HYSTER-YALE, INC. (HY) Business

Item 1. BUSINESS

General

Hyster-Yale, Inc. ("Hyster-Yale" or the "Company") and its subsidiaries, including its operating companies, Hyster-Yale Materials Handling, Inc. ("HYMH") and Bolzoni S.p.A. ("Bolzoni"), is a globally integrated company offering a full line of high-quality, application-tailored lift trucks and solutions aimed at meeting the specific materials handling needs of its customers. The Company's solutions include attachments, parts, fleet management services, technology and energy solutions. The Company is headquartered in Cleveland, Ohio.

Through HYMH, the Company designs, engineers, manufactures, sells and services a comprehensive line of lift trucks, attachments, parts, fleet management services, technology and energy solutions marketed globally, primarily under the Hyster®, Yale® and Nuvera® brand names, mainly to independent Hyster® and Yale® retail dealerships.

The Company owns a 90% majority interest in Hyster-Yale Maximal Forklift (Zhejiang) Co., Ltd. ("Hyster-Yale Maximal"), a manufacturer of low-intensity and standard lift trucks and specialized materials handling equipment. Hyster-Yale Maximal also designs and produces specialized products in the port equipment and rough terrain forklift markets. Lift trucks and component parts are manufactured in the United States ("U.S."), Northern Ireland, China, the Netherlands, Mexico, the Philippines, Brazil, Japan, Italy and Vietnam. Hyster-Yale was incorporated as a Delaware corporation in 1999.

Bolzoni manufactures precision-engineered lift truck attachments, forks, masts and lift tables designed for handling delicate and specialized loads. These solutions are marketed under the Bolzoni®, Auramo® and Meyer® brand names and the Silver Line product portfolio. Bolzoni also produces components for lift truck manufacturers. Bolzoni products are manufactured in Italy, the U.S., China, Germany, Finland and Brazil. Through the design, production and distribution of a wide range of attachments, Bolzoni has a strong presence in the lift-truck attachments market and industrial materials handling.

The Company has four segments, which include three in the lift truck business as discussed below, as well as Bolzoni. The Company’s lift truck business includes the following three geographic operating segments: the Americas, EMEA and JAPIC. Americas includes lift truck operations in the U.S., Canada, Mexico, Brazil, Latin America and the corporate headquarters. EMEA includes operations in Europe, the Middle East and Africa. JAPIC includes operations in the Asia and Pacific regions, including China.

During 2025, the Company announced a strategic business realignment of Nuvera Fuel Cells, LLC ("Nuvera") designed both to increase near-term profits and to create an integrated energy solutions program in the Americas segment, which is part of the HYMH business. Nuvera was merged into HYMH in the second quarter of 2025. These changes did not impact the Company's Consolidated Financial Statements, but did impact its reportable segments. The historical and current results of the former Nuvera segment are now presented within the Americas operating segment. Refer to Note 4, Business Segments, for additional information on the Company's reportable segments. Comparative prior period amounts have been recast to reflect the segment change.

The Company makes its annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and any amendments to those reports available, free of charge, through its website, www.hyster-yale.com, as soon as reasonably practicable after such material is electronically filed with, or furnished to, the Securities and Exchange Commission ("SEC").

The components of the Company's revenues were as follows for the year ended December 31:

Sales of internal combustion engine and electric lift trucks as a percentage of the Company's revenues were as follows for the year ended December 31:

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Manufacturing and Assembly

The Company manufactures components, such as frames, masts and transmissions, and assembles lift trucks in the market of sale whenever practical to lower product costs, including from tariffs or import fees from countries where the Company manufactures products, minimize freight cost, serve customers efficiently and balance currency mix. In some instances, however, it utilizes one worldwide location to manufacture specific components or assemble specific lift trucks. Additionally, components and assembled lift trucks are exported when it is advantageous to meet demand in certain markets. The Company operates eleven lift truck manufacturing and assembly facilities worldwide with four plants in the Americas, three in EMEA and four in JAPIC, including joint venture operations. In addition, the Company operates seven Bolzoni manufacturing facilities worldwide.

Parts and Service

The Company offers a line of parts to service its large installed base of lift trucks currently in use in many industries. The Company offers online technical reference databases specifying the required parts to service lift trucks and an ordering system.

