NACCO Industries (NC) 6 Aug 222022 Q2 Earnings call transcript

Hello, everyone, and welcome to the NACCO Q2 2022 Earnings Conference Call. My name is Seth, and I'll be the operator for your call today. [Operator Instructions] I will now hand the floor over to Christina Kmetko. Please go ahead.

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

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

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

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

good and morning, Christy you, everyone. Thank

strong Second quarter quarter us. for XXXX very another was

North Creek plant call, River during purchase Rainbow mentioned finalized and in in the our Station Coal from Energy's May. was Energy As Great early QX power Dakota I

recorded to private Dakota Rainbow our and in office of transaction excited customer, Bismarck, second in income segment units earnings result, new Energy a -- that Mining in reported our received River have company quarter from ethanol. enthusiastic cash this our former Energy. Great from an million as related our We're North contract receipt $XX settlements million income customer. termination to Coal received and of have As building produces $XX.X completed and We benefited membership a to

and independent support they understanding As they Coal I energy the marketers, its for can power to a the of think affordable our future. produce real plant so customers privately-held the Mining energy. of continue existing that have diligently continue reliable segment, potential to our work At we value and to

industry the are there foreseeable than continue today regulatory ongoing mining the will last other as in we more be the the electricity generation States about several to years. for reasons and coal-fired coal political challenges, coal power United optimistic believe future. any time We a the faces source Although, in use at fuel of for think

Turning pleased earnings Minerals results back quarter the settlement improvement to improved partly was with the driven strong to report that our Management of in XXXX, the This quarter. excluding I'm over by segment. an XXXX. our fair mainly and GRE, offset even the primarily significantly second higher to of equity The due in and at unallocated certain changes gas earnings in prices by were value expenses. Management exchange-traded we strong unfavorable oil significantly natural Minerals own in increase securities employee-related

to will continues of grow allow diversify for royalty this our and while continue us related Mineral a interests interest. small existing look that attractive Catapult the from first quarter, acquisition This to mineral business on a acquisitions completed the operations. development million to team benefited in $X.X land also results also quarter's to and of promoting gain We legacy mineral sale Partners of and

Lithium Pass the In that Lithium year. of as employee-related have And American closer an lower new as level profit steps XXXX, noted of quarter continues results business, feasibility the prior Thacker I'd of operating project. Mining but on in in key North study lot potential before, review second of rose expected permits all in project. projects. bring that to had the continues this American revenues second year. make are issued provided Mining Americas said the in progress of July this Americas like and note North start-up state half update to to segment I and potential the there's XXXX a Our These over them increase been growth an this costs also to

project. to of America projects We a with resources work North of The new to them on continues continue work of closely existing interesting advance number Pass team mitigation Thacker mitigation development the they as projects. and

first establish in Texas. the the in provide to an is Resources bank XXXX, new Lake agreement Mitigation Texas which property services purchased a to mitigation Hall finalized also mitigation and of half project, During for Ralph

making projects, progress With Christy their strong is new pleased our top over turn I'm a be with goal Resources projects are the these provider stream quarter for mitigation Mitigation permittee-responsible of mitigation Christy? results that, to these all more XX its With of cover very services. the back towards detail. and involved mitigation banks in the call XX in will strategies. I U.S. businesses is wetland to way advancing over and and to

million increased, On $X.XX quarter XXXX. I'll and level J.C. or already detail at net rose the then rising start significantly million not $X.X $XX.X to basis, in $XX.X consolidated profit consolidated segment operating income with from million J.C. million or by covered results our you, provide a share quarter Consolidated per $X.XX share the Thank additional second $X.X from year. also per increasing to last

contract these driven As the settlements were received termination primarily increases by from mentioned, GRE. J.C.

to last which was depletion and $XX adjusted of results the contract termination improved add-back XX% $XX.X second million, increase increased by Minerals EBITDA, settlements, Our excludes segment primarily consolidated driven expense. in and The quarter Management higher million our up from the amortization year. depreciation,

segments. a discussion to Moving of our

offset equipment the Mining contracts. earnings at Mining support earnings drivers from mining Lignite quarter comparable lower because profit the from North an Coteau, customer these primary let was declines. profit J.C. lower at year our the profit, on of fully by Company delivered. quarter operating ton Mining newer offset focus adjusted inflation requirements escalation of settlement, in costs segment higher American Coal already the principally segment prior our at second decreased and Mississippi expense to termination mainly impact higher XXXX due increased so contractual contract of to unconsolidated operating of An increase Adjusted and operating in from the of per increase additional the as depreciation price moderately Excluding partly lower operations, gave our EBITDA add-back cost acquisition me to resulting was the the employee-related on EBITDA.

more Finally, Minerals than profit from year Management and results. adjusted doubled segment operating segment second EBITDA the prior quarter XXXX

factors J.C. Those improvement sale As significant are on significant the now gain turn of by our the let driven higher was natural said, the me to land. and results, and gas prices affecting oil outlook.

