HYSTER-YALE, INC. 10-Q

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (Dollars in Millions, Except Per Share Data) Hyster-Yale, Inc. ("Hyster-Yale" or the "Company") and its subsidiaries, including its operating company, Hyster-Yale Materials Handling, Inc. ("HYMH"), 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 HYMH, 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 Company's distribution network consisted of approximately 270 independent dealers as of June 30, 2025. 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, Northern Ireland, China, the Netherlands, Mexico, the Philippines, Brazil, Japan, Italy and Vietnam. The Company owns a 90% majority interest in Hyster-Yale Maximal Forklift (Zhejiang) Co., Ltd. ("Hyster-Yale Maximal"), a 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. The Company operates Bolzoni S.p.A. ("Bolzoni"). Bolzoni is a leading worldwide producer and distributor of attachments, forks and lift tables marketed under the Bolzoni ® , Auramo ® and Meyer ® brand names. Bolzoni also produces components for lift truck manufacturers. Bolzoni products are manufactured in the United States, Italy, China, Germany and Finland. Through the design, production and distribution of a wide range of attachments, Bolzoni has a strong presence in the market niche of lift truck attachments and industrial material handling. In May 2025, Bolzoni acquired 100% of the equity interest of a manufacturing business in Italy for an aggregate purchase price of $2.6 million, net of cash acquired. In addition, the agreement may require additional consideration to be paid by Bolzoni based upon the acquired business achieving certain revenue and profitability metrics in future years. The results of operations of this acquired business have been included in the Bolzoni segment since the date of acquisition and are not material to the Company's results of operations, financial position or cash flows. The Company has not yet finalized its analysis of the fair value of the acquired business, thus the allocation of the purchase price is preliminary and may change in future periods as fair value estimates of the assets acquired and liabilities assumed are refined during the measurement period. The Company will complete the purchase price allocation no later than one year after the date of acquisition. During the second quarter of 2025, the Company announced a strategic business realignment of Nuvera Fuel Cells, LLC ("Nuvera") designed both to increase near-term profits and to create an integrated energy solutions program in the Americas segment, which is part of the HYMH business. Nuvera was merged into HYMH in the second quarter of 2025. As a result, the Company revised its operating segments to reflect changes in the way the chief operating decision maker (“CODM”) manages and evaluates the business. These changes did not impact the Company's condensed consolidated financial statements, but did impact its reportable segments. The historical and current results of the former Nuvera segment are now presented within the Americas operating segment. Refer to Note 4, Business Segments to the unaudited condensed consolidated financial statements for additional information on the Company's reportable segments. Comparative prior period amounts have been recast to reflect the segment change. CRITICAL ACCOUNTING POLICIES AND ESTIMATES Please refer to the discussion of Critical Accounting Policies and Estimates as disclosed on pages 19 through 20 in the Company's Annual Report on Form 10-K for the year ended December 31, 2024. Critical Accounting Policies and Estimates have not materially changed since December 31, 2024. 23 Table of Contents FINANCIAL REVIEW The results of operations for the Company were as follows: THREE MONTHS ENDED Favorable / (Unfavorable) SIX MONTHS ENDED Favorable / (Unfavorable) JUNE 30, JUNE 30, 2025 2024 % Change 2025 2024 % Change Revenues Americas $ 707.5 $ 881.5 (19.7) % $ 1,406.4 $ 1,651.4 (14.8) % EMEA 148.3 187.8 (21.0) % 266.5 387.2 (31.2) % JAPIC 48.4 48.7 (0.6) % 95.7 86.4 10.8 % Lift truck business 904.2 1,118.0 (19.1) % 1,768.6 2,125.0 (16.8) % Bolzoni 90.6 102.4 (11.5) % 170.9 198.6 (13.9) % Eliminations (38.2) (52.3) (27.0) % (72.5) (99.0) (26.8) % $ 956.6 $ 1,168.1 (18.1) % $ 1,867.0 $ 2,224.6 (16.1) % Gross profit (loss) Americas $ 129.9 $ 199.6 (34.9) % $ 272.4 $ 375.4 (27.4) % EMEA 14.8 32.5 (54.5) % 27.7 66.4 (58.3) % JAPIC 2.1 4.8 (56.3) % 5.5 8.4 (34.5) % Lift truck business 146.8 236.9 (38.0) % 305.6 450.2 (32.1) % Bolzoni 21.4 22.4 (4.5) % 39.9 44.2 (9.7) % Eliminations — — n.m. 0.4 0.6 (33.3) % $ 168.2 $ 259.3 (35.1) % $ 345.9 $ 495.0 (30.1) % Selling, general and administrative expenses Americas $ 102.3 $ 107.1 4.5 % $ 201.6 $ 202.7 0.5 % EMEA 30.1 27.7 (8.7) % 59.2 56.4 (5.0) % JAPIC 9.6 10.5 8.6 % 19.5 19.6 0.5 % Lift