The Company sells HYSource™ branded parts to dealers for Hyster® and Yale® lift trucks. The Company also sells parts under the UNISOURCE™ brand to Hyster® and Yale® dealers for the service of competitor lift trucks. The Company has a contractual relationship with a third-party, multi-brand, parts wholesaler in the Americas in which orders from the Company's dealers for parts are fulfilled by the third party who then pays the Company a commission.

In addition to parts, the Company sells services, including full maintenance leases and fleet management.

Marketing

The Company has a global marketing organization structured to support the geographic divisions. The global approach is centered around six key areas: Brand Strategy and Activation; Commercial Enablement; Training and Engagement; Product Management and Strategy; Content and Create Services; and Industry Strategy & Market Insights.

Patents, Trademarks and Licenses

The Company relies on a combination of trade secret protection, trademarks, copyrights, and patents to establish and protect the Company's proprietary rights. These intellectual property rights may not have commercial value or may not be sufficiently broad to protect the aspect of the Company's technology to which they relate or competitors may design around the patents. The Company is not materially dependent upon patents or patent protection; however, as materials handling equipment has become more technologically advanced, the Company and its competitors have increasingly sought patent protection for inventions incorporated into their respective products. The Company owns the Hyster®, Yale®, Bolzoni®, Auramo®, Meyer®, Nuvera® and Maximal® trademarks and believes these trademarks are material to its business.

Distribution Network

The Company distributes lift trucks and attachments primarily through two channels: independent dealers and a direct sales program to major customers. In addition, the Company distributes parts and services for its lift trucks mainly through its independent dealers. The Company’s end-user base is diverse and fragmented, including but not limited to the following industries: retail, durable goods, food and beverage, industrial and logistics.

Independent Dealers

The Company’s dealers, located in 111 countries, are generally independently owned and operated. The following table summarizes the Company's dealers as of December 31, 2025:

Direct Customer Sales

The Company operates a direct sales program to major customers or global accounts for both Hyster® and Yale®. This program focuses on large customers with centralized purchasing and geographically dispersed operations across multiple dealer territories. This program accounted for 28%, 22% and 19% of new lift truck revenues in 2025, 2024 and 2023, respectively. The independent dealers support these major customers by providing parts and service on a local basis. Dealers receive an installation fee for the support they provide in connection with these major customer sales and for the preparation and delivery of lift trucks to customer locations. In addition to selling new lift trucks, this direct customer sales program markets services, including lift truck rentals, full maintenance leases and fleet management.

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Financing of Sales

The Company is engaged in a joint venture with Wells Fargo Financial Leasing, Inc. ("WF") to provide dealer and customer financing of new lift trucks in the United States. The Company owns 20% of the joint venture entity, HYG Financial Services, Inc. ("HYGFS"), and receives fees and certain remarketing profits under a joint venture agreement. The term of the agreement is valid through December 2028. The agreement automatically renews for additional one-year terms unless written notice is given by either party at least 180 days prior to termination. The Company accounts for its ownership of HYGFS using the equity method of accounting.

Under the joint venture agreement with HYGFS, the Company’s dealers and certain customers are extended credit for the purchase of lift trucks to be placed in the dealer’s floor plan inventory or the financing of lift trucks that are sold or leased to customers. For some of these arrangements, the Company provides recourse or repurchase obligations to HYGFS or to others. In substantially all of these transactions, a perfected security interest is maintained in the lift trucks financed, so that in the event of a default, the Company has the ability to take title to the assets financed and sell it through the Hyster® or Yale® dealer network. Furthermore, the Company has established reserves for exposures under these agreements when required. In addition, the Company has an agreement with WF to limit its exposure to losses at certain eligible dealers. Under this agreement, losses related to guarantees for these certain eligible dealers are limited to 7.5% of their original loan balance. See Note 17, Guarantees and Note 18, Debt and Equity Investments and Related-Party Transactions, to the Consolidated Financial Statements in this Annual Report on Form 10-K for further discussion.

