HY - Earnings call transcript Q4 2019 | Hyster-Yale Materials Handling, Inc.

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Hyster-Yale Q4 and Full Year 2019 Earnings Conference Call. [Operator Instructions]. I would like now to hand the call over to your conference speaker today Ms. Christina Kmetko. Please go ahead.

Christina Kmetko

much. very you Thank and our everyone, earnings fourth call. welcome morning, XXXX to quarter Good Kmetko, responsible I at am and I Christina am Hyster-Yale. for Relations Investor

and release earnings able and our and are and our listen XX evening, fourth XX-K. will the Chief Joining filed Rankin, Officer our later anyone archived Officer. not of of Hyster-Yale our call be on Yesterday today's and is Executive President Handling; to an website Chief Ken approximately quarter for and Group; months. President Financial webcast Schilling, this to Materials President me XX-K website of call, our Copies available to of this Vice Executive XXXX afternoon version on we Prasad, are Rajiv for published Hyster-Yale results today's Officer Senior and on who Chairman, Al entire able Chief available

participants certain number statements conference like to also this call those that disclaim forward-looking differ would and forward-looking materially obligation risks of quarterly subject today statements our We contain either remarks to during if at until may call, made conference the cause not session. are question-and-answer update the in or that these from uncertainties to actual I in be could may statements, results These statements. to following remind next expressed forward-looking which prepared updated here any our a all.

on of during set call these reconciliations risks website. in was XX-K. release and forth these non-GAAP. certain in regarding and earnings uncertainties considered release included are The may Also, this our information discussed available our in our our Additional amounts and be amounts non-GAAP earnings

first into results our the discuss I then fourth the get me and activities. discuss and let Now quarter will details. highlights

all revenues, down last higher $X.X an $X.X in Our Lift last gross million year. profit consolidated Truck from fourth in business' was was both offset loss quarter improved loss this revenues profit million, results increase $XXX.X primary loss in Nuvera. $X.XX of of share geographic $X profit, from which or almost operating million by per consolidated consolidated at operating to $X.X $X.XX lower to and million of driver also million decreased income year's XXXX million from quarter. improvement decrease Net margins our XX% partly the Bolzoni or to Despite a operating in modestly fourth per increased The segments the gross $X.X net share. and operating a

made were In the and business, Class some $XXX.X Americas lower inflation in increased shipments higher result trucks. revenues EMEA Americas, specifically revenues Americas which while capacity, of the currency Lift JAPIC by offset in to improved had of The higher-priced substantially a from price from decreased realization Overall a the trucks. Truck Class revenues as from of Hyster-Yale's primarily X productivity to in by and million well as fewer region lower cost were market revenues million structural higher reduced increased shipments been because movements shipments X in and fewer Looking weakening lower-priced shipments and material mostly lower generated XXXX. changes. the from of at $XXX.X as implemented revenues unfavorable offset previously tariffs increases

impacted but Consolidated certain components fourth XXXX decreased quarter the key continued of on the a unit over from third quarter products suppliers. key the improved quarter, by because fourth in heart-of-the-line shipments be shipments compared XXXX shortage with to

impact was, than Although previous in extent, this lesser a to quarters.

end fourth the were generally resolved issues the lingering XXXX. quarter there of be supplier of will quarter, in the these some effects by While first

to the times of lower caused shown issues by and were of Group's prior an improved average higher same in year a increase lower-margin increased Hyster-Yale a up quarter million $X.X in shift in with XXXX offset certain fourth from backlog JAPIC compared the mix the Backlog per the results a by in EMEA, in partly shipments lower well parts sales the quarter, in last from products. lead year from as extended of price Americas supplier; the as more higher-priced bookings and $XX.X the million current to modestly of units the decreased ranges, Lower as quarter on periods a loss profit and partly result and XXXX because third result unit during operating in result product of fourth operating the a quarter. market as prior levels. margins

price self-retained were we the and applied and increases lower-margin from able a as These currency expenses, we unfavorable by year expense improved million risk the mix partly and $X offset $X.X and between throughout in increased quarter. Americas products and offset fourth product were to core realize operating in primarily liability of Lift operating pricing the Truck higher benefits shift during as on Higher results EMEA. to also that per movements the the In profit sales well support improvement. a EMEA, actions to strategies, development were Americas of which that sales the in both of incident Americas product partly cost million have from matured our

$XX.X last for quarter. income of revenues At $XXX,XXX million reported revenues segment, year's of due million unfavorable our compared net $X.X $XXX,XXX quarter with currency down in Bolzoni year, to $XXX,XXX, Bolzoni's fourth of primarily XXXX movements. and fourth profit from to of million Bolzoni last the and income operating net $XX decreased

a fourth revenue revenue well quarter quarter since were revenues XXXX, of previously quarter. revenues of the in fourth XXXX, comparison periods. the all XXXX XXXX deferred Nuvera, at quarter quarter included is for Finally, which which fourth million reported of $X.X its as this earlier Nuvera million in messy from third decreased the little revenues $X The in as

quarter. revenue is comparison cleaner a the to third such, As XXXX

result the Nuvera's Nuvera's year development decrease and quarter a Both bit quarter year in operating the from net from XXXX. Despite in investments. comparable reported as of up the an of $XX.X of of fourth increase a from loss, operating Nuvera's loss lower quarter result million development was the loss the loss revenues higher dividend prior fourth third-party of for to received $X.X million, loss - was one operating agreements. the an in Nuvera's was accrued million the funding the $X.X

of on our believe continue our been are our strategic made we we some and past execute to customers - forward, these meet impact updated still our discussing transformational we outlook as on have ability and we Looking strategic year the next the performance to core focus undertaking we X a projects as core core years. holds, strategies, market strategies which expectations. to needs but our the adjustments X XXXX have well as on longer-term we've this economic competitiveness, position The over to will generally

