Q1 2026 Hyster-Yale Inc Earnings Call

May 6, 2026

Operator: Good day, and welcome to the Hyster-Yale, Inc. Q1 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 touch-tone 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 Sejba, Director, Investor Relations and Treasury. Please go ahead.

Speaker #1: 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 the conference specialist by pressing the star key followed by zero.

Speaker #1: After today's presentation, there will be an opportunity to ask questions, to ask a question. You may press star then one on your touchstone phone.

Speaker #1: 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 Sejba, Director, Investor Relations and Treasury.

Speaker #1: Please go ahead.

Speaker #2: Good morning, and thank you for joining us for Hyster-Yale's first quarter 2026 earnings call. I'm Andrea Sejba, Director of Investor Relations and Treasury. Joining me today are Al Rankin, Executive Chairman, and Rajiv Prasad, President and Chief Executive Officer.

Andrea Sejba: Good morning, and thank you for joining us for Hyster-Yale's Q1 2026 earnings call. I'm Andrea Sejba, Director of Investor Relations and Treasury. Joining me today are Al Rankin, Executive Chairman, and Rajiv Prasad, President and Chief Executive Officer. Yesterday, we filed our Q1 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.

Speaker #2: 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.

Speaker #2: The earnings release, along with the replay of this webcast, is available on the Hyster-Yale website, where the replay will remain accessible for approximately 12 months.

Speaker #2: 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.

Speaker #2: 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.

Andrea Sejba: 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 Q1 performance and outlook, then turn the call over to Rajiv to discuss the operations with a strategic update for the business. During the Q1, bookings improved sequentially, increasing 7% from the Q4 as we moved from the cyclical low reached in the Q3 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.

Speaker #2: 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 Rajiv to discuss the operations with a strategic update for the business.

Speaker #2: 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.

Speaker #2: 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.

Speaker #2: 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.

Andrea Sejba: 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.

Speaker #2: Revenue declined to $795 million driven primarily by the normalization of excess backlog and a shift towards lighter duty, lower price 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.

Andrea Sejba: Good morning, and thank you for joining us for Hyster-Yale's Q1 2026 earnings call. I'm Andrea Sejba, Director of Investor Relations and Treasury. Joining me today are Al Rankin, Executive Chairman, and Rajiv Prasad, President and Chief Executive Officer. Yesterday, we filed our Q1 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.

Speaker #2: 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.

Speaker #2: While these actions strengthen our competitive position, the transition reduced shipments of higher-priced traditional models and contribute to the year-over-year revenue decline in the quarter.

Speaker #2: 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 Sejba: In Q1, we reported an adjusted operating loss of $26 million, which included approximately $30 million of gross tariff costs. 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 H2. We anticipate Q2 to represent the low point for both operating profit and net income. Tariff costs are expected to increase in Q2 before mitigation actions take effect. At the same time, stronger bookings, backlog growth, and ongoing cost reductions are expected to drive meaningful improvement in H2. Based on this progression, we expect to deliver a modest consolidated operating profit for the full year, despite a loss in H1.

Speaker #2: While pricing and cost actions provided partial offsets, tariffs and the shift to lighter duty, lower price trucks more than impacted results. Looking ahead, we expect 2026 to improve compared to 2025, with profitability in the second half of the year.

Speaker #2: 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.

Speaker #2: 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.

Speaker #2: Based on this progression, we expect to deliver a modest consolidated operating profit for the full half. With that overview, I will now turn the call over to Rajiv.

Andrea Sejba: With that overview, I will now turn the call over to Rajiv.

Speaker #3: 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.

Rajiv K. Prasad: Thank you, Andrea, good morning, everyone. With that context on our Q1 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 supplier price increases and higher steel costs. 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 IEEPA tariff regime.

Speaker #3: 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.

Speaker #3: 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.

Speaker #3: 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 orders and delivery cycle not immediately.

Speaker #3: In February 2026, the US Supreme Court invalidated tariffs imposed under the IEPA tariff regime. While that decision created a pathway to pursue refunds, it did not reduce the overall tariff burden on our business.

Rajiv K. Prasad: While that decision created a pathway to pursue refunds, it did not reduce the overall tariff burden on our business. 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, and 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 IEEPA tariffs through the U.S. 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 Q1 results or reflected in our outlook.

Rajiv K. Prasad: 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. 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.

Andrea Sejba: With that overview, I will now turn the call over to Rajiv.

Rajiv Prasad: Thank you, Andrea, good morning, everyone. With that context on our Q1 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 supplier price increases and higher steel costs. 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 US Supreme Court invalidated tariffs imposed under the IEEPA tariff regime.

Rajiv K. Prasad: 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, but structural changes intended to improve performance as market conditions normalize. Our transformation is centered on 4 priorities. First, product evolution. As customer preferences continue to shift towards standard and value configurations, we have begun introducing these offerings within our core 1 to 3.5 ton 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.

Rajiv Prasad: While that decision created a pathway to pursue refunds, it did not reduce the overall tariff burden on our business. 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, and 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 IEEPA tariffs through the US 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 Q1 results or reflected in our outlook.

Rajiv K. Prasad: 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 Q1, reflecting restructuring actions initiated in 2025, including Nuvera strategic realignment and broader workforce reductions. We began to see early benefits in the quarter, with meaningful margin improvement 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 lifecycle management across the organization. Fourth, commercial and go-to-market execution.

Rajiv Prasad: 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. 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.

Rajiv K. Prasad: 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 all four priorities is our integrated individual product line management model, which brings together product engineering, operation, and commercial teams with clear accountability. This model is designed to sharpen decision making and translate strategy into measurable financial outcomes as market conditions normalize. With that foundation in place, I want to outline how these efforts are translating into early customer traction and acceptance of our strategy. One example comes from a new conquest opportunity with a large warehouse club customer that had concerns about pedestrian safety during after-hour stocking. We demonstrated our proximity detection and related safety technologies, highlighting their effectiveness in blind corners and high traffic environments.

Rajiv Prasad: 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, but structural changes intended to improve performance as market conditions normalize. Our transformation is centered on 4 priorities. First, product evolution. As customer preferences continue to shift towards standard and value configurations, we have begun introducing these offerings within our core 1 to 3.5 ton 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.