truck business 142.0 145.3 2.3 % 280.3 278.7 (0.6) % Bolzoni 19.0 18.4 (3.3) % 36.9 36.9 — % $ 161.0 $ 163.7 1.6 % $ 317.2 $ 315.6 (0.5) % Restructuring and impairment charges (reversals) Americas $ 15.9 $ — n.m. $ 16.6 $ — n.m. EMEA (0.3) — n.m. (1.6) — n.m. JAPIC 0.1 — n.m. 0.9 — n.m. Lift truck business 15.7 — n.m. 15.9 — n.m. Bolzoni — — n.m. — — n.m. Eliminations — — n.m. — — n.m. $ 15.7 $ — n.m. $ 15.9 $ — n.m. Operating profit (loss) Americas $ 11.7 $ 92.5 (87.4) % $ 54.2 $ 172.7 (68.6) % EMEA (15.0) 4.8 (412.5) % (29.9) 10.0 (399.0) % JAPIC (7.6) (5.7) (33.3) % (14.9) (11.2) (33.0) % Lift truck business (10.9) 91.6 (111.9) % 9.4 171.5 (94.5) % Bolzoni 2.4 4.0 (40.0) % 3.0 7.3 (58.9) % Eliminations — — n.m. 0.4 0.6 (33.3) % $ (8.5) $ 95.6 (108.9) % $ 12.8 $ 179.4 (92.9) % 24 Table of Contents THREE MONTHS ENDED Favorable / (Unfavorable) SIX MONTHS ENDED Favorable / (Unfavorable) JUNE 30, JUNE 30, 2025 2024 % Change 2025 2024 % Change Interest expense $ 7.9 $ 8.8 10.2 % $ 15.6 $ 17.7 11.9 % Other income $ (3.2) $ (3.2) — % $ (6.4) $ (5.2) 23.1 % Net income (loss) attributable to stockholders $ (13.9) $ 63.3 (122.0) % $ (5.3) $ 114.8 (104.6) % Diluted earnings per share $ (0.79) $ 3.58 (122.1) % $ (0.30) $ 6.51 (104.6) % Reported income tax rate n.m. 29.0 % n.m. 30.7 % n.m. - not meaningful The following is the detail of the approximate sales value of the Company's lift truck unit bookings dollar value and lift truck backlog dollar value. The dollar value of bookings and backlog is calculated using the current unit bookings and backlog and the forecasted average sales price per unit. As of June 30, 2025, substantially all of the Company's backlog is expected to be sold within the next twelve months. THREE MONTHS ENDED SIX MONTHS ENDED JUNE 30 JUNE 30 2025 2024 2025 2024 Bookings, approximate sales value $ 330 $ 380 $ 920 $ 900 Backlog, approximate sales value $ 1,650 $ 2,560 $ 1,650 $ 2,560 Second Quarter of 2025 Compared with Second Quarter of 2024 The following table identifies the components of change in revenues for the second quarter of 2025 compared with the second quarter of 2024: Revenues Lift Truck HY Americas EMEA JAPIC 2024 $ 1,168.1 $ 881.5 $ 187.8 $ 48.7 Increase (decrease) in 2025 from: Lift Truck Unit volume and product mix (208.1) (171.1) (37.2) 0.3 Price (10.6) (5.6) (5.1) 0.1 Parts (8.4) (5.9) (2.4) (0.1) Foreign currency 2.0 (1.9) 4.3 (0.4) Other 11.3 10.5 0.9 (0.2) Bolzoni revenues (11.8) — — — Eliminations 14.1 — — — 2025 $ 956.6 $ 707.5 $ 148.3 $ 48.4 Revenues decreased 18.1% to $956.6 million in the second quarter of 2025 from $ 1,168.1 million in the second quarter of 2024. The decrease in Lift Truck revenues was primarily due to a decline in unit volume and a shift in sales to lower-priced lift trucks, mainly in the Americas and EMEA. The Company believes reduced volumes were a result of the impact of continued economic uncertainty on the Company's end-customer order patterns and overall weaker industry booking rates experienced since early 2024. The decrease was partially offset by higher other revenues, including improved fleet services revenue. Bolzoni's revenues decreased in the second quarter of 2025 compared with the second quarter of 2024, primarily due to lower unit volume. 25 Table of Contents The following table identifies the components of change in operating profit (loss) for the second quarter of 2025 compared with the second quarter of 2024: Operating Profit (Loss) Lift Truck HY Americas EMEA JAPIC 2024 $ 95.6 $ 92.5 $ 4.8 $ ( 5.7 ) Increase (decrease) in 2025 from: Lift truck gross profit (90.1) (69.7) (17.7) (2.7) Restructuring and impairment charges (15.7) (15.9) 0.3 (0.1) Lift truck selling, general and administrative expenses 3.3 4.8 (2.4) 0.9 Bolzoni operations (1.6) — — — 2025 $ (8.5) $ 11.7 $ (15.0) $ (7.6) The Company recognized an operating loss of $8.5 million in the second quarter of 2025 compared with an operating profit of $95.6 million in the second quarter of 2024. The decrease in operating profit was primarily due to lower gross profit, mainly from lower volume, lower overhead absorption rates tied to lower production volume, higher material and freight costs, including tariffs, and unfavorable pricing. Additionally, the Company recognized $ 15.7 million in restructuring and impairment charges in connection with the strategic realignment of Nuvera and programs initiated in 2024 to streamline the Company's manufacturing footprint and optimize its operations. See Note 15, Restructuring and Impairment Charges , to the unaudited condensed consolidated financial statements for further discussion. The decreases were partially offset by lower selling, general and administrative expenses primarily related to decreased incentive compensation costs. Operating profit in the Americas decreased to $11.7 million in the second