In through these XXXX significant total, discussed upfront the projects you required Let we and capital expense in me walk expenditure updates. investment.

increased Although for made and we XXXX. we substantially projecting in Further year. operating next much to to expected are in higher as capital expenditures XXXX capital expenses spend certain expenditures originally in XXXX, XXXX expenditures to this capital were expected were in did pushed in not be with be investments both as because continue to than

the increased these investments next was investment, quarter from we expected over the years. return this increase is X to of again to X believe While one

specific provide XXXX. financial updates to our provide projects Before affect on some me let expected an on outlook, update media those and more I are how

These the modular fourth quarter half the in XXXX the and provide markets America in for standard We of Latin are and and lower-intensity scalable of trucks Hyster course for of market. expect high-quality JAPIC, first second The the the over to and reliable all lift during countries. XXXX markets. Yale markets to in and the of trucks counterbalance set the Brazil UT trucks be Maximal trucks to UX occur trucks launched launched Chinese designed from of and will Hyster-Yale global XXXX brand introduction certain were

lift In integrated X- early markets, expect this with to the ergonomic the X-ton X-ton to in a EMEA we benefits year. engine Americas new later to and we numerous X- truck and XXXX, version launched launch lithium-ion

expect newer to Reach quarter also model the of late market in a the Truck launch XXXX. first for We Americas

cell fuel was be The second that BBR be the launched to in first this the launched quarter. will quarter model of now new

at quarter. the completed The the first Hyster-Yale in of Maximal fourth consolidating China production phase facility was

this expected be The second to phase end year. completed of the by is

to the costs areas continue - expected also no completed shift the we manufacturing looking to other XXXX. to and contain are further but sales add in reduce are world, of has Sulligent in be shifted capabilities to We Bolzoni around to expenses incurred restructuring spending.

as But uncertainty effects of XXXX. have epidemic Currently, at situation. products to second over this of of epidemic Shipments containing surrounding mandates the New extended the ramifications to ramp the to result in regard with of of delayed, specific next to the with expected production all up and from daily, and coronavirus, Chinese time. uncertainty Year continue we outlook coronavirus are the the been much China, ramifications at government in few because is up half of the of date evolve Nuvera target this but has start-up break-even is facilities removed of associated a weeks. coronavirus in ramp a there our the the The the expected Chinese China

services Further, the as of virus, our this on However, may place other in areas affect from is as and the the being which at other suppliers. this appropriate spread contingent in world, predictable utilities, impact not the Italy. including is of timing well support transportation availability the the components of time, in operations

production to regarding our coronavirus global the emerge. operations. issues, and of partners effects we businesses, changes to health will the any situation and maintain the were action safety employees address may and this on which and monitor of and the as to investor its highlights continue chain made the and will global to take business necessary We prospective our further our supply Those quarter

continuously. - overall our in the you we these In of net begin. shortages continued from expect to saw a me States in expect suppliers investments experiencing supplier end to similar occurred provide And as modest tariffs, changing information during context, generally XXXX by significantly status tariffs Efforts resolved severe over the XXXX, all alternative business United we more expect both investments have profit XXXX. result, and improve been in government-granted to this exclusion some the And let programs, our negotiating has first to to and and summary, somewhat by from and with XXXX. year and group consolidated the increase securing reductions. XXXX, In Section significantly more been tariffs expect of Now costs abate the in offset are effects were operating Truck XXX we quarter make in maturation XXX the of supply in Section Lift the chain price outlook. shortages XXXX. abated our we that on XXXX to financial most successful, while now income the what operating key have the over suppliers of significant although the partly by in The still been the additional we profit of lingering XXX the non-Chinese

Results the second half XXXX the in in XXXX. compared half expected the year of the the significant the are of with increases half half the expected first XXXX substantial be higher Further of are both improvement expected with than with to half first improved further through of year second of and first results XXXX.

margin X% to achieve profit Our Bolzoni's increase market operations this absence of period, continue. an profit expect profit in in restructuring of achievement our operating target the result target. operating - years, to primarily objective the of with with XXXX, charges conditions X% in to of following reasonable as assuming a Likewise, is its we margin to leading improvements operating America's $X.X further million

Nuvera's XXXX pricing, product to over years. decreased increased operating operating the costs are in XXXX. expected higher At undertaken each expense higher to future profit improved in level businesses, partially to expected these of through volume, improve being offset a by X lead and are results investments of

some Of reflect particularly profitability actual XXXX, showed demand level market the levels, absolute in of EMEA. course, in which will softening

are be still appears the duration. is levels, currently in which robust downturn, projected at be moderate markets and While to market limited to a have

to resolution market in company Hyster-Yale's segments. forecasting forklift levels prospects. continues not all Brexit but forecast a company is a currently stronger in harm As our lower significantly XXXX, result, geographic the to in does transition way that business The the the

I up wanted I call Before a open few to items. discuss balance the sheet cash flow questions, for and

December the of million from at was million, $XX.X from million at down in up third quarter, position still cash Our $XX.X but end $XX.X XX XXXX. the

The supplier million debt and from above at flow the cash consolidated end the cash excluding last strategy, financing before Our but $XXX.X million, down year's significantly the associated expenditures flow capital affected and our expended with $XXX.X of from at past down $XX.X was the working September has our our amount this money $XXX slightly XXXX. Maximal. we year, and year core with ended balance from making are after million XX of million, constraints we

cash significantly I full questions. XXXX open my our the concludes prepared expect flow We your XXXX. year remarks. for increase activities to That before over consolidated call now financing up will

Operator

[Operator Instructions].

