WASHINGTON, D.C. 20549
FORM 10-Q
____
|_X__| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE SECURITIES AND EXCHANGE COMMISSION ACT OF 1934
For the quarterly period ended March 31, 1995
OR
____
|____| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________________ to
__________________
Commission file number 33-28812
HYSTER - YALE MATERIALS HANDLING, INC.
(Exact name of registrant as specified in its charter).
Delaware 34-1617886
- ----------------------------------------------------------------------
(State or other jurisdiction of) (IRS Employeridentification No.)
incorporation or organization)
2701 NW Vaughn, Portland, Oregon 97210
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(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code (503) 721-6000
- ---------------------------------------------------------------------
NONE
- ----------------------------------------------------------------------
Former name, former address and former fiscal year, if changed since
last report
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months, and (2) has
been subject to such filing requirements for the last 90 days.
Yes X No
Number of shares of Common Stock outstanding at April 30, 1995:
5,598.857
<PAGE>
HYSTER-YALE MATERIALS HANDLING, INC.
TABLE OF CONTENTS
PAGE NO.
Part I. FINANCIAL INFORMATION
Item 1 - Financial Statements
Unaudited Consolidated Balance Sheets - March 31, 1995
and December 31, 1994 3
Unaudited Consolidated Statements of Income - for the
Three Months ended March 31, 1995 and 1994 4
Unaudited Consolidated Statements of Cash Flows - for
the Three Months ended March 31, 1995 and 1994 5
Notes to Unaudited Consolidated Financial Statements 6
Item 2 - Management's Discussion and Analysis of Results of
Operations and Financial Condition 7 - 9
Part II. OTHER INFORMATION 10 - 12
<PAGE>
PART I
ITEM 1 - Financial Statements
HYSTER-YALE MATERIALS HANDLING, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED BALANCE SHEETS
MARCH 31 DECEMBER 31
1995 1994
---- ----
ASSETS (In thousands)
Current Assets:
Cash and cash equivalents $7,891 $10,763
Accounts receivable, net 149,711 141,232
Inventories 237,011 208,828
Assets held for sale 7,794 7,884
Deferred income taxes 5,387 5,192
Prepaid expenses and other
8,022 9,474
----- -----
415,816 383,373
Other Assets, net 11,084 10,808
Property, Plant and Equipment, net 129,627 125,616
Deferred Charges:
Goodwill, net 370,365 373,076
Other, net 11,250 13,376
------- -------
381,615 386,452
------- -------
$938,142 $906,249
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $192,400 $176,332
Short-term obligations 9,967 3,120
Current maturities of long-term 3,002 45,577
obligations
Accrued expenses 73,529 80,617
Deferred income taxes 2,742 4,034
Accrued income taxes 15,846 12,189
------- -------
297,486 321,869
Other Liabilities 49,996 48,281
Deferred Income Taxes 19,225 18,756
Long-Term Obligations 251,787 211,417
Stockholders' Equity:
Common Stock 6 6
Capital in excess of par value 198,205 198,205
Retained income 106,801 98,395
Foreign currency translation 14,636 9,320
adjustment and other ------- -------
319,648 305,926
------- -------
$938,142 $906,249
======== ========
See notes to unaudited consolidated financial statements.
<PAGE>
HYSTER-YALE MATERIALS HANDLING, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS ENDED
MARCH 31
------------------
(In thousands)
1995 1994
---- ----
Net sales $363,161 $245,328
Cost of sales 292,529 194,798
------- -------
Gross profit 70,632 50,530
Selling, administrative and
general expenses 44,256 36,744
Goodwill amortization 2,711 2,711
------- -------
Operating profit 23,665 11,075
Other income (expense):
Interest income 217 146
Interest expense
(7,496) (8,726)
Other, net 157 (640)
------- -------
(7,122) (9,220)
------- -------
Income before income taxes
and extraordinary charge 16,543 1,855
Income tax provision 6,857 993
------- -------
Income before extraordinary charge 9,686 862
Extraordinary charge, net of tax (1,280) -
------- -------
Net income $8,406 $862
======= =======
See notes to unaudited consolidated financial statements.
