Hyster-Yale Materials Handling (HY) 28 Feb 242023 Q4 Earnings call transcript

Good morning, ladies and gentlemen, and welcome to the Hyster-Yale Materials Handling Q4 and Full Year 2023 Earnings Analyst Conference Call. [Operator Instructions] This call is being recorded on Wednesday, February 28, 2024. I would now like to turn the conference over to Ms. Christina Kmetko. Thank you. Please go ahead.

Thank you. thank Earnings joining Call. and XXXX for everyone, Quarter Fourth morning, you us for Hyster-Yale's Good I'm Investor Relations. Kmetko, Christina and I'm responsible for evening, XX-K. fourth results, Yesterday our full published XXXX year quarter and and our filed we These documents the on are Hyster-Yale website. available

comments a like webcast, website afternoon. that to including company remarks to related will remind We replay be for available answers this will questions today, and you recording forward-looking results on replay to will future are approximately of The are remain and this our statements. later XX include any expected months. I'd our the therefore

Our filings. of actual differ risks We these forward-looking may our XX-K our in from range that due uncertainties release, forward-looking described not quarterly are update statements results call. may until earnings conference and our statements wide SEC to next other a earnings materially and

may referencing are our also be available We our numbers website. earnings in reconciliations will considered on release that non-GAAP. Those be

Prasad, Executive Vice Our President, Officer Treasurer. presenters Senior today and Executive Rajiv Chief our Rankin, are Financial Chairman; and President Minder, Chief Al Scott Officer; and

of way, formalities out call begin. the Rajiv the let the me over With to turn to

Christie, had fourth an everyone. morning, quarter. and excellent good Thanks, We

our for appreciation. been fourth performance, an million, the price $X third consolidated to year-over-year, have full And $X.XX we revenues the component or per growth billion. to is $X.XX led was stock -- of quarter. prior XXXX $XXX equity earnings that we improved would which a to profit over add reported a For that X.X%. profit million year. year Fourth income margin leading of quarter, company's operating operating the over share quarter that million additional share a $XXX to if of expense consecutive $X.X XXX% the to after increase published of And Discontinued of related net quarter quarterly

approximately drove third JAPIC quarter over due decreases quarter shipment was decline compared XXXX. to prior some and of XXXX. mainly deliveries. we modestly of specific shipments Despite EMEA overstocking still despite to in impeded labor product shipments America This QX approximately challenges due units previous a issues units of the XXXX. challenges led The shipped due planned in were highest quarter to our the shipments both during lower largely the decreasing shipments skilled XXX,XXX prior few sequential regional both and increases in production many and and of units JAPIC XXX,XXX given production grew in represents with and supply of challenges, to dealer and full shipments year shipped number revenues quarter impact fourth the in mainly to XXXX XXXX XXXX. Ongoing year-over-year quarter compared year. Our in we've component strong factories year levels progress year the EMEA. The The the launch large full decrease. and the in lower on This primarily while were the rate

component compared global maintaining XXXX focused from last and anticipate to and production we outpaced production XXXX. production cadence lingering new products an pipeline facilities. In economy still all our to a market the XXXX on increased expected labor to regions remain in shipment early Our are general, estimates full We across on and improve rates year. constraints dissipate,

Our regions. and core in strong Lift Truck most market levels pre-pandemic above remains

compared global full with booking XXXX economic major in the market data Declines created XXXX, decline all geopolitical and in outlook. global geographies, recently in activities The levels. robust instability, continue This evidenced XXXX industry a and volumes in factors tensions Middle includes coupled uncertainty most market by EMEA. particularly ongoing in lift to XXXX that with China XXXX except third decreased India. activity latest strong across occurred year available truck publicly quarter East. between factors, These external However, create global the shows

Our the decreased that slowed also We of compared internal quarter prior in estimate decline with estimates global that year. bookings Americas. somewhat XXXX rate in market X truck EMEA lift suggest have accelerated

estimates second XXXX truck quarter market show XXXX, XXXX strong double-digit a decline the market offset fourth full XXXX, by global market to to lift first-half XXXX increase. and decrease the levels. In With robust volume a levels. Within should is from stabilize comparable decline, year expected booking with be remain a half

to the decline prior extended we These given focus, backlog third at levels. fourth with largely continue Looking all Truck margins broader demand our XX% year combined in in decline bookings with Lift an resulted quarter the were quarter seen in position. stronger from Americas bookings compared X% in this Hyster-Yale, with This strong market markets. prioritize decrease our XXXX decreases

versus expect in because of we our to increase gains gains overall. improvement quarter XXXX, within market flat share each XXXX. global largely are are full year technology driving market share markets. bookings a Anticipated for expected Market warehouse-related this solutions XXXX For emerging