Backlog

The following table outlines the Company's backlog of unfilled orders placed with its manufacturing and assembly operations for new lift trucks for the years and periods ended (in millions):

As of December 31, 2025, the Company expects substantially all of its backlog of unfilled orders placed with its manufacturing and assembly operations for new lift trucks to be sold during the next twelve months. Backlog represents unfilled lift truck orders placed with the Company’s manufacturing and assembly facilities from dealers and direct sales to customers. In general, unfilled orders may be canceled at any time prior to the time of sale; however, the Company can assess cancellation penalties on orders within a certain period prior to initiating production. In certain circumstances, orders may be cancelled, for a limited time period without penalty, after receiving notice of a surcharge on the order from the Company. The dollar value of backlog is calculated using the current unit backlog and the forecasted average sales price per unit.

Key Suppliers and Raw Materials

In 2025, the Company was subject to substantial new tariffs imposed by the U.S. on imports of materials from various countries and industries within those countries. Tariffs, ongoing volatility in global markets and the impact on demand and supply may result in unanticipated cost increases for the Company's products. The Company attempts to pass these increased costs along to its customers in the form of higher prices for its products; however, the Company may not be able to fully offset the increased market-based costs of industrial metals and other materials due to overall market conditions.

Steel is a significant raw material required by the Company's manufacturing operations and is generally purchased from steel producing companies in the geographic area near each of the Company's manufacturing facilities. Other significant components for the Company's lift trucks are engines, axles, brakes, transmissions, tires and batteries and chargers. In addition, the Company depends on a limited number of suppliers for some of its crucial components, including diesel and gasoline engines, drive-system components, cast-iron counterweights used to counter balance some lift trucks and tires and wheels. Some of these critical components are imported and subject to regulations, such as customary inspection by the U.S. Customs and Border Protection under the auspices of the U.S. Department of Homeland Security, as well as the Company's own internal controls and security procedures. Although most components are available from numerous sources or in quantities sufficient to meet requirements, the Company has experienced, and may continue to experience, significant shortages of key components for certain products. This has negatively affected, and may in the future negatively affect, production levels.

Government and Trade Regulations

The Company has been impacted by ongoing trade disputes, including the imposition of tariffs by the U.S. on imports of materials, which has resulted in higher material costs. In addition, the Company’s business has been affected in the past by trade disputes between the U.S. and foreign jurisdictions. There continues to exist significant uncertainty about the future of U.S. trade policy and volatility of current or potential new tariffs on foreign jurisdictions, including but not limited to, Brazil, China, Europe, India and Mexico. In the future, the Company's results of operations may continue to be materially adversely affected to the extent the Company is affected by trade disputes with other foreign jurisdictions, and increased or new tariffs are levied on its goods or the materials the Company purchases or products the Company sells.

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Competition

The Company is one of the leaders in the lift truck industry with respect to market share in the Americas and worldwide. Competition in the lift truck industry is based primarily on strength and quality of dealers, brand loyalty, customer service, new lift truck sales prices, availability of products and parts, comprehensive product line offerings, product performance, quality and innovation, including features, and the cost of ownership over the life of the lift truck. The Company competes with several global lift truck manufacturers that operate in all major markets, as well as other niche companies. The lift truck industry also competes with alternative methods of materials handling, such as automated warehouses, including conveyor systems and automated guided vehicles and systems as well as suppliers of alternative power sources including lithium-ion and hydrogen power suppliers. The Company's parts offerings compete with parts manufactured by other lift truck manufacturers, as well as companies that focus solely on the sale of generic parts.

Bolzoni is a leader in the lift truck attachment industry. Competition in this industry is based primarily on product quality and performance, price, availability of products, comprehensive product line offerings, innovation, including features, the cost of ownership over the life of the attachment, brand loyalty, and customer service. Bolzoni competes with a few global lift truck attachment manufacturers that operate in all major markets, as well as other niche companies.

The use of lithium ion and hydrogen fuel-cell technology in industrial and commercial applications, including lift trucks, is a developing market. Companies implementing such technology face competitors that integrate more traditional energy technologies into their product lines, as well as competitors that have implemented or are implementing alternatives to traditional energy technologies, such as lithium batteries, fuel additives and other high efficiency or “renewable” technologies.

Cyclical Nature of Lift Truck Business

The Company’s lift truck business historically has been cyclical. Fluctuations in the rate of orders for lift trucks, attachments and fuel-cell technology reflect the capital investment decisions of the Company’s customers, which depend to a certain extent on the general level of economic activity in the various industries the lift truck customers serve. During economic downturns or economic uncertainty, customers tend to delay new lift truck and parts purchases. Consequently, the Company has experienced, and in the future may continue to experience, significant fluctuations in its revenues and net income.

