HYSTER-YALE, INC. Q1 FY2026 earnings call

• Tariffs: Incurred ~$130 million direct tariff-related costs since 2025. Effective tariff rate expected to increase ~6% in 2026. Applied for ~$40 million refunds for IEPA tariffs and plan to seek $15 - $20 million from suppliers. - Product evolution: Introducing new core counterbalance models on modular, scalable platforms in 1 - 3.5 ton line to address value demand. - Operational and cost structure transformation: Operating costs declined in Q1 due to restructuring, expecting margin improvement as volumes recover. Long-term manufacturing footprint optimization ongoing. - End-to-end digital enablement: Better aligning product development, manufacturing, and commercial execution. - Commercial and go-to-market execution: Focus on discipline, pricing, dealer execution, and aftermarket penetration. Examples of customer traction: Proximity detection safety tech in a warehouse club, new three-wheel stand-up counterbalance truck in warehouse, Route Runner in direct store delivery with orders from large beverage distributors.

Revenue declined to $795 million. Bookings improved sequentially, increasing 7% from the fourth quarter. Backlog increased modestly. Operating cash flow was 33 million of cash used in operations. Inventory management improved with finished goods inventory decline. Tariffs were a significant headwind with approximately $30 million gross tariff costs in the first quarter. The lift truck market favors lighter duty, lower priced equipment. New core counterbalance models introduced. Product segment financials: Revenue from modular scalable trucks in 1 - 3.5 ton counterbalance line, with shift to lighter-duty, lower-priced trucks impacting revenue. Revenue contribution % not explicitly given but shift in market mix is noted.

• 2026 expected to improve vs 2025 with profitability in second half. - Second quarter expected to be low point for operating profit and net income. Tariff costs to increase in Q2 before mitigation. Stronger bookings, backlog growth, and cost reductions expected to drive improvement in second half. Full year expected to have modest consolidated operating profit despite first half loss.

• Tariffs remaining a material headwind with uncertain refund timing and amount. - Lift truck market shift to lighter duty, lower priced equipment is more pronounced and longer lasting than prior cycles, which could impact revenue and margin if not managed. - Uncertainty in timing and ultimate amount of tariff refunds which are not fully reflected in outlook.

Q: Talked about unit mix with modular equipment, lag between model introduction and full uptake, margin.

A: Majority of 1 - 3.5 ton trucks now modular scalable. Shipments starting now, bookings there since early 2026. Dealers will sell once products out. Margin designed to hit target.

Q: Talked about tariffs, mitigation strategies.

A: Pricing (two-thirds) and cost (one-third). Pricing via embedded in core price or surcharge, cost via working with suppliers.

Q: Update on CFO search.

A: Talking to board about type of person, will launch immediately after board meeting in couple of weeks.

Q: Expansion on pent-up demand, automation, battery strategy.

A: Conversations with customers show increasing RFQs, quoting, dealer confidence. Doing well in warehouse, launched new products. Battery strategy: Starting to ship lithium-ion batteries in Europe, initiate in North America Q3, large growth plans in second half of 2026 and significant in 2027.