NACCO Industries (NC) 9 May 212021 Q1 Earnings call transcript

Ladies and gentlemen, welcome to the Connectco Industries First Quarter Earnings Call - Apologies, ladies and gentlemen, welcome to the NACCO Industries First Quarter Earnings Call. My name is Katie, and I'll be coordinating your call today. [Operator Instructions]. I will now hand you over to our host, Christina Kmetko to begin. Christina, please go ahead.

you. Thank and XXXX everyone, call. quarter to welcome morning, first our earnings Good am am NACCO I Kmetko for I and at responsible Christina Investor Relations Industries. joining for this you Thank us morning.

both version President, available available today entire XX-Q. Elizabeth the filed this first Vice Yesterday, not Executive J.C. is quarter me information Controller. archived NACCO's this able call, North on today's Butler, and published listen Joining Officer to Coal; are Loveman, afternoon of our XX we If be is NACCO President This will our and anyone XXXX to later an and American on for and Chief our of webcast website months. website. our approximately and results

matters statements. risks subject a statements These differ the Our among answers follow, made uncertainties remarks and materially that if any in today. that including actual statements disclaim and be our filings earnings We our SEC. may issued we forward-looking statements, from number these to with These results of the which to call, forward-looking and next here release in could contain our others, that cause forward-looking until XX-Q in conference not have questions, expressed to other to include, those at update described obligation all. are updated, risks your last night quarterly earnings

CEO, opening over measures for first, and to I J.C. our non-GAAP and we but quarter the discuss that first release in In call will me these our a company's President some let remarks. be for Butler, our information performance. be moment, website. In J.C.? results, believe our is useful addition, turn Reconciliations non-GAAP discussing we'll evaluating the found on operating earnings can in

year-end good of a future, have grow optimistic lot our strategies glad confidence very and everyone. I already Christy, a that I XX-year until I we've mining the larger to smaller entered good call the be capacity is to had first In this Florida. I some X lot developments. this because you, and in relocated our mentioned about of months quarry news customer in a our Difficulty] [Technical dragline call report. was diversify. at Difficulty] very to [Technical on I'm in Thank at that quarry new dragline year, operate a delivered this with We'll positive a will increase services a contract our limestone morning, commissioned. Central of and into production

with be an mining limestone also to at We And deliveries approximately Mining the annually in Florida. with larger amended expect a tons an commences contract hopeful dragline American customer customer Mining American in million an gravel mining existing in North to project April, once years XXXX. quarry quarry North existing for operate is dragline a X.X into greenfield multiple an Indiana. and the with This for in customer near new services a operate Indianapolis. contract will aggregates providing entered infrastructure for a transportation existing quarry sand multi-year additional

tons this from year. be quarry XXX,XXX deliveries per million expect X and We between to

contracts or our All are of accretive expected be XXXX new to revised to earnings. these

North a better note ever. pipeline is there than bigger projects in of I'd growth before, said lot I've and potential American is business, As that and potential new this of Mining's

of diversify. over a our includes the oil segment price the a in efforts lot well. to finding as a well banks. of manages $X.X Eagle gas some that Ford continued this also Delaware is North opportunities grow of Minerals as Eagle is Mitigation its to business diversify Basin Partners, actively and very Management Minerals showing growth which $XXX,XXX Southeast in Our business country, in small and segment, for XX,XXX success Resources grow purchase the acres Mineral purchase our the acquisition and acquisition of larger of million. Catapult just for Basin. preliminary of gross Ford of areas in completed acquisition Management develop attractive in a working part the acres The and as and part in X,XXX opportunities is We're net mitigation America continuing part the royalty price existing on

Coal operate Mining Creek the Finally, power third-party and Mine, Creek new it services in segment under had some for our customer a news our a Coal also to are owner a to the to positive efforts continue sell sell we plant with announced mining of Station. agreement. to GRE's that very is If GRE, Falkirk quarter. Falkirk expect Coal during successful, negotiations Station exclusive the Mine

issued good to a care communities and where documents we for workplace, annual the These for also corporate well our each operate. and a description the provide citizen to of safe growth report the diversify, our a deal, this as describes development for a Corporate since In thorough is the to shared. to always values. key that stewards like titled GRE's have I investor Responsibility. maintain XXXX add already of good our our last core to of they've it grow can't short, the While environment objectives to take we add be as what do and operating of call, us, is to how and also we I think We've description to piece be this we included positive in things so our of right earnings We've this our employees, businesses. information presentation. financial anything protect core and strategies a the further would strive as

our the We of believe long-term keys culture one success. proud and legacy are quite and our our that to it's of

at and these website to turn over Christy read that, more With report the call back I results to our detail. in the presentation to documents. party on for interested I Christy? our encourage available any will Our cover quarter nacco.com. annual investor are

