HY - Earnings call transcript Q3 2021 | Hyster-Yale Materials Handling, Inc.

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Operator

Good day. And thank you for standing by. Welcome to the Hyster-Yale Third Quarter 2021 Earnings Conference Call. [Operator Instructions] I would now like to hand the conference over to your first speaker today, Ms. Christina Kmetko, Investor Relations. ahead. go please Ma'am,

Christina Kmetko

Relations morning, our thanks call. XXXX and for Christina Good today. I joining Welcome Kmetko, Investor responsible am to third I Hyster-Yale. everyone, you. for and us am at Thank quarter earnings

Today's XXXX Rankin, Yesterday Joining Executive and our evening, Ken our later site. is are be we Officer; approximately available and are filed and and on The being President quarter available our and Chief Senior XX-Q, President; of published Chairman Vice webcast. Web me results Prasad, recorded Chief both on call which our our on this for Schilling, call webcast will today's and months. Al Rajiv Financial Web third Officer. XX site afternoon

your are uncertainties These here the forward-looking expressed Al and be at XX-Q matters call described night until in to risks earnings Our I'll results SEC. forward-looking to filings with not any our for next questions over the quarter cause let contain disclaim opening to subject we include, those Rankin, our have discuss CEO, these all. some made our in results. among if In other a and risks remarks current differ forward-looking a which release statements conference turn our may We call, update quarterly statements, to last that of remarks. issued Chairman could Al? first, me and to in obligation the updated moment, and our earnings statements number actual statements. including from to that These follow materially today. others, answers But

Al Rankin

and good Christina, morning Thanks, everyone.

importantly, a profit lower loss operating [indiscernible] and mixed, quarter and third Our results much XXXX for are reporting. at level net most again the very

XXXX over lift quarter, of as levels. But the markets grow it XXXX suggested the moderated. As to second truck decreased market quarter from as quarter expected, during continued third demand last

high and levels, of in level new a achieved which bookings level, gain, record year-over-year the were growth backlog contributed lift high at share market quarter. Hyster-Yale As historically a and truck to second the result strong the exceeding

Given production year -- are indicated costs, and has robust losses well constraints, these the of the for in into is the factors, plants the lift fully contraction result XXXX. leading we of margin expected place Group truck slotted fully remainder and at and continuing business for rising chain we slotted its as quarter, to Hyster-Yale Last material quarter significant anticipated logistics plans and became third backlog, as supply other Hyster-Yale significantly and companies. what on similar had shutdowns. on our ability expecting, normal a component the severe the to impact in issues our supply second in trucks ship of well chain quarter saw to logistics number units. impact constraints a shortage our accelerated the and on exacerbated This we as and planned for the worse, beyond their global Further, were impact a significantly we

to unfavorable our operating substantial Group, the led prospects, As net profit the Americas losses than ability needed schedule build These losses felt than on result, only certain third reduced to near-term for with Hyster-Yale company for is factors quarter. inventory to sales third adjustments at poor. due Nuvera to equipment at and coupled consolidated quarter and expected, quarter impact we modestly division, a with largest in shipments to receive substantially lower the higher our the the and where trucks second components were

opportunity on increase our for supply margins and and chain Christina? of logistics our is as and in you difficult production team dynamic outlook an backlog, high. the expect, on and challenges components new these very will orders. environment. to for increased well we the expanded obtain diligently will Rajiv to given these Further, an in and As quarter, very operations backlog need chain financial projects. production supply more provide results is problems, resolve financial would supply high and business Christina update reviews this strategic the our for impact chain our bottlenecks, then given detail After working the the the as Ken for discuss provide

Christina Kmetko

about start Thanks, individual quarter and I'll segments. with the Al. high-level then the comments discuss

mentioned, changes decreased share in third XX,XXX XX,XXX bookings units. historically XX% a the lift quarter. due XXXX, from Al high level We booked a extraordinary third XX.X% ended quarter bookings the increase we with gain, As had to in but backlog level our market truck of the over record the of and of second quarter units