growth XXXX solutions technology strong rates. Our had business very

We in that momentum expect on build XXXX. to

Reduced of XXXX. we expect combined be times half competitive anticipated from extended the the bookings marketplace. to in us its in extended with maintain year level This by quarter. lower since look backlog XXXX. reduced. levels into XX% first us our lead to our will allow XXXX, head to XXXX to contributed levels lowest levels. market year-end XXXX, early an our backlog levels we Planned the backlog pre-pandemic backlog As decreased fourth should price closer booking the help as are We'll reduce targeted to bring in increases, to and further backlog margin has production decline in

optimal period. were Given likely product above current on for lines levels certain extended an expectations, times our lead backlogs and remain

modest XXXX the normal year billion. within levels trended revenue approximately for serve decline quarter, worth prior impact if XXXX. -- to industry times and of as modestly warehouse can to a cushion the than trended months fourth anticipated. It's global in At end expected should backlog to noting trucks business are and bookings return areas value rates. which of lead backlog more the This as such up that XX cancellations, was our approximately our backlog levels represents Some than $X.X

] industry and rate year cancellation and higher our booking focus quarter. substantially from benefits was our unit on margins initiatives margins fourth prior to inflation. orders However, in in average Increase to continued in remains below strong prices at backlog [ due pricing the This largely our average. offset the

third unit other Our third the over the average average per booking decrease over sales and quarter QX price prices, compared prior includes XXXX the year expected. backlog XXXX and prior as XX% year on X% hand, with quarter.

Warehouse on We and generally shorter lower continue progress are have price times. expanding our to share make market. warehouse in trucks the market lead

this to This solutions. can the of the enhance opportunity advanced sell in market Additional truck the for and increased technology customer greatly sales Hyster-Yale. segment to value the

line-by-line on out expected objectives. times cash to are are continue pricing We our booking Material balance and for factor free pricing. to material rates basis, make setting with growth production while labor profitable maximizing decreased moderately. a stabilize and projections and flow and on we XXXX, strategic continue cost our lead a significant cost projected XXXX, progress to freight increase costs are In backlog modestly. In costs generally to material

strong increase of lead XXXX particularly continue in year. increased gross profit an in combined to are first year freight of shipments late of units. ordered the unrest, the compared margins half pricing is expected we and In trucks shipment result likely price in backlog context, to in expected the first volumes product May in of temper warehouse price the XXXX effect with of margins our to second year. first throughout are XXXX, This, half we This, and costs the combined ratio of exemptions to anticipated elevated cost improved unit unit in ship of geopolitical in to with higher the to a competitive environment operating with as the half is XXXX. Tariff half this mix expire the is expect higher set XXXX. more As

gross control. monitor and year, closely work should levels. expense driven profit ongoing continue margins impact and We'll to factors manufacturing reduce For labor as and improved XXXX competition, material to the forward productivity well the adjust We'll be and accordingly. impacts tariffs externally from as to comparable we'll from the through pricing costs full

turn and capital to I over working on levels our flow. comment call Before Scott, the I'll cash

made improve specifically our throughout levels. We've our reducing continue on working cash inventory flow capital, We the year. to progress

We've production consistent should reduce flow excess inventory in still that and that levels our reducing However, cause we like, due across lingering building would potential to efficient earlier. progress largely inventory. increased and already material, labor than production have significantly mentioned I We'll significant an units seen XXXX. I'm made additional constraints to report supply remain challenges shortfalls higher These levels and of some with XXXX. chain January can inventory isolated actions pleased on progress focus inventory. we more to continue on-hand

throughout expect is key cash also carefully balance who needs. Our our to by timing We're It XXXX. efforts their further all committed area leaders. Board. our we business a for and to an partners for improvement customers' This improvement. closely Together, is with dealer and of extend our order me delivery monitored significant deliverable flow

in Scott quarterly over Now to detail. the to call our XXXX and turn cover more I'll financials outlook

implemented increased echoing and part Lift due XX,XXX versus in results X% X% Europe. pace Good XX% periods. increasing the XX,XXX bookings X both major as Rajiv. favorable by to start X% the QX, favorable a growth units, sales our markets Consolidated quarterly unit and of $XX were was Once topped priced, shift than offset again, lower installed by healthy of and higher revenue previously year. all down regions. In primarily due the well used but base, billion a full Thanks, as unit I'll favorable price partly our These million, strong were a morning, increases prior capacity shipped were benefits lower positive everyone. Rajiv's quarter regions, toward all to declines of currency QX in were in our These growing service shipments in the sequentially sales to year within higher million prior improvement prior lower and revenues geographies. fourth effect trucks; we effect sales by our in year. business. $XX versus our or in mainly comments $X around increase Truck mix

