...The speculative-grade ratings on Portland, Ore.-based NMHG Holding Co. reflect its aggressive financial profile, fair liquidity, and leading positions within cyclical and volatile markets. NMHG competes in the global forklift truck market, which is characterized as moderate in size, somewhat consolidated, and modestly capital intensive. Over the business cycle, the industry grows at GDP-like rates. Larger forklift manufacturers are also gaining market share from vendor consolidation, which is leading to national account opportunities. However, the industry is both cyclical and volatile; currently, demand is robust for lift trucks, following weakness in the 2000-2002 period. Although volume remains robust, it takes time to pass on increased raw material costs to customers because of the fixed-price, lengthy time horizon of the backlog, as well as strong industry competition. In 2004, raw materials were a negative drag on pretax earnings of $48 million, and material pressures likely will...