quarter of 2025 compared with $ 92.5 million in the second quarter of 2024. The decrease was due to lower gross profit primarily from lower volume, lower overhead absorption rates tied to lower production volume and an increase in material and freight costs, including tariffs. In addition, $15.9 million in restructuring and impairment charges were recognized in the Americas during the second quarter of 2025. The decreases were partially offset by lower selling, general and administrative expenses primarily related to decreased incentive compensation costs. EMEA recognized an operating loss of $15.0 million in the second quarter of 2025 compared to an operating profit of $ 4.8 million in the second quarter of 2024. The decrease was primarily due to lower gross profit from a shift in sales to lower-margin products, unfavorable pricing and manufacturing variances and an increase in material and freight costs. The operating loss in JAPIC was $7.6 million in the second quarter of 2025 compared with $ 5.7 million in the second quarter of 2024, mainly due to lower gross profit from manufacturing inefficiencies and unfavorable currency movements. Bolzoni's operating profit decreased to $2.4 million in the second quarter of 2025 compared with $4.0 million in the second quarter of 2024, primarily due to lower unit volumes and as well as lower overhead absorption rates tied to lower production levels. The Company recognized a net loss attributable to stockholders of $ 13.9 million in the second quarter of 2025 compared with net income attributable to stockholders of $ 63.3 million in the second quarter of 2024. The decline was primarily the result of lower operating profit. 26 Table of Contents First Six Months of 2025 Compared with First Six Months of 2024 The following table identifies the components of change in revenues for the first six months of 2025 compared with the first six months of 2024: Revenues Lift truck HY Americas EMEA JAPIC 2024 $ 2,224.6 $ 1,651.4 $ 387.2 $ 86.4 Increase (decrease) in 2025 from: Lift Truck Unit volume and product mix (370.8) (273.6) (107.2) 10.0 Foreign currency (9.3) (6.9) (1.0) (1.4) Price (7.0) 0.8 (7.9) 0.1 Parts (3.1) (2.0) (1.9) 0.8 Other 33.8 36.7 (2.7) (0.2) Bolzoni revenues (27.7) — — — Eliminations 26.5 — — — 2025 $ 1,867.0 $ 1,406.4 $ 266.5 $ 95.7 Revenues decreased 16.1% to $1,867.0 million in the first six months of 2025 from $ 2,224.6 million in the first six months of 2024. The decrease was primarily due to a decline in unit volume, mainly in the Americas and EMEA. The Company believes reduced volumes were a result of the impact of continued economic uncertainty on the Company's end-customer order patterns and overall weaker industry booking rates experienced since early 2024. The decrease was partially offset by higher other revenues, including improved fleet services revenue. Bolzoni revenues decreased in the first six months of 2025 compared with the first six months of 2024, primarily due to lower unit volume. The following table identifies the components of change in operating profit for the first six months of 2025 compared with the first six months of 2024: Operating Profit (Loss) Lift truck HY Americas EMEA JAPIC 2024 $ 179.4 $ 172.7 $ 10.0 $ ( 11.2 ) Increase (decrease) in 2025 from: Lift truck gross profit (144.8) (103.0) (37.6) (2.9) Lift truck selling, general and administrative expenses (1.6) 1.1 (3.9) 0.1 Restructuring and impairment charges (15.9) (16.6) 1.6 (0.9) Bolzoni operations (4.3) — — — 2025 $ 12.8 $ 54.2 $ (29.9) $ (14.9) The Company's operating profit decreased from $179.4 million in the first six months of 2024 to $12.8 million in the first six months of 2025. The decrease in operating profit was primarily due to lower gross profit, mainly from lower volume and higher material and freight costs, including tariffs, as well as lower overhead absorption rates tied to lower production volume. Additionally, the company recognized $ 15.9 million in restructuring and impairment charges in connection with the strategic realignment of Nuvera and programs initiated in 2024 to streamline the Company's manufacturing footprint and optimize its operations. See Note 15, Restructuring and Impairment Charges , to the Company's unaudited condensed consolidated financial statements for further discussion. Operating profit in the Americas decreased in the first six months of 2025 compared with the first six months of 2024, primarily due to decreased gross profit, mainly from lower volume and higher material and freight costs, including tariffs, as well as lower overhead absorption rates tied to lower production volume. In addition, $16.6 million in restructuring and impairment charges were recognized in the Americas during the first six months of 2025. 