<PAGE>
HYSTER-YALE MATERIALS HANDLING, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED
MARCH 31
-------------------
1995 1994
---- ----
(In thousands)
Operating Activities:
Net income $8,406 $862
Adjustment to reconcile net income to net
cash used by operating activities:
Extraordinary charge, net of tax 1,280 -
Depreciation and amortization 8,196 8,058
Deferred income taxes (858) (1,018)
Reserves for self-insurance 951 (146)
Other, net 252 639
Working Capital Changes:
Accounts receivable (3,076) (1,393)
Inventories (25,912) (21,182)
Accounts payable 12,888 13,202
Other current assets 1,584 158
Other current liabilities (3,888) (8,827)
------- -------
Net cash used by operating activities (177) (9,647)
------- -------
Investing Activities:
Expenditures for property, plant and
equipment (8,237) (6,308)
Other 587 250
------- -------
Net cash used by investing activities (7,650) (6,058)
------- -------
Financing Activities:
Reduction of long-term obligations (139,304) (6,810)
Revolving credit facilities, net 137,000 10,700
Short-term obligations, net 5,809 1,518
Other (298) 496
------- -------
Net cash provided by financing activities
3,207 5,904
------- -------
Effect of exchange rate changes on cash 1,748 155
------- -------
Cash and Cash Equivalents:
Decrease for the period
(2,872) (9,646)
Balance at the beginning of the period 10,763 20,255
------- -------
Balance at the end of the period 7,891 10,609
======= ========
See notes to unaudited consolidated financial statements.
<PAGE>
HYSTER-YALE MATERIALS HANDLING, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1995
Note A - Basis of Presentation
The accompanying unaudited consolidated financial statements
of Hyster-Yale Materials Handling, Inc. and subsidiaries (the
Company) include the accounts of Hyster-Yale Materials Handling,
Inc. (Hyster-Yale), a 97% owned subsidiary of NACCO
Industries, Inc. (NACCO), and its wholly-owned subsidiaries
NACCO Materials Handling Group, Inc. and NACCO Materials Handling
Holding Co. The Company primarily does business as NACCO
Materials Handling Group, Inc. with two product brands, Hyster
and Yale.
These financial statements have been prepared in accordance with
generally accepted accounting principles for interim financial
information and with the instructions to Form 10-Q and Article 10
of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted
accounting principles for complete financial statements. In the
opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation
of the financial position of the Company as of March 31, 1995,
and the results of its operations and cash flows for the three
month periods ended March 31, 1995 and 1994 have been included.
Operating results for the three month period ended March 31, 1995
are not necessarily indicative of the results that may be
expected for the year ended December 31, 1995. For further
information, refer to the consolidated financial statements and
footnotes thereto included in the Company's annual report on Form
10-K for the year ended December 31, 1994.
Certain amounts in the prior periods' unaudited consolidated
financial statements have been reclassified to conform to the
current periods' presentation.
Note B - Debt Refinancing
On February 28, 1995 the Company entered into a new long-term
financing agreement to replace the senior credit facility
existing at December 31, 1994 and refinance the majority of its
long-term debt. The new agreement provides the Company with an
unsecured $350 million revolving credit facility with a five year
maturity and an extension option and interest rates comparable to
its former senior credit facility. The new agreement also
provides the Company with reduced interest rates upon achievement
of certain financial performance targets. With the new credit
agreement in place, the Company can redeem the remaining $78.5
million of its 12 3/8% subordinated debentures and intends to do
so in August 1995.
In connection with the refinancing, an extraordinary charge of
$1.3 million, net of taxes was recorded in the first quarter of
1995 to write off the deferred financing fees remaining from the
former senior credit facility. When the remaining subordinated
debentures are redeemed, an additional extraordinary charge of
approximately $2.1 million, net of taxes will be recorded.