Americas quarter several component of increases the $X.X XX.X% six truck including higher variances elimination unit expenses by material the higher primary third in of our cost increases due increased for segments, and prior XX.X%, many of prior profit driven This the million, higher $XX.X favorable in from from in our the of resulting to $XXX.X million, operating associated significant was up of and we of cost freight insufficiencies cost actions year. the containment loss Our increased $XX.X inflation, year. million revenues shipments $X.X $XX.X in of prior and primarily the by shortages million, drivers the significant factors, XXXX. with and with result taken from operating and EMEA in the lift were manufacturing our driven the million million, revenues primarily Despite XXXX business compared operating increase third revenues, of reported the consolidated an quarter to

value reduced value. near-term, [carrying] by realizable In sales addition, an fixed million as forecast, to net reduce fixed to reduced a of asset estimated result recorded $XX.X market a the charge its its value in million Nuvera $XX of impairment value and the assets inventory near-term [Ph] a to

will establish of prior net U.S. a in deferred valuation with of factors to assets, million compared discuss tax which $XX.X detail. million and a in allowance charge As We year Ken a on quarter. loss a million reported net more $XX.X $X.X these certain income the of result consolidated

of due from decrease in operating Turning profit of Americas to down truck primarily million, our operating and and lift the to delays higher prior EMEA experiencing factors the EMEA our the significant segment with higher segments, profit consolidated from in greatest same the lesser By and the in in costs production felt our discussion results. the difficulties, $XX.X noted reported of far, loss impact $XX.X the a but a extent. an division results, operating gross expenses both resulting specific million Americas year quarter, business to of I

the in gross breakeven Bolzoni quarter operating revenues, these year. However, and mostly was by costs prior higher operating results, offset third the higher JAPIC, to material year the quarter. were which XXXX Bolzoni's and revenues the Despite resulted reporting XX.X% lower for over profit in expenses. increased freight shortages component prior lower comparable

in Nuvera, $XXX,XXX from $XXX,XXX Finally, in decreased the third to quarter prior the revenue year. at

up As from of result That unfavorable asset million a operating charges, $XX.X update fixed of inventory the the completes $XX.X of was XXXX. results in loss $X.X the for and quarter. million Nuvera's the million,

on strategic turn will Now, and provide an overview to our our operations Rajiv, who projects. let me

Rajiv Prasad

Christina. Thanks,

Our long Latin sales XX% increased in markets, XXXX went the But before quarter over third approximately team growth. second continued our translated exceeded lead lift XX% over orders increases all in that environment. improvements compared programs well truck The due third market pull price of times bookings market to to with the decreased the into market gain the quarter, combined except this the quarter. an effect into market America. to share strong share the prior quarter, improve more than as market year downturns market The as company's global forward increase the prior and in

in that truck We expect markets year the with global the quarter highs in and of lift the fourth decline quarter from fourth historical recede market XXXX prior to the compared XXXX. XXXX of will

to remain expected higher both significantly are levels. pre-pandemic However, periods than

result significant the including XXXX on XXXX recover, the decrease respective lift XXXX are own, in in quarters. and bookings is third a increase quarter has demand markets the quarter of the supply significant truck significantly market Many and of the quarter. a this intensified causing in anticipating succeeding with which industries, experiencing a As in XXXX compared global over is the our outlook, stress compared fourth past chain, as this quarters our with business substantial

to to address space shortages to in of lack challenges goods related they're caused result as at ports the available once the received These a port and supply congestion and supplier shortage of component a due diligently group China, truck logistic the by truck Our has arising general chain shipping and constraints shortages. availability challenges. challenges U.S. at are continued to availability to of move U.S. the labor work

All parts of these receive at ability factors to their have time. our limited scheduled originally

and put securing significant have other vendors. channels, different through into methods shipping other We including components effort

limited. shipping constraints that to vendors alternative However, can methods are components successfully our difficult. availability provide components counteracting be necessary configured proven alternative And mean very the of the of therefore, and nature highly limited that these has very build-to-order

only modestly were backlog, As XXXX a despite quarter. than the result, second unit shipments high higher the

level. the factors XXXX in In a lead has to new large to high times increase over second and substantially. quarter led backlog extended This a delivery fact, these backlog historically