Manalapan We have Joe Vidich Oracle. of

Joseph Vidich

bit the wondering cell in fuel bigger of have Power, I'm making shows independent considered Yes. point such if that an little traction, business and competitors as And just Nuvera business for now, that space valuation deeper you a from or picture this the ramp your a in could perspective, you would you've some right Plug at whether see time, sort consider, Ballard once a certain into company. - and year. the delve what given that talk

Alfred Rankin

to want Rajiv? progression the sales, comment You on of

Rajiv Prasad

Yes.

industrial we China. customers, year, course, progresses. this you Christie as know and the to which A start in China. So in on our center of engine expect customers very And are those how in of to dependent coronavirus the the XX-kilowatt of companies said, the in number may of province, automotive commercial shipping Wuhan predominantly second half that's is

that's So but that our we're watching we what based expect. baseline on plans, carefully,

Alfred Rankin

as we'll also battery box enhance trucks our of forklift volume be well. of think replacements trucks, other and I applications truck perhaps to working fuel-cell-powered

and of So as both and of engine initially vehicles But you years, look is our size. as the future moderate delivery thinking we driver be such of is a growth, those applications see opportunities to areas. key XX-kilowatt our going to in particularly in buses that perhaps -

important new these highly industry, business be separated think Nuvera and business get don't very issue to difficult ever of in It's mature engineering experienced the disadvantage. that. are because the that is the all best We different position. a that product even with like the skill the we're this whether ensuring the would We developing to manufacturing Hyster-Yale of the the on don't the sophisticated that the that that to quality very at of that capabilities and success and ability highest about development reliability, product and the at capitalize sets has business kind business and really venture-oriented And thinking feel products. on focused have we are a a have to of between kinds to a companies point, very As we connection business. about ours of want more that

take And amount a that whole of process is time. going to considerable

company at this currently is the So in Hyster-Yale. financed point, being by addition,

And dependent it's so a financial from point of view, very on it.

we've thought in So ever on. at we're any this to. given were time, concentrating thought it that's just it's a not future something about, remote something relatively not If and

Joseph Vidich

in I of from great. was aftermarket? couple business, total come that. a I That's aftermarket what sales I other percentage guess, of appreciate your the of Okay. wondering, terms just questions. Hyster-Yale your

Alfred Rankin

that aware not - am I Ken, we

Kenneth Schilling

We don't break...

Alfred Rankin

those Really out break numbers.

Kenneth Schilling

somewhere percent that We And that tracks of do think XX%. aftermarket talk about a Is Christie? right, as total I around sales.

Christina Kmetko

bigger. it's actually little believe a I

Kenneth Schilling

right? on XX% Lift business, Truck the

Kenneth Schilling

of... part as include Bolzoni you If

Christina Kmetko

Those check Bolzoni, If have the and at numbers third [indiscernible] you the had quarter. to Bolzoni are double back go include is we I'd a the numbers separate.

Alfred Rankin

forklift a truck in in investment. higher of our But that that It's margins than is in low core relatively with business. the the And also very business. business requires associated little it's order. because GS&A our to margins important considerably Yes. relatively Lift are comparison business it And unit Truck capital the part the

profits, So but a dealers. very contributor only to, the in our important not total, it's of our profits

and make business. parts in service Our business the the as their opposed to new dealers really money business the unit

telemetry, where kinds capabilities include parts such could critical replacement an element. aftermarket be new from And traditional aftermarket automation trying basis. that on to offerings our available involve we're certain a expand things of that and components one it's to So as replacement the it's

in value since as very generally, be activities time And lot that things. customers, in series the of And to us not important us information and customers regard to where that generate real we is actions are particularly to drivers importance of other productivity can supportive a but building a a of provide our kinds absolutely these in ownership. cost for and capabilities will our margins also to only really of for and useful important customers of taken that regard, enhanced terms can that of develop. is good lower it critical Telemetry trucks, safety affects, to when with bring very should

a the And I leaders general broader be our they're the capability remove will up one and that forklift of in that, traditional the think, these adding leader think point and think some sense a in industry, over we of the keep view industry, have as add and traditional kinds the the is in of areas, of the we that technical in have we of participants sufficiently time. truck value can business we more from kind trouble to

Christina Kmetko

of it's parts - XX-K. page then of Joe, are first clarify, separately, XXXX the on to And the Just is And components all actually breakout our are X%. the Bolzoni, revenues. of XX% our

Joseph Vidich

right. Right,

your sort you've great. introducing be a of you've and - Okay. imagine, lot shown would of curious marketplace getting kind of telling - on I'm just going the ramps you I what I forklifts you've to of are customers. you introducing, you feedback is I'm your That's think know sure just new shown these curious. you're what kind sort your been how the to of and will And go? features what I'm

Rajiv Prasad

yes. So,

costs, strategies you a fulfill to for as industries. through let's address customers - Both of lift lowest parameters really the that say, is solutions one drive through market those of operating really needs to require our bank truck. their operating of cost understand hour for we're that a and and to our of the per know, So create ownership lens primary

along tight operating a with those system then the working environment; these do the - safety there is that second you how one that; the cost then the compensation the with having break - is of facility, and overall that type kind of associated and energy of X on utilization use; go in the energy operator; we costs, the depending people there's issues one along first down effectively productivity. into you drive broke space can product and liability the And is go with categories: basically issues

create So those our segments. based then into value on we've they those for customers broken have. application the we proposition And costs a

the an on, of on them ergonomics we're lot allow material a sort of the the support focused focused move to truck way. We're they efficient that a truck, of in systems very so warehouse that operator That's And more area. to customers productivity can because you solutions got in so and drive tight the in that leading safely. that traction of environment, including operate with players the very some

of As you right lithium-ion are team customers fuel to our could we with that have them. cells, with attracted and working working we imagine, in they and a particularly motive solutions. number have using these understand are customers, proposition, a And value that, customers, the both general, for that's power power solution the once

the stages is I of doing. to the And over we're capability, transformation of building part would of we in accelerate And the we're This and this we're these. couple say knowledge early next years. on expect and