This As times satisfaction. to a of booking and of production overall decreased lead XX,XXX result improve customer billion. value a our solid $X.X and helps decrease backlog levels, roughly with lower units output

XXXX. increase. $X.X All XX% to growth. businesses over For a the our X GDP contributed full billion, outpaced significantly this global marking of Overall, year-over-year we improvement growth year, revenue reported

to earnings. Moving

by resulted operating improvement the XX% in prior profit a rate. operating Our This XXX% year. consolidated profit $XX year our to was fourth nearly margin was million, operating growth improving year our a full nearly outpaced X.X% as Operating quarterly revenue versus margin for the and profit nearly million operating profit Full year-over-year $XXX million. quarter X.X%. profit increased $XXX incremental margin

approximately quarter per share. per year net $X.XX compares expense of $X component million fourth $X.XX equity per million or QX and company's million $XX the price net quarter by appreciation. million compensation related This after This stock additional tax to of Fourth income roughly $X the earnings reduced to a was quarter $XX share. or fourth our income $X.XX. of prior included incentive share results

year, per For compared the a the XXXX. $X.XX company of in share earnings generated loss full to

attributable the a X.X% I'll benefited were million Significant principal same incentive margin the our price seek additional over employee-related favorable ratio strong as product $XXX expenses costs remain higher margins with time $XX price-to-cost expanded perspective, disciplined shift year-over-year. prior implemented revenue profit higher-margin channels. Lift as to shift mix material largely favorable Trucks and a to more stock This increases and business profit demonstrating day-to-day generated products, efficient margin margin offset We the a our business of some was growth with continue the growing expenses, more compensation For by to in to leverage results million million our execution. by well along inflation, vigilant sales QX, led due to profit $XX this assets by million to mainly from XXXX $XX Truck growth Product price drivers. including Operating results and recently in the grows. a in Lift and appreciation. to elevated toward incremental tempered over Americas discuss increases XX% EMEA operating of period. higher-margin QX Americas business. as by moderated The ways

sale increased reported to Operating million in million, prior prior the The than business. from profit Bolzoni. on included million of million $XX Turning operating profit $X.X a XXXX's business year. year. of lower million $X.X a $X $X.X loss to revenues

mix profit over profit year-over-year dollars prior while favorable of were operating loss revenue and continues declined product was U.S. the the sales Bolzoni's were Excluding as cell to year XXXX's development due higher compensation volumes. At funding of fuel due currency position Nuvera, prior implemented by less year, gross prior engine reduced offset QX as including along to margins shift itself movements costs increases to a lower effect than new due products to improved that quarter expenses, sale, decreased product result in versus the incentive comparable. for a support receiving operating lower-margin Fourth year growth. R&D prior shipments. to with years, to business government fewer primarily operating expenses. Price a

Looking XXXX, we XXXX over revenue Truck profit increase ahead to Lift operating and expect levels. to

significantly price-to-cost XXXX due First volumes anticipated ratio despite to ongoing over unit profit freight operating in largely improve prior anticipated half year, projected favorable is to costs. higher an higher

aligns government were strategy these exemptions for mix expiration context applied the market have Hyster-Yale of moment certain the are effect expected and XXXX, been extended full tariff with increased to provided increase required products these immediately today. be moderate XXX compared recap enacted our sales exemptions operating The the expected in In first on tariffs. multiple It pay warehouse XXXX, channel. I'll due some on to Subsequently, exemptions imported anticipated will that to times. tariffs of costs. China. to These from to from exemptions is product the the for tariff U.S. occurs, half the expire. that how tariff to May half it a If and the in share Section company material Second situation will rates XXXX for volumes. our take important to latter applies this on profit increasing

should argue work over margins to We are continue in our place on remain reduce that to and these while warranted exemptions we impact their product time.

level, than half of to efficiency to pricing XXXX year-over-year modestly to by from an we gains with focused as shipments higher volumes XXXX. on The expected in Higher to impact half offset is temper in we're along and phase presence to as development expiration increase. strengthen is XXXX. anticipated placed year-over-year more change manufacturing continue Operating lower tax likely Nuvera's important of ways we be sales purposes strong comparable the should profit We'll foundation as costs. At tax income produce expected term, the partially should that current from XXXX's the to backlog could XXX-kilowatt margins net XXXX, continued higher costs of as costs. efficiently materially. Overall, and profit in technology orders the progress to for and related expect rate U.S. occurs, anticipated begin combined freight our costs, costs These increasing higher likely demonstrations product out material product Moving tariff focus and results. improve improve of Europe impact to fully offset ongoing XXXX. the them profit more ongoing to product customers business with the more bookings Longer customer due with a Nuvera, partially significantly largely debating anticipate XXXX booked manage to to needed are Bolzoni. increase increasing higher product powerful attachment period cell in financial component, engine in operating outlook labor to tax comparable margins engine China. exemptions to strong in well capitalize XXXX. will higher made they demonstrations levels and Orders are on during increased law to of XXXX. sales our components. operating Truck are our anticipated fuel due growth and expected long-term our these expanding goals. to year-over-year as toward R&D losses levels adjust should second tax units, Lift in net adoption production the revenues year. in competitive legacy capitalization reverse and first XXXX in compared the of U.S. is we drive expense. from shipments overhead fixed-price treating in result returns. At for XXXX ruling currently by substantial production We be higher sales will income The This the new, coupled XXXX operating results to engine to consolidated higher reduced to Congress we'll anticipate company's change year. In projected environment utilizing costs, a R&D The If from as rate thus the this continued would tax results operating

