Hyster-Yale Materials Handling, Inc.

Good day and thank you for standing by and welcome to the Hyster Yale Q2 2021 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's remarks, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star 0. I would now like to hand the conference over to your speaker today, Christina Kometko. Please go ahead.

Thank you. Good morning, everyone, and thanks for joining us today. Welcome to our 2021 Second Quarter Earnings Call. I am Christina Kometko, and I am responsible for investor relations at Hyster Yale. Joining me on today's call are Al Rankin, Chairman and Chief Executive Officer, Rajiv Prasad, President, and Ken Schilling, our Senior Vice President and Chief Financial Officer. Yesterday evening, we published our second quarter 2021 results and filed our 10-Q. This information is available on our website. Today's call is also being webcast. The webcast will be on our website later this afternoon and available for approximately 12 months. Our remarks that follow, including answers to your questions, contain forward-looking statements. These statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements made here today. These risks include, among others, matters that we have described in our earnings release issued last night and in our 10-Q and other filings with the SEC. We disclaim any obligation to update these forward-looking statements, which may not be updated until our next quarterly earnings conference call, if at all. In a moment, I'll discuss our current quarter results, but first, let me turn the call over to our chairman and CEO, Al Rankin, for some opening remarks.

Al. Thanks, Christy, and good morning, everyone. Results for our 2021 second quarter, once again, very mixed and not at all at the level we had thought we'd be reporting for this quarter. As we predicted last quarter, the truck market demand during the second quarter was strong and continued to grow, albeit at a more moderate pace than the previous two quarters. As a result of the market growth, as well as share gain, bookings were extraordinarily strong and at record levels, which helped to generate a new record lift truck backlog level, exceeding the historically high level achieved in the first quarter. Given these factors, we have solid production and plans in place and are fully slotted for the remainder of the year and into the early part of 2022. On the other hand, during our last earnings call, and even more so during our investor day in late May, we indicated that our expectations for the second quarter were dependent on our suppliers' ability to produce components and our ability to work through the logistics constraints needed to get those component parts to our factories on a timely basis. As most everyone is aware, the global supply chain and logistics industry constraints we saw in the first quarter did not moderate and they have, in fact, gotten worse for us in a way very similar to what many other companies are experiencing. This had a severe impact on our ability to ship in the second quarter, particularly higher-priced backlog products. As a result, our second quarter shipments were substantially lower than we expected, probably by something up to about 4,000 units, with the largest portion in our Americas division where receiving components needed to build certain trucks on schedule was quite poor. These factors, coupled with consistently rising material and logistics costs, led to a substantial decrease in our second quarter margins. and subsequently significantly reduced second quarter operating profit and net income to levels that were much lower than were expected and lower than the 2021 first quarter. While these results were not what we had planned or expected, our team continues to work diligently to obtain the components we need on a timely basis and with an appropriate inventory on hand. Given our very high backlog, and the visibility it provides, the opportunity for increased production as supply chain bottlenecks are resolved is high. After Christine reviews the financial results for the quarter, Rajiv will provide more detail on the supply chain issues, as well as provide an update on our business operations and strategic projects. Ken will then discuss our outlook in this dynamic environment. Christine?