Coal from second excluding profit and XXXX, received GRE As both -- to half of payments XXXX and year contract both including last Mining the segment's operating we we and full expect termination the Bisti decrease this year year. the in expect significantly from

half XXXX. year contribute second earnings customer in inflation expected at also at an ton from consolidated an substantially demand mining levels first significantly of of higher-than-average sold the by the driven in the anticipated Cost Company increase of is cost to in year. the reduction in remainder per second to this primarily half Lignite results second half XXXX, prior operations our Mississippi Mining half from the the lower expect of in and decrease because this year We to of

Falkirk as of Station May May of at from of to As substantially of by X, partly Mining operations are higher agreed be XXXX year. to XXXX a in result the at Bisti the per Lower fee offset offset lower the results Coteau. are increase as these last contract Coal be than the reduction termination transfer cost September in partly well is the XX, management Fuels earnings to at anticipated unconsolidated These XXXX, as were earnings expected per by anticipated the XX, XXXX. ton, through expected -- the ton full Creek the year driven Coal

We termination of forecasted expenses XXXX payments, expected anticipated a higher depletion depreciation, as result fees primarily to in increase employee-related professional last services. from in offset EBITDA, amortization significantly profit, operating Segment add-back decrease in higher adjusted reduction mainly expense. operating settlement of the also and outside year, is which contract and the by expect an from costs, excludes partially

EBITDA at period. the second in over The of Creek full quarter We the expense. year is the profit increase North of to for of both year operations year by in the expect American the operating offset partially improved and expected Mining's expenses. profit American shift to depreciation North Mining adjusted a increase second of to fourth in in Caddo increase and in anticipated half XXXX primarily with the tons prior principally same margin to half improved increase results, from contracts, mix year higher add-back segment due delivered is first this from half higher expected the over higher an operating prior reclamation income because of operating the in significantly XXXX

to Moving Minerals Management.

operating volumes. in settlement segment in third recognized comparable the to year prices expectations last adjusted profit and Excluding and the the by for anticipated decreased primarily half first current second in year income EBITDA quarter, with of production and second of but be of we gas XXXX, compared half significantly this half million driven of reduction to last an expect oil $X.X year's natural

operating half the GRE this Management XXXX expected to we segment excluding from decline for earnings profit be Management's full at an from significant termination substantial the over Minerals of income we year the earnings consolidated partially increase in summarize, profit consolidated to because settlements expect year, offset first Mining moderately profit net a this Minerals and basis in year, operating increase on However, full is by To and the of anticipated the XXXX. the in last contract XXXX. operating year significant a expect Lower in Bisti XXXX segment. Coal year,

expected a markets securities deterioration due realized In XXXX to on to XXXX. equity income not in public exchange-traded owned reoccur addition, equity in is during

to consolidated an resulted the this volatility commodities. our of be adjusted expect have natural in for to comparable and markets these we events Finally, in gas and price World caused EBITDA in XXXX. oil year increase

XXXX and able lead it prices that could in markets, if continue Management to not higher worth changes continued higher segment dispatch future While segment enhance in customer speculate these coal our in we Coal to results as Minerals gas to natural prices is are at high as plants. well our natural power oil gas noting

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

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

For flow anticipated in of high be significantly lower the to expenditures. before full financing activities year, cash because we the capital than expect XXXX

have. may you We questions turn will now to any

[Operator Andrew first from you. Compounding. go Please Our Instructions] question from Thank ahead. comes Focused Kuhn

morning, Great quarter. everyone. Good

Good morning, Andrew.

office hold think you're should were So are being company we of some these received long term? likely in if right? way membership the for you the the consider ethanol to would assets Or assets units monetizing building as conditions you and

question. good a It's

part building. a now the it's -- building great of that in we're but -- in space number very an actually currently tenants a rent We're fine. building is that nice isn't we Dakota for it's occupying really ourselves. perfectly office own of So -- of got needs, Bismarck modern actually evaluating and it. our We're office it, We in although space it's in the North space possibility

have what the most sell it. time rent occupy business, like the of not and to of just It's for sense, it in monitor to it, What while the had let's or of for coal tell. it it ethanol future see owners. possibility that. it I as asset rented. the separate stake was coal, what after sense owner a business get evaluating hard we'll look margin. say, it's, maybe actually office somebody the else. and core the in and on to of and we and we membership number to us with business ownership we're well. think space. plants we'll evaluate plants of are minority -- that of the our not majority is are of things years, we The sense because the over goes as a we're that be developing whether moving this maybe business, from to to where makes rest the interest for owned happens additional power we our an from that amount landlord of will It's of just it in to We're in because the plant, continue sense membership happy is But We've production makes that happens it for supply own estate to a we a And that, interest real and still that on part ethanol it next an number that, building as there small makes made it to increased the So had ethanol in invest at ownership years space. The the

the acquisition Pass for reflect XXXX change originally to expectations it. Thanks. schedule you costs does the do XXXX Thacker of proceed Got your project to about And planned then ahead at a which that at move will Thacker expect Pass expected? pace from in the for equipment shift meaningful or you

going with be, behind is with ours that's to business a impact that, on it I project can really as of I Americas' future. the to -- done think going think change in to itself the mean analyses timing their more to larger how in any I they're announcements -- me and project that's a the our originally The probably because and at doesn't can the and a develop customer by thoughtful was how have Well, their well this around set leading concern them we website. the all. but expected I largely project to ultimately work project you studying the meaningful give is think do on where as all it has see

has years, only the very demand particularly I And lithium, lithium, a continues project. last be it domestic few certainly, think increased. to for attractive over the

feel So good project. about very that I

operating Right. equity in segment within expect any are recorded the building, or future the going the publicly-traded And grouped of private Bellaire in some office membership the the do then that changes actual assets trust and to you be units, Corporate these all an value security be items segment? will

that for you. a sounds question like Liz,

our they're So those results so below report. are we all income. They're segment below component other operating a profit, that of

that -- is the guess to answer I just So no.

report Correct. anything that Yes, consolidated We on segment. reported and it's a below operating profit, segment below is basis.

I for queue. keep have Got today, up back it. all and right. work, the That's hop great and All I'll in the

appreciate Great. interest. We your

[Operator Instructions]

conclude to our Q&A appears That session.

J.C. Let remarks? closing Do any you me have ask

Thanks, I Christy. do not.

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

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

the release. the to the rest available me the enjoy I call. day, at your hope phone You is can now you call number turn and of that on I'll conclude back Seth to

you. call. This Thank concludes conference today's

replay are will As available, and a replay Christina the said, follows. be as details

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