million, then $X.X up improvement start to by our lower the On earnings offset million Coal segment. driven earnings with $X.X XXXX substantially This North our partly an from the increase at first and detail profit employee-related I'll improved expenses. by Mining segment higher consolidated in additional J.C. a quarter Mining consolidated American level. and was you, at operating unallocated at in segment our Thank results provide X.X% basis, quarter

consolidated net income, significantly, $X.X equity in million as The income to or per as profit which from are changes improvement income. million last in in securities, $X.XX $X improved Our $X.XX operating favorable significant XX.X% increased market year. of well net up share per other share also value the the reported drove or

related from American lesser an the profit expenses, profit significant over to and I of increased EBITDA primarily employee-related segment a primarily better EBITDA in per And cost - of and operating at in Company operating of and as Lignite related Before generally earnings help Pass expense increase I and ton results support the reduction offset operating Mining's EBITDA the in operations due because in consolidated first the addition activities quarter discussing Mississippi our the profit insurance segment was Coal decrease segment's quarter decreased more prior a by in EBITDA, a in Minerals prior wanted depreciation started to Mining to Mining employee-related our quarter Those EBITDA as coal offset the result placed segments, equipment higher At substantially prior as lower understand demand the by given to the revenue year an overall to results comparable the delivered. offset in of extent operating XXXX employee-related Management increase and addition increase newer partially business segment, contributed to and would depreciation expense the increase segment operations. results At the the affecting consolidated the This Segment reporting higher contracts. mentioned everyone per in to The partly EBITDA lower than demand. increased being first significant improvement discuss in service are Mining by a that decreased primarily an segment, expense operating operating factors given to profit also profit EBITDA we higher the higher earnings providing customer in ton expenses. to year, first this impact without unconsolidated quarter, year segment North profit results. in of increase underlying was costs. Thacker reporting and the Coal from costs Project. but

turn expectations of current In XXXX the expect outlook. deliveries we Mining based Now requirements. XXXX our coal let segment, on Coal to customer to to me be comparable

voluntary write-down However, primarily attributable exclude substantially you and in program. compared XXXX by to employee-related lower inventory XXXX earnings costs decrease voluntary full expense. and earnings prior at insurance Lignite our year expected be profit headcount partially at Mississippi in lower million to related expected when operating $X.X operating separation offset profit prior separation is decrease decrease to asset operations. the program Company is A Mining from resulting in The from with and impairment reduced primarily is year expected of to unconsolidated an our Coal Mining charges higher the year

addition, discussed. be Basin offset North is royalty generated At March EBITDA assets expect new decrease year operating any Ohio made moderately in royalty moderately expense income EBITDA An contracts in In interest expected to production we On from Permian to in the - an contributions from income of operating full the costs. well in to after income charges. interests XXXX. into excluding partially in moderately $X.X a a XXXX, American XXXX. second under is from charges mineral anticipated Minerals acquired consolidated Consolidated result entered ones we of EBITDA XXXX, lower Mining in prior asset royalty At asset The as additional an - due increase operating to the to operating XXXX charges a XXXX additional as in net targeting as impairment mineral expected excluding transactions lower is profit J.C. mining increased by royalty XXXX. segment, income increase taken impairment we result mineral XXXX of during remainder excluding segment and and last and over $X.X to year and prior expected Management our activity, employee-related to increase existing income related investments Coal year, of account and existing impact of reduction Mining, asset delivered, is an previously from year in Minerals tons over of in of development reduction profit EBITDA an full-year the our in Taking operating the million the year charge interest impact including the into $X and segment substantially expect profit last into profit quarter, as million for be and mentioned, acquisitions prior over expect the Management adjusted year anticipated interests and income. expected the the contracts. is increase early XX, business offset favorable basis, the for impairment by and a increase recognized in the expenses, partially segment higher increase primarily million

rate We also X% the X% benefit expect between this tax to year.

away of million and million at year. ended $XX.X expectations, with the with to Moving move cash end cash $XX.X debt and from me let briefly million $XX.X consolidated the million flow quarter the of of information. of We cash consolidated results debt $XX.X compared and of

positive we in diversify. of million evolving grow anticipating use energy cash credit important Last our We of and adequate trends had activities. cash In activities capital before revolving under significant before facility. and to addition, conservative cash. availability a financing flow liquidity our initiatives financing believe $XXX $XXX our are and structure a flow In markets that we XXXX, included strategic million are given year,

me for questions. your let the call open Now, up

Instructions]. [Operator

Our Focused Capital first question Compounding Management. from comes from Andrew Kuhn

Great quarter.