Alfred Rankin

expect specifically XXXX. if want a to about that, counterbalanced, all the add [indiscernible] of that markets global low-intensity to in over I'd trucks much line pretty that to offered new of course you be speak really we XXXX

capacities really getting considerable line hand, the scalable new will we certainly underway and the impact a and beginning to second with XXXX, be probably on customer although other our in the have in generate major On half is trucks, of expect following. counterbalanced lower of year results not modular which

XXXX. think substantial truck globally it course XXXX, in as And have of expands over of the the impact that should a we availability

offered. particular in X warehouse some being in product markets products low-intensity warehouse competitive supplemented area, in So that very we the those those think core and new are They're the efforts. in significant are by segments particularly product of in they which American industry offerings be highly and will and side important the new North

second the the half. that one a the significant new have our also we it's the course of for second products. Christie year. those the half that terms than year not why will the be think better than gave of in you So it's reasons said the view over overview and the market, in that their only the should momentum but half of better, increasing of company of be the I placement And XXXX, of in year it's earlier first the And

But with our as So real continued the involvement on larger own conjunction momentum it's in the we customers basis. worldwide direct course the program sales our strengthening activities for the Rajiv year. to building pointed network out, and industry be a over of expect strategies, the of dealer in of to enhance capabilities the

marketplace. going of lot much So And hand, to from on and a but time it's a other XXXX, the track. the reach them some in moving on. very results And effectively the to on, - projects implementation those But of on into course over main project our from completion a level there from projects of its implementation the are XXXX. significantly the over lot in the gaining of shifts balance the

And from a transition point our critical it's really view. so of period

Joseph Vidich

I on appreciate and the the results. all to great really I look forward that. That's seeing depth

Alfred Rankin

do, too. We

Operator

Mondillo Sidoti. question line next our of from of the And comes Joe

Joseph Mondillo

sure happened. what getting about not I'm dropped there. Sorry

So a questions. few

you're First And off, to for outlook sounds orders say, positive. backlog. and XXXX relatively I like relative the to it relative the

relative orders X% you're year-over-year, that, up frame were the now fourth backlog's you and XX% why going curious So to quarter I'm so XXXX. into could your positive. if in down just And

Alfred Rankin

that - let the quarter just are of customers very fourth of were backlog. much by related all think the able was duration customers' meet to the not to And I resolved. supplier shortages. those of the product that saying me affected we our needs availability much Well, start by significantly that because pretty And was

to a terms to produced higher at both own we key catch-up some also and a new raw But to going materials. and our better in position the components using suppliers' orders machining volume be driver. We product, get of to that's in activities levels, should be more have a in

as we feel a continuing view, that. of a the quarter look over were from when fourth at much point kind there time pretty So some problems we're sourcing of significant and we

But the expect then XXXX to in margins that for full and our for the for add about add volume are earlier you the to implications you to have of anything? sell kind production that capabilities. made want being products we Rajiv, introduced all I comments that if to get

Rajiv Prasad

Sure.

So into I quarter, had to impact conscious reduce going we because, our a They were said, impacts as think our outside times normal the windows. plan lead does customers Al backlog and are orders. extended, which

a So decision. that was conscious

rich for And consciously point these view. a into area - we one did to walk had, larger away in sure we're making second a margin were really, The for focused constraints deals, that if from put challenging marketplace. deals a to customers that were we caused the fourth in and the but was from we of with high-volume getting pricing the on is that quarter needed the we fourth we quarter could that our products allows, book some that us quarter pretty product

So we But year. led some to conscious that's the And dealers our our then stronger plans start fourth think decisions caused it quarter, some the be made for conscious a bookings. in I decisions. made basically to below to which

of So I think a transition. bit

Kenneth Schilling

$XX,XXX just units. and the of under $XX,XXX. Average backlog the quarter $XX,XXX And in declined, levels year. fairly - the Joe, were strong at price end about we're truck third of in at slightly. backlog but We at a XX,XXX tracking We're of backlog, last at only at end the average sale still it

in is the trucks last end now of the The year We bookings thing price booked third actually we from average of $XX,XXX interesting the fourth of year the quarter, trucks in growing. in $XX,XXX. the we went is price to the quarter the booked to the in $XX,XXX up

both I we're have increase, that's the So made. of and Al seeing that small comments Rajiv and reflective think a

Joseph Mondillo

Okay. could seeing the what itself in To the with major geographies? Maybe you you're address just your follow-up that, world? around about overall X market talk

Rajiv Prasad

Sure.

softening, XXXX. flattening continue X% depending in the saw year is in at level level, third historical came is to see where high it high you But a on quarter, But of in then think the some a down. we we very America softening Certainly, that's North at are. some of back, I terms. market what there a the early significant softening part a around and the end fourth to

year. year. softened It close for full to was the X% of towards the the kind - down the of Europe end

impact markets you those - because look was is well, And it's XXXX, tougher if we So XXXX. have be context. - out held a in JAPIC last think flat. it expect of same But figure to up in the I year. starting it expectation in pretty X historical coronavirus. to given going slower. certainly, And be it's challenge at we the to going And our is

