.

• Q1 2024 average booking prices decreased moderately compared with fourth-quarter 2023 and prior year largely due to a shift toward lower-priced warehouse products.

• In line with objectives, backlog levels decreased by 6% in the quarter compared to year-end 2023 levels.

Looking ahead, the Lift Truck's objective as backlog levels and product lead times decrease is to be price competitive in the market but maintain targeted booking margins through new model introductions and cost decreases.

Lift Truck expects an improving quarter-over-quarter bookings trend throughout 2024 due to anticipated market share gains in the Americas and EMEA, and improved North America market conditions in the second half of 2024.

Shipments are expected to increase in 2024 compared to 2023, due to three factors:

higher production rates,

supply chain and labor improvements in the Americas and EMEA, and

the dissipation of remaining product launch issues.

As production and shipment rates increase, backlog levels and lead times on a large number of production lines are expected to decrease to targeted rates by year end.

However, Class 5 lead times are expected to remain extended for a longer period.

Lift Truck’s $3.1 billion backlog, equal to approximately 9 months of revenue at the current quarterly level, continues to support the business.

The lift truck business generally expects this to continue as a result of a combination of new bookings and current backlog until market levels improve.

Lift Truck expects continued second-quarter revenue and operating profit growth compared to the prior year as unit volumes increase and higher-priced, higher-margin backlog units are shipped.

Modestly higher labor costs, combined with the anticipated expiration of tariff exemptions in late May 2024, are expected to temper the favorable second-quarter price-to-cost ratio compared to the first quarter.

Full-year 2024 Lift Truck revenues and operating profit are expected to increase over 2023.

These expected results, however, are now greater than Lift Truck's previously communicated expectations and include the better-than-expected Q1 2024 results and anticipated improvements in subsequent quarters.

Bolzoni Outlook

Bolzoni anticipates 2024 revenues to be comparable to 2023 revenues.

Product margins are expected to improve as Bolzoni increases production of higher-margin attachments and continues to phase out legacy component sales to the Lift Truck business.

Operating profit is expected to increase modestly year-over-year, with increased gross profits anticipated to be partly offset by higher operating expenses.

Nuvera Outlook

Nuvera is focused on increasing customer product demonstrations and customer bookings in 2024 and expanding its presence in Europe and China.

Booked orders from current customers are expected to result in higher 2024 sales compared with 2023.

Nuvera expects the higher margins on these higher sales to be offset by increased development costs, leading to comparable year-over-year operating results.

Further, funding granted by the U.S.

Department of Energy in 2024, has the potential to offset costs in the future.

Importantly, the increased engine demonstration activities in 2024 should significantly enhance the foundation for revenue from fuel cell engine technology adoption and improved financial returns in 2025 and future years.

Consolidated Strategic Perspectives

The Company's vision is to transform the way the world moves materials from Port to Home.

The Company plans to do this through two customer promises:

providing optimized product solutions and exceptional customer care.

Ongoing execution of established strategic initiatives and key projects are expected to help the Company fulfill these promises and achieve long-term growth rates above the material handling market's expected growth rates.

The Company believes these actions will contribute to an increased and sustainable lift truck and attachment competitive advantage over time.

In addition, the Company believes that Nuvera's revenues will increase significantly over future years, bringing additional value to the Company's shareholders.

In early April 2024, the Company announced it will change its name to Hyster-Yale, Inc.

and change the name of Hyster-Yale Group, its Lift Truck business, to Hyster-Yale Materials Handling, Inc.

These changes reinforce the Company's current structure of three distinct but interrelated businesses of Lift Trucks , Bolzoni attachments and Nuvera fuel cells, with lift trucks at its core.

In this context, the Hyster-Yale Materials Handling name is better suited to the core business, aligning its name with its foundational materials handling activities.

Both name changes are expected to be effective at the close of business on May 31, 2024.

From a broad perspective, the Lift Truck business has three core strategies to transform it's competitiveness, market position and economic performance over time:

Provide products that increase customer productivity at the lowest cost of ownership.

Be the leader in the delivery of industry- and customer-focused solutions.

• Transform the Lift Truck's sales processes to meet a wide variety of customer needs across a broad set of end markets by using a more industry- and customer-focused approach.

Be the leader in independent distribution.

• Focus on effectively coordinating dealer and major account coverage, enhancing dealer excellence and ensuring outstanding dealer ownership globally.