Rajiv K. Prasad: Following those discussions, the customer engaged directly with our innovation team and elected to move forward with an initial purchase for a greenfield site as a test deployment. Beyond safety, we're also seeing acceptance of our new product platforms designed to improve productivity and address labor constraints. In warehouse trucks, we introduced a new three-wheel standup counterbalance truck featuring technology-driven ergonomic and productivity enhancements that are resonating with customers. In direct store delivery, customer evaluation of the Hyster and Yale Route Runner, a nested pallet truck with a detachable motorized sled, demonstrated operational efficiency gains, including delivery efficiency, reduced labor reliance, and improved route times. We view this as a differentiated solution addressing an underserved market. Commercially launched in April, the Route Runner has already secured orders from several large beverage distributors.

Rajiv Prasad: 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 Q1, reflecting restructuring actions initiated in 2025, including Nuvera strategic realignment and broader workforce reductions. We began to see early benefits in the quarter, with meaningful margin improvement 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 lifecycle management across the organization. Fourth, commercial and go-to-market execution.

Rajiv K. Prasad: Taken together, these examples reinforce the direction of our strategy, delivering high value, differentiated solutions that address real customer needs and support growth opportunities, reduce cyclicality, and improve operating margins over time. With that perspective, I will turn the call over to Al for closing remarks.

Alfred M. Rankin, Jr.: Thank you, Rajiv. As you have heard today, the industry remains in a difficult phase of the cycle. Demand has been constrained by macroeconomic uncertainty, including the impact associated with the Iran conflict, the changing mix of trucks which customers want and need, tariffs which continue to be a material headwind, and customers who have remained cautious as they work through receipt of equipment ordered in prior time periods. At the same time, we are beginning to see early signs of improved demand led by enhanced customer engagement and increased focus on fleet replacement. Against that backdrop, the actions our Hyster-Yale team has taken and continues to take to transform Hyster-Yale have the capability of repositioning Hyster-Yale's profit structure and growth prospects.

Rajiv Prasad: 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 all four priorities is our integrated individual product line management model, which brings together product engineering, operation, and commercial teams with clear accountability. This model is designed to sharpen decision making and translate strategy into measurable financial outcomes as market conditions normalize. With that foundation in place, I want to outline how these efforts are translating into early customer traction and acceptance of our strategy. One example comes from a new conquest opportunity with a large warehouse club customer that had concerns about pedestrian safety during after-hour stocking. We demonstrated our proximity detection and related safety technologies, highlighting their effectiveness in blind corners and high traffic environments.

Alfred M. Rankin, Jr.: Over the past year, we have focused on strengthening the fundamentals of the business by expanding our product lines, lowering our structural cost base, improving operational flexibility, sharpening our focus on cash generation, and investing in marketing the products and capabilities that matter most to our customers. These actions are not short-term responses to a difficult environment. They are deliberate structural changes designed to improve how the company performs as volumes recover and market conditions improve. Importantly, they are consistent with the transformation Rajiv described. We are optimistic that 2026 represents a turning point. We expect bookings to improve, backlog to rebuild a bit, and cost reduction actions to take hold, and we expect all of this to strengthen financial performance significantly in H2. We remain disciplined in our execution activities and prudent in our capital allocation.

Rajiv Prasad: Following those discussions, the customer engaged directly with our innovation team and elected to move forward with an initial purchase for a greenfield site as a test deployment. Beyond safety, we're also seeing acceptance of our new product platforms designed to improve productivity and address labor constraints. In warehouse trucks, we introduced a new three-wheel standup counterbalance truck featuring technology-driven ergonomic and productivity enhancements that are resonating with customers. In direct store delivery, customer evaluation of the Hyster and Yale Route Runner, a nested pallet truck with a detachable motorized sled, demonstrated operational efficiency gains, including delivery efficiency, reduced labor reliance, and improved route times. We view this as a differentiated solution addressing an underserved market. Commercially launched in April, the Route Runner has already secured orders from several large beverage distributors.

Alfred M. Rankin, Jr.: Hyster-Yale has navigated many cycles over its history, and that experience gives us the confidence of experience, not complacency. The actions underway today are designed to transform Hyster-Yale to build a higher growth, higher margin, and less cyclical business. As a result, we believe the company will then be well-positioned for significant shareholder returns over time. That concludes our prepared remarks, and we'll now open the call for questions.

Operator: We will now begin the question and answer session. At this time, we will pause momentarily to assemble our roster. The first question will be from Edward Jackson from Northland Securities. Please go ahead.

Rajiv Prasad: Taken together, these examples reinforce the direction of our strategy, delivering high value, differentiated solutions that address real customer needs and support growth opportunities, reduce cyclicality, and improve operating margins over time. With that perspective, I will turn the call over to Al for closing remarks.

Al Rankin: Thank you, Rajiv. As you have heard today, the industry remains in a difficult phase of the cycle. Demand has been constrained by macroeconomic uncertainty, including the impact associated with the Iran conflict, the changing mix of trucks which customers want and need, tariffs which continue to be a material headwind, and customers who have remained cautious as they work through receipt of equipment ordered in prior time periods. At the same time, we are beginning to see early signs of improved demand led by enhanced customer engagement and increased focus on fleet replacement. Against that backdrop, the actions our Hyster-Yale team has taken and continues to take to transform Hyster-Yale have the capability of repositioning Hyster-Yale's profit structure and growth prospects.

Edward Jackson: Thank you. Good morning. Excuse me.

Rajiv K. Prasad: Hi, Ted.

Edward Jackson: I'm gonna start. First question, I wanna, kind of go into, you know, unit mix, with regards to the, you know, the modular equipment and the, you know, the more I mean, this is the strategy you guys have been going for. Could you maybe unpack for me the, sort of the mix in the lift truck business between older legacy units and, you know, the newer, you know, more, you know, modular product? Then, you know, maybe talk a bit about, you know, where that trend has come from. You know, kind of where was it, say, you know, as you rolled through last year to where it is now and where you see it's going?

