Material handling manufacturer Hyster-Yale grew dealer sales in the Americas in the fourth quarter as it benefited from improving supply chains and a higher-margin product mix. The continued sales growth comes as loans from Wells Fargo Financial Leasing increased and dividends remained flat sequentially.
HYG Financial Services (HYGFS) loans from Wells Fargo grew to $1.3 billion, an increase of 8.3% quarter over quarter and year over year, while Hyster-Yale’s dividends from HYGFS were $10.5 million in Q4, flat QoQ but down 41.9% YoY, according to the company’s 10-K filing with the Securities and Exchange Commission.
Hyster-Yale owns 20% of the HYGFS joint venture with Wells Fargo Financial Leasing, with HYGFS providing lift truck financing for Hyster-Yale dealers and customers in the United States.
Hyster-Yale’s incremental obligation to Wells Fargo, excluding the receivables guaranteed from HYGFS’ loans, is $236.5 million, up 4.7% QoQ and 9.8% YoY. The obligations remain secured by 20% of HYGFS’ customer receivables and other secured assets of $306.3 million, up 4.6% QoQ and 8.8% YoY, according to the filing.
Sales by the numbers
Hyster-Yale dealer sales, direct sales and shipments increased in Q4, while order backlogs and bookings continued to drop. Hyster-Yale set a record for shipments in 2023 despite production challenges, Scott Minder, senior vice president, chief financial officer and treasurer, said during today’s earnings call.
For the year ended Dec. 31, Hyster-Yale reported:
- Dealer sales for the Americas totaled $1.6 billion, up 26.8% YoY;
- Direct sales for the Americas were $541.3 million, an increase of 17.3% YoY;
- Order backlog totaled 78,400 units, down 8.1% for the second consecutive quarter and 23.2% YoY;
- Unit shipments were 102,200 units, up 1.4% YoY; and
- Unit bookings were 78,500 units, down 19.1% YoY.
WHAT THEY’RE SAYING:
Analysts are confident in Hyster-Yale’s overall position, Chip Moore, managing director and senior research analyst at equity research firm Roth MKM, told Equipment Finance News.
“Underlying platform positioning continues to improve overall, with investments in key strategic initiatives (modularity, electrification and automation) set to accelerate more meaningfully this year (now that capital constraints are abating),” Moore said in a Roth MKM research note.
THE BIG PICTURE: Hyster-Yale’s sales growth was the result of supply chain improvements facilitating better production and a more favorable product mix, Minder said.
“Ongoing skilled labor challenges in many of our factories impeded progress on planned production rate increases and shipments during both the quarter and the full year,” he said. “Our 2024 production and shipment rates are expected to improve in all regions compared to 2023.”
Hyster-Yale also benefited from higher prices that were the result of inflation and a favorable product mix in the Americas, Minder said.
Shares of Hyster-Yale Materials Handling Inc. (NYSE: HY) were down 16.78% from market open to $58.33 as of market close today. Hyster-Yale has a market capitalization of $1.2 billion.
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