Research and Development

The Company’s lift truck research and development capability is organized around four major engineering centers that are coordinated on a global basis. Products are designed for each brand concurrently and generally each center is focused on the global requirements for a single product line. The Company’s counterbalanced development center, which has global design responsibility for several classes of lift trucks for a highly diverse customer base, is located in Fairview, Oregon. The Company’s big truck development center is located in Nijmegen, the Netherlands, adjacent to a dedicated global big truck assembly facility. Warehouse trucks are designed based on regional differences in stacking and storage practices. The Company designs warehouse equipment for sale in the Americas market in Greenville, North Carolina, adjacent to the Americas manufacturing and assembly facility. The Company designs warehouse equipment for the European market in Masate, Italy, adjacent to its manufacturing and assembly facility for warehouse equipment.

The Company also has engineering centers in the United Kingdom, India and China to support design activities for its four major engineering centers.

The Company’s lift truck engineering centers utilize a three-dimensional CAD/CAM system and are interconnected with each of the Company’s manufacturing and assembly facilities and certain suppliers. This allows for collaboration in technical engineering designs and collaboration with these suppliers. The Company also utilizes artificial intelligence tools to analyze, design and enhance the efficiency and innovation of its product development process. Additionally, the Company solicits customer feedback throughout the design phase to improve product development efforts.

The Company also has research and development locations located in Greenville, North Carolina and Billerica, Massachusetts for the design, development and testing of technology solutions, including automation and energy solutions.

Development and innovation of attachments occurs in each of the Bolzoni manufacturing plants for the specific products produced in that location.

Sumitomo-NACCO Joint Venture

The Company has a 50% ownership interest in Sumitomo NACCO Forklift Co., Ltd. ("SN"), a limited liability company that was formed in 1970 primarily to manufacture and distribute Sumitomo-branded lift trucks in Japan and Southeast Asia and to manufacture Hyster® and Yale® branded lift trucks, related components and service parts for distribution by the Company outside of Japan. Sumitomo Heavy Industries, Ltd. owns the remaining 50% interest in SN. Each SN stockholder is entitled to appoint directors representing 50% of the vote of SN’s board of directors. All matters related to policies and programs of operation, manufacturing and sales activities require mutual agreement between the Company and Sumitomo Heavy Industries, Ltd. prior to a vote of SN’s board of directors. As a result, the Company accounts for its ownership in SN using the equity

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method of accounting and is included in the JAPIC segment. The Company purchases Hyster®- and Yale®-branded lift trucks and related component and parts from SN for sale outside of Japan under agreed-upon terms. The Company also contracts with SN for engineering design services on a cost plus basis and charges SN for technology used by SN but developed by the Company. During 2025, SN sold approximately 9,000 lift trucks.

Human Capital Resources

As of January 31, 2026, the Company had approximately 7,500 employees. The employees are distributed between each of the Company's businesses as follows:

Certain employees in the Danville, Illinois parts depot operations are unionized. Although the Company’s current contract with the Danville union expires in 2027, the Company expects to close the Danville location and move the parts depot operations to the Avon, Indiana Customer and Parts Solution Center in 2026. All other employees at the Company's facilities in the U.S. are not represented by unions. In Brazil, all employees are represented by a union for salary and benefits contracts, which are negotiated annually for the following year. In Mexico, certain employees are unionized. The Company’s contract with the Mexican union expires annually in March, at which time salaries are negotiated for the following year. Benefits in Mexico are negotiated every other year.

In Europe, certain employees in the Helsinki, Finland; Salzgitter, Germany; Craigavon, Northern Ireland; Masate, Italy; Piacenza, Italy; San Donato, Italy and Nijmegen, the Netherlands facilities are represented by a union or a works council. The Company believes its current labor relations with both union and non-union employees are generally satisfactory.

Corporate Responsibility

The Company is committed to being responsible corporate citizens, guided by vision and values. The Company remains focused on long-term viability, understanding that corporate responsibility is essential for building resilience in an increasingly dynamic world, and that delivering value requires strong, successful, and sustained relationships with all our stakeholders.

To achieve this, the Company has three focus areas: people; economy; and environment.