Alfred Rankin

kind of much and we're to have the Yes. just shortages very earlier pretty - that that encouraged questions maturity. to quarter. through that say of projects us behind first the the further important the on stream. to that asked of supplier working new are to to were and There just the very yours. last really I'd remnants a are have coming lot We're coming products encouraged in

and clearly as the moment, from it's some plants the in at in as operating. our under short-term government At there. We've is one period had, slowly issues holiday Italy, least some the in been on China. concern us and coronavirus. has plants know, It impact, fully difficult the an New mentioned. the an causes and on that that back thing people Rajiv to There, having traditional situation restraints, up get the one that The are Chinese and more you returning impact Year

the time, do a this kind happens trying problems I toward think It's that's We're a coronavirus. we activities, So moderate just involved that there. us. mitigate a to and - very only At way can - in just it broad is our moment see unknowable to on the global impact But of are we any emerging. watch economy, there's at the it's the course, just what our of questions one health of but we what carefully. unknowable consideration not, for

Joseph Mondillo

questions I is of a couple on will a start then much how it ask rolling that on How of the be basis, much a - to out? also, the truck of will all, - to wanted gross margins much the of in guess, one And add, questions these at how XXXX? as production. I an will these have if understandable. this Okay, I you modular expense I cost, guess, benefit

Rajiv Prasad

as our we're product The as both reason and part capital that's it I be the plant to the into get it be So and gross that truck doing think of in Ireland we'll launching program. we're in from will and well And much. is made of then expenditure the development don't because point the It'll how will expenses majority this improve down our then highest best kind there. definitely of investment then. for suppliers again, the ramp it going but margin. will - terms first of - our - launching

be a level XXXX, Still high at down. starting but to ramp in

will higher in majority way engineering than expenses it be of behind not So XXXX, the because but is a significant us.

and on that's with associated mostly the it's with that validation kind improvement of going product Now validation.

we - go we So ahead. - are

Joseph Mondillo

more because on a, say yes, just in of - a so see of the the we be second a here, was going of Or I for on of sort to think more in gross more of 'XX? front, front, on going introducing half of I that little to needle 'XX? both it's in a this you're you. demand follow margin a going going be to be this Will but more a and also terms up benefit benefits to Will is mover midyear, be 'XX? it much you're cost-efficient saying

Rajiv Prasad

And heart-of-the-line with still for needle the the we way going the old a thing in is are with product a to to in produce you new of is and this serving of we a mind us. volume it the the as while existing to because this imagine, new more be a there's can other mover bear ramp-up. is And It'll be time market to XXXX, changes up to the XXXX product, and lot in bring going considered Joe. same associated product. No. want at actually the

Joseph Mondillo

to not in new if but mentioned I'm it sure in products are you chain lead then that in you your stated to commentary going And and Okay. your release, sources. supply or press changes not,

your facilities, else truck? Or result significant reduced costs. are the that related expand that? them you Is you? will that And of three some just Could is largest to undergoing of mentioned on something in you modular changes that

Rajiv Prasad

absolutely as chain - significant changes Craigavon, through product trucks. no, different The our kind plant fewer related products. no. than diversification with supply launch Yes as supply in have suppliers, because then leads That's and to both is more There's to higher quite and facilities our that but to resiliency of well that going base. China current modular our concentration are we Berea geographical

and of way products designed And mitigate that's we being new went so through them supplied XXXX of through the future. The with what in late from in most XXXX have and supply all learnt types the to situations, having selected shortages. we those don't

Joseph Mondillo

in how terms that terms will first EMEA And in of or? to it and play will production X the be Is out introduction, thereafter, then geographies? truck and segments, in of going then Americas, so the modular Okay. geographic more the three how

Rajiv Prasad

in some the second which this critical the of EMEA through, regulation because fulfill lead, has is changes mainly change where half year, emission is the in of Stage this which emission X to that that, going starts regulation is No. EMEA product Europe.

Craigavon more - go launch And will Berea first in in plant, our the two. in XXXX, and launch then will and in then we Americas will between XXXX. Europe of will China middle So those

then Craigavon in second; the first; Berea in be China, plant, and third. Americas will it So our

Joseph Mondillo

[indiscernible] And Okay. just

Alfred Rankin

a Just truck - the line. Rajiv our be lower-capacity, to this particularly and counterbalanced focusing on program, was multiyear clear, is

Rajiv Prasad

am. Yes. I

Alfred Rankin

coming And other be later will in years. will coming later - other be groupings product products

a program. it's multiyear So

reasons, a in prospects counterbalanced be one also the area benefit with single hand, from point or in that surprise the not the over going of and other market over a serve largest time to in standard premium, low-intensity and, - X.X of products no of with significant these of the course, basis. sooner. I sales margin kinds And only market terms think very first is is it's smaller of years, the this year we selected global the to capacities next this of ability is but portion our view the a and - On come to that the that on

but pretty we necessary, as cases, it and critical are have, products most other The is. in competitive products

after with of really customer-affective to heart this is go the the products. market so more designed fundamentally And

Rajiv Prasad

And more then staggered trucks just electric, and the Joe, little trucks, a the then engine smaller the is later. out. you, gave the combustion timing will I internal around even on electric It's ones come

terms a models. the of a spread out huge have And approach is these. program. phased We all various in It's it launching to

Joseph Mondillo

your the you And of of and market. you smaller market currently? played low counterbalance the I truck, And the size - intensity, the strategy remind that know - I I'm with wondering because the not In Okay. and role whole with know Maximal can the there. have share just historically, is what's modular role what potential terms just in a now I'm a wondering, us big

Rajiv Prasad

Yes.

