Company: NC
Filing Date: 2025-08-06
Form Type: 10-Q
Source: 0000789933-25-000041
Chunk: 83

Company: NACCO INDUSTRIES INC
Filing Date: 2025-08-06
Form: 10-Q
Item: Part I, Item 8
Chunk 83
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, strategically positioned to deliver consistent financial returns. Our businesses operate exclusively in the U.S. and provide critical inputs for electricity generation, construction and development, and the production of industrial minerals and products. Increasing demand for electricity, on-shoring and current federal policies are creating favorable macroeconomic trends within these industries. We continue to capitalize on these tailwinds, pursuing longer-term growth opportunities. Through disciplined capital allocation, operational expertise and an entrepreneurial yet cautious approach to growth, we have unique capabilities and clear competitive advantages that enable us to capture a wide range of attractive growth opportunities. Our platform is supported by multiple vectors for value creation, and we are steadfastly committed to delivering compounding returns and expanding investor value over the long term.

While the current quarter presented some unexpected operational challenges, our business model is purposely built for durability and resilience. Our foundation rests on a stable base of long-term coal-mining contracts, generating dependable recurring cash flows. As new long-term contracts are added each year in our other businesses, these multi-year agreements create a “layering” effect as their contributions compound. This, combined with income generated by our Mineral and Royalty assets, provide cash flow stability. We remain confident in our ability to deliver improving results during the second half of 2025, with momentum building as we move into 2026.

Over the remainder of the year, we anticipate a substantial increase in consolidated operating profit compared to the first half, although full-year results will be lower than the prior year due in part to $13.6 million of business interruption insurance income recognized in the third quarter of 2024. In addition, we intend to terminate our defined benefit pension plan in the fourth quarter of 2025. Although the plan is currently over funded, a significant non-cash settlement charge is anticipated upon termination. The pension settlement charge and lower operating profit are expected to lead to a substantial year-over-year decrease in net income and EBITDA compared with the 2024 second half and full year.

Our Utility Coal Mining segment, operated by North American Coal, constitutes the foundation of our business, anchored by a stable portfolio of long-term mining contracts. We anticipate customer demand to remain steady in the second half of 2025 and throughout 2026 at the unconsolidated mining operations. At MLMC, results for the 2025 second half are expected to improve over the first half of 2025. However, a reduction in the 2025 contractually determined per ton sales price compared with 2024 is anticipated to continue to