most of the do is our single over the of times of effect right production XXXX in backlog course remainder significant we in XXXX first orders. these of material backlog in and truck price half Our our of the to all cost address issue orders At increases. not inflation. record increases lift several margins new effect the XXXX implemented But managing full the reflect many our for slated have the for price now business, of

nevertheless, mainly improve lift our to best in to target result, working truck the the are a the try increase quarter the into quarter orders shipped, first are The of in XXXX. continue fourth realized to the to half they team as ensure XXXX. be dates, new experience given As units working margins is current the margins margins. at also we went Due shipped, between booked are based when expect future the fourth and on will low sales and in these of backlog gross XXXX team effect to unit price backlog of lag is diligently they the to

business spend market our me and has three expected strategic initiatives, to minutes truck on strategies let impact transformational lift few a economic are a that core our have performance. competitiveness, position, discussing Now, the

provide lower new this productivity. while and to by the modular for and is of focus lay scalable cost first for customers, is providing enhanced The enhancing applications. enhanced our ownership to primary of are initiative low-intensity of lower expected our strategic project, customer ownership productivity including cost market which The position groundwork

application for trucks, toward engine Additional trucks telemetry, now AFES systems. geared product of dominated to electrification this, key automation, combustion internal operator along by with options, our and projects

focus to leader customer-focused delivery the needs. using Our primary an in approach meet sales initiative solution. The and by industry-focused of is to second core industry strategy is approach the of our this strategic be our customers' transforming

range focus organizational cell to beverage, sale to independent major of on while and sell outstanding account appliance, on Europe dealer broader implementing fuel Finally, immediate of attachment adoption in its XXXX. one late business heavy-duty coverage, automotive the JP also strategic to Bolzoni to this America both XX in to strong various streamline ownership the our and globally. cylinders approach shorter its and serving and of its Nuvera based dealer increasing operations produced also Bolzoni dealer for help Sulligent, through America by continuing times, using locally North strengthen and is a on be continues is both kilowatt working ability in which attachments industries It and approach America applications industries. but sales, The distribution. focus serve product its in expected produced providing with core support on to is industry-specific and paper, with engines, ensuring to strategy strengthening niche, marketing, continues leader an third potential, key corporate focus vehicle excellence lead is released and capabilities, brand introduction were Alabama components on its operations. its plant. three Americas company and near-term initiative customers markets focus the and North other with in North commercial XX increase XPL,

these for in continue result commercialization of XX these the ramping for focus will demonstration a on fourth and XXXX, to booking quarter market. quote engine XXXX As Nuvera and accelerated the global kilowatt products. its Nuvera releases, of operation up In

call development focus a engine for on truck believe in applications of we addition, future the in long-term we on to turn I'll resolution we component achieve update and an costs. the relative for the Overall, place has Nuvera new have to In growth of to liquidity. right material Ken? and freight of market. continue and shortages forklift can and now continues initiated quarters strategies once XXX-kilowatt over Ken stabilization

Ken Schilling

Rajiv. Thanks,

chain during need factors, her As current our operations, logistic was strategies, book -- tax tax from The you've stemming asset, to shipment valuation and our have constraints. upon pre-tax contributed challenges in established based a Rajiv, allowance U.S. available heard and declining and supply levels, our the U.S. a are to our results the our in evidence deferred planning our for quarter. remarks. these valuation than objectives of months U.S. nine from no to far recent constraints. first tax supported valuation of both need XXXX, these to experienced rules The the required allowance Due due Christie to longer which of against lower deferred Al realization a due accounting lack logistics which allowance forecasts to mentioned third review of record including losses, supply the the cumulative assets and we

costs, the quarter third XXXX chain have prior to cost of at year the the U.S. to first the non-renewal are and third to and logistic quarter inflation least negatively continued of experience and year to freight of of to of remainder prior Significant year. worsen Nonetheless, compared and the with increase in are quarter continue continue fourth the over XXXX. expecting the XXXX. to in quarter which into over freight expect cost quarter supply components tariff the half higher We fourth constraints XXXX expected current exclusions shipments fourth the the we XXXX material affect

