Alfred M Rankin Jr

Nacco Industries Inc's materials handling group (NMHG) is feeling the wrath of the economic cycle.

The company anticipates significant declines in global forklift markets with little expectation for recovery until 2010. NMHG manufactures and markets forklifts under the Yale and Hyster brands.

The company says NMHG is operating with capital expenditure constraints, planned plant downtime, reductions in workforce, restrictions on spending and travel, suspension of the incentive compensation programs and profit-sharing wage freezes, and salary and benefit reductions.

For the 2008 fourth quarter ended December 31, the wholesale side of NMHG reports profit of USD1.6 million - down from USD23.8 million for the comparable 2007 quarter.

Quarterly sales decreased to USD647 million from USD760 million, and shipments dropped to 20,830 units from 25,046.

The year-end backlog was 14,900 units in comparison to 30,500 units at the end of 2007.

The company recorded a USD6 million pre-tax charge for reductions in force at all NMHG locations because of the downturn in forklift markets.

The key drivers for the change in results at NMHG wholesale were a decrease in market volume for units and parts, unfavourable foreign currency movements and the reduction-in-force costs, says Alfred M Rankin Jr, chairman, president and chief executive officer of Mayfield Heights-based holding company Nacco Industries.

The retail portion of NMHG reported an adjusted quarterly loss of USD1.6 million in 2008 versus USD1.1 million in 2007. Reduced spending and lower interest expense were noted for the retail side.

In addition to NMHG operations, publicly traded Nacco Industries has housewares and mining businesses.