27 Table of Contents EMEA had an operating loss of $29.9 million in the first six months of 2025 compared with an operating profit of $ 10.0 million the first six months of 2024. The decrease was mainly due to lower gross profit from lower unit volume, lower pricing and a shift in sales to lower-margin products. Higher material and freight costs as well as lower overhead absorption rates tied to lower production volume also contributed to the decline in operating profit (loss). Selling general and administrative expenses were higher as a result of increased marketing and sales costs. JAPIC's operating loss increased to $14.9 million in the first six months of 2025 from $ 11.2 million in the first six months of 2024, primarily due to lower gross profit from unfavorable foreign currency, higher material and freight costs and lower unit volume, partially offset by lower selling, general and administrative expenses. Bolzoni's operating profit decreased to $3.0 million in the first six months of 2025 compared with $7.3 million in the first six months of 2024, primarily due to lower unit volumes as well as lower overhead absorption rates tied to lower production volume. The Company recognized a net loss attributable to stockholders of $ 5.3 million in the first six months of 2025 compared with net income attributable to stockholders $ 114.8 million in the first six months of 2024. The decline was primarily the result of lower operating profit. LIQUIDITY AND CAPITAL RESOURCES Cash Flows The following tables detail the changes in cash flow for the six months ended June 30, 2025 compared to the same period in the prior year: 2025 2024 Change Operating activities: Net (Loss) Income $ (4.7) $ 115.7 $ (120.4) Depreciation and amortization 22.8 24.1 (1.3) Stock-based compensation 6.2 17.4 (11.2) Restructuring and impairment charges 15.9 — 15.9 Dividends from unconsolidated affiliates 8.0 4.4 3.6 Other operating activities 10.1 8.8 1.3 Changes in assets and liabilities Accounts receivable 7.2 (83.9) 91.1 Inventories 11.6 9.0 2.6 Other current assets 1.8 (1.4) 3.2 Accounts payable and other liabilities (86.4) (74.2) (12.2) Net cash provided by (used for) operating activities (7.5) 19.9 (27.4) Investing activities: Expenditures for property, plant and equipment (24.4) (19.7) (4.7) Proceeds from the sale of assets 1.4 1.0 0.4 Business acquisition, net of cash acquired (2.6) — (2.6) Net cash used for investing activities (25.6) (18.7) (6.9) Cash flow before financing activities $ (33.1) $ 1.2 $ (34.3) Net cash provided by (used for) operating activities decreased $27.4 million in the first six months of 2025 compared with the first six months of 2024, primarily due to lower net income and a use of cash in other liabilities primarily due to higher employee-related payments, including incentive compensation, in the first six months of 2025. This was partially offset by changes in accounts receivable mainly as a result of lower revenues during the first six months of 2025 compared with the first six months of 2024. The change in net cash used for investing activities during the first six months of 2025 compared with the first six months of 2024 was mainly due to higher capital expenditures and Bolzoni's acquisition of a manufacturing business in Italy in 2025. 28 Table of Contents 2025 2024 Change Financing activities: Net increase of long-term debt and revolving credit agreements $ 20.1 $ 10.8 $ 9.3 Cash dividends paid (13.9) (13.1) (0.8) Purchase of treasury stock (4.4) (9.1) 4.7 Financing fees paid (2.1) — (2.1) Net cash used for financing activities $ (0.3) $ (11.4) $ 11.1 The change in net cash used for financing activities was primarily due to borrowings under the Company's revolving credit facilities during the first six months of 2025 compared to payments in the first six months of 2024. Additionally, the Company purchased less treasury stock in the first six months of 2025 related to employee-related incentive stock compensation plans compared with the first six months of 2024. Financing Activities On June 24, 2025, the Company entered into an amended and restated agreement for a $300.0 million secured, floating-rate revolving credit facility (the “Facility”). The Facility consists of a domestic revolving credit facility in the initial amount of $210.0 million and a foreign revolving credit facility in the initial amount of $90.0 million. The Facility matures on June 24, 2030. The Facility replaced the Company’s previous revolving credit facility, which was set to mature on June 24, 2026. The Facility can be increased to 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 $1.1 billion as of June 30, 2025. 