to chain, prices exclusions and and availability as and in salaries supply truck of lift operating in business accordingly. aggressively continue the logistics result these half the component work reinstatement first manage increase a factors costs, tariff will quarter and losses the our significant XXXX the for orders adjust new all Nonetheless, net We pre-pandemic and fourth and in of costs expect the associated the in we XXXX. benefits, with of to

life and by of shipment volume the As we increased and to our higher-priced as as well bookings, anticipated backlog an expect a trucks return XXXX. XXXX of lift result second Rajiv potential XXXX business QX strategies operating half discussed truck the the of current core the in to in profit the

improved are However, reduction product for the we of costs occur, transportation and availability. or logistics component this and of the stabilization assuming to expectation and continued

both fourth In period the introduction the prior longer initiatives. the the XXXX. continued scalable first and year cost-saving product are implementation addition, quarter modular operating profit currently released expect the of and months the with the also income and over Bolzoni, this in At compared of we additional and term, net to in families assuming period continued we and of increase nine

component profit the return assuming cost. the to and of second half first costs. operating of of have shortages component quarter Consolidated a material we of freight XXXX. to to a losses shortages year significant to permit material an and fourth On are net operating continued as resolution relative XXXX, the and in in expect loss course of extensive significant to as Over expected results as cost XXXX, the of moderate improved stabilization in XXXX half at pricing the basis, well Bolzoni's expect and shortages, we the returns higher component progresses freight inflation given Nuvera, despite consolidated reasonable

moderated to shipments. result reduced a fuel cell expect losses at Nuvera have also of as We enhanced

we year While a maintaining during in investments in priority. the make business continue additional the to and the expect be XXXX, remainder liquidity will to of

We have adequate near-term us to in borrowing help weather challenges. place facilities these

during revolving expand capital refinance period. loan this of As our to June $XXX.X to working of at finance hand debt of million and had of in we the on debt million with fortunate $XXX growth second and compared of and $XX.X facility XX, be term million $XX.X were million XX. our hand September challenging to our XXXX able cash We credit on quarter ash facility and needs at

million now revolving borrowing XX. compared under facilities September our unused XX, of June call capacity back million at we to the of $XXX.X I'll credit turn with approximately $XXX.X As had over Al.

Al Rankin

and finish focused we on challenging environment. will effectively we XXXX, be managing As a in dynamic

We near-term, continue the and of remain our focused execute our strategies and to our long-term on employees. safety mid-term,

transformative. Our strategy clear the and is longer-term for

external as the and number specifically which explicit challenges. as projects cost logistics long-term prospects support businesses this for truck, around uncertain create near-term a discussed, world as lift are abnormal and as we've collectively a key issues, But result largely and the manufacturing levels the Our influences, suppliers' well of strategy. Nuvera of objectives supply Bolzoni

the well End markets market are segments. cell strong. As of rates fuel as timing key adoption for

are environment, backlog, lift We a diligently chain we to supply strong have record truck current working and manage booking the headwinds.

We are products innovative customer continuing demand. to in meet invest to increased

As a result, shipment we significant. increased believe opportunities are very future

supply strategies that we and to us earnings occur, is us, have we solid deliver long-term logistics will increases it our sales and given when difficulties. will significant impact when forecast future. Nevertheless, difficult and in a very performance, the believe However, and the these are for will challenges these prospects behind

now We turn have. to any may will questions you

Operator

Your Hutton. comes the Instructions] [Operator Moore EF from from of question first line Chip

line open. Your is

Chip Moore

question. for my Good taking morning. Thanks

Christina Kmetko

morning, Good Chip

Rajiv Prasad

Good morning.

Al Rankin

Chip. morning, Good

Ken Schilling

Good morning.

