NACCO Industries (NC) 3 Mar 222021 Q4 Earnings call transcript

Good day and thank you for standing by. Welcome to NACCO Industries Fourth Quarter and full-year earnings call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions]. today's being that advised be conference recorded. is Please Instructions]. [Operator hand over to I would speaker conference to like Kmetko. now your the today, Christy you. Thank

may begin. You

and at I am Good XXXX Kmetko and you welcome And for Christina joining full-year Investor responsible quarter Relations for morning. morning, Thank Industries. earnings this to us I'm call. NACCO everyone. fourth our

results Yesterday call me our and available and afternoon our and Loveman, Vice Elizabeth XX today Officer, Executive and quarter This XX-K. are approximately Joining our being be this website. for fourth and filed J.C. The we Controller. information Chief full-year on on our Butler, will later webcast XXXX is President and available webcast. published President website is also Today's months.

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

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

Good Christy. everyone. you, morning, Thank

to for are we given strong million I'm quarter XXXX. a fourth frankly, pleased significantly on these income excluding generating and strong As in quarter Management that results us. than improved net operational the XXXX our more our last I'm really much The delivered company Mining earnings fourth in our results, charges, year and every fourth But quarter recognized we to other operating Comparisons higher of $XX.X and report look even segments. by profit that pleased was Coal XXXX Minerals full-year back little and non our charges, impact report to the prior year. complex of driven the quarter

and helped Our recently helped for quarter gas acquired prices Minerals as segment and Higher oil natural interest, outstanding by royalty mineral Management more another royalty had and mineral well as income interest. well. as legacy

to to the Partners operating significantly operating profit Coal our the our contract our while Mineral portfolio of team primarily demand in in expand our despite at customer owned and interest quarter fourth of Mississippi of the segment, Mining was improved royalty opportunities Bisti Fuels end development for the quarter. Catapult over Our increase of Mining also at at On mineral look because interest. profit acquisitions, This continues Company. year promoting termination prior of quarter third XXXX through increase Lignite an

in in well use as the faces XXXX, natural a increase Although sides. results as to United contributed and segment, on electricity segment. the coal in benefited significant of regulatory It to fuel coal increase Management increase future. for foreseeable in in prices continue believe Coal Minerals us in will challenges, at gas deliveries coal our Mining two industry for political we an source the the The and our increasing contributed as States dispatch an

customers they to our support diligently can produce We continue existing continue work so reliable and to affordable to that energy.

already not additional did this in for meet existing from strong of North We we hiring XXXX, business invested and bolster costs operational future the our expectations. maintenance segment to the segment, We American and contracts added fourth-quarter but our new the in by results Turning Mining do. services income our grow business capabilities. entered Arkansas. did thing financial experts American these Indiana, and the strategic lime right quarry [Indiscernible] XXXX, into Throughout Texas, new new was mining this customer, mining Central contract agreements contract also that expanded North people in by Florida. a a Mining its feel services and with in hiring to XX-year entering geographic into stone a footprint to

commissioned modestly contribute our with it While is more this larger to significantly dragline to aligns second contract contributed of once half XXXX. expected focus and is only results, in long-term the a XXXX

project pipeline to As lot can of I've experts potential whole the potential a is permits advance in in XXth. business, provide to continues operate and skills apply mine to American and a by a northern state their We mine received experience project new minerals. we of A of this That specialized work key recent before, our they've substantial mining we're of our projects of Pass growth Lithium in an Thacker services February decades quarry, working a said company Nevada. can or as example their have continues announcement there to this final works. or North Mining wide as with range with great them on where entire of that shown is of and all Americas, leverage

North expertise as existing fee is in established mitigation project partner with evaluating project mid-sized Americas to income new Mitigation agreement that similar XXXX, provide Resources Texas. Lake an a contract has as management projects, the projects and The support of in mine. second number a expands contract development to America continue management to sale joint the fee and interesting complete, coal a XXXX. Coal is We sale move to Early and is of have mitigation mitigation We've provide mining of fee this their project this to Creek that Falkirk expected services to Texas. resources a note of in This North team existing for relating restoration project Creek Mine advance should be agreement the that forward. they fee maturity, agreements for Station is the Once well. with to announced deliver continues Energy will previously management the quarter to great resources venture expected a us to finalized GRE Energy. between of Rainbow the Lithium At [Indiscernible] importantly, into in it's new Also, Rainbow operate solutions. we More GRE's Center terminate. and Station a and mitigation a would will Falkirk mitigation great generally I serve Coal occur under to

receive and a this of will will from forward to payment $XX certain us. look ownership We completion of termination GRE We to transfer other the assets million GRE, transaction.