Edward Jackson: Kind of behind that, maybe some discussion with regards to on a like-for-like basis, what would be the difference in terms of price point and maybe a discussion on the difference, if there is any, in margin?

Al Rankin: Over the past year, we have focused on strengthening the fundamentals of the business by expanding our product lines, lowering our structural cost base, improving operational flexibility, sharpening our focus on cash generation, and investing in marketing the products and capabilities that matter most to our customers. These actions are not short-term responses to a difficult environment. They are deliberate structural changes designed to improve how the company performs as volumes recover and market conditions improve. Importantly, they are consistent with the transformation Rajiv described. We are optimistic that 2026 represents a turning point. We expect bookings to improve, backlog to rebuild a bit, and cost reduction actions to take hold, and we expect all of this to strengthen financial performance significantly in H2. We remain disciplined in our execution activities and prudent in our capital allocation.

Rajiv K. Prasad: Um-

Edward Jackson: Kind of one big, huge multi-point question, and I have a couple more.

Rajiv K. Prasad: Yeah

Edward Jackson: They won't be quite as big.

Rajiv K. Prasad: You're asking for some data that we don't typically publish. We certainly don't talk about volume. Let me just firstly, the majority of the trucks that are now modular scalable are the 1 to 3.5 ton trucks, especially the internal combustion engine trucks, although we're in the process of launching our electric version of the 1 to 3.5 trucks. Now, a couple of the two most important series have been launched already, what we call our 2 to 3 ton DBB and the 2 to 3 ton CBB. The start of production for the DBB has already started in Europe, and the CBB will start soon. The internal combustion engine trucks in that range are fully. Now, the only thing we're shipping are the modular scalable trucks.

Al Rankin: Hyster-Yale has navigated many cycles over its history, and that experience gives us the confidence of experience, not complacency. The actions underway today are designed to transform Hyster-Yale to build a higher growth, higher margin, and less cyclical business. As a result, we believe the company will then be well-positioned for significant shareholder returns over time. That concludes our prepared remarks, and we'll now open the call for questions.

Rajiv K. Prasad: That shipment has started this year, especially into our EMEA, the territories with emission control. That's North America and Western and Eastern Europe. Now we've been shipping those trucks for quite a while into Asia Pacific, Middle East and Africa, and South Africa, for instance, but now fully implemented globally. The legacy version of that truck is now out of production, apart from 1 model that's going into some of the emerging markets. The 1 to three-and-a-half ton truck is the largest part of the market, especially if you take out the small pallet trucks. For us, typically it's around a third of our volume. A third of the market, a third of our volume.

Edward Jackson: Thank you. Good morning. Excuse me.

Andrea Sejba: Hi, Ted.

Rajiv K. Prasad: That kind of gives an idea of, for some of the other product lines, what we're introducing are not trucks on the same platform, but trucks that fill that gap. I'll give you an example. We're going through and introducing for our 4 to 9 ton truck range, a low intensity product. Later in the year we'll be introducing a more standard version of the truck, probably in the early, in Q4, in North America. In some markets, those are available. That's how we're covering it. Ultimately, we'll have a modular scalable version in the 4 to 9 ton, but that's still a few years away. That's in development, just initiated development right now. That's how we're covering the market.

Rajiv Prasad: Um-

Edward Jackson: Kind of one big, huge multi-point question, and I have a couple more.

Rajiv Prasad: Yeah

Edward Jackson: They won't be quite as big.

Rajiv Prasad: You're asking for some data that we don't typically publish. We certainly don't talk about volume. Let me just firstly, the majority of the trucks that are now modular scalable are the 1 to 3.5 ton trucks, especially the internal combustion engine trucks, although we're in the process of launching our electric version of the 1 to 3.5 trucks. Now, a couple of the two most important series have been launched already, what we call our 2 to 3 ton DBB and the 2 to 3 ton CBB. The start of production for the DBB has already started in Europe, and the CBB will start soon. The internal combustion engine trucks in that range are fully. Now, the only thing we're shipping are the modular scalable trucks.

Rajiv K. Prasad: I would say that currently somewhere around 40% of the market we've got covered with some level of scalability. You might wanna just discuss a little bit the lag between the introduction of the models and the full uptake, both with our national accounts and with our dealers. Sure, because that really, it hasn't occurred yet. Yeah, I think that's the other part of your question is where are the shipments today? I think the bottom line is we're getting ready to really ship lots of these, but they're in the market, and they're just getting started as far as looking backwards are concerned. I think that's correct, Rajiv. That's right. Yeah, the bookings have been there for, you know, since early part of this year. The shipments are basically happening now onwards.

Standard version of the truck, uh, probably in the early, in the fourth quarter um in North America. And now in some markets, those are available. Um so that's how we're covering it now. Ultimately, we'll have a modular scalable version in the 4910 but that's still, uh, a few years away that's in development, just initiated development right now, but that's how we're covering the market. So I would say that

Currently somewhere around. 40% of the market. We've got covered with some level of scalability.

In terms of Market, you might want to just discuss a little bit, the the lag between the introduction of the models and the full uptake, both with our national accounts and with our dealers and so uh because that really, it hasn't occurred yet. And so I think that's the other part of your question is, where are the shipments today? And I think the bottom line is we're getting

Rajiv Prasad: That shipment has started this year, especially into our EMEA, the territories with emission control. That's North America and Western and Eastern Europe. Now we've been shipping those trucks for quite a while into Asia Pacific, Middle East and Africa, and South Africa, for instance, but now fully implemented globally. The legacy version of that truck is now out of production, apart from 1 model that's going into some of the emerging markets. The 1 to three-and-a-half ton truck is the largest part of the market, especially if you take out the small pallet trucks. For us, typically it's around a third of our volume. A third of the market, a third of our volume.

Rajiv K. Prasad: It's going to You know, dealers will receive those trucks, customers will get to, you know, have demonstrations and try it out in their application, and then more orders will come in. There is that cycle, which seems to take us somewhere around four to six months to do. Although the feed orders are already there, which we're filling and shipping. Yeah, that's a really important point to me because we have really good dealers, especially in North America and parts of core Europe, and we have a sound structure in other parts of the world. When they get the product, they will sell it. It's unrealistic to think that we could, you know, get the share we traditionally get before those products really get out there in the marketplace.