<PAGE>
Note C - Inventories
Inventories are summarized as follows:
MARCH 31 DECEMBER 31
1995 1994
--------------------------
(In thousands)
Finished goods and service parts $97,429 $82,331
Raw materials and work in progress 153,905 137,897
LIFO Reserve (14,323) (11,400)
--------- ---------
Total $237,011 $208,828
========= =========
The cost of inventories has been determined by the last-in
first-out (LIFO) method for 60% and 61% of such inventories as
of March 31, 1995 and December 31, 1994, respectively.
ITEM 2 - Management's Discussion and Analysis of Results
of Operations and Financial Condition
FINANCIAL REVIEW
The results of operations for the Company were as follows for
March 31:
Three Months Ended
March 31
------------------
(In millions)
1995 1994
---- ----
Revenues
Americas $ 249.5 $ 174.1
Europe, Africa and Middle East 95.8 58.2
Asia-Pacific 17.9 13.0
----- -----
$ 363.2 $ 245.3
===== =====
Operating profit
Americas $ 16.9 $ 9.5
Europe, Africa and Middle East 5.8 0.7
Asia-Pacific 1.0 0.9
------ ------
$ 23.7 $ 11.1
====== ======
Operating profit excluding goodwill
amortization
Americas $ 18.8 $ 11.4
Europe, Africa and Middle East 6.5 1.4
Asia-Pacific 1.1 1.0
------ ------
$ 26.4 $ 13.8
====== ======
<PAGE>
FINANCIAL REVIEW (Continued)
Sales and Operating Profits
The following schedule details the components of the changes
in net sales and operating profit and net income for the first
quarter of 1995 compared with 1994:
Net Operating Net
Sales Profit Income
----- ------ ------
(In millions)
1994 $245.3 $11.1 $0.9
Increase (Decrease) in 1995 from:
Lift truck unit volume 85.8 16.1 10.5
Sales mix 1.6 (2.0) (1.3)
Average sales price 14.5 14.5 9.4
Service parts 6.5 3.3 2.1
Manufacturing cost (9.2) (5.9)
Other operating expense (8.4) (5.5)
Foreign currency 9.5 (1.7) (0.8)
Other income and expense 1.0
Differences between effective and
statutory tax rates (0.7)
Extraordinary charge (1.3)
------ ----- -----
1995 $363.2 $23.7 $8.4
====== ====== ======
Increased sales volume in 1995 reflected the continued
economic improvement in North America and Europe and
improvements in global market share. While price discounting
was prevalent in the forklift industry, modest price increases
were initiated in mid-1994 which favorably impacted the first
quarter of 1995. Service parts volume and income improved in
North America and Europe, primarily due to improved economies
and new dealers in Europe.
Gross profit decreased to 19.6% of sales in the first quarter
of 1995 from 20.6% in the first quarter of 1994 due to higher
raw materials prices and unfavorable labor variances related
to vendor parts shortages. These higher costs were partially
offset by the higher absorption of fixed costs due to
increased production volume. Other operating expenses were
higher in 1995 due primarily to higher volume related customer
service costs, higher profit-based compensation and benefit
expenses, and general inflation. Operating profit was also
adversely affected in 1995 by the stronger Japanese Yen which
increased the cost of purchases sourced from Japan, offset
partially by the strength of the British Pound versus the U.S.
Dollar which translated into improved European results.
The Company's backlog of orders at March 31, 1995 was
approximately 25,200 units compared to the 24,600 units at
December 31, 1994. Backlog has increased slightly as
increased orders have outpaced the record levels of production
in 1995.
<PAGE>
FINANCIAL REVIEW (Continued)
Other
Interest expense during the three month period of 1995 was $7.5
million compared to $8.7 million in the same period a year ago.