revolving amendment quarter fourth of have during our to XXXX. the we the credit Lastly, agreements and are extension happy completed of successfully

and Looking of back core our strategies performance was to a on it XXXX, the to strong grow protect and year diversify. on

resources on Christy the in strong With I a quarter because turn company in the long-term to reflect we're the believe lot rebranded also I confidence bringing for teams I the pursue with strong our sound the And strategies. to Christy. I life. protect to makeup enthusiastic business see very more our in changing of that trajectory executing and over call natural businesses. will tagline, outlook I'm of continue about we to we on detail. back to our to what businesses as and have cover We our better that, about our results the we optimistic have core be strategies diversify. grow to

million and rising profit quarter also an with detail On additional million $X.X of J.C. basis, last of level. increased $X.X operating Consolidated to $XX.X our the Thanks XXXX. the consolidated a in $X.XX from start provide a income year. $X.XX or significantly, increasing segment I'll of $X net loss results operating to per a from or then loss per consolidated share at net fourth-quarter loss share million rose million

mentioned, are the these not fourth XXXX. charges taken $XX.X in in quarter J.C that included results As of reoccur prior year did million in

from employee-related $XX.X to earnings fourth consolidated operating In year These segment, in of increased result The adjusted and by well of American depletion, improvement profit, a results quarter last me decrease excluding as increased amortization expense driven Segment Mining's in segments. operations, EBITDA operating EBITDA were the at so Mining driver unconsolidated Mining substantially $X.X let result and focus operating American primarily mining as Company. as the lower North fourth-quarter was in Mississippi the charges, segment the Lignite lower Management Mining's prior partially support expense the North EBITDA. in offset Coal in operations. million of increase million by a year. Mining fourth-quarter newer discussed consolidated but in Lignite Coal on and substantially a primary adjusted from adjusted loss partially as increase of Our the Minerals positive depreciation, XXXX adjusted prior Mississippi the J.C costs. already loss profit at an significantly of year EBITDA improved higher XXXX equipment was higher our depreciation additional Segment earnings million Company, resulting expenses contracts. than fourth to from quarter Mining decrease EBITDA offset $X.X operating by was acquisition as improvements our increased of adjusted operating

XXXX. operating profit production impairment fourth-quarter and the realized the significant and adjusted results. by year, affecting $X.X higher even are was The prices. excluding segment EBITDA Finally, significantly million after gas factors this in increased quarter and Minerals Management's charge over oil increased prior Those for the improvement natural driven the

from coal XXXX. mining we segment turn me XXXX, let significantly operating profit Now to outlook. decrease the to In expect

results in per customer increased transaction. an by it could high Mining to part expect primarily driven unconsolidated happen. contributes closure but mining It a XXXX prior due at consolidated the the substantially driven outage to Company, operations expected earnings earnings lower to lead ton. is anticipated Lignite the isn't to to the at be is significantly mainly reduction operations Rainbow as from demand did an cost from planned XXXX, A power our at reduction gas forecast possible in Energy earnings decrease of We Falkirk, assuming resulting that which levels, expected plant that power to natural in Mississippi just prices increase lower dispatch, our will by Mining at in Coal plant in

according late the annually also broad levels a to the will the new May of expected Falkirk's Agreement After Creek per higher adjust Termination XXst, to Fuels ton through support Rainbow have contribute in transfer to contract fee of the management decline thereafter fee ton XXXX. an base Coal we and agreed unconsolidated in a in operations from management with XXXX, effective Energy measure to tracks which addition Bisti at XXXX. of in index May the to per the In the U.S. fee earnings date line with reduction current increases of XXXX, inflation. Sales a current the Station, in mining Coal