Getting ready to really ship, lots of these but they're in the market and they're just getting started as far as looking backwards or concerned. I think that's correct prey, that's right. Uh, so yeah, the bookings have been there for, you know, early part of this year, the shipments are basically happening. Now, um, now onwards so it's going to, you know, dealers will receive those trucks customers will get to

Um, you know, have demonstrations and try it out in their application and then more orders will come in. So there is that cycle which seems to take us somewhere around 4 to 6 months.

To do, although the feed orders are already there.

that's really important point to me because, um,

And parts of poor Europe. Um, and we have a sound structure and other parts of the world.

When they get the products, they will sell it.

and so,

Rajiv K. Prasad: We feel that the strength of our dealership and our own efforts with the national, with our national accounts and large accounts as we have these trucks more fully in the pipeline and available for customer application, are gonna really start to move, especially in H2. Yeah. In terms of margin, we feel we've designed each of these trucks to hit their target margin requirements. We expect that this will have a positive impact on our margin.

Rajiv Prasad: That kind of gives an idea of, for some of the other product lines, what we're introducing are not trucks on the same platform, but trucks that fill that gap. I'll give you an example. We're going through and introducing for our 4 to 9 ton truck range, a low intensity product. Later in the year we'll be introducing a more standard version of the truck, probably in the early, in Q4, in North America. In some markets, those are available. That's how we're covering it. Ultimately, we'll have a modular scalable version in the 4 to 9 ton, but that's still a few years away. That's in development, just initiated development right now. That's how we're covering the market.

It's unrealistic to think that we could, you know, get us a the share, we traditionally get before those products. Really get out there in the marketplace. And so we feel that the strength of our dealership and our own efforts with the national with our national accounts and large accounts as we have these trucks more fully in the pipeline and available for customer application are going to really start to move especially in the second half.

And in terms of the margin, we feel we've designed each of these trucks to hit that target margin requirement.

Um, and so we expect that this will have a positive impact on our margin.

Edward Jackson: If I recall, I'm gonna kind of just regurgitate just to make sure I understand, you know, the whole, you know, thing with the modular trucks is that the goal with a key part of the strategy behind this is to be able to produce trucks that you can be more competitive with because, you know, like some of the, you know, the Asian stuff is coming in, and it's just very inexpensive, so that you can be price competitive with them and be able to produce them at a comparable margin that you've had in the past, so, you know, at a solid margin. The combination of those two things should enable you to take share because, you know, you've been having some competitive issues with regards to pricing.

So if I recall you, so I'm going to kind of just regurgitate just to make sure I understand you know the whole

a thing with the module, the trucks is that the, uh, the the goal with

A key part of of the strategy behind this is to be able to produce trucks.

that, um, you can be more competitive with

Rajiv Prasad: I would say that currently somewhere around 40% of the market we've got covered with some level of scalability. You might wanna just discuss a little bit the lag between the introduction of the models and the full uptake, both with our national accounts and with our dealers. Sure, because that really, it hasn't occurred yet. Yeah, I think that's the other part of your question is where are the shipments today? I think the bottom line is we're getting ready to really ship lots of these, but they're in the market, and they're just getting started as far as looking backwards are concerned. I think that's correct, Rajiv. That's right. Yeah, the bookings have been there for, you know, since early part of this year. The shipments are basically happening now onwards.

because, you know, like some of the, you know, the Asian stuff is coming in, and it's just very, very inexpensive so that you can be price competitive with them and be able to produce them at a, um, a comparable margin that you've had in the past. So, you know, at a solid margin and the combination of those 2 things should enable you.

Edward Jackson: You're gonna have, you know, at worst, an equivalent product, probably a better one, with an architecture that allows you to keep your margins and then be better competitive, be more competitive within the marketplace. Is that kind of where we're going with it?

Alfred M. Rankin, Jr.: I would encourage you to think of the market as having three segments in it, if you will, to oversimplify it. A value, a standard, and a premium. We've historically had great strength in the premium. We continue to do that. We've had some entries in the standard. Now we are introducing a full line of standard and value trucks, which are growing segments in the marketplace because customers are looking, because of high prices in general, for more cost-effective solutions. It's not so much a matter of being directly competitive with our old trucks with the competition, as it is a matter of filling gaps in the product line that have become much more important than they were.

To take share because you know you ba you've been having some competitive issues with regards to pricing you're going to have you know at worst and equivalent product probably a better 1 with a uh with a an architecture that allows you to keep your margins and the be it'd be better competitive be more competitive within the marketplace. So that kind of where we're I would encourage you to think of the the market is having

Rajiv Prasad: It's going to You know, dealers will receive those trucks, customers will get to, you know, have demonstrations and try it out in their application, and then more orders will come in. There is that cycle, which seems to take us somewhere around four to six months to do. Although the feed orders are already there, which we're filling and shipping.

There are three segments in it. If you were to oversimplify it—a value, a standard, and a premium—we've historically had great strengths in the premium segment, and we continue to do well there. We've had some entries in the standard segment, and now we are introducing a full line of standard and value trucks.

Al Rankin: Yeah, that's a really important point to me because we have really good dealers, especially in North America and parts of core Europe, and we have a sound structure in other parts of the world. When they get the product, they will sell it. It's unrealistic to think that we could, you know, get the share we traditionally get before those products really get out there in the marketplace.

Which are growing segments in the marketplace because customers are looking because of high prices in general, from our cost-effective Solutions. So it's not so much. A matter of being directly competitive with our old trucks, with the uh, competition as it is. A matter of filling gaps in the product line that have become much more important than they were.

Rajiv K. Prasad: I think the customer's application always really required them to have, you know, I think we've given these examples before. For instance, in retail, these trucks do, you know, 5 to 750 hours a year. You don't need a, you know, a very sophisticated truck for that application, and our low-intensity truck is more than capable of handling those applications. In light manufacturing, you have more of a standard truck, and that's a pretty big market. In the past, we sold our premium truck into that market, had lower margins because the customers didn't really need all the capability of. That's what gets rectified. We weren't really participating in any significant way in the value part of the market. That's how that gets fixed.