Chip Moore

could I in the actions current about talked right. margins, was in more pricing drill wondering We've backlog, the you into relation maybe if a bit past. particularly relation layers to in to

on least And margin impact was quarter? in thinking don't worse assuming modest next much speak And the supply I maybe backlog? how that could quarters, chain bit. get a the of the front? How mix do decade. last an you couple think over Are little about this quarter in of the look lowest improvement things at to things This level was we sequential also then

Al Rankin

Rajiv, to you want that? take

Rajiv Prasad

Chip. Sure,

our booked XXXX of I challenges, as in think chain -- we've generally we've quarter first first fourth trucks supply and the to we're quarter the building our of talked thing say about that with XXXX.

the exponential, them the And you at freight with To quarter, on you've a sense then us but $XX,XXX I typical from container. I than in were has to margin give think The that, anybody we sustained would have process. driving spot same to but to it, if not and for we think increases, the which logistics. is bring hit a our lot last East. I global was expecting. compression XX-foot don't or a used cost longer the challenge chain They up else least tracking for primary $X,XXX price commodity to $X,XXX the know prices we been expecting a is And container call been in costs force factor. not in. mix was supply for one huge secondary had linear, of early

on our a certainly were impact unpredictable huge those So, compression. and margin had

we'll continue in expect this do then we'll we the year. things quarter. the quarter the were up Now, in build second fourth of year, the half quarter build fourth And through in first the booked and to that the to booked backlogs that first and -- the into third were of

we've don't So, margins more into inflations The I is as pricing that of last of just have well the say price that more unfortunate know don't it. quarter see trucks now thing margin, the said, seen. will in with I cover the recently these if ourselves can booked to as backlog. thing because we're full would build improve the been The right is trucks Ken the we third have the booking building all XXXX, answer. we the of trucks

Al Rankin

things this recently. January, were fact, I different February for we as times add has and And various future in just costs most started more accelerating, a beginning couple at year, between of the period I'd think, roughly price the at place the that. speaking. The in of put increase increases quite to aggressively then

the that trying meant be is were time to and shipped. future been that out it's prices trucks process uncertain. forecast we've to Unfortunately, to So, in long respond been of

I certain to any future relate in to it's we're increases very so, that price we're are the increases. as of as say that now cost increases careful fact, have making assuming up. assuming bookings being far about And we're cost very as kinds difficult moderation. accelerated, cost would And catch that been concerned

that trying from trucks nine more very be be year structure are So, our booked less, a months now. cost will we're that or to now that conservative about for to being shipped

of were going that's caused accelerated should and therefore, And later, catching we as the price process. been just future forward up to on increase as us rate. as the on accelerated. this the outlined, go whole -- dynamic XXXX. a cost of have cost buildup. we in has And this is another quarters faster that level that's But So, at the the it But be shipments, over

Chip Moore

second was my That's capex. helpful. Thanks. And around question

just the bit is I million back think $XX track focus on think delaying take now. in that's the a strategic unprecedented everything it's talking on about And Obviously, if of little any or year. initiatives, there? we liquidity, before in if if but curious I were of that's lower the this the we half environment,

Al Rankin

are programs, in that expect the not to that scrubbing our working long-term and relate critical Let and as and product hard environment. sales me kinds say of share gain you those this implementation marketing anything capex, delay that strategic do just But we would we're of would programs. those very programs, would to especially

side, perhaps that I we it that So, is been thing feel hung the But supply inventory to bubble have have have a of very, very enormous is year. an on this impact year I capex that an related think the had both shortages for the next because even us. chain up and more disciplined process past due understand on that trucks that to is important

due inventory inventory And on chain clearly and that sure working only then those focused capital we're constraints now that given that purchasing trucks, past making we produce new the down operating be are what very supply can bring under. dramatically. that So, built is bubble we're

to further management capital the working CapEx. would I point importance this at more in attach reductions So, than

Chip Moore

it. Got

Okay. That me. last makes sense. one And for just

on Nuvera, efforts, from right? the accelerated the quarter, developing larger We engine. talking new curious Just about materially were changed commercialization if last anything's

there? I Just, some when we expect front, the take any guess, bookings might on traction insights to

Rajiv Prasad

-- take as fuel happening. of what's our cell own example doing just with let's an programs again, our what Nuvera, we're So,

field, on robustness using improved that cells what those the of the we've our -- some solutions for battery And data. BBRs. got we as we box in we've marketplace of replacement performance we feedback what the amount call the So, know, gained in a and as fuel of you huge

learned huge a that's thing. amount. We've So, one

us an we're The bigger we our is for the think cell And in applying our with we're second thing fuel future integrated starting trucks. -- is trucks.

