Dealer sales for material handling manufacturer Hyster-Yale fell slightly in the third quarter as supply chain issues delayed product launches and limited dealer supplies.
HYG Financial Services (HYGFS), a joint venture owned 80% by Wells Fargo Financial Leasing and 20% by Hyster-Yale, received $1.4 billion in loans from Wells Fargo, an increase of 16.7% year over year but flat compared with the previous quarter, according to the company’s Nov. 5 10-Q filing with the Securities and Exchange Commission. Hyster-Yale’s dividends from HYGFS totaled $4.4 million in Q3, down 58.1% YoY.
HYGFS provides lift truck financing for Hyster-Yale dealers and customers in the United States, according to the filing.
Hyster-Yale’s incremental obligation to Wells Fargo, which removes receivables guaranteed from HYGFS’ loans, is $246.6 million, up 1.4% quarter over quarter and 9.2% YoY. HY’s obligations are secured by 20% of HYGFS’ customer receivables and other secured assets of $325.9 million, up 2.2% QoQ and 11.3% YoY, according to the 10-Q filing.
BY THE NUMBERS
Hyster-Yale direct sales and revenue increased in Q3, while dealer sales declined, President and Chief Executive Rajiv Prasad said today during the company’s earnings call.
“Our manufacturing operations were hampered by supply chain constraints and a handful of product introduction issues,” he said. “This resulted in missed sales, creating manufacturing inefficiencies and increasing costs.”
For the third quarter, Hyster-Yale reported:
- Dealer sales for the Americas of $412.4 million, down 0.2% YoY;
- Direct sales for the Americas of $155.7 million, up 47.9% YoY;
- Total Americas revenue of $771.1 million, up 7.6% YoY;
- Total dealer sales of $567.7 million, down 6.6% YoY;
- Total direct sales of $157.1 million, up 45.2% YoY; and
- Total revenue of $1 billion, up 1.5% YoY.
THE BIG PICTURE: Hyster-Yale aims to continue to aggressively and profitably extend its backlog, as well as increase its bookings and market share through production shifts, Prasad said during the earnings call.
“We’re also focused on aligning our production schedule to match market demand,” he said. “At this point, new bookings will fill open 2025 production slots, which are in the second half of the year.”
While the decline in dealer sales and overall market slowdown compared to last year’s significant growth prompts some concern, overall market conditions remain comparable to previous cycles in the lift truck and material handling industries, Prasad said.
“The lift truck industry is very resilient and has gone through similar cycles in the past,” he said. “We plan to push through this latest downturn while still delivering on our customers’ promises to provide optimized product solutions and exceptional customer care.”
Shares of Hyster-Yale Materials Handling Inc. (NYSE: HY) were down $9.21 or 14.7% from market open to $53.47 as of market close today. Hyster-Yale has a market capitalization of $1.1 billion.