And I I think the customer's application always really.

Uh, required them to have—you know, if you—I think we've given these examples before. For instance, in retail, these trucks do, uh, in a 500 to 750 hours a year, you don't need—

Al Rankin: We feel that the strength of our dealership and our own efforts with the national, with our national accounts and large accounts as we have these trucks more fully in the pipeline and available for customer application, are gonna really start to move, especially in H2.

Uh, you know, uh, very sophisticated truck for that, that application and I low intensity truck is uh, is more than capable of handling those applications.

Or in like manufacturing, you have more of a standard truck and that's a pretty big Market in the past. We would we sold our premium truck into that market had lower margins because the customers didn't really need all the capability of

Rajiv Prasad: Yeah. In terms of margin, we feel we've designed each of these trucks to hit their target margin requirements. We expect that this will have a positive impact on our margin.

Rajiv K. Prasad: Now we can participate across the board and have good margins at each of those segments.

And so that's what gets rectified and we weren't really participating in any significant way in the value part of the market. So that's how that gets fixed. Um,

and now we can participate across the board and have good margins at each of those. Um,

Segments.

Edward Jackson: Well, the timing's nice 'cause you're hitting it when the market's gonna be coming out of a cycle and.

Rajiv K. Prasad: Yeah.

Edward Jackson: You know, I mean, it's good timing. Shifting to next question. You know, you talked with regards to tariffs and, you know, had a $30 million impact in Q1. Q2 is gonna be something greater than that, and then it'll start to tail off because of mitigation strategies. How do you mitigate the tariffs?

Well in the timing is nice because you're hitting it when the Market's coming you're coming out of a cycle. And in the

Rajiv K. Prasad: Pricing.

Edward Jackson: What are the strategies? How are you going about that?

Rajiv K. Prasad: Just pricing.

Edward Jackson: Okay.

Rajiv K. Prasad: There's two, the two primary strategies. The first one is pricing. Either, you know, embedded in our core price some of the tariffs which have been there for a long time, such as the Section 301, and now even some of the Section 232 is in the core price. For the others, like the Section 122 and the IEEPA, which we thought was more temporary, we put a surcharge in place. Now also, you know, we have to be conscious of the market price, so we have a pretty sophisticated pricing program where we determine, you know, how much pricing we can put in.

You know I mean it's a good timing. Um, shifting to next question, you know, you talked with regards to tariffs and you know they had a 30 million impact in the quarter. A second quarter is going to be something greater than that. And then it will start to um uh tail off because of mitigation strategies. How do you mitigate the Tariff scale? Just where you, what? What are, what are the strategies? How are you going about that? Just pricing. Okay, so there's 2, the 2 primary strategies. The first 1 is pricing.

uh, either, you know, embedded in our

Tariffs, which have been there for a long time, such as the 31%.

And now even some of the uh 232 is in the core price and then for the others, like the 122 and the ieepa which we thought was more temporary. We put a surcharge in place.

Um, now also

Al Rankin: I would encourage you to think of the market as having three segments in it, if you will, to oversimplify it. A value, a standard, and a premium. We've historically had great strength in the premium. We continue to do that. We've had some entries in the standard. Now we are introducing a full line of standard and value trucks, which are growing segments in the marketplace because customers are looking, because of high prices in general, for more cost-effective solutions. It's not so much a matter of being directly competitive with our old trucks with the competition, as it is a matter of filling gaps in the product line that have become much more important than they were.

Rajiv K. Prasad: Whatever is remaining, then we have to take action on the cost side, you know, start to go back to our suppliers, work with them to, you know, get the components located in regions where the tariff's more manageable and focus on cost reduction. The way I would split it is about two-thirds is gonna be pricing and about a third is going to be cost. That's how we're managing it, Ted.

You know, we have to be conscious of the market price. So we have a pretty sophisticated pricing, uh, program where we determine, you know, how much pricing we can put in, and then, whatever is remaining, then we have to take action on the cost side, you know, start to go back to our suppliers to work with them to, you know, get the, uh, components located in regions where the tariffs small manageable.

And focus on cost reduction, the way I would split it is about 2/3, going to be pricing and about a third is going to be cost.

So that's how we're managing it. Ted

Edward Jackson: Okay.

Rajiv K. Prasad: Adjustment takes a little longer. Does the pricing because, as you know, we build to order, so we have a backlog. Backlog's been somewhere around 4 to 6 months, depending on the truck. That's why, you know, we had a, you know, we've got the Q1 that was, you know, from a revenue point of view, there was a reduction because we had a low point in our bookings in the Q3 of 2025, and that slowed through. Now it's gonna start building back up.

Rajiv Prasad: I think the customer's application always really required them to have, you know, I think we've given these examples before. For instance, in retail, these trucks do, you know, 5 to 750 hours a year. You don't need a, you know, a very sophisticated truck for that application, and our low-intensity truck is more than capable of handling those applications. In light manufacturing, you have more of a standard truck, and that's a pretty big market. In the past, we sold our premium truck into that market, had lower margins because the customers didn't really need all the capability of. That's what gets rectified. We weren't really participating in any significant way in the value part of the market. That's how that gets fixed.

now, the cock adjustment takes a little longer. That's why we've got and so does the pricing because as you know, we built the order. So we have a backlog backlog spin somewhere around 4 to 6 months, depending on the truck. And that's why, you know, we had a, you know, we've got the um, first quarter.

Uh that was you know from his Revenue point of view there was a reduction because we had a low point in our bookings, in the third quarter of um 2025 and that flowed through. And now it's going to start building back up.

Edward Jackson: Okay. That was great. My last question is pretty simple. It's just maybe an update on where you are in the CFO search.

Okay, that was great. My last question is pretty simple. It's just maybe an update on where you are in the, um, the CFO search.

Rajiv K. Prasad: Yeah. We're talking to our board about the, you know, type of person we're going to look for, and then we'll launch it immediately after our board meeting in a couple of weeks.

Yeah. So we we're uh, talking to our board about the uh, you know,

The type of person we're going to look for, and then we'll launch it in. Um,

Edward Jackson: Okay. You haven't even begun that process yet? Okay, that's fair. Okay, thank you very much.

