Hyster Yale (NYSE:HY) reported first-quarter financial results on Wednesday. The transcript from the company’s first-quarter earnings call has been provided below.
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The full earnings call is available at https://app.webinar.net/RzV9WGBlbK0
Summary
Hyster-Yale Inc saw a 7% sequential increase in bookings in Q1 2026, although revenue declined to $795 million due to a shift towards lighter duty, lower-priced trucks.
The company reported an adjusted operating loss of $26 million, impacted by approximately $30 million in gross tariff costs.
Hyster-Yale Inc expects profitability in the second half of 2026, with stronger bookings and ongoing cost reductions driving improvements.
The company is focusing on introducing new counterbalance models and aligning its product portfolio with evolving customer needs towards standard and value offerings.
Management highlighted strategic initiatives including product evolution, operational transformation, digital enablement, and enhanced commercial execution as part of its transformation plan.
Full Transcript
OPERATOR
Good day and welcome to the Hyster Yale Inc. First Quarter 2026 Earnings Conference Call. All participants will be in a listen only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today’s presentation, there will be an opportunity to ask questions. To ask a question, you may press Star then one on your touchtone phone. To withdraw your question, please press Star then two. Please note this event is being recorded. I would now like to turn the conference over to Andrea Aceba, Director, Investor Relations and Treasury. Please go ahead.
Andrea Aceba (Director of Investor Relations and Treasury)
Good morning and thank you for joining us for Hyster Yale’s first quarter 2026 earnings call. I’m Andrea Aceba, Director of Investor Relations and Treasury. Joining me today are Al Rangin, Executive Chairman and Rajeev Prasad, President and Chief Executive Officer. Yesterday we filed our first quarter 2026 earnings release which provides a detailed overview of our financial results and performance. Today’s discussion is intended to supplement that release by offering additional insights and context. The earnings release, along with a replay of this webcast is available on the Hyster Yale website where the replay will remain accessible for approximately 12 months. Before we begin, I would like to remind you that today’s call includes forward looking statements that are subject to risks and uncertainties which could cause actual results to differ materially from those expressed or implied. These risks are described in our earnings release and SEC filings. We will also reference adjusted financial measures which we believe provide useful supplemental information to GAAP results. Reconciliations to the most directly comparable GAAP measures are included in our earnings release and investor presentation. I will start with a brief overview of our first quarter performance and outlook, then turn the call over to Rajeev to discuss the operations of with a strategic update on the business. During the first quarter, bookings improved sequentially, increasing 7% from the fourth quarter. As we moved from the cyclical low reached in the third quarter of 2025, backlog increased modestly, although shipments have not yet reflected this improvement from a cash perspective. Operating cash flow followed typical seasonal patterns with $33 million of cash used in operations representing a slight improvement compared to the same period of last year. Inventory management continued to improve with meaningful year over year reductions from better alignment of production with demand. Finished goods inventory declined compared to last year, improving efficiency and positioning us for higher production. Later in 2026, revenue declined to $795 million, driven primarily by the normalization of excess backlog and a shift towards lighter duty lower priced trucks. This shift reflects a broader and more persistent change in purchasing behavior, customers increasingly select the right truck for their specific application, prioritizing standard configurations, near term affordability and fit for purpose solutions. In response, we have introduced new core counterbalance models built on our modular and scalable platform to address growing demand for standard and value offerings. While these actions strengthen our competitive position, the transition reduced shipments of higher priced traditional models and contributed to the year over year revenue decline in the quarter. Tariffs also remained a significant headwind affecting profitability. In the first quarter we reported an adjusted operating loss of 26 million which included approximately 30 million of gross tariff costs.
Andrea Aceba (Director of Investor Relations and Treasury)
While pricing and cost actions provided partial offsets, tariffs and the shift to lighter duty, lower priced trucks more than impacted results. Looking ahead, we expect 2026 to improve compared to 2025 with profitability in the second half of the year, we anticipate the second quarter to represent the low point for both operating profit and net income. Tariff costs are expected to increase in the second quarter before mitigation actions take effect.