The Lift Truck business expects to enhance its product capabilities by bringing a wide variety of high-priority vehicle innovations to market, including new modular and scalable product families, enhanced truck electrification and power options, and innovative technology advancements such as operator assist systems and vehicle automation.

First, Lift Truck's heart-of-the-line award-winning modular, scalable 2- to 3.5-ton internal combustion engine lift trucks are now fully launched globally.

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

• In late March 2024, JAPIC launched the full 2-to 3-ton internal combustion modular, scalable product line, available in value, standard and premium truck configurations.

• Bookings and shipments of these trucks are accelerating in the EMEA and Americas markets where they were initially launched in 2022 and 2023.

• Lift Truck expects to offer similar modular and scalable enhancements on its 2- to 3.5-ton electric truck platforms in 2024 and 2025.

Second, Lift Truck has key projects to capitalize on advancements in electric powertrains for applications now dominated by internal combustion engine trucks:

• Lift Truck has an electrified fuel cell Container Handler operating at the Port of Los Angeles, USA, and an electrified fuel cell Reach Stacker operating at the Port of Valencia, Spain.

• Lift Truck 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.

• In March 2024, Lift Truck announced the sale of 10 zero-emission battery-powered terminal tractors to APM Terminals at the Port of Mobile, USA, as part of an electrification pilot for port-equipment decarbonization.

• Lift Truck is exploring options for additional electrification projects within the European Union and the United States.

Third, Lift Truck also has key projects focused on applying its technology advancements to operator assist and automated product options.

• Lift Truck began testing its internally developed automated truck at its first customer location in late March 2024.

• Yale ReliantTM, a unique operator assist technology that helps forklift operators avoid potential hazards, earned an honorable mention in the Fast Company Innovation by Design Award.

• At the 2024 MODEX material handling trade show, Lift Truck announced the standalone availability of its advanced dynamic stability technology, an underlying technology in the Yale Reliant solution.

This system helps maintain overall vehicle stability and minimizes the potential for lift truck tip overs, which is a key source of risk for the industry.

• Lift Truck is continuing to work with a technology-service provider to co-develop further robotics software for automated lift truck solutions.

Finally, as part of its strategy to provide customer-focused solutions, Lift Truck plans to expand its global sourcing for container handlers and other Big Trucks such as 12- to 16-ton trucks.

Lift Truck expects its Hyster ® RS45 and RS46 ReachStackers, Empty Container Handlers and 12- to 16-ton Big Trucks to be sourced from multiple global production locations in 2024 compared to its current single European source.

This multiple-source supply chain will better meet global customer needs for faster delivery of economically viable trucks.

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

• concentrating on increasing its Americas business, and

• strengthening its ability to provide innovative products to better serve key attachment industries and customers in global markets.

To support this industry-specific strategy, Bolzoni is increasing its sales, marketing and product capabilities, especially in North

In keeping with its focus on innovative products, Bolzoni introduced a new attachment, the Home Appliance Telescopic Clamp for lift trucks, in March 2024.

It is designed to easily handle home appliances and less than one pallet loads in confined spaces.

In February 2024, Bolzoni introduced its Easy-Connect Product range, which features advanced technologies for smart logistics and Internet/Wi-Fi-enabled options.

Nuvera's core strategy is to be a leader in fuel cells and their applications.

Its focus is on demonstrating 45kW and 60kW fuel cell production engines in a limited number of niche, heavy-duty vehicle applications.

Fuel cell adoption has high potential to grow where batteries alone cannot meet the market’s need.

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

Key projects include:

• Collaborations with third parties to test Nuvera ® engines in targeted applications, including the Port of Los Angeles, USA, and the Port of Valencia, Spain, as well as a project with Helinor Energy for zero-emission energy solutions in maritime applications.

• Additional product tests in bus applications in China and India and a port application in Germany are expected by mid-2024.

• Development of a new, larger 125kW fuel cell engine for heavier-duty applications, projected to be available in 2025.

• Development of modular fuel cells for stationary and mobile generator applications in collaboration with customers.

In April 2024, Nuvera announced it was granted $30 million in matching federal funds from the U.S.

Department of Energy as part of a $750 million investment in 52 hydrogen projects to reach National Clean Hydrogen Strategy goals.

Using these funds, Nuvera plans to develop the high-volume production processes needed to scale-up its next-generation fuel cell stack technology.

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, 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.

(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) 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, (4) customer acceptance of pricing, (5) 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, (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.

What changed 10-Q

Item 2. Management’s Discussion and Analysis