Material handling manufacturer Hyster-Yale grew dealer sales in the Americas in the third quarter as the company benefited from improving supply chains and a higher-margin product mix. The sales growth comes as loans and dividends from Wells Fargo Financial Leasing remained flat sequentially.
HYGFS is Hyster-Yale’s 20%-owned joint venture with Wells Fargo Financial Leasing, which provides financial services to independent 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 $225.9 million, and is secured by 20% of HYGFS’ customer receivables and other secured assets of $292.9 million, according to the company’s 10-Q filing.
Sales by the numbers
Hyster-Yale dealer sales, direct sales and shipments were up in Q3, while order backlogs and bookings declined. This was part of the company’s strategy, Scott Minder, senior vice president, chief financial officer and treasurer, said during the company’s earnings call Wednesday.
In other Q3 results, Hyster-Yale reported:
Dealer sales for the Americas totaled $413.2 million, up 43.1% year over year;
Direct sales for the Americas inched up to $105.3 million, an increase of 1.3% YoY;
Order backlog as of Sept. 30 totaled 85,300 units, down 8.1% compared with Q2 and 21.2% YoY;
Unit shipments were 25,700 units, up 4.9% YoY; and
Unit bookings were 18,200 units, down 12.1% YoY.
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.
“Improving supply chains, especially in the Americas, allowed for higher production rates of units priced above prior-year levels,” he said during the call. “We saw a favorable mix shift towards higher-margin products in all regions, as well as a shift to higher-margin sales channels.”
Why it matters
Hyster-Yale $14.7 million in, or 36.6%, of used forklifts for sale listing in the United States in September, which was 36.6% of the market, according to Sandhills Global market reports. With that share of sale listings, Hyster-Yale was the largest forklift manufacturer, ahead of Caterpillar’s $10 million in sale listings, Hyundai’s $8.4 million in sale listings and Toyota’s $7.2 million in sale listings.
It was the fourth straight quarter of positive results for Hyster-Yale as the company navigates the post-pandemic landscape, Minder said on the call.
“We’re making solid progress on our objectives, and our financial results clearly demonstrate it,” he said. “We’ll continue to focus on things that we can control and leverage our process discipline to effectively work through things that are outside of our control.”
Despite production and backlog improvements in Q3, Hyster-Yale expects the market to decline in the first half of 2024, Chief Executive and President Rajiv Prasad said during the earnings call.
“Planned production increases in the 2023 fourth quarter and 2024, combined with anticipated market decline through the first half of 2024, should enable further reductions to our extended lead times and backlog levels,” he said. “Our lead times and backlog levels will likely remain above optimal levels for much of 2024 on certain product lines, although some product lines such as our warehouse trucks are expected to return to more normal lead times and backlog levels within the next year.
Shares of Hyster-Yale Materials Handling Inc. (NYSE: HY) were up 76 cents or 1.77% from market open to $43.69 as of market close today. Hyster-Yale has a market capitalization of $737.42 million.