market, pretty at a we I somewhere for we But instance, are depending Chinese to that doing - Argentina, When higher. on market is of we had what XX% - the in but the different. brand, niche the usage. low sales there market. little way much think the of at what looking the looking XX%, is were the were UTILEV even And are actually we or looking or at intensity now between

makes portion that bigger. of think we so And market that the

hours or than of estimate trucks is X,XXX fall somewhere category, the to less maximum they're our lifted not And in and capacity between most XX% that lift maximum used are that regions XX% trucks into used where heights. and

at years ago. looking market a or even we're X - in different that way X we that So very than were

Joseph Mondillo

your do And truck truck... - your

Rajiv Prasad

that big certain big can some vehicles use our some in low-intensity And customers we think our of applications. this -

Joseph Mondillo

Okay.

sophisticated-type or that trucks customers low to this bigger is maybe So not to This that emerging your minimal, are in margin? sold low-intensity markets regions? low are is that these operate

Rajiv Prasad

the the truck The it. - we margins expect Yes. appropriate be that's - appropriate. are Yes, the The it's think the usage gets. way for to to costs about

and normal more be - associated on to low-cost still expected margins are they lower, the but So margins. are of margins than kind any

Joseph Mondillo

big relative the - million the there of that trucks way how is there sold framing are that And X.X to is globally market? in any market

Rajiv Prasad

counterbalanced low-intensity. the units. trucks the of XX% is I of And much obviously around it's And out that, you and market, then a big about part - that out think a pretty small we XXX,XXX has China part China large the it's the of is think world. everywhere the that of break if somewhere around it, but

Kenneth Schilling

counterbalanced Joe, the overall. are And industry more in we of truck a company

we in from - the are Class for classifications, X - would than while important. important those - I sold X. of across XX% us. greater So percentage perspective, Very Class all an trucks category a It's I and product

Joseph Mondillo

and investing Okay. marketing strategy Perfect. you've closing To in you in, you're on that mentioned what transition sales been I to your, maturity. guess, know and I

I that I think least was SG&A, the and You up at the in about business, saw up Lift say, XXXX. XX%. think, growth. sales or to At minimal SG&A on XX% want I was so, Truck

provide I'm So new how Any in in terms are curious XXXX? there? investments stage you - what - can - much more incremental more just what at more we of color

Rajiv Prasad

Yes.

in in and terms marketing think place. of maturing investment the is have the sales people So I we

have tools a we now team phase And now a We And place. that are to gone tools question execution it's support execution. systems have refocusing of are of from that these new the phase. and processes in development The an developed.

modifying the to are organization bit little a allow to them we execute. So

people these hand, will a of this, other may XXXX, point lot again, which just but redeploy Product in pretty as we through think a view. of increase in we on probably get to, the We into additions. way, always marketing some we rate is So resource-intensive on sales and the is run the pretty launch focus go programs. a not some development, on solid from phase,

that see go So somewhat we'll up.

Joseph Mondillo

guess, in leading to that's how on say just Reach that so can specifically, where in Okay. terms relative Truck I And then in are the market progressed know overall automations, you terms you Any of of more in XXXX. launched you automation? I product [indiscernible] comments development, on

Alfred Rankin

Can quarters off is probably that on too that terms I operating I of just pretty we're And far that the in the wouldn't that? the make to sort is rest one and be the say - expenses fourth comparison basically XXXX quarter be the of earlier of difference in much GS&A fourth biggest the year. between the over it think XXXX quarter. overall going up comment other the to to catching annualized of course in

Joseph Mondillo

follow-up and referring that you're that. And just on - a to

in you referring the to fourth quarter? that the You're $XXX million SG&A saw of

Alfred Rankin

a Lift what but... Well, I don't basis, head my Truck-only in have is exactly on that number

Joseph Mondillo

basis? Lift a On Okay. Truck-only

Alfred Rankin

was not was business comment, now. the was just commenting Truck that I of Lift Yes, in my making only strictly three in maturity on on the that's businesses. where relative basis terms Rajiv And on what Lift Truck-only the the

work. inflationary we're point to cost So going GS&A. have increasingly, I But where think we're capabilities we that, our at put the in the to

they've execute. Now got to

Kenneth Schilling

global think as as to Hyster-Yale company I equally public that... well a comments applies And it to truck at as your some out of company a lift

Alfred Rankin

on focus business. to strictly forklift really truck wanted I the on

Rajiv Prasad

asking automation you're are. about we think where and So we

we you or jump the really talk taking - it have been the run-dual which about so can multiple I we're So when trucks, to automation. truck mode, run let will on about just button a it, hit a again, automation, And operate itself. forklift approach we're automated talking and

X Truck as into And X is dual this been step we So with - and our and well pickers we've movers the in JBT market. that's mode. we've of as with and solution partners, put call that's Balyo where our our Balyo what Reach the some working horizontal order both

infrastructure. big our to learning. and a a imagine, the quite from program, there's executing building system high. then management the manufacturing are because the linking management into It change And actually changing We're warehouse up We're such lag interest you difference interest certainly, can time customers But the that it's the capability. very or involves a as system. between

well so And system-intensive. software-intensive it's as quite as

seeing are results we're truck. struggling to mature, taking our in see customers and get good it. operate a customer in environment to where approach an to to are But So the customers projects some accelerating. this forklift then our personnel We especially and while take measured payback

that, X, Phase to big a horizontal and automotive parallel over then products, happening introduced be trucks. the we years automation and and or into for developing own will were the movers. in around warehouse And as in XXXX counterbalance In system our next internal industry, our then what's X that and are that, finally, the our X after built

important traction It's XXXX So very around will very get start we have and in think customers. to us, program our more to to important quite automation. But XXXX. I a it