Lower 1995 interest expense can be attributed to the 1994
partial retirement of subordinated debentures. Equity
earnings from the Company's investment in Sumitomo-Yale were
$0.4 million in 1995 compared to a loss of $0.6 million in
1994. The improved results related to higher sales of product
to the Company to meet demand in the United States and Europe.
The Company has entered into unsecured interest rate swap
agreements for a portion of its floating rate debt to provide
protection against significant increases in interest rates. At
March 31, 1995, the Company had outstanding interest rate swap
agreements with total notional principal amounts of $130
million. The Company will continue to evaluate its exposure to
floating rate debt.
Provision for Income Taxes
The Company recorded a tax provision of $6.9 million on pretax
income of $16.5 million in 1995 for an effective tax rate of
41.4%. The higher than statutory rate resulted primarily from
the nondeductibility of goodwill amortization. This compares
to a tax provision of $1.0 million on pretax income of $1.9
million in the first quarter of 1994 for an effective tax rate
of 53.5%. The higher level of pretax income in 1995 reduced
the effect of the nondeductible goodwill amortization, and thus
lowered the effective tax rate.
Extraordinary Charge
As discussed in Note B of the accompanying unaudited
consolidated financial statements, the extraordinary charge of
$1.3 million, net of $0.9 million in tax benefits in 1995
represents the write-off of unamortized deferred financing fees
associated with the former senior credit facility, refinanced
in the first quarter of 1995.
LIQUIDITY AND CAPITAL RESOURCES
As discussed in Note B of the accompanying unaudited
consolidated financial statements, the Company entered into a
new credit agreement as of February 28, 1995 which provides a
$350 million unsecured revolving credit facility.
The Company believes it can adequately meet all of its current
and long-term commitments and operating needs through
internally generated funds and borrowings available under
current credit agreements. As of March 31, 1995 there was
$205.0 million available under the unsecured revolving credit
facility.
Expenditures for property, plant and equipment were $8.2
million for the first three months of 1995. The majority of
these expenditures were for manufacturing expansion and tooling
related to future production of new products. Estimated
capital expenditures for the remainder of 1995 will be
approximately $30.0 million. Principal sources of financing
for these capital expenditures are internally generated funds,
bank borrowings and assistance grants from local development
boards.
<PAGE>
PART II
Item 1 - Legal Proceedings
None
Item 2 - Change in Securities
None
Item 3 - Defaults Upon Senior Securities
None
Item 4 - Submission of Matters to a Vote of Security Holders
None
Item 5 - Other Information
None
Item 6 - Exhibits and Reports on Form 8-K
(a) Exhibit-See Exhibit Index on page 12 of this quarterly report on Form 10-Q.
<PAGE>
Signature
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned thereunto duly
authorized.
Hyster-Yale Materials Handling, Inc.
(Registrant)
/s/ Julie C. Hui
--------------------------
Julie C. Hui
Controller
(Chief Accounting Officer)
Date: May 12, 1995
<PAGE>
EXHIBIT INDEX
Exhibit 27 Financial Data Schedule
<PAGE>
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<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> MAR-31-1995
<CASH> 7,891
<SECURITIES> 0
<RECEIVABLES> 153,268
<ALLOWANCES> 3,557
<INVENTORY> 237,011
<CURRENT-ASSETS> 415,816
<PP&E> 224,059
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<TOTAL-ASSETS> 938,142
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<BONDS> 78,524
<COMMON> 6
0
0
<OTHER-SE> 319,642
<TOTAL-LIABILITY-AND-EQUITY> 938,142
<SALES> 363,161
<TOTAL-REVENUES> 363,161
<CGS> 292,529
<TOTAL-COSTS> 339,496
<OTHER-EXPENSES> 0
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<INCOME-PRETAX> 16,543
<INCOME-TAX> 6,857
<INCOME-CONTINUING> 9,686
<DISCONTINUED> 0
<EXTRAORDINARY> (1,280)
<CHANGES> 0
<NET-INCOME> 8,406
<EPS-PRIMARY> 0
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