NACCO Industries, Inc. Q3 FY2025 earnings call

• J.C. Butler noted Q3 2025 EBITDA increased to $12.5M from $9.3M in Q2, driven by improvements in all segments. - Utility Coal Mining is anchored by long-term contracts, but Mississippi Lignite faces pricing issues. - Contract Mining saw 20% Y/Y tons delivered growth, with a new multiyear contract in Florida. - Minerals and Royalties: Catapult completed a $4.2M acquisition in July, seeking more investments. - Liz Loveman discussed consolidated results, segment details, pension plan termination, liquidity ($80.2M debt outstanding, $152M total liquidity), and capital spending ($44M in 2025 remaining, up to $70M in 2026).

Utility Coal Mining: Operating profit and segment adjusted EBITDA declined primarily due to 2024 insurance recoveries and a reduced per ton sales price at Mississippi Lignite Mining Company. Fourth quarter 2025 results expected to improve over 2024 but full-year 2025 to decline; 2026 expected to improve. Contract Mining: Revenues net of reimbursed costs rose 22% driven by higher customer demand and parts sales. Operating profit and segment adjusted EBITDA increased. Fourth quarter 2025 expected to improve with momentum into 2026. Minerals and Royalties: Operating profit and segment adjusted EBITDA increased year-over-year due to equity investment and royalty revenues. Fourth quarter 2025 expected to decline, but full-year 2025 to increase; 2026 expected to modestly increase.

• Utility Coal Mining: 2025 full-year results to decline, 2026 expected to improve. - Contract Mining: 2025 fourth quarter expected to improve with momentum into 2026. - Minerals and Royalties: 2025 full-year operating profit to increase, 2026 modestly increase. - Consolidated: 2025 fourth quarter operating profit comparable to prior year, full-year lower than 2024; 2026 expected to have meaningful improvements in operating profit and net income.

• Utility Coal Mining: Contractual pricing mechanics at Mississippi Lignite could impact results. - Minerals and Royalties: Variable performance due to permit and project timing. - Pension plan termination will trigger a noncash settlement charge.

Q: Regarding Contract Mining segment ROIC and project timing, J.C. Butler explained about timing with assets in projects yet to deliver, like Sawtooth mine in Northern Nevada and Florida project, noting a mismatch between assets and current profitability.

Q: About differences in contracts between unconsolidated mines and Mississippi Lignite Mining Company, J.C. Butler stated unconsolidated mines are fee-for-service, while Mississippi Lignite has a contractual formula-based pricing structure different from typical mining contracts.