Immediately after our board meeting in a couple of weeks.

Rajiv Prasad: Now we can participate across the board and have good margins at each of those segments.

Okay, so you haven't even begun that process yet. Okay, that's fair.

Rajiv K. Prasad: We've been doing a full evaluation of our finance team, and we've kind of rearranging a few things, and that's given us a better idea of the type of capability we need in our new CFO.

Okay. Thank you very much for a full evaluation of our finance team, and we've kind of—we're rearranging a few things, and, uh,

Edward Jackson: Well, the timing's nice 'cause you're hitting it when the market's gonna be coming out of a cycle and.

Rajiv Prasad: Yeah.

Thanks giving a us, a better idea of the type of capability, we need in our new CFO.

Edward Jackson: Well, don't rearrange Andrea too much 'cause I like working with her.

Andrea Sejba: Thank you.

Well, don't rearrange Andrea too much, because I like working with her.

Thank you.

Operator: Thank you. Our next question will be from Alfred Moore from ROTH. Please go ahead.

Thank you. And our next question will be from Chip Moore from Roth, please. Go ahead.

Alfred Moore: Hey, good morning. Thanks for taking the question.

Rajiv Prasad: Pricing.

Edward Jackson: What are the strategies? How are you going about that?

Rajiv Prasad: Just pricing.

Edward Jackson: Morning

Alfred Moore: like working with you too, Andrea.

Edward Jackson: Okay.

Rajiv Prasad: There's two, the two primary strategies. The first one is pricing. Either, you know, embedded in our core price some of the tariffs which have been there for a long time, such as the Section 301, and now even some of the Section 232 is in the core price. For the others, like the Section 122 and the IEEPA, which we thought was more temporary, we put a surcharge in place. Now also, you know, we have to be conscious of the market price, so we have a pretty sophisticated pricing program where we determine, you know, how much pricing we can put in.

Andrea Sejba: Thank you. You too.

Alfred Moore: Thanks. Maybe for me, maybe you could just expand a bit on some of the dynamics you're seeing around this pent-up demand out there with aging fleets and need to replace. You know, just talk about the conversations you're having. It sounds like, you know, you've got a fair degree of confidence that things improve here in the back half. Of course, you've got some new products coming out that align with, you know, some of the inflationary pressures out there. Maybe just dive in there.

Hey, good morning, thanks for taking the question. Uh, and like working with you too Andrea. Um, thank you.

maybe, um,

Rajiv K. Prasad: Yeah. Maybe at a high level, Chip, I can give you. Then we will dig in. At a high level, if you look at the profile like we've talked, I just said we had a low point in bookings in Q3. Let's say that was $380 million, right? That was very low for us. It was a really tough quarter for us and everyone else. Then we grew, you know, kind of rose to $540 in Q4 2025. Q1 was around $585, something like that, close to that. I'm just talking units, not parts, not other sales, not our technology stuff, just units, because that is the driver for our business. All the other stuff comes from that.

Thanks, maybe for me. Um maybe you could just expand a bit on some of the Dynamics, you're seeing around this pent-up demand out there with aging fleets and need to replace, you know, just talk about the conversations, you're having. It sounds like, you know, you've got a fair degree of confidence, uh, that things improve here in the back half. And of course, you've got some new new products coming out that align with, uh, you know, some of the inflationary pressures out there, but, but maybe just dive in there.

Yeah, maybe uh, at the high level.

Rajiv Prasad: Whatever is remaining, then we have to take action on the cost side, you know, start to go back to our suppliers, work with them to, you know, get the components located in regions where the tariff's more manageable and focus on cost reduction. The way I would split it is about two-thirds is gonna be pricing and about a third is going to be cost. That's how we're managing it, Ted.

Tip I can give you and then we we will dig in but at a high level if we if you look at the profile like we've talked I just said we had a low point in bookings. In the third quarter they said I was 380 million dollars, right? Of uh,

That was very low for us. It was a really tough quarter for us and everyone else. Um,

then we um grew you know, kind of rose to 540 in the um

Fourth quarter of 2025.

Edward Jackson: Okay.

Rajiv Prasad: Adjustment takes a little longer. Does the pricing because, as you know, we build to order, so we have a backlog. Backlog's been somewhere around 4 to 6 months, depending on the truck. That's why, you know, we had a, you know, we've got the Q1 that was, you know, from a revenue point of view, there was a reduction because we had a low point in our bookings in the Q3 of 2025, and that slowed through. Now it's gonna start building back up.

Rajiv K. Prasad: Then, you know, we expect that to continue going up. That's been in conversation with our customers. A few dynamics are going on. I think as we've talked over the last couple of years, we did a lot of deliveries in 2023 and 2024 to our customers who'd been waiting, since, you know, some of these orders were put in 2022 that we delivered in 2023, and some orders that were put in 2023 that we delivered in 2024. That's kind of stabilized. Now, as we talk to customers, their average age of the fleet is a little higher than we would like or they would like.

Um, first quarter was around 5.85% other sales, not our technology stuff just units because that is the driver for our business. All the other stuff comes from that. Um

And then, you know, we expect that to continue going up. Um and that's been in conversation with our customers.

Um so so a few Dynamics are going on. I think as we've talked over the last couple of years,

We did a lot of deliveries in 2023 and 2024.

To our customers who've been waiting.

Edward Jackson: Okay. That was great. My last question is pretty simple. It's just maybe an update on where you are in the CFO search.

Rajiv Prasad: Yeah. We're talking to our board about the, you know, type of person we're going to look for, and then we'll launch it immediately after our board meeting in a couple of weeks.

You know, some of these orders were put in in 2022 that we delivered in '23, and some orders were put in in '23 that we delivered in '24.

so,

That's kind of stabilized now.

As we talked to customers there.

Edward Jackson: Okay. You haven't even begun that process yet? Okay, that's fair.

