The teleprinters of the day output each character as five parallel bits on five lines, typically encoded in the Baudot code or something similar. The Lorenz machine output groups of five pseudorandom bits to be XORed with the plaintext. The pseudorandom bits were generated by ten pinwheels, five of which stepped regularly, and five of which were stepped irregularly under the control of two more pinwheels. Apart from the stepping of the five irregular pinwheels (which either all stepped together, or all stayed together), the Lorenz machine is actually five parallel pseudorandom generators; there is no other interaction between the five lines. The numbers of pins on all the wheels were relatively prime.
The British cryptographers of Bletchley Park codenamed German teleprinter ciphers FISH. The Lorenz machine in particular was codenamed Tunny. They built Colossus, arguably the world's first computer, to attack it.
Occasionally, German cipher clerks would err by sending two different messages using exactly the same pinwheel settings. Bletchley cryptographers referred to this as a depth of two. Like any XOR based stream cipher, this could be cracked relatively easily by Bletchley Park, especially if the message was fairly long. Without ever having seen a Schlusselzusatz, they first "got into" Tunny through a pair of 4000 character messages sent on a depth of two.