return we or employed. Our growth XX% significantly capital GDP total a ROCE, outpaced rate XX% achieved year-over-year global And on revenue than greater rates. growth

X% also XX% working November achieve XXXX our XXXX made of Day, long-term capital goal. At operating target required toward Investor We our we but is a significant improved on We metric to sales. this objective. work our established more in profit margin progress performance of our

We XXXX, expect these over sustainable results to in time. goals more financial further progress on working and make our we're

We operations efficiency. generation. also debt progress in to and to $XX generated net from capital cash increased $XX or of our cash another efforts cash compared and company ongoing that The QX, flow from metric, million profits improve almost working to X% by used third made levels. higher This quarter cash critical on million reduce comes we

and generated of cash from year the This of to we XXXX. million. operations $XXX full full $XX year, $XX XXXX compares on with capacity. unused cash of We $XXX million million For ended approximately in hand million borrowing

leverage, a profitability as debt and financial QX. XX%. This versus improvement debt total significant our marks XXX-basis measured to point balances, lower of by result a our was As capital

further generate for opportunities we reductions additional we cash, capital accretive leverage and As expect deployment.

lower or tools technology rates as quarter inventory levels. We increase. of on inventory, inventories. through working reducing X day QX to focused outstanding, push inventory We're deploying us excess capital remain decreased by use to continue inventory third production help specifically improving maximize the efficiency DIO, ultimately on-hand XXXX reductions, versus We for days levels.

$XX can supply to improvements million. in summary, ongoing inventory includes significant eye spending capital discipline levels business to adjust are strict to maintained accordingly. In challenges, increase for a close and economic labor cause our making a efficiency. XXXX. XXXX to in on rise solid anticipate return an conditions compares network We projection significant to initial keep to to XXXX. XXXX objectives. we and While million due Similar economic Capital compared capital million This $XX constraints intermittent growth restrained of XXXX, XXXX and were $XX on we're we'll expenditures and investing anticipated expenditures our uncertainty. in progress

Our financial things results work focus and that control we leverage through discipline the are to clearly on to show it. things We'll beyond our control. continue effectively our can process

Now core made programs. Rajiv strategies our discuss we've call the turn I'll to back Rajiv? on to progress the and

held plan Scott. past vision I from this explained is moves Investor We November, material Day We Thanks, to to our this the transform X promises. customer through port where home. do way our to

second, First, product providing providing customer and solutions; optimized by exceptional by care.

using technologies is solid and Our profitable on electrification, modular core several in global for Netherlands production support strategic sourcing each on truck advanced both Nijmegen, and also programs. invest on these lift focus promises. and these supporting projects This the XXXX, Fuyang, generation. I'll we'll increase enhance adoption Truck the that handlers X for scalable our product strategies sustainable long-term our and rate expand our will these making growth truck progress container cash Lift strategic and projects business. key other updates our key globally. at options increase on to facilities. We're key on China and and primary working business lift business In projects drive on its initiatives a remains launching success The execute few provide

internal Production is our trucks products modular Over in years, lift X and scalable JAPIC in market. expect market and during products of X quarter key the to we engine Xx of accelerating, launch last Americas to first XXXX. the these the launched combustion EMEA these we

launch and enhancements expect making truck over X-ton similar X- these are 'XX to products globally the to We electric and platform 'XX. to

enhance The product expected modular ways. business separate the to in is scalable several platform

closer move reducing chain capital by working our shrink and our and as core supply to cost factories. First, levels

of footprint; truck fuel a -- helping their in that Stacker Reach Spain. to and port now and a the by empty trucks customizable delivering and by products, finally, Second, at new more X big in an fuel needs. On cell by Germany to Los container volume XXXX. Valencia, customers have third-party operating a providing electrified manufacturing electric port currently terminal increasing handler fuel a in big Handler in anticipate testing, sales our optimize We Angeles worldwide cell meets X a customer cell Container electrification, tractor with better the product of we Hamburg,