Rajiv K. Prasad: Utilization is also down a little bit, you know, because, you know, manufacturing is in North America and in Europe is down because of the, you know, just the economy for things is down. We expect that to build back up. The conversations we're having with customers, we've seen increasing, you know, RFQs going out to the field. Quoting activities are going up. Engagement with our customers are going up, which are leading indicators. We're seeing the same thing from our dealers. Our dealer inventories are back into normal conditions. Those are all good indicators for what's coming. We're seeing more stock orders come in from our dealers. For our high flow business, these are ready to, you know, stock units, ready-to-sell units.

their average age of the fleet is a little higher than we would like, or they would like, and, um,

Al Rankin: Okay, thank you very much.

Rajiv Prasad: We've been doing a full evaluation of our finance team, and we've kind of rearranging a few things, and that's given us a better idea of the type of capability we need in our new CFO.

Uh, but utilization is also down a little bit, you know, because—

you know, manufacturing is uh,

is in in, in North America and in Europe is down because of the, um,

Edward Jackson: Well, don't rearrange Andrea too much 'cause I like working with her.

Uh, you know, just the economy for things.

Is down. Um,

Andrea Sejba: Thank you.

Operator: Thank you. Our next question will be from Alfred Moore from ROTH. Please go ahead.

Chip Moore: Hey, good morning. Thanks for taking the question.

Andrea Sejba: Morning

Chip Moore: like working with you too, Andrea.

Andrea Sejba: Thank you. You too.

But we expect that to build back up. Uh, the conversations we're having with customers. Uh, there is no, uh, that we've seen increasing, um, you know, rfqs going out to the field. Quoting activities are going up engagement with our customers are going up, which are leading indicators.

Chip Moore: Thanks. Maybe for me, maybe you could just expand a bit on some of the dynamics you're seeing around this pent-up demand out there with aging fleets and need to replace. You know, just talk about the conversations you're having. It sounds like, you know, you've got a fair degree of confidence that things improve here in the back half. Of course, you've got some new products coming out that align with, you know, some of the inflationary pressures out there. Maybe just dive in there.

Rajiv K. Prasad: We're seeing our dealers more confident. Alta, who is one of our dealers, who's public company, if you look at their report, you know, they're talking that as well. It's not just one of our dealers who publishes things, you know, kind of earnings, who's also essentially compatible with the story I'm talking about. That's. We're seeing all of that. As we look at some of our large customers and their plans, we're seeing that they have plans for Q3 and Q4 that are significant. That's what gives us the confidence to say that we do expect both shipments and bookings to continue rising into the H2 of the year.

Um, we've seen seeing the same thing from our dealers. Uh, dealer inventories are back into in normal conditions. Uh, so those are all good indicators for what's coming. We're seeing more stock orders come in from our dealers, so for a high flow business. So these are ready to, you know, kind of stock unit, ready to sell units. Uh, we're seeing more idealist, more confident,

um,

Rajiv Prasad: Yeah. Maybe at a high level, Chip, I can give you. Then we will dig in. At a high level, if you look at the profile like we've talked, I just said we had a low point in bookings in Q3. Let's say that was $380 million, right? That was very low for us. It was a really tough quarter for us and everyone else. Then we grew, you know, kind of rose to $540 in Q4 2025. Q1 was around $585, something like that, close to that. I'm just talking units, not parts, not other sales, not our technology stuff, just units, because that is the driver for our business. All the other stuff comes from that.

And outer, who is 1 of our, uh, dealers, uh, whose public company? If you look at their, um, reports, you know, they are talking that as well. So it's not just a 1 of our dealers.

who publishes things, you know, kind of earnings is also

Essentially compatible with the story I'm talking about, so,

That's—so we're seeing all of that. Um, as we look at some of our large customers and their plans,

What we're seeing is that they have plans for third and fourth quarter that are significant.

That's what gives us the confidence to say that, we do expect those shipments and bookings to continue Rising into the into the second half of the year.

Alfred Moore: Very, very helpful color, Rajiv Prasad. You know, maybe for my follow-up, talk a bit around automation. I think you highlighted a few things already, but, you know, are you gaining share in warehouse and the role there? Lastly, just an update on the battery strategy. Thanks.

very, very helpful caller, uh, praie and

Rajiv Prasad: Then, you know, we expect that to continue going up. That's been in conversation with our customers. A few dynamics are going on. I think as we've talked over the last couple of years, we did a lot of deliveries in 2023 and 2024 to our customers who'd been waiting, since, you know, some of these orders were put in 2022 that we delivered in 2023, and some orders that were put in 2023 that we delivered in 2024. That's kind of stabilized. Now, as we talk to customers, their average age of the fleet is a little higher than we would like or they would like.

You know, maybe for my follow-up um Talk a bit around uh automation. I think you highlighted uh a few things already but but you know, are you gaining share and warehouse and, and the role there and then lastly, um, just an update on

Rajiv K. Prasad: Yeah, sure. Actually, we are doing well in the warehouse, especially with our reach truck, and we've just launched the new product that I talked about, the three-wheel stand, which is getting excellent feedback from, especially our large customers. Then we continue to demonstrate our automation solution. As you know, since April, we've been out there renting it. It's more a material handling as a service model for our automated trucks. We've had a couple of really good wins with that. In MODEX, we introduced an early version of our, you know, kind of a stacker. This is, you know, tow tractor obviously pulls trailers, but this is a version of the truck, then lifts products to typically second level and first level.

Uh, the battery strategy, thanks.

Yeah, sure. So um

actually we are doing well in the, in the warehouse, specially with our reach truck. And we've just launched the new product that I talked about, the 3 will stand, which is getting excellent feedback from specially our large customers. Um and then we continue to demonstrate our um automation solution. Uh as you know since April we've been out there selling the um

Rajiv Prasad: Utilization is also down a little bit, you know, because, you know, manufacturing is in North America and in Europe is down because of the, you know, just the economy for things is down. We expect that to build back up. The conversations we're having with customers, we've seen increasing, you know, RFQs going out to the field. Quoting activities are going up. Engagement with our customers are going up, which are leading indicators. We're seeing the same thing from our dealers. Our dealer inventories are back into normal conditions. Those are all good indicators for what's coming. We're seeing more stock orders come in from our dealers. For our high flow business, these are ready to, you know, stock units, ready-to-sell units.