on So, reach XXXX, we which early stackers, having developing announced. the first complete pits, which and handlers. are be We'll have cell fuel a working based. in tractor, will empty a quarter ports, for we've jointly, we're top We'll our solution container -- terminal which have well,

So, these are port integrated biggest have make the trucks we all systems them. cell into for fuel applications. They'll

What So, applications believe external are bit that benefit that's where And product, takes release time. those the are the are a product. segments stages the fuel of internal the taking Nuvera for basically, market are from the test we And beauty focus is. developments development. with this the then It time focused side, little the prototypes, instance. develop similar and typically on prototypes, customers we in could trucking the of to on early demo heavier cell

So, refuse trucks talk trucks. refrigerated we or about

So, products solution if battery like will that, where very we you work don't them, think well. the electrify

and talk kind is of are forward with. focus about markets that discussing the that we'll Nuvera future. those And with, the the that more moving they're that's So, in

Al Rankin

would add and a to these potential of that I applications. unlikely solutions those well to work understood those that isn't and to heavy-duty vehicles broadly be understood. in in battery productively of builders only that appears is significant electrification by portion effectively the heavy-duty for pure users segments the need so amplify What to are quite

very available the hope the battery that you. fuel trying we're than our solution fill to where focus helps ones of that to term to a rather carbon gap way focus right and where there's think electrification will very, we So, they cells offer move on on really long limited broad, be solutions, non as I very solution. sort

Rajiv Prasad

the about as more we'll things future again, this And solidify. in talk

Chip Moore

of you. sense. No, makes lot that. with agree a Thank I

Operator

you. Thank

comes question Please proceed & line next Sidoti Company. Ferazani from your from question. of Your the Steve with

Steve Ferazani

usually the which it that to quarter, freight Hi, it's bad sequentially. I'm everyone. because less the margin looking worked? material something its Revenue up and at I improving simply simply prices Is -- exposure. numbers, is about And doing a seasonally that not the answer given volatility was given clearly European even complexity, European is are just there larger it's that weaker ask else or less costs. want better though components,

Al Rankin

main work cycle shorter. the at think thing I is time that that's is much the

So, delivery Rajiv, from would to order be… time the

Rajiv Prasad

eight weeks. Six to

Al Rankin

could to weeks six freight it than Just does. or so, they truck, more respond be rapidly increases eight a business or and cost the ability much forklift to forklift cost months six price have where eight truck from the material

Rajiv Prasad

I really think backlog, competitors have just of for have in we the but the mean situation I is great Bolzoni marketplace. not the amount huge too

expect of truck, weeks for before backlog what potential, We Bolzoni, showing certain that. the But about come XXXX. our extent, probably for we're positive in is excited Bolzoni very the market eight will the XXXX to order at market into shipments happen significant potential, and And and when going XXXX, attachment a very the to will six a delivery the in trucks not the were booked.

Al Rankin

combine strategy have a We North that on engine we strategic particular enhancement industry of initiatives his on powerful outlined delivery one there. company capabilities you activities work in going the with that market in summary, emphasis think the Rajiv focused perspective sort with When broad America. and our very of a he

Steve Ferazani

times company's how We different of two sort answers about affects and getting time. it been have that I'm lead lead backlog talked [indiscernible] on seems orders. and going spending what every through

thriving to they're more know are Some intensity. to looking seeing others I that spending want a is ahead perhaps already say order they're that your wait thoughts. in and just long are time orders. hear be would a People far saying deterrent lead going but

Al Rankin

think we're for the lead And you can customers book time that lead to current have for current market, moment. that queue and is that you right, but the general. better as all ultimately, and very generally industry shorter of had we now for and at is market bigger because getting sure us this to we Yes, you're for a I better better need. But we at us, large long back customers. But the think believe if step slots of they that for even the basically see and take in that, about can backlog dynamics competitors make our the the everyone; want the our situation have ahead last you seeing a just quarter, their it's not customers time and we backlog in say, have see better

significant So because cancellations we on time. of see, as booking you are there lead a ahead not the of going because any is getting long amount

times. So, I a the That's build more is get the back get to lead primary and think like We situation. to transition normal backlog through would it back mission. to our