key technologies system in Trucks within is projects United the actively for by -- also business additional lift and Group on Our automated next-generation increasing business Lift the the demand European Big Truck has truck operator Lift Truck In our electrification exploring focused and assist States. applying Union solutions. on-track projects advancements

agreement leading quarter, service technology third our vehicle a the a with for into we robotic During automation. development entered joint to technology software enhance provider

the customers strengthening on Finally, also and for key its integrated serve supply needs as should The continues customers delivery trucks. provide viable global and increasing Bolzoni for economically while with streamlining a single and its focused chains across attachment operating will entity. of to business Americas dual-source This time-efficient our global company to operation meet ability work production markets. industries its strengthening is company help market. the on the handlers container better

this breaking coverage asset, of working industry to broad its Bolzoni into part expand regions. markets new As is sales and

to Nuvera the larger several in equipment recycling product various continues and fuel We have and potential. cell parties earlier. new the which duty on heavier announced even adoption covered Hyster-port developing and engine We've support engines are Nuvera to applications electrification placing test areas. be XXXX. cell to with is applications, port-related niche, beyond also projects engines XXX-kilowatt currently cell does need. These projected applications third I where our available demonstrations targeted into for a fuel near-term is heavy-duty in expanding fuel battery-only for focus capabilities XX-kilowatt vehicle not for applications meet are more XX to production market's the fully likely offerings Nuvera

zero-emission in in announced January, China, energy in Helinor Energy for project solutions. In maritime a joint mid-XXXX. application expect to have by products Nuvera also test Germany Nuvera additional with India and

Nuvera is These years. and have customers far. with so launch and stationary the for mobile progress working modular initiatives Additionally, cell we top pleased are seen with over next power applications X fuel I'm priorities, to generators the

Al turn the over call I'll to for remarks. closing Now Al?

Thanks, to closing, Rajiv. are the significantly strategic In only improved team's not ongoing to of our due initiatives business results I'd XXXX improve execution but actions that offset note like resiliency. to its global taken also the company external and headwinds

to continue our profitable our results substantial longer and backlog over These for demand Our better products should for and reflect a healthy solutions. actions company term. position growth the

Lift for Truck profitable the mature a strong, Bolzoni businesses are business. Our foundation and

cell the earlier, that believe growth the the a year -- emphasize substantial in our year XXXX full sustainable income prospects foundation business want million done an long and for higher has was I year we the that point $XXX over net to in While years. term. job than future made Nuvera Rajiv fuel business laying moving forward profitability the ago. The outstanding a team has

experience demand cyclicality our customer return to chains and short-term to likely in As norms, are we markets. pre-pandemic supply

plan we growth, businesses. and cash that core confident in long-term I'm However, a have sound our generation profitability for

the our the believe I Fuel to during goals this detail XXXX contributor and business cell a Day. shareholder the addition, all major time. of firmly business structure November returns team execute Nuvera covered in financial for Investor our performance have we we strategic to place will achieve In in strong and Hyster-Yale. long-term in longer be differentiated programs total provide to that We expect term our right deliver over XXXX to growth

to are website. review event If haven't our encourage you I'd an opportunity you both to listen or of on transcript which replay those had the to view the available materials,

turn now questions will have. to you We any may

Instructions] comes question Your line from from the first [Operator Ted Jackson of Northland.

forecast so XXXX. have your to say you list a thing, a ask did Congratulations XXXX? get I of few just what into for of going CapEx before questions, fabulous But questions, on really a I'm just long one my clarity, fiscal was I them.

that said be million. We would Yes. $XX

a basis? be million. much? mean, tremendous that normal $XX so a is of like can to what's that you longer-term That's pushing jump. through walk on the kind I up level And

Yes.

So I'll take that.

So $XX spike X look few -- if running to in needed our we this a go you average But over working in been capital million between years, last X at it's our if capital projects, years, if our and while the and typically, back we expenditures. look or you moderate $XX we million. around at had expense

both back OpEx We continues -- as been there strategy of our and little CapEx held also through moderated that significant XXXX. But have are growth bit. part a projects projects that

over the that. want years, on catch to we up next so And X

the is the development operational that So footprint. It's CapEx. for main product driver also additional around and improving our

things me future they're to the be, last really say that our programs probably looking, up are some and business. have are in Let pick major at on to backward we profitability, not timely which just on at very point some a during can terms that there undertake going impact some the we forward-looking all are that of improving the And performance there think are XXXX. think, of

this some that point. are special move likely at things are So there there to number to evolve and in that

said at you that million $XX So million to will through least call it, go forward $XX this, XXXX.

