Company: NC
Filing Date: 2025-11-05
Form Type: 10-Q
Source: 0000789933-25-000102
Chunk: 86

Company: NACCO INDUSTRIES INC
Filing Date: 2025-11-05
Form: 10-Q
Item: Part I, Item 8
Chunk 86
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 operating profit for the 2025 fourth-quarter to be comparable to the prior year quarter. Full-year operating profit will be lower than 2024 due in part to the 2025 second-quarter break-even results. 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 fourth quarter and full year. We expect meaningful year-over-year improvements in both operating profit and net income in 2026.

Our Utility Coal Mining segment, operated by North American Coal, constitutes the foundation of our business, anchored by our long-term mining contracts. We anticipate steady customer demand for the remainder of 2025 and in 2026 at the 

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unconsolidated mining operations. At MLMC, fourth-quarter 2025 results are expected to improve over 2024 due to operational efficiencies. However, this improvement is not expected to offset the effect of the reduction in the 2025 contractually determined per ton sales price, causing MLMC's and the Utility Coal Mining segment's 2025 full-year results to decline compared with 2024. Looking ahead, we expect improving profitability for this segment in 2026, driven by anticipated improvements at MLMC in both sales price and cost per ton delivered, particularly if the customer's power plant is able to operate more consistently.

The Contract Mining segment, operated by North American Mining, represents our mining growth platform. Our expanding pipeline of potential deals and continued engagement with customers position this segment as a key pillar for future growth. Through ongoing geographic and mineral expansion, we are building a growing portfolio of long-term contracts. As an example, North American Mining executed a multi-year contract in October 2025 to provide dragline services as part of a project to construct an embankment dam in Palm Beach County, Florida. This project should be accretive to earnings beginning in the second quarter of 2026.

Sawtooth, a North American Mining subsidiary, is the exclusive provider of comprehensive mining services at Thacker Pass, which is owned by a joint venture between Lithium Americas Corp. (TSX: LAC) (NYSE: LAC) and General Motors Holdings LLC. The U.S. Department of Energy also holds warrants to purchase five percent non-voting, non-transferable