Joseph Mondillo

Okay. could low-cost comment cost at vehicle also, suppliers, the Any I in with status now? one I on before, at funding to base? the what automation And lower you question terms And then certification? on coronavirus to were where with trying in you're the that? what's throw of developing least stat And where doing in you is maybe right What wanted and guess, - color you're for Nuvera. the

Rajiv Prasad

Yes.

were of X that we was where China. we So levels - in there's so certification

New You have we which the period. in to the truck certify have And were the the of Year over done. we process certifying engine,

you truck. a Once for So that's cities the is can do soon have right halt the to to certification catalogs now. as And into And from. the truck come certified, plan as - that the buy of cycle. the XX,XXX-kilometer then putting durability a then to able they're to resume available it's is

Alfred Rankin

Buses.

trucks. [indiscernible] We have

Rajiv Prasad

about of yes. Buses. obsessed Kind yes. trucks, Buses,

assuming If will original of a that need seems the into to couple think solution put end, that I back-to-work some area so that we mentality. back behind in movement think catalogs happens, saying get to but Chinese then the we'll the defer it which through Wuhan the we do be buy there goes to the from. it these two about - months now things, encouraging that government be then schedule, seems So can cities be fall steps that to probably really can our the can

Operator

question of Mike Shlisky Company. & And from our the of next Dougherty line comes

Michael Shlisky

doing the you been business. I your question to effort you've one some so to for year, on share expand in environment. with try quick pricing and have customers their deals just some gain Last an

a imagine, some gotten and the hopefully bit which targeted curious of to, for if done some couple there given on of pricing this far some I'm this year - last to you'll heading bit be pricing add not. year? that's year a demand into is softer a that a I sharper out of back as accounts. it as be was for would than your tougher truck years have we're or And market, effort, could also actually for trying back lift whether Now it's a able a year goes, it little getting environment tighter that

Alfred Rankin

of the that let sort here. occurred needs there end of had at comment XXXX some Basically, the mentioning a think of and were the backdrop I on largely Well, you me to readjustment factual development be little XXXX. because In in trucks our that a of XXXX, bit of capability of we felt the activities in the that to the accomplished terms mind in particularly been warehousing in that we and had customers, of and area. purpose able we important that demonstrate industry large we had

appropriate of we we capability focused trucks. that for value-adding ensuring that were margins And the were on gaining our so

our pricing And of earnings that, in out a improvement release. our in significant course, profit is so And of our called year very margins, was margins. the and year last gross

and then marketplace to then more pricing. coming have that And new a somewhat see the permit improved products these in, margins that secondly, the so - products nothing margins regard likely to previously to I year last question ahead gain we as of continuing we come with that the from the selling, themselves we're gain they is over your to able to year to been in we get products and the have general so won't pattern margin think that improvement into continue last - environment new that to us answer were will that the

Rajiv Prasad

good. think that have those the businesses did some XXXX from think where away reiterate just very our right customer solution discipline in I'll pricing probably walk I I for didn't We base. was we

where And for than as used time have - just we'll to kind a we've we as products rather pricing so them once selling tool, using tool, them. back the of right a go

when pricing view. to a the really the sure the that, product to to our industry customer. well very do and pricing discipline, we of strategy that's guts right from make you And do our seem right we're applying And point of

Michael Shlisky

softer going I question foreword Rajiv. in That guess the I can XXXX, the a crust there, you of a [indiscernible] the of bit it's is, big that keep if environment? was guess, a

Alfred Rankin

weaker - particularly what we was in last quarter, our also in year, market the than in markets prices first half the said the second said was the in the that Americas, particularly strengthened. we What - and fourth half

I we course see the so more course And or of moderate levels demand the in of think XXXX of in XXXX. more than stable

- further sort see happening. happen If of softening don't it's this a lot point. So stabilized think anything, we at I of

Operator

Instructions]. [Operator

Kearney comes Funds. of from Your next of Gabelli question Brett line the

Brett Kearney

have Just ask, selling and approach. wanted the one you initiatives segmented underway, to industry-specific more of

days, customers distribution teams going, guess, this Just know receptivity, it's And both how then at partners? any ask, but sales I with that's indications wanted I early your both from to still stage? and internally you're getting the then

Rajiv Prasad

Brett. Yes,

take this through internally the it I stage to process that a the then execution think, very, is, - I and through earlier, our the little developed I expecting we them network. in to said out the have our reroll of salespeople, go very tools and processes - over bit think our certainly, with dealer and to and our evolution well. tools as Where are we're now some broader,

adjustments. this. expect what then focused That's we of over the team And making on lot mature highly XXXX. That and reinforcing, is a spend time, that we our to leadership - reviewing

of way very the So to, the value it's it. customers see expected - the and been and we have and wherever engaged done

Alfred Rankin

to accounts I a with in applications. process selling people that, very solutions many selling that team with for years. would been large familiar say specific very that mind that useful keep I and for program that it's probably in think a you national has many, had provides And industries - direct we've

not so an for is this us. And process new entirely

couple involved, developed We Rajiv is wave XXXX of the one wave we're selling the we selling to that general, And the of of industry strategies. that that we are looking biggest significantly of accounts. over techniques we and the where years. the that accounts accounts maturity mentioned, last XXXX. have national comfortable than to. that over effect larger see to expanded which have course coming the the They're but the first dealers in have And our the smaller over they're area the channels very than selling have course really X the formalized capabilities the typically is That's larger

is And and reasonable and of or effectively is of kind that a own our that an of have support we develop that our to program rely - they set can it I ability obvious people all of it's greater to think in on for sort than by dealers. that train executed a resources have

the application dealers less a dealer are basis. the they're specialized "run the by general the - So the dealer focused secondly, are of that to also really sold longer. the program application. smaller trucks less on importance execution mill" more typically fundamentally accounts, of is more going take because But it's that on standard It's a of more

quite in own the past, with larger the rolling we've feel said put that account business is to now market out, share good in being dealer force generally small sales implemented, it's accounts. these with And had we've cover good in good pretty quite in also middle is challenge our a just these national Where direct program we're so how where I but I we that emphasize It's in area. we've area. about would more mainly XXXX in the And them. accounts think our people

of we in industry as it. have sense, additional value-added X So set designed that our fair and in think we're of other portions a In with deploying business program. are we it that sales to give capabilities us bringing of the sense, we're one our another share

about way another that's it, to think So Brett.