Andrea Aceba (Director of Investor Relations and Treasury)
At the same time, stronger bookings, backlog growth and ongoing cost reductions are expected to drive meaningful improvement in the second half of the year. Based on this progression, we expect to deliver a modest consolidated operating profit for the full year despite a loss in the first half. With that overview, I will now turn the call over to Rajeev.
Rajeev Prasad (President and Chief Executive Officer)
Thank you Andrea and good morning everyone. With that context on our first quarter performance and near term outlook, I would like to step back and focus on how we are positioning the business and the progress we are making on our transformation as we navigate this phase of the cycle. I’ll begin with tariffs. Given recent legal and policy developments, tariffs have already had a significant impact on our cost structure. Since Liberation Day in 2025, we have incurred approximately $130 million of direct tariff related costs excluding indirect effects such as supply price increases and higher steel costs.
Rajeev Prasad (President and Chief Executive Officer)
With a predominantly built to order manufacturing model, there is an inherent lag between tariff implementation and corresponding price realization. As a result, cost recovery occurs over the order and delivery cycle, not immediately. In February 2026, the U.S. supreme Court invalidated tariffs imposed under the International Procurement Agreement (IPA) tariff regime. While that decision created a pathway to pursue refunds, it did not reduce the overall tariff burden on our business.
Rajeev Prasad (President and Chief Executive Officer)
Subsequent action by the administration introduced new higher tariffs including a 10% global tariff under section 122 and expanded tariffs under section 232 that now apply to the full import value of certain steel derivative products including finished forklifts and components. Based on current conditions, we expect our effective tariff rate in 2026 to increase by approximately 6% compared with 2025. With respect to refunds, we have applied for approximately $40 million related to previously paid International Procurement Agreement (IPA) tariffs through the U.S.
Rajeev Prasad (President and Chief Executive Officer)
customs and Border Protection CAPE process. We also plan to seek approximately 15 to 20 million in reimbursements from suppliers. These potential refunds were not included in our first quarter results or reflected in our outlook. The timing and ultimate amount of any recovery remains uncertain. Even if recovered in full, these refunds would represent only a portion of the tariff costs we have incurred. Consistent with our prior communication, we expect any refunds ultimately received would be used to mitigate ongoing and future tariff impacts.
Rajeev Prasad (President and Chief Executive Officer)
Turning to the broader operating environment, the lift truck market continues to favor lighter duty, lower priced equipment. This shift has been both more pronounced and longer lasting than in prior cycles. Rather than viewing this solely as a near term headwind, we see it as a clear signal of how the market is evolving. Our transformation is intentionally designed to strengthen our position in these value oriented segments while preserving the ability to scale margins and earnings as volume recover.
Rajeev Prasad (President and Chief Executive Officer)
Against that backdrop, our focus remains on executing our transformation initiatives to lower our cost base, improve flexibility and reduce earnings volatility across the cycle. These are not short term responses to current conditions for structural changes intended to improve performance as market conditions normalize. Our transformation is centered on four priorities. First, Product Evolution as customer preferences continue to shift towards standard and value configurations, we have begun introducing these offerings within our core one to three and a half tonne counterbalance truck product line where demand for lighter duty application is increasing. These products are built on our modular scalable platforms enabling common architecture, shared components and flexible manufacturing. This improves cost efficiency, supports competitive price points and allows us to respond more quickly as demand continues to evolve. While this transition has reduced shipments of higher priced traditional models, in the near term our new products are gaining traction. We expect to continue moving in this direction with additional product introductions planned as we align our portfolio to customer needs and support future volume growth. Second, operational and cost structure Transformation Operating costs declined year over year in the first quarter reflecting restructuring actions initiated in 2025 including Nevera Strategic realignment and broader workforce reductions. We began to see early benefits in the quarter with meaningful margin improvements expected as volumes recover. In parallel, our longer term manufacturing footprint optimization continues with the largest financial benefits expected in later periods. Third, end to end Digital Enablement we continue to better align product development, manufacturing and commercial execution through more integrated systems and processes. This is improving decision making, execution speed and life cycle management across the organization. Fourth, commercial and go to market execution we remain focused on discipline pricing, dealer execution and improving aftermarket attachments and service penetration over time to strengthen mix cover, tariff and lifecycle economics. A key enabler across …
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