Yes.

for years. come X for neighborhood for will the in over the and I think the last kind really of deficit X down rate. it making it's be years, then And that run to normal we'll more up

and normalized Okay. to with as XXXX forma pro kind for changes rate given see and the all your do taxes stuff, the And then of you current what guidance, beyond? tax with regards

can I take that. Ted, So

we to impact tax law losses effect, from in remains I that. And be think capitalization in ahead, XXXX, net primarily negative to looking a in XXXX. if rate see our used the tax higher our current operating expect because up we we're R&D going

due normalized. be what operate going be on we spend to tax rate that's impacted, the to quantified would than but higher It's R&D between to XXXX we haven't to I we XX% at somewhere And expect yet. do given call a it that XX% really capitalization. least going to So but would negatively we our that in countries depend R&D in, expect

really which I that tax put one used to that carryforwards, times. of it. that part and is of very years, there. depreciating of putting is was what in in indicated, a can This everybody until for And the a corporations was Scott been what's make X of of we And books. place happens that the normally expenditures, so understands never this tax began. And a development then start do loss program instead is really it in you it you would capitalization taxation product on sure time research made recent has you relatively get changes we want happening past. expensing and keep the were large ever amount,

So period in law, but programs in which to Congress. there's the order put in as to a probably through right spending thing under it do other [indiscernible] this get was -- a X-year was because the tax so-called not

to So our is way hope that and our this is currently a to bill is hope and back going circulating go is is there that always the been. it's

way it much [indiscernible]. I that's think an accurate to put pretty as

that, with Al. agree would I

it doesn't so -- it if goes back... if But

unique heavy industries very this This capital punitive country, the law industry. is situation a for for in all capital-intensive -- is a

organization. you because can't and thoughtful did I is Congress they this well-run such Well, a mean believe

I with Absolutely. agree you.

the than but to sure I understand, it's XX%. of tax kind But just law make how to that high not, be to be. But -- the guidance corrected, if give going word, can't that would will be you is it's let's use to rate it any so if higher XX%

to I our couple would at Yes, if tax is to spend of over Ted, into forecast of point back kind you R&D years into can our do that would you to look that I mean your divide rate. and increase you earnings, what pretax the last what

And and would estimate. you -- that so you that help would just your to inform those I point disclosures

just question, I'll then And Okay. ask I other many line step I'll have more and more one get in. and but of let people out

first in the is data were Just they on quarter I you've the and since unit asking with would, nature, you've very decline it's the of time well you strength back EMEA. quarter driven thinking kind happen, stronger quarter? And on that seasonal as is the kind would first was ever unit for we I sequentially. And of quarter XXXX. that do is helpful. units quarter into going down fourth weak it your unit in the -- only your quarter Americas which available your If typically that and a at perspective, seasonal quarter, a see guess shipment if second the being what business is or I'm is seen XXXX. very, in pretty shipments unit and fourth a fourth And you in and of the down what expect only least time by be look the the on kind extensive weakness of fourth at first drove That in the that given it normal? your typically site, backlog, to seen kind given of level It's about in as quarter

No.

particularly some I related think of in our stated is some were what launches as in to happened late happen, of middle we a launches. number issues we and on release, software those was, product the of

on we of the second those quarter. happen So the today, couldn't wheels mostly towards we issues cleared correct now here to have ship trucks all so half And trucks. as to them these sit we that because are but we've

in shipped, and they were So of February. instead those in January early were shipped December,

We extends [indiscernible] have fourth we elaborate been quarter, point Rajiv's but good quarter. point a units them just view, maybe it made the nice just bookings on ship If further have it have XXXX. in We backlogs better. me of backlog let I to that in the don't there fourth of any in those to of mighty months we more would our market, much suppose And in coverage So underlies very and our comment. certainly the of backlog cover XXXX. build the only had got the would that for kind last couple is if out. that good downturn

more all So is silver a and of sort a timing it there from and a view. that, point of lining is issue of our

year. half first of we So in the we as guided, strong the have expect

going that to in get it's Okay. 'XX? sales. -- that question And FY we do one it's this to going because sneak a fourth what very similar And regards of then I'm kind quarter made stronger first down I'm how out Again, relates with think in similar to typically as quarter, is kind what of happen? quarter, more, of because in it about a to line aftermarket that to

maybe said, -- as coming this can down levels, market reflected the But Scott this see then slows and in -- part we've a is market. have Well, the see trend it, little that a the we a times answer pretty maybe can I'll what in. bit again, we to as the in high of see of it's then bit, trucks. that I -- and step we've from the started we a And of run slowdown is

to hours that So the -- be and servicing being therefore, the the week, needs there then is the impact trucks amount be to used proportionately that need past and of consumption. done per are

economic but we economic of first year. the hugely slower I'm little sure think second from -- expect in a bit slowdown to drop then any the that And we expect we've I half that see, of event. in around said, a half return as significant -- the was some a just to not world.

particularly So large. [indiscernible]

The only it the thing last is on parts of add I sales would years. done really couple we've well to

So pretty versus drop volumes. it's significant a

in in good Europe, Scott, to Yes. that how -- at I And part good believe. much a us. look Yes. a down point, consumers for slowed thing mainly That's big a Germany one and they're is Yes.