Steve Ferazani

supply it's issues the about in worth and transitory clearly intensity but certainly deal about and a that's expands. as addressed to As not hearing no just something anymore. and And talking duration the you intensifying, workarounds the grown trying gone with year think on. And to that easing, chain has one's lot, it ability has think through that I'm you've perhaps

Al Rankin

or let have than it with and save during generous we entertainment that. today, to up consumer Goods public COVID demand. way Right, XXXX; was answer COVID benefits up, think demand, has the total changed pent people because it's way mix based that me in look have But rather demand have shifted. I spend. huge demand down. above a you and all travel, which period at the they give just People but gone increase influence. a in in gone to increased had huge if had very has degree so that a the broadly over government Restaurants, companies of XXXX, don't general and the broad whether internalized the the level have not

end claiming to We've goods, the have consumers commodity of is structure and product supplier's producer's at supply And demand consumers got then the out whole look by U.S. what It's chain chemicals. so, for if you around is capacity. a the world or the that capacity, everything up the in lot about heard consumption end you capacity.

You're hearing daily about chips.

increase All sort supply this from these just cost a of margin ships have is enough between carefully on in becomes that who certainly that contest marginal. lower about very demand. the on you it's opportunity. people who and have a between not the those high than and to And shipping, result really, are commodities, particularly think demand. small substantial is imbalance. of if cases, It been, increased It's of want or kind is those supply get, impact thinking the many a not now you afford and can't I not can and the to small the of in What demand. really Demand will, mismatch bidding space see reflect

the So in it's a a through economy of development. coursing broad-based world and very issue commodity in that's way terms the

is, think that's of mix And that be the So, will the sustained. shift questions really one I then demand backlog.

time here that's all of to the think $XX break constraints. going because I take chain the to partly supply it's question

couple heard chip chip to of It's manufacturing. about operations to going years a stream. You've take fab on bring new

to last and we in And compared be some that toward of as couple is so we years forth. moderates kind and decline of so, to going on there's the think shift travel market COVID on what the XXXX entertainment, forecast and more a in because expenditures so back

And going dynamics. the just the think but what's business. kind you I of So, in captures broad overview, it a lift that you truck when miss on on focus very that's

Steve Ferazani

That's thoughtful answer. fair. Thanks the Appreciate everyone.

Operator

comes next Gabelli line from from Kearney with Brett the question. Instructions] [Operator you. of your Your Funds. Please question Thank proceed

Brett Kearney

morning. good Thanks my guys, question. Hi, for taking

Christina Kmetko

Good morning.

Al Rankin

morning. Good

Rajiv Prasad

morning. Good

Brett Kearney

the markets. bit market proceeding So, that, some And in in similar thoughts been It there's was establishments geographic product guess encouraging. Italy? sounds it I slower Nuvera, new is sounds in whether of like to like to a at around China bus like on I is more initially demonstrations that sounds based test it the facility of interest curious there's which able much little North how tied anticipated. the America. increasing you've than establish other And

Just forward? resources going Nuvera allocating strategically, and you're thinking how at them about

Rajiv Prasad

place. cells see solution long-term thing much to really gaining of And buses increasing. understand thinking is North the fuel regions China starting that East the in characterize put just fuel some for first a Trucks say, are happening momentum. to are thinking There's important for cell I Coast amount trucks. it, as mobility some programs, for in of what's America, the of large huge And also. government-sponsored California a starting being programs -- and of geographies particularly application then is interest Europe, in and in is to fuel the a more from to if it's In think cells government-led in about cell is fuel I there becoming transition China.

critical our fuel been So, as overall, part understanding cell journey a move there's and a of electrification is much interest we forward. more that

The second think to area applications think about starting in about applications the where are is people if we are, phases.