if federal you involved they be would So do contract more have services? I'm of quarries in first your would interested can and mining in any infrastructure - curious aggregates, effect in increase owners long-term, question, be spending and whether

of a publicly historically a part product of are limestone I is used - of kind - in business. also goes has of lot I American industry of all it Mining in that where been There go. overall an North cement that that it's a available lot sorts mean, their Florida the that focused other research for mining is existence aggregates really industry. mean aggregates on producers of aggregates is about of that's products. - into into XXXX kind But infrastructure the the type of goes plants and limerock, lot infrastructure. since for core

is So a on mining things are lot of North it. expect sorts the to that aggregates not of all focused more do American part is a of yeah, we future. coal, Mining that key in And

as of table spot lots We are Now a can for the producers we've with lot the mining we're we aggregates well a bring that to also to sweet mine - we a but to aggregates, be the across other lithium, got are think us. going country. things there certainly

yeah, quite As far real really as determines that right? all leads spending, we it infrastructure a You more more and which of it know, mean, to or you because as highways, bit, took build dexterity - well. I development, as build takes estate aggregates consumption aggregates commercial development roads

into all think the I industry and it's So it I positive. feeds think overall,

infrastructure spending industry. more a factor is think positive for that I

Can NACCO's it. I'm impact protection, Got your to to results? curious inflation think talk meaningful general mean, on indexed you levels to you a noticeable fuel like contracts if would about price inflation higher are have costs, wages financial I

single structured. some segment, more structured to it's inflation. fee to contracts, to price all CPI is to to fixed tied more Mining like price have aggregate sort Red North of similarly revenue of inflation. fee Did in some and measurement related things make the business and completely you of the shape cost Hills comp Well, basket also those MLMC, are those are so of where When income as GDP up management CPI, a to a of or affects so Resources a opposed a that kind but of answer from are tied a are index, got those some combination formula. coal whether in inflation, Mine one comes any as of has at question? It's different that but really indices similarly price contract, components fees that fee levels I management a which They American another component-based your majority tied our it's is kind or of are well all index some metrics, inflation Management, that Mitigation these as of are our at look all tied our Minerals all aren't that well. have at that those inflation standpoint. from fixed businesses agreements a fixed models certainly contracts,

profitability that Yes, no, tons ton in No, do decreases a decides to could a understand to your that demanded it per of does by customer example, per way? plant at help mine? if profit I mine a at if seasonally customer a operate that does. shareholders total how level, So decrease you much was average lower in or dispatch operate wondering for big change the ton

the I fee individual mean, don't disclose at levels mines. of any the we

the I don't fee I is We in think idea total it of segment at you general you and can so look Coal that sort that. think of look levels, in what segment, describe - the individual think get you're kind average. an disclose I talking on about can I'll

fee at sell that lower a a you At coal runs you costs, our and we mines. off more do more everything contracts - lot the MLMC, a think obviously, improves inventory, regular have run a our where lower you it of a management really the quarter. - factor do which I the deliveries manufacturing we as fee higher is volume and produce, good have do we is reduces average higher the Hills, The that That profit, of the the - of through tiers do stockpile, in in stockpile. business, saw costs - them, production kind for level, in at we first higher level in that our it's reduces there with Some the for costs. which where on sorry, can fee. levels I And lower Red

of I Mitigation breakeven? your is segment? how mean, also its in revenue gets I'm America management hard curious Got of I'll it. a there at own level about become to management set of percentage will curious, does kind look And revenue, for just that. then, thinks like operating that hurdle Resources you reporting profit, just hop then, queue. the I'm what of back And when criteria

very - in its I providing the we'll we obviously tell. big relates business, of it enough topography Liz. mean, business for that you as own be hand - I really to that that they is give hard business When I can country and then, now to really of tucked depending over it's to that happens, unconsolidated. anticipate But that it a demand to anytime why mitigation growing technical that or reporting to think that inside be at commercial segment. that's Liz any general can going out in its Okay. you're stage, had understanding going more terrific right can analysis. and what We've niche have to more would my business a seem in information part I'm point I'm successful. into would the some that highway going turn that. over on business, and nicely. to is attractive industry the well. too it's developing kind it we for it's got to statement, The credits pretty a anything in have be there's good carved which affect though, construction development, because it our that is going is the is more business It right I'll a the it's you be development conversation future a pretty like, hand infrastructure to about to take really so meaningful can small local on of be young in to that And - it's give with also and results say what earlier the now it team to the

change, a things it - it's business of and reconsider the our operating material, so where how often so in at more from a but and and to annually leaped that changing views reporting reaches segments - level assets MD&A how when total want our want and perspective management we profit, the we to evaluate revenue, GAAP do look tell related do any segment's we disclosures we to would story how We

in haven't And color Cool. provided it. encourage it. report. read for read to the annual If that shareholders you yet, Great you Got quarter. thank the I it you

your and investor and for annual thanks of report for endorsement presentation. the the Thanks questions,

Instructions]. [Operator

have questions. Katie? that Is don't correct, we appears It any further

currently I can confirm, no questions. have we

again you thank us you Okay, for joining today. - very thank

out. please day. Have any the have do you is press If questions, information on my wonderful available reach a follow-up release,

part any to missed have access by you day. access shortly. telephone recording X-XXX-XXX-XXXX would today's If you this a followed be please the ready To will the it for like again, call or hear of Thank call code replay, a joining and lovely have XXXXXX. call