Christina Kmetko

using approach emphasis national And earnings our just the successful on and Brett, numbers what support accounts. add in bit make that our said, to calibrate have that industry some Al just statement that program XX-K. the a that we sales our in And little release has we this been to

they XX% you If they sales in look account XX%. in at were And sales. were our national of XXXX, XXXX, our

supports it is have fact to implement... then that we're successful, this. it So and why to just that's that on moving the We

Alfred Rankin

I than of is generally very and Just bring our we us. heart to and when solutions North position solution instance significant in where this recently the moved probably customers, as supplier away - creative there's better and bring one some able to in America, to steel them. a to on in from we were the moved a capabilities additional relatively am. speaking, Rajiv But long-time comment they And toward another industry

to is than It So really customer selling and industry solution the the you're also solve a that selling he the but it price trucks the strategy, giving trucks value of part problem. on avoids customer's it's on one ability better has today. because

Operator

next line the Mike our Robotti of comes from [ph] Tiedroff And question of Securities.

Unidentified Analyst

my taking question press release. and investor Thanks the for comprehensive in the very perspective much

As the looking company what out the it your investors as question there at Day in relates the over And more isn't why should to things achieving of goals? that, the at you profitability profitability that was I a company's Investor and look regarding years, the the guess, few are next be terms profitable.

as they particular, that in comprehensive are interested volume-dependent, and or on working plan may this you're whether place. in just part that operational put that you things be strategic, perspective And in I'm things not of

Alfred Rankin

come talked point about where of has think margin a We margins on our are get the margin the course problems, solving that fact, attractive. Adjusted largely standard can XXXX. did in customers' from view over Well, is We that that I significant focusing that is earlier of they enhancement. volume-dependent. we

may product, we to wanted where, had we not had we get right we what have the we exactly areas certain products applications. to said, into very felt demonstrated as wanted leader-customer Rajiv but that had do certain We in important

to that Now value, we disinclined those to take reasonable seen the want have margins or the in value business. that are they've sell accounts we and

fourth not but sort driver. We new going and So improvement to I from quarter annualized that's think is look there's out GS&A the pointed at terms impact. be in stable you be to of of products, that room likely the relatively for major if seasonalized margin

the adjusted does And key. larger but and then really profit total, margin that our volume, the margin things: with the it adjusted the manufacturing standard it variances covers a itself, the two in incremental bottom so adds one, margin with the with line. profit, standard standard to from incremental gross it contribution reduces And the is incremental in level-adjusted also plan; relatively volume - added it sale brings

it a So story. significantly is volume very

just from we're very to the gained much hand, to wanting describing. the by more and And driven the customers other not by program programs being been new by it the a these by price. driven we've It's we're the bringing is all to these be that value On volume them. volume. is products selling a way not be But that gained

Rajiv Prasad

but So for volume, Al the is be nature XXXX, the large going it's absolutely drivers right. volume to It's it. the of XXXX for two and

margins And of we low-intensity The now really in we It's well. first haven't And products. product of the go one is set part I will market have the to you're for I market. think serving as because at said just a the a truck. these that be selling participated the the sales before, part standard our customer low-cost that rather target than very

Reach and industry but are will out we coming additional including support coming The that new selling Al touched new some and have of on along approach, the coming we Truck that out. the some Americas, second that's in area maturation other, with products then the products the is industry process. our the approach, product XXXX out the some electrification, electrification through whole - end-rider have

or the So profitability two. key two are on the those progress for drivers because are the we next key year how those to areas they profitability, additional over for, watch the

Operator

back there the the turn for And in questions queue. to the are any presenters closing I further no call remarks.

Christina Kmetko

you add, Do anything want Al? have you to

Alfred Rankin

And to in year we've that of this opportunity a company. that important it's think I add a a very Well, businesses as all our clear total profitability ahead, our lot to in the significantly is got we ahead. have to we And as commented ensure really we're bit that all on. of programs. a That's people earlier, trying capabilities we Rajiv these of executing done the can focused what that we're in terms job get little execution the have feel

developed. That's So of a certain skills. they're set

in Now we another execute got it's set to skills. of them and marketplace, the

this and thought terms ought half, process of about course that. my that comparisons And to on first very remarks, I be that a with earlier previous year half. in we're way is of XXXX, the focused as said in the ramp-up over much So with and earnings second

Rajiv Prasad

Thank you.

Christina Kmetko

you. Thank

happy please Thank answer to you any I'm questions, calls. have you. If do any reach out. follow-up

Alfred Rankin

bye. Bye,

Operator

Thank you for your participation in today's conference call.

Just be call concluded. call available today's after a is reminder hours replay that today's an of on-call will two

please and dial we like Thank you'd access to If disconnect. for that, X-XXX-XXX-XXXX. you now today, may

Hyster-Yale Materials Handling (HY) 26 Feb 202019 Q4 Earnings call transcript