People

Employees are the foundation of the Company's success. Their expertise, dedication, and innovation drive the Company's operations forward everyday – which is why the Company is deeply committed to investing in their safety, well-being, development, and engagement. The Company achieves this through focusing on training and education and commitment to labor and human rights and environmental, occupational health and safety ("EOHS") as fundamental responsibilities of the Company.

In addition, the Company maintains open communication channels with employees to understand and support employee needs and contribute to the success as a business; whether through a formal or other open feedback systems. To further foster collaboration and engagement across global operations, the Company supports Employee Resource Groups ("ERG"s). These

employee-led and employee-run groups are open to all regular, full-time employees with the goal of creating spaces where

employees can build community, develop leadership skills, and enrich the Company culture.

The Company is committed to corporate responsibility throughout all aspects of the organization and recognize its

importance to our employees, customers, investors, and the local communities in which the Company operates.

Economy

The Company is committed to operating with integrity throughout every level of the business, which provides the foundation for innovation, trust, and long-term organizational success. Our responsible business strategy guides how the Company supports our customers, empowers our employees, and creates lasting value within the communities where it operates. The Company remains dedicated to upholding the highest ethical standards and recognize responsibilities to our employees, customers, communities, and the environment to go beyond compliance at every level of business.

The Company views suppliers as an extension of its business and a critical component to the Company's success. To ensure a resilient supply chain that meets or exceeds our quality standards for parts and services provided, the Company collaborates closely with a diverse network of suppliers around the world. The Company's supplier network is built upon six core pillars, designed to promote a resilient, global supply chain. These six pillars reflect our shared commitment to quality, reliability, diversity, compliance, efficiency, and customer satisfaction.

The Company's dedicated focus on product safety begins with product development teams as they create robust product designs, explore innovative technologies and build comprehensive support solutions that enhance both operator safety and

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safety for those around our equipment. The Company's ongoing training and support teams provide extended care to customers and operators throughout the life of the product.

Environment

Environmental responsibility is a core principle of the Company's operating structure, embedded within our EOHS program as well as a standalone priority. The Company is committed to integrating sustainable practices across our organization and processes, from reducing emissions and energy use to minimizing waste generation and water consumption. By investing in continuous improvement, the Company is not only reducing our environmental footprint but strengthening our resilience and leading the way towards a more sustainable future for our industry.

Environmental Matters

The Company’s manufacturing operations are subject to laws and regulations relating to the protection of the environment, including those governing the management and disposal of hazardous substances. The Company’s policies stress compliance, and the Company believes it is currently in substantial compliance with existing environmental laws. If the Company fails to comply with these laws or its environmental permits, it could incur substantial costs, including cleanup costs, operational disruptions, fines and civil and criminal sanctions. In addition, future changes to environmental laws could require the Company to incur significant additional expense or restrict operations. Based on information available as of the date of filing this Annual Report on Form 10-K, the Company does not expect compliance with environmental requirements to have a material adverse effect on the Company’s financial condition or results of operations.

The Company’s products may also be subject to laws and regulations relating to the protection of the environment, including those governing vehicle exhaust. Regulatory agencies in the U.S. and Europe have issued or proposed various regulations and directives designed to reduce emissions from spark-ignited engines and diesel engines used in off-road vehicles, such as industrial lift trucks. These regulations require the Company and other lift truck manufacturers to incur costs to modify designs and manufacturing processes and to perform additional testing and reporting. While there can be no assurance, the Company believes the impact of the additional expenditures to comply with these requirements will not have a material adverse effect on its business.

The Company is investigating or remediating historical contamination at some current and former sites caused by its operations or those of businesses it acquired. While the Company is not aware that any material outstanding claims or obligations exist with regard to these sites, the discovery of additional contamination at these or other sites could result in significant cleanup costs that could have a material adverse effect on the Company’s financial conditions and results of operations.

In connection with any acquisition made by the Company, the Company could, under some circumstances, be held financially liable for or suffer other adverse effects due to environmental violations or contamination caused by prior owners of businesses the Company has acquired. In addition, under some of the agreements through which the Company has sold businesses or assets, the Company has retained responsibility for certain contingent environmental liabilities arising from pre-closing operations. These liabilities may not arise, if at all, until years later and could require the Company to incur significant additional expenses.