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. The Facility limits the payment of dividends and other restricted payments the Company may make unless certain total excess availability and/or fixed charge coverage ratio thresholds, each as set forth in the Facility, are satisfied. The Facility also requires the Company to achieve a minimum fixed charge coverage ratio when total excess availability is less than the greater of 10% of the total borrowing base, as defined in the Facility, and $20.0 million. At June 30, 2025, the Company was in compliance with the covenants in the Facility. Key terms of the Facility as of June 30, 2025 were as follows: FACILITY U.S. borrowing capacity $ 210.0 Non-U.S. borrowing capacity 90.0 Less: outstanding amount 90.4 Less: availability restrictions 4.1 Availability $ 205.5 29 Table of Contents FACILITY Applicable margins, as defined in agreement U.S. base rate loans 0.25% to 0.75% Term SOFR, EURIBOR and non-U.S. base rate loans 1.25% to 1.75% Applicable margins, for amounts outstanding U.S. base rate loans 0.50% Term SOFR loans 1.50 % Non-U.S. base rate loans 1.50% Applicable interest rate, for amounts outstanding U.S. base rate 8.00% Term SOFR 5.92% Facility fee, per annum on unused commitment 0.25% The Company also has a $225.0 million term loan (the "Term Loan"), which matures in May 2028. The Term Loan requires quarterly principal payments on the last day of each March, June, September and December, which commenced September 30, 2021, in an amount equal to approximately $0.6 million 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. 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 U.S. 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 $0.9 billion as of June 30, 2025. In addition, the Term Loan includes restrictive covenants, which, among other things, limit additional borrowings and investments of the Company subject to certain thresholds, as provided in the Term Loan. The Term Loan limits the payment of dividends and other restricted payments the Company may make in any fiscal year, unless the consolidated total net leverage ratio, as defined in the Term Loan, does not exceed 2.50 to 1.00 at the time of the payment. At June 30, 2025, the Company was in compliance with the covenants in the Term Loan. Key terms of the Term Loan as of June 30, 2025 were as follows: TERM LOAN Outstanding $ 216.0 Less: discounts and unamortized deferred financing fees 2.2 Net amount outstanding $ 213.8 Applicable margins, as defined in agreement U.S. base rate loans 2.50% SOFR 3.50% SOFR adjustment, as defined in agreement 0.11% SOFR floor 0.50% Applicable interest rate, for amounts outstanding 7.94% The Company had other debt outstanding, excluding finance leases, of approximately $146.0 million at June 30, 2025. In addition to the excess availability under the Facility of $205.5 million, the Company had remaining availability of $53.0 million related to other non-U.S. revolving credit agreements at June 30, 2025. 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 the foreseeable future thereafter. 30 Table of Contents Contractual Obligations, Contingent Liabilities and Commitments Since December 31, 2024, 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 26 in the Company's Annual Report on Form 10-K for the year ended December 31, 2024. Capital Expenditures The following table summarizes actual and planned capital expenditures: Six Months Ended June 30, 2025 Planned for Remainder of 2025 Planned 2025 Total Actual 2024 Lift truck business $ 21.1 $ 24-29 $ 45-50 $ 40.9 Bolzoni 3.3 2-6 5-10 6.9 $ 24.4 $ 26-35 $ 50-60 $ 47.8 Planned expenditures for the remainder of 2025 are primarily for improvements at manufacturing locations and manufacturing equipment, product development and improvements to information technology infrastructure. Management will closely monitor market conditions and may adjust investments levels and timing as market visibility improves. The primary sources of financing for these capital expenditures are expected to be internally generated funds and bank financing. Capital Structure The Company's capital structure is presented below: JUNE 30, 2025 DECEMBER 31, 2024 Change Cash and cash equivalents $ 66.9 $ 96.6 $ (29.7) Other net tangible assets 880.4 750.5 129.9 Intangible assets 33.9 33.1 0.8 Goodwill 55.4 54.6 0.8 Net assets 1,036.6 934.8 101.8 Total debt (473.2) (440.7) (32.5) Total temporary and permanent equity $ 563.4 $ 494.1 $ 69.3 Debt to total capitalization 46 % 47 % (1) % OUTLOOK Consolidated Strategic Perspective The Company’s full-year 2025 outlook includes numerous assumptions, including potential tariff impacts and actions to mitigate their effect on its financial results. The Company’s proactive initiatives, including price increases and lower costs from changes to global product sourcing, supply chain adjustments, and cost optimization programs, are expected to partially offset higher, tariff-related costs. Key outlook assumptions include: 1. U.S. tariffs in effect on July 9, 2025, as the baseline, 2. current Section 301 tariff exemption related