Investment Thesis
Hyster-Yale faces severe financial distress with deteriorating fundamentals: unprofitable operations (-3.8% net margin), negative free cash flow of -$42.7M, and inability to service $484.4M debt (negative interest coverage of -3.9x). Declining revenue (-12.5% YoY) combined with operational cash burn ($-32.9M) threatens solvency within 2-3 years at current trajectory.
Strengths
- Positive gross margin of 15.7% demonstrates underlying product demand despite market challenges
- Current ratio of 1.31x provides near-term liquidity buffer for operational needs
- Substantial asset base of $2.0B offers collateral and potential restructuring value
Risks
- Negative operating cash flow and free cash flow indicate business cannot self-fund operations; cash reserves of $81.8M depleting rapidly
- Negative interest coverage (-3.9x) with $484.4M debt creates imminent covenant violation and refinancing risk
- Accelerating revenue decline (-12.5% YoY) in industrial equipment sector suggests structural demand weakness or market share loss
- Quick ratio of 0.67x indicates potential working capital stress and inability to meet short-term obligations without inventory liquidation
Key Metrics to Watch
- Operating cash flow - must return to positive to avoid liquidity crisis
- Revenue stabilization and growth recovery - current decline trajectory unsustainable
- Debt covenant compliance status and refinancing access
Financial Metrics
Revenue
795.2M
Net Income
-30.5M
EPS (Diluted)
$-1.71
Free Cash Flow
-42.7M
Total Assets
2.0B
Cash
81.8M
Profitability Ratios
Gross Margin
15.7%
Operating Margin
-3.5%
Net Margin
-3.8%
ROE
-7.1%
ROA
-1.6%
FCF Margin
-5.4%
Balance Sheet & Liquidity
Current Ratio
1.31x
Quick Ratio
0.67x
Debt/Equity
1.13x
Debt/Assets
77.0%
Interest Coverage
-3.89x
Long-term Debt
484.4M
Disclaimer: This analysis is generated by AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: 2026-05-07T09:17:30.454190 |
Data as of: 2026-03-31 |
Powered by Claude AI