North to increase the profit in Bisti in from XXXX, mainly fees. and depreciation, excludes is In XXXX and EBITDA million costs Mining increase the Segment XXXX. expense. EBITDA, We insurance from Fuels significantly and profit a over operating offset the anticipated requirements to also amortization fee prior higher of depletion, an payments in anticipated anticipated professional in we by of operating contracts expect in Mining an result increase and million expected an reduction an customer which increase other partially customer expected the $XX to increase operating significantly result adjusted as a this as during XXXX, American increase and adjusted in year executed GRE decrease from is expense. the from contributions in primarily for termination of to improved termination operating over in significantly expenses due full-year depreciation Segment from North $XX.X contract expect XXXX, forecast XXXX profit, American

production Management, to expect expected of income are XXXX we absence and natural to EBITDA recognized be with Ohio driven significantly the of segment adjusted million decline operating $X.X and reduced settlement curve These XXXX. from XXXX. in primarily profit Minerals on compared in wells to in by declines Moving decrease the

an at and XXXX, from we by reduction expense. prices and in summarize, Our income the operating adjusted North is with stabilize in anticipated expect be to profit levels more on and significantly line Minerals at in gas net America and a Mining Mining expected oil half profit partially XXXX. averages Management at are EBITDA basis over current tax to decrease of in in Coal consolidated operating market XXXX. that segment the expectation and segment second will income higher XXXX, lower To Lower offset income consolidated the consolidated moderate

the gas received moment. expect building upon membership Rainbow to the in GRE as which at the office prices units closing Midwest be of Dakota Energy. expected increases North value compensation the Obviously, are natural we of oil Additionally, and to AgEnergy, the the in the recognize and transaction of events world causing from are with part

are segment continued not prices oil to as higher in results segment, of natural of gas out, to we power XXXX that prices could coal Minerals our natural our While Management higher it plants. able worth high if speculate might this enhance and dispatch play is well generally all how in lead as customer gas noting

cash Moving away million. consolidated $XX with briefly provide from debt flow the of me results information. million quarter We some expectations, let and $XX.X cash ended of

$XXX.X In facility. newly our million addition, availability under we revolving had of credit refinanced

capital income, result cash decrease the As of is return of a net expenditures a and financing expected cash forecasted flow anticipated before significant to in in XXXX. activities to use

any you questions to have. turn now may will We

stand Please roster. Q&A we while Instructions]. by the [Operator compile

Compounding. Your first Focused question with Andrew Kuhn is from

and Good everyone great great quarter morning, year.

Andrew. morning Good

Morning.

price, cut gas you in a mean natural Coal natural my your major segment way of move your is prices pretty outlook Coal outlook. XXXX range segment prices? a in current for being doubling outlook that the say of Or So be first think your natural off? under gas do or half the reliable a relates gas question broad Would to

No, I dispatch in increased mean, we levels. saw XXXX

Now, back. lots other factors natural of on power do yet dispatch outages, issues we believe was locked there. what if that started XXXX plants, about be gas It everybody roaring think the levels But in it's it dispatch. not increased significant in exactly come be kind was mean, when to right? be we when segment? a it I Particularly, can in mean, still Coal we economy, congestion I -- XXXX, can you led down focus of driver of that the the transmission There's can very we know prices. think

we sort what think saw lot were of out I of so of rapidly of pretty a play during the And as year. as view well What companies course a had out play of the And customers. supported conservative continued prices increasing natural year. a of the throughout of our lot we a sort amongst that lot the think course during of decisions and year the that a gas dispatch we

natural You in we also far we half the talked to about and the that that. prices last they move had our to sort Today's that gas average you're natural of back are outlook, of fact above of right, see the assumption gas going XXXX. about were moderate a prices

think to the I think together, last likely has that. outlook, that's conservative that view will this a week But dispatch, of predict natural much even affect events that our on that's but always plan exactly that support prices how put or to gas it's I pretty before hard dispatches, that the so. we the reflected of

with helpful? the sorts reliability got that. the the that think of energy the rethinking industry coming all I on has things they're of are dependability like and prices going situation forecasting of and in sort and Was in Ukraine way and energy out that's what's things Russia everybody

Yeah, initial made no, Catapult oil that's your very helpful. actually were you and royalties at that's Thank when prices then were lower. investments oil in

be able think today's that hit your oil you'd double-digit target? still could at to unlevered you investments in level, XXXX if return find prices do So stayed oil

and think buyers a that might period sellers of selling At and It's might times I cash for and are people can. thing more find in are might time, interested more other sellers. find goes category another mean, Same to necessarily any we buyers that assets that generalities. doesn't fit buyers we reserves, assets. on you there one. don't near-term undeveloped holding interested are into be one. market in I in flow you with

there of activity small we huge there of in taking that newspaper. take when We a transaction, a very of headlines in hundreds also and of transactions or being a there's know make We're here. of millions could period sort that we're We is about be opportunistic lot time view sort activity in selective -- rather buy. of things what an the dollars, lot

whatever acquire. attractive about have We think put on profile have a still we've which there just at confirms sort me for not it. not our approach. won opportunity we every us. we're environment, we disciplined chasing our return that And to bid are that bidding current can provide We're that in opportunities thinking I that seeing an got pretty We're pretty think in fit and the carefully actively I of

there's make think to in opportunities still XXXX I acquisitions. So good be going to

That's AgEnergy Dakota the income of material North then some that Midwest recognize hear. XXXX great at you membership you'll on interests. transfer to mentioned be expect office And the the to you building to full-year Do income earnings?