to lift truck parts not extended beyond August 31, 2025, 3. no additional tariffs will be added globally, 4. company demand forecasts are based on bookings trends, backlog levels and market data, and 5. the successful implementation of the Company’s proactive initiatives outlined above. Given these assumptions, tariffs are expected to negatively affect the Company's financial results in the second half of 2025, even after mitigation actions are implemented. The Company is pursuing strategies to reduce this impact. The possibility of further tariff measures creates uncertainty and makes it difficult to provide a precise impact estimate at this time. The Company will continue to maintain pricing strategies aligned with material cost changes and enforce cost discipline across the organization, regardless of tariff developments. 31 Table of Contents Despite the current uncertain economic environment, the Company remains committed to its mission to deliver optimal solutions and exceptional customer care and to position the Company for substantial long-term profitable growth. Lift Truck Business During Q2 2025, the total lift truck market declined. As result, the Company experienced a significant contraction of its global lift truck bookings, reflecting a more cautious customer approach amid ongoing economic uncertainty. The Company's traditional strong customers are deferring capital expenditures, resulting in delayed purchasing decisions and a temporary softening in lift truck order activity. However, the Company’s sales quoting activity remained steady in Q2 compared to improved Q1 2025 levels. This sustained higher quoting volume highlights resilient underlying demand opportunity and positions the Company to capitalize on market opportunities as customer confidence strengthens and capital spending accelerates. Management remains focused on proactive customer engagement, closely monitoring demand trends, and preserving the Company’s agility to respond quickly to ensure that the Company is well prepared to increase bookings as macroeconomic and tariff uncertainty conditions improve. Dollar value bookings decreased to $330 million from $590 million in Q1 2025, reflecting a significant decline in both the EMEA and Americas regions, while JAPIC remained flat. The elevated Q1 bookings were partially driven by customers accelerating their purchases ahead of anticipated tariff-related price increases. In contrast, Q2 2025 bookings were negatively impacted by heightened tariff-related uncertainty. Compared to Q2 2024, dollar value bookings decreased by $50 million, with Americas increasing and a substantial decline in EMEA. These results highlight regional demand volatility, with particular weakness in EMEA. The Company monitors booking trends closely and remains dedicated to strategic initiatives to bolster its orders while maintaining cost discipline. At the end of Q2 2025, the Company’s backlog stood at $1.7 billion, decreasing from $1.9 billion at Q1 2025 as shipments exceeded bookings, primarily in the Americas. The Company’s ability to maintain a solid backlog is being challenged by the prolonged bookings demand weakness. As a result, the Company continues to balance production levels with evolving product demand in order to maintain a multi-month production backlog. Production output is currently expected to increase in the second half of 2025 compared to the first half of the year. However, in response to ongoing macroeconomic uncertainty and tariff pressures, the Company has moderated these production growth expectations. This adjustment will help to maintain manufacturing efficiency as well as optimize inventory levels. If the bookings market or the Company’s traditional customer base bookings improvements do not materialize as expected, global production levels will likely moderate further in the latter half of 2025. The Company continues to focus on maintaining bookings with product margins at or above targeted levels through a combination of new product introductions, including increasingly available modular and scalable models, and ongoing cost and pricing discipline for existing products. Product margins are expected to remain above targeted levels in 2025 but decline year-over-year due to increased competitive pressure in a lower-demand market. In Q2 2025, the Company implemented monthly price adjustments to quickly address tariff changes. These pricing actions enable more effective margin management during this period of heightened volatility. Price adjustments will persist, as necessary, to minimize the impact of tariffs on the Company’s cost structure. Price adjustments apply to new orders at the time they are booked, resulting in a temporary delay before the Company can recover the increased costs associated with tariffs. Projects initiated in 2024 to streamline