Moore MKM. from question comes ROTH Chip of line next the your from And

How some more down. Scott, about for you for backlog talked that? now Maybe through? on And for you scalable about expand the come on increase, implications rolling come into being should starts potential up. we help think short-term And there? modular we benefits of maybe as those margins Any and to cyclicality talked to think then to potential about back some pricing these to how about next platforms the CapEx year? should new competitive

you price/cost the can comment Rajiv, relationships? on So

Sure.

we needs the you warehouse And -- I big truck. the the product range our on side at business, business if still counterbalance on the So strong the think are of in very look scalable on modular our to using side. fill out

so do the So lead of shortest. where are some the we our warehouse times now -- expect

the And so marketplace. in more being competitive we are

really some mechanism one for going -- able cost for scalable the I'm therefore, is our make XXXX thinking the our to thing margin business. But and have margins on warehouse with XXXX, and modular right seeing us we're the are target elevated the compression margins right a So forward trucks customer, tune to about better. because we in price is the now more and for

We term, to warehouse will do really our and we come is strategy XXXX XXXX. that -- will the with same out longer in think starting So with trucks work. design, that modular scalability more

through So we'll see have meantime, to the of with But we the get the the products. current set same then. period impact in

that things had in side. are to may continue. I substantial we've up worth on in think keeping that some time from hopeful and we of improvements will much too, go It's last the couple mind, of they few fairly A cost seeing some hard where. reductions -- say and the we're But from cost are months, how the those

increasingly, increasing didn't competitors, up. that or did. is move to cases, as as our thing caught our customers costs in But they've we many rapidly second address The

times. thoughtful. But decide ways, to in our So healthy margins they And in really, on They keep very is I our a marketplace to hard well. very be we're above just to to going what the do levels. been at going and want we think targets lot as to careful depend work some recent in

our we talking what certainly to And that so in to margins long and down solution program they above be decrease we're cases having the margins our matures consistently about on is margin our to target discussion next away think the few to But over the our below target to modular take term. customers, the rather design the key ought this the thing years. giving than from potential us and our has we perform the feel focus that them scalable as right -- for coming

a on shift and That's helpful Got mix it. color. ASPs. follow-up And maybe

I for just to Any for looks unique normalized? heavy to mix take XXXX how like Or around think in a duty, that think dynamics in rental mix? maybe the there's some think way mix? about and -- as it post-pandemic you more volumes some Should warehouse more is normalized be share. increasing been example, about

feel the likely businesses. big I area. been There supplier we're some that enhanced see we're significant Truck ways, business thing in And difficulties. and volumes. to strong And think Big in other our have Truck you have bookings in been more Big in one some an of -- pretty we is recently really truck the

I a haven't a of positive Yes. we So things. look mixture we mix forward. for that's mean sign as been

to think as expect we We that think yet start to it, of haven't the again, if in talked rest we have a idea second XXXX our the the better about and rise but get middle we financials then modeling we into of year. for at of But we're XXXX of the about but half of I to XXXX, some continue next quarter. we'll that

could And cancellations, there. helpful. you I another had That's commentary on very Understood. ask some if

what you're think measures seeing protective I side. in the have expand on dealer on some on Maybe just there you place and that? touch

was new facilities down from slowed by a also is have we're bullish And of opening build our is, are out accounts. number the there of that Yes. facilities. really, the of it seeing our major what down. things very cancellations They've of slowed expansion and Majority infrastructure or suppliers

cancellation, been what's projects. it's a that's time really driving to so our -- their a And they cancellations. And of small delay future deferrals mostly of mixture as amount some

one could Very exemption, Section I if just think it. the way there? one another sneak big what see about helpful. And that If Appreciate benefit you there Is kind XXX on Tariffs. could is? impact a of last how get to we in

a about $X about I our just Yes. mean million -- month. as think it

Sponheimer comes line from question Gabelli. from next your And of Brian the

if say $XX Just XXX? to don't Section I per on month heard $X correctly, the -- per I million you million that know or did month

million. $X

negative it mean, clearly, backlog is have about that into pricing XXX in would the to more differently what in potentially have thinking you to there the to back. maybe And just first you're there? priced through to I does coming about some half ability a going year to the sales Section have than from appear the dynamic? anticipating I'm be If price, account where Can of what's you and going you're talk this through your pricing what flowing take

that you for careful those talking we booked we're pricing, the price... When talking of already and of be you I think the those this bookings talk about be should majority phrase it. year. how XXXX. be we would the how it would have Many we're about about We --

Yes.