So, the let's -- initial that phases been vehicles say. truck has are to captive depot, a

because trucks fueling. So, category forklift fit of that

go example. can delivery trucks gave from can -- I made example, that airports think good be vehicles. available refuse we We hydrogen So, support that depot to forklift think trucks will are a And and a to trucks. in

the Nuvera now is various next then trucks regional. more focused types So, be to captive we've be where that's is much are to going and Phase trucks these that of -- and vehicles, terminal think the defined. going tractors three we phase is right

So, haul next not long-haul them. but trucks, for regional trucks, area maybe that's the

have had these customer see base North the in What getting Europe in we've developing this China is forward. combustion those own of America. that's course, both a customers trucks time because in is electrifying which and we for experience and solution is fuel our So, And create of trucks and solutions we're is engagement huge a then also already time, evolution, robust of taking internal taking it a with lot engagement in cells lift our adding for but the engine, to internal it trucks. and amount

Al Rankin

big the the bit of in North significantly. really world Let have me for readjusted question, three of the the of China, that. fuel a add prospects that thrust and to Europe little America, sort To cells, your areas

is up If the particularly is, fast. recent last a backed the by highly to period, you and become China, in significantly priorities economy are very think Chinese, the one in months about few very And complexities and can subject very very, very, that the the of regulated incentives. priorities change that's clear in subsidies

And environment we attractive to into That's invested there two in basis. the when in the a on those very that the entered China, the major equipment. very, the broad arrangements was that inventory we we and and ones, was going had make so, regulatory were that in expectation commercial the only reason

good. very, reduced used we're the not the be as have cost. the reduced have from and But the sales. you the at It because to should of We just is usable it point out inventory not sold But near-term likely very of our little be perfectly is the can't value those. up -- both inventory equipment be that would in point I of will both It now, of noted, view.

working business has And change. less that, certainly change -- and in change. for have we cells focal business tends us place, that in them to I But those. use kinds and earlier. put we're far to does incentives significant think when of are -- China in forklift -- more in in delay for Europe, in But I to in that that being we gaining more of kind It's to get relative focus as it in much Europe. concentrating significant be on as the careful fuel are described far States, the in It the in applications think opportunity now see opportunities, less far electrification contracts force Chinese more a the we're -- bottom these Europe. going outlined. is in So, push have we Rajiv to on We the very and Europe United government truck building on They're the segments not Americas. line for the see that that teeth the market regulatory opportunities. of the to And a of probably pro-addressing the different declined climate and some is fact, environment point to in going

between to world different terms a We're but important. going rebalance likely all play near-term we the to development. major rather in in the market going So them, emphasis of areas be three right now. of it's in total, of prospects see fundamental the in They're all

Brett Kearney

That's restriction guys And is very the maybe you And that I Ken, then to have in QX. you. okay. just one other covenant me agreement? Yes, remind a of just from covenant right, maybe complete whether probably that able quick covenant curious, there financial refinance helpful. a proactive, just for one, it Thank in standpoint? package Could on were included back you dividends

Ken Schilling

as dividends to we as And long manage to as ability, the agreement, continue the the maintain have situation. maintain availability specified forward. adequate to we restrictions within continue those in to through goal is availability on move Yes, to pay our to

we well -- volatility the expected, help B material weather logistics. in the this and ABL, With larger us only term seasonal of increased in but us that unexpected to to as not the also nature with and we the help pricing our increase Loan availability material the did as through that sales

continuing to that charge The fixed sized to issues. We're was we're it to isn't we'll upon. And availability. that. again, So, through those springing something relying consider work manage

Brett Kearney

helpful. Okay, terrific. much. Very Thanks so

Operator

the There are call now further Thank Christina. queue. no questions you. to will back on I turn

ahead. Now, please go

Christina Kmetko

do Thank you. That will comments? conclude Al, have closing our session. final Q&A any you

Al Rankin

final There's comments. no

Christina Kmetko

becomes Thank few transcript Okay. morning. Investor post site just online when available. available will be it this on We'll final of A later also Web you. call We'll a our replay Relations close reminders. a with the

If you have any questions, to please reach out me.

I the to the You your now you to rest conclude it on back of day. operator can hope release. enjoy the the press at I call. number will me reach turn the

Operator

approximately again, Once hours Christina. available this the as be reminder, call. conclusion of two will a replay you, the Thank encore after

You your November at or Time. for you can Thank until participation. ID XX:XX is XXXX, XX, dial XXX-XXX-XXXX Eastern p.m. XXX-XXX-XXXX out Conference number XXXXXXX.

disconnect. You may now

Hyster-Yale Materials Handling (HY) 6 Nov 212021 Q3 Earnings call transcript