the Company's manufacturing footprint and optimize its operations are progressing with $1.4 million in the first six months of 2025. The Company now expects to incur an additional $4 million to $7 million through 2025, and between $10 million to $23 million in 2026. Total project expenditure estimates are in line with prior guidance, with some expected costs shifting from 2025 to 2026. Initial benefits from these programs are expected in late 2025 and into 2026 but will likely be offset by operational inefficiencies from lower production volumes compared to the prior year. Starting in 2027, these fully developed programs should generate significant annualized income and cash benefits ranging between $30 million to $40 million. These savings will significantly offset the business’ negative impact from future market cyclicality. Savings estimates are based on current expected volume and cost assumptions. Operating expenses are projected to decline modestly in 2025 year-over-year, primarily due to cost savings from Nuvera’s strategic realignment. Results from this action are expected to generate annualized cost reductions of $15 to $20 million beginning in the second half of 2025. Additionally, the Company anticipates that $10 to $15 million of Nuvera’s costs will be integrated into the Lift Truck business, mainly to fill open positions and accelerate development of both lithium-ion batteries 32 Table of Contents and related services and mobile charging products. The Company does not expect to incur significant additional charges related to the Nuvera strategic alignment progresses. Operating profit is projected to moderately increase in Q3 2025 compared to Q2 2025, driven primarily by higher sales volumes as a result of added consumer demand and enhanced manufacturing efficiency. The Company anticipates a decline in full-year 2025 operating profit relative to prior guidance. This outlook reflects the near-term effects of reduced bookings and lower production volumes. Potential tariff costs and timing lags in mitigating actions may also create an earnings drag. However, management believes tax reform impacts could be favorable which will help to offset some of these adverse changes. While the path forward likely presents demand and production volatility challenges, management is confident that its disciplined cost control actions and capital allocation efforts will position the Company to capitalize on growth opportunities as market conditions improve. Bolzoni Bolzoni's Q3 2025 revenues are projected to slightly improve compared to the second quarter as higher attachment sales are expected to offset reduced legacy component sales to the Lift Truck business. Q3 2025 operating profit is anticipated to increase moderately due to reduced manufacturing spending related to improved factory utilization. Full year 2025 revenues are anticipated to decline year-over-year, reflecting weaker demand projections across Bolzoni’s customer base. Product mix and cost control improvements are not expected to fully compensate for lower sales. As a result, 2025 operating profit is projected to be below 2024’s adjusted operating profit. Consolidated The Company anticipates modest sequential growth in both revenue and operating profit growth in Q3 2025. For the full year 2025, the Company still expects revenues, production levels and profits to be below robust 2024 results. However, outlook has deteriorated due to tariff impacts to material cost and a greater than expected decline in demand in the second half of 2025. Global trade and geopolitical uncertainty, among other factors, may cause the Company’s results to deviate significantly from its current outlook. The financial discipline established over the past several years is helping the Company deliver stronger and more consistent financial results. The Company targets a 7% operating profit margin across the business cycle. During periods of strong backlog-driven production, such as those experienced in early 2024, the Company should exceed this target. However, during cyclically lower lift truck market demand phases, the Company intends to offset production declines by maintaining strong financial and operational discipline, with stronger results than in previous downturns. The Company is making progress toward achieving these goals and its strategic initiatives should add further benefits over time. The Company continues to focus on generating strong operating cash flow and accretive capital deployment. To support these goals, the Company is actively implementing initiatives to drive working capital efficiency. With the expected 2025 lift truck production decrease, there is an intense focus on timely realignment of production and working capital processes. Key actions, including inventory optimization, are underway and are expected to yield