-- we what months XX I did And billion. think So $X.X look about already of our in XXXX, is $X.X and it you for at XXXX, billion. if was backlog orders

characterize times it we because that will counterbalance, the really So trucks, we be to Trucks And and on for the good support -- will those is will rates. ensure we have have target on both to we to -- pricing continue those continue have way would their more long around lead I our that -- our products. Big lines margin side, warehouse production our lines still those the orders production

Big the warehouse about I'm Or just a does If side? this thinking Is impact Section standpoint, XXX -- from is what the more? competitive it it where on Trucks?

mostly No. counterbalanced. It's actually

Really.

Okay.

Okay.

any one changes On markets? the of from marketplace, that thinking Analyst Since business. any to for did market about the last Just the you Day potential Day your is electrification to how talking job about obviously, Nuvera, conventional as it maybe excitement me. one for to good your relates end in changes Investor or a then some

Yes.

very on place. taking are focused obviously are we market what So dynamics

interest, for of certainly like. And team is of our the and of power you've integrators But mobile green what both solution in the backup of kind be outages, And The of end network the as then hit at looks the capacity. is also is kind search working of by has that its an an producers backup power is cetera. find centers, solutions. fuel at with by power with but also generated hydrogen there's actually, the are charging to issue. times also which The stationary intermittent trucks for first as data been and hydrogen we've ports, continues also we increase have actually some there's hydrogen there the closely instance, more the solutions electricity some for chargers work developed I instance, for strange. hydrogen, so -- seen would outage say But users battery running et thing are being and remote right very for to as availability electric for both backup trucks, seen,

So port the then important think increasing we've the then and pressure continue interest solutions. we marine we of will around going that's ports because side. And the to the equipment been to very a I on on decarbonized. And -- much on-road more is are slower be seen lot see progress

disposal they'll need probably enough good to mean, longer I auxiliary think they're truck which like garbage with and be power cells. initially, hungry, which are trucks be kind stationary, is powered feel have batteries. solutions, back X/X a truck focused we won't think the -- at while I going and medium-duty term, but for of of least the need devices we those they're to that fuel

But the and but -- think little are I probably we on are market the markets hand, still expected. than active. very, very the slower other port generator So marine and a market those

have very to about in be products. soon. marketable saying those active those we So those of of we'll quite all programs bit have And a more areas very

you. Thank

line Ted Northland. from the We from question. more your last Jackson only of And have time for question is one

Ted? Are there, you

that and it's Sorry, bit on I little a bookings Can we everything else about was mean, given under company constraints down. this had talk mute. I backlog supply more so has the understandably backlog? so, sun and huge the working

book-to-bill of listen below ] moving you X is the second something a see to it, guidance, book-to-bill that time. I [ Is point? fair at back say, has the So about one it to that call that and talk for in But assume 'XX. towards, I this when a at half been you we'll long be

in a volume see greater don't Yes. in see We're decrease looking 'XX a 'XX. trucks. compression margin warehouse on just the market in We of bookings a volume. We bit of and

strength in that With Right. back correct? the being half,

Ted. right, That's

Right.

would of into the would cutting half the to get you we of where reading then through essentially I'm -- through be won't anymore. be -- you're in to see get of why book-to-bill number level, not that's through kind general of back so a [ year, kind we at be on backlog eating would able least [indiscernible] those second you that it like, -- X sort holistic saying ] eating you're to And a

Your backlog will be just trending at let's say... time

It'll be yes. trending --

bookings trucks We still like big don't we above be XXXX. smaller of our trucks XXXX, think ending larger see I trucks most even well level. desired some achieve of early we normalization our counterbalance and our our our on backlog in -- and target if don't lines will XXXX backlog the until important counterbalance the

that optimal help? over be still there then. until Does So backlog

know does. you. a time, wise Okay. I'd to I what down and that we're at And it was lost I final up was, question another written can of ask it Yes, because whole I pick I out going time. now then

participating. for our of With this We'll that, be call transcript Q&A on A the post available. also replay We conclude our website available morning. we'll thank later when it a will session. you becomes

release, questions, back feel day. I'll it to our reach any the to have information I you hope If of call. the out turn please free you. operator, Thank you the rest enjoy and to to on me. conclude My is now press the

gentlemen, that for and for conclude you participating. conference Ladies all you. Thank Thank our today. does

disconnect. all may You