I we'll not to recognize we just about want be and clear recognize so Well, It's it to they're that. us. it's income when sell transferred it going are to that that going way. the and get it to

to to to you, get it we we May what wait all we're we're will over -- material? Liz, to closes decide this comment -- it should, going then the the in title going is and as I on, get do it. think assuming with property

appraisal building, we'll We'll an it's get the office and don't appraisal know us, but it's look -- a super material at I and to it's it's that an real estate,

a office of tower It's Bismarck. of on some major edge sort in not district. It's major building the office one-story development a

Yeah.

one just going below our be profit. operating will be to is included It other other And it income. point, recognized in

like you thought said the one segment I drop Got I'll question segment. X then going resources have I are explain guess it. more million. what But I that more back in for capital this I a to approximately capital XXXX being could be And in mitigation, represents, that of about kind was queue. you wondering expenditures of if light and

back great the that, expand could and jump on be queue. you that would if So I in will

light generally in Well, are in capital a It's business. equipment some segment, business. pretty that but is we acquiring a that it segment, not

and work business. asset-light this think acquire and is property. I dirt the business, we do that's generally, of some wetland you pretty a that perform But the Liz, can time-to-time of is involved think fair? can mitigation we stream that from So in

That's correct.

And if would ask like you question, a Instructions]. again, to [Operator

is Kanfer next Donovan question Nachy with Your from Energy.

the Hey everyone. Thanks for Great quarter. remarks.

Coal of to EPA on the those question rule. Creek ruled CCR treatment there and application the to ruled might sale. or if Just of the operating that. is Thanks. My hasn't Any thoughts how under expected understanding EPA any And type and post-sale? a sale an hasn't of outstanding EPA on on knowledge, them. for risks closure there a affect my remains that on or performance insights different the

to that respect challenges aware So any the with presents I am not transaction. of that

I closing that long-term believe And any facility. anybody that -- the real expected. think this it's problem the is is has for is expectations I transaction don't that towards headed this operation a of

great. And of whether major specific to response quickly, your behind driver Thanks. was gas prices Okay, question and my are if only are any driver. prices there Mississippi basically or decrease for this Plant a the decisions, whether was Plant, driver, understanding earlier the that Hills fundamentally about past major I'm there dispatch, unique dispatcher, possibly not are gas drivers the wondering increased And was Red there. a there about

the just the and forecasting you're between XXXX difference then big XXXX Given XXXX XXXX well. as and difference and between

piece that's by the how mechanical TVA, largely grid together of I availability will drivers for two mean, dispatched what coal one to right? sales, is is which ultimately to up that dispatch. plant of play really two big those determine the controlled out. work things, plant. respect With things onto is Those of results Coal at made the us, extent of the of look the and is to dispatch other coal is

Is not you dispatching that's which as right? dispatched. the issues, with have natural doesn't up be aligned prices, is the is it's with to plant and dispatching same plant it's mechanically but up get gas any driven doesn't and dispatch gas mechanical can shape, TVA great not it's end levels, high you prices in TVA and When available, plant, mechanically but very by that planets those available, helpful? versa, high mechanically and year the available get the you if it tremendously You vice like If TVA plant have a not dispatch if XXXX. can the it's wanting natural end

is. you. Thank It

you. Thank

over further remarks. to questions Christy now no Kmetko time, this closing turn If at I for will there it are back

will closing have conclude J.C, That Q&A our you. you do Thank session. any remarks?

do I not.

All right.

online it the close a call morning. will also this with We'll be when Relations transcript website on A becomes available. will We of few post Investor our available later reminders. a replay

If out you reach me. questions, please have to any

on of You the day rest now can turn you it I Operator at to reach and number earnings the back release. enjoy to conclude the Hope me the your will our phone call.

call AM This replay is [Operator beginning number will for the The This through replay XX:XX Instructions] or midnight. for concludes today's March to conference XXXX-XXX-XXXX Time dial available XXth at Eastern call. at today XXX-XXX-XXXX. be