And really, we're renting it. It's more a, um, mature handling-as-a-service model for our automated trucks.

um, and we

We've had a couple of really good wins with that, but in Modex we introduced, uh,

the anolis version of our

uh, you know, kind of Stacker.

Uh, so this is you know, tow tractor obviously pulls trailers, but this is a version of the truck then lift.

Rajiv K. Prasad: Can also pull things off production lines or set things on distribution lines. We had very, very positive response to that at MODEX. We'll start demoing that with what we call friendly, our core customer base, in Q3, and then release it for sale in Q4. In the background, there's work going on in automating some of the other warehouse products, especially the reach truck and also our counterbalance trucks, which will come in 2027 and 2028. We're building up our automation product line, but also, we're seeing success, early success with key customers that we've targeted initially. In terms of the batteries, we're starting to ship now our own lithium-ion batteries to customers, especially in Europe.

Um, products to typically second level. And, uh, first level can also pull things off production lines, or settings on distribution lines.

And we had very, very positive response to that, that modex, uh, will start demoing that, with what we call Friendly, uh, core customer base, um, in the, uh, in the third quarter.

uh, and then

Release it for sale, in the fourth quarter.

Rajiv Prasad: We're seeing our dealers more confident. Alta, who is one of our dealers, who's public company, if you look at their report, you know, they're talking that as well. It's not just one of our dealers who publishes things, you know, kind of earnings, who's also essentially compatible with the story I'm talking about. That's. We're seeing all of that. As we look at some of our large customers and their plans, we're seeing that they have plans for Q3 and Q4 that are significant. That's what gives us the confidence to say that we do expect both shipments and bookings to continue rising into the H2 of the year.

And then, in the background, there's work going on on automating some of the other Warehouse products, especially the reach truck, and also our counterbalance trucks, which will come in '27 and '28.

So, we're building up our, um, automation.

Also, we're seeing early success with key customers that we've targeted initially.

Um,

Rajiv K. Prasad: We'll initiate that in North America in Q3, so right at the beginning of Q3. We have pretty large growth plans for it in H2 of the year, then it'll be a significant part of our business in 2027. We'll talk more about that at our investor day that we're planning for Q4. We'll get into a lot more detail and probably bring along some of the things we're doing on the energy side and the technology side as well.

In terms of the batteries, we're starting to ship now our own lithium-ion batteries to customers, especially in Europe, and we'll initiate that in North America in—

The third quarter right at the beginning of the third quarter.

Um,

and we have pretty large growth plans for it in the second half of the year. And then it'll be a significant, um, part of our business in, in 2027,

Chip Moore: Very, very helpful color, Rajiv Prasad. You know, maybe for my follow-up, talk a bit around automation. I think you highlighted a few things already, but, you know, are you gaining share in warehouse and the role there? Lastly, just an update on the battery strategy. Thanks.

And we'll talk more about that at our um investor day that we're planning for the fourth quarter. Get get into a lot more detail and probably bring along some of the things we're doing on the energy side and the technology side as well.

Alfred Moore: Great. Yeah, look forward to that in November, I think, right? Yeah, thanks very much.

Rajiv Prasad: Yeah, sure. Actually, we are doing well in the warehouse, especially with our reach truck, and we've just launched the new product that I talked about, the three-wheel stand, which is getting excellent feedback from, especially our large customers. Then we continue to demonstrate our automation solution. As you know, since April, we've been out there renting it. It's more a material handling as a service model for our automated trucks. We've had a couple of really good wins with that. In MODEX, we introduced an early version of our, you know, kind of a stacker. This is, you know, tow tractor obviously pulls trailers, but this is a version of the truck, then lifts products to typically second level and first level.

Great. Yeah. Look forward to that in, uh, November, I think, right? So, if—yeah, thanks very much.

Operator: Ladies and gentlemen, this concludes our question and answer session. I would like to turn the conference back over to Andrea Sejba for any closing remarks.

Hey, ladies and gentlemen, this concludes our question-and-answer session. I would like to turn the conference back over to Andrea Saba for any closing remarks.

Andrea Sejba: Thank you, Chad. Thank you for your questions. A replay of our call will be available online later today, and the transcript will be posted on the Hyster-Yale website. If you have any follow-up questions, please feel free to reach out to me directly. My contact information is included in the press release. Thank you again for joining us today.

Thank you Chad. Thank you for your questions. Uh, replay of our call will be available online later today and the transcript will be posted on the High Street. Yale website, if you have any follow-up questions, please feel free to reach out to me directly. My contact information is included in the press release. Thank you again for joining us today.

Operator: To access the digital replay of this conference, you may dial one eight five five six six nine nine six five eight or one four one two three one seven zero zero eight eight. Replay beginning at two PM Eastern time today. You will be prompted to enter a conference number, which will be nine three eight seven zero nine eight. Please record your name and company when joining. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

To access the digital replay of this conference. You may dial 1 855 6699658 or 1. 412 317, 088 replay, beginning at 2 p.m. eastern time today.

You will be prompted to enter a conference number, which will be 9387098.

Please record your name and company when joining.

The conference has now concluded, thank you for attending today's presentation. You may now disconnect

Rajiv Prasad: Can also pull things off production lines or set things on distribution lines. We had very, very positive response to that at MODEX. We'll start demoing that with what we call friendly, our core customer base, in Q3, and then release it for sale in Q4. In the background, there's work going on in automating some of the other warehouse products, especially the reach truck and also our counterbalance trucks, which will come in 2027 and 2028. We're building up our automation product line, but also, we're seeing success, early success with key customers that we've targeted initially. In terms of the batteries, we're starting to ship now our own lithium-ion batteries to customers, especially in Europe.

Rajiv Prasad: We'll initiate that in North America in Q3, so right at the beginning of Q3. We have pretty large growth plans for it in H2 of the year, then it'll be a significant part of our business in 2027. We'll talk more about that at our investor day that we're planning for Q4. We'll get into a lot more detail and probably bring along some of the things we're doing on the energy side and the technology side as well.

Chip Moore: Great. Yeah, look forward to that in November, I think, right? Yeah, thanks very much.

Operator: Ladies and gentlemen, this concludes our question and answer session. I would like to turn the conference back over to Andrea Sejba for any closing remarks.