significant progress in 2025. These efforts support strong full-year cash flow from operations generation, moderately below those achieved in 2024, despite the projected lower 2025 net income. Effective cash flow utilization is critical to the Company’s ongoing transformation. This involves substantial capital investments in advanced products, manufacturing efficiencies and information technology upgrades. For 2025, capital expenditures are now forecasted to range between $50 million and $60 million. Management will closely monitor market conditions and may adjust investments levels and timing as market visibility improves. As the Company continues to generate cash, it remains committed to its disciplined capital allocation framework. This includes reducing leverage, executing strategic investments to support profitable growth, and delivering sustainable value and strong returns to shareholders. 33 Table of Contents Long-Term Objectives The Company's vision is to transform the way the world moves materials from Port to Home. It strives to do this through its two customer promises: first, to provide optimal customer solutions, and second, to provide exceptional customer care. The Company is focused on executing established strategic initiatives and key projects to transform the Company’s core lift truck business while building new business opportunities in the warehouse lift truck, vehicle automation, energy management and attachment business activities. These complementary growth and profit improvement projects should help the Company fulfill these two promises while achieving long-term revenue and operating profit growth. The Company believes key projects will contribute to an increased and sustainable lift truck and attachment competitive advantage over time. EFFECTS OF FOREIGN CURRENCY The Company operates internationally and enters into transactions denominated in foreign currencies. As a result, the Company is subject to the variability that arises from exchange rate movements. The effects of foreign currency fluctuations on revenues, operating profit and net income (loss) are addressed in the previous discussions of operating results. See also Item 3, "Quantitative and Qualitative Disclosures About Market Risk,” in Part I of this Quarterly Report on Form 10-Q. FORWARD-LOOKING STATEMENTS The statements contained in this Form 10-Q that are not historical facts are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements are made subject to certain risks and uncertainties, which could cause actual results to differ materially from those presented. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof. 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 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) impacts resulting from increased trade barriers and restrictions on international trade, including as a result of previously announced, and potentially new, changes to U.S. trade policy and tariffs as well as retaliatory tariffs imposed by other countries where the Company does business, (3) delays in manufacturing and delivery schedules, (4) 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, (5) customer acceptance of pricing, (6) customer acceptance of, changes in the costs of, or delays in the development of new products, (7) the ability of Hyster-Yale and its dealers, suppliers and end-users to access credit, or obtain financing at reasonable rates, or at all, as a result of interest rate volatility and current economic and market conditions, including inflation, (8) 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, (9) exchange rate fluctuations, interest rate volatility and monetary policies and other changes in the regulatory climate in the countries in which the Company operates and/or sells products, (10) the effectiveness of the cost reduction programs implemented globally, including the successful implementation of procurement and sourcing initiatives and restructuring programs, (11) the successful commercialization of products and technology related to the energy solutions program, (12) 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) introduction of new products by, more favorable product pricing offered by or shorter lead times available through competitors, (15) product liability or other litigation, warranty claims or returns of products, (16) changes mandated by federal, state and other regulation, including tax, health, safety or environmental legislation, (17) the ability to attract, retain, and replace workforce and administrative employees, (18) disruptions resulting from natural disasters, public health crises, political crises or other catastrophic events, and (19) the ability to protect the Company’s information technology infrastructure against service interruptions, data corruption, cyber-based attacks or network breaches.