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NACCO Industries(NC) - 2024 Q3 - Quarterly Report
NCNACCO Industries(NC)2024-10-30 20:54
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Financial Performance - Revenues for the three months ended September 30, 2024, increased to 61,656thousand,up32.461,656 thousand, up 32.4% from 46,546 thousand in the same period of 2023[6] - Gross profit for the three months ended September 30, 2024, was 7,244thousand,comparedtoalossof7,244 thousand, compared to a loss of 2,174 thousand in the same period of 2023[6] - Net income for the three months ended September 30, 2024, was 15,635thousand,asignificantimprovementfromanetlossof15,635 thousand, a significant improvement from a net loss of 3,832 thousand in the same period of 2023[9] - Basic earnings per share for the three months ended September 30, 2024, was 2.14,comparedtoalossof2.14, compared to a loss of 0.51 per share in the same period of 2023[6] - Operating profit for the three months ended September 30, 2024, was 19,699thousand,comparedtoanoperatinglossof19,699 thousand, compared to an operating loss of 6,267 thousand in the same period of 2023[6] Cash and Cash Equivalents - Total cash and cash equivalents at the end of the period was 63,052thousand,downfrom63,052 thousand, down from 128,167 thousand at the end of the same period in 2023[13] - The company had net cash used for operating activities of (2,879)thousandfortheninemonthsendedSeptember30,2024,comparedto(2,879) thousand for the nine months ended September 30, 2024, compared to 63,020 thousand in the same period of 2023[13] - The company experienced a net cash provided by financing activities of 11,877thousandfortheninemonthsendedSeptember30,2024[13]BusinessSegments−Thecompanyoperatesthreebusinesssegments:CoalMining,NAMining,andMineralsManagement,focusingonnaturalresourcesandenvironmentalsolutions[17]−TheCoalMiningsegmentoperatesunderlong−termcontracts,withMLMC′scontractrunningthroughApril1,2032,andisaffectedbycustomerdemandanddieselfuelpricefluctuations[20]−TheNAMiningsegmentoperatesinfivestatesandincludesexclusiveresponsibilityfortheThackerPasslithiumprojectinnorthernNevada[27]−TheMineralsManagementsegmentgeneratesincomeprimarilythroughleasingroyaltyandmineralinterests,withafocusongas,oil,andcoalproduction[29]ExpendituresandInvestments−Thecompanymadeexpendituresforproperty,plant,andequipmenttotaling11,877 thousand for the nine months ended September 30, 2024[13] Business Segments - The company operates three business segments: Coal Mining, NAMining, and Minerals Management, focusing on natural resources and environmental solutions[17] - The Coal Mining segment operates under long-term contracts, with MLMC's contract running through April 1, 2032, and is affected by customer demand and diesel fuel price fluctuations[20] - The NAMining segment operates in five states and includes exclusive responsibility for the Thacker Pass lithium project in northern Nevada[27] - The Minerals Management segment generates income primarily through leasing royalty and mineral interests, with a focus on gas, oil, and coal production[29] Expenditures and Investments - The company made expenditures for property, plant, and equipment totaling (30,697) thousand for the nine months ended September 30, 2024[13] - Expenditures for property, plant, and equipment totaled 8,296millionforthethreemonthsendedSeptember30,2024,significantlydownfrom8,296 million for the three months ended September 30, 2024, significantly down from 23,759 million in the prior year, a decrease of 65.0%[79] - The company is targeting investments of up to 20millionintheMineralsManagementsegmentforQ42024,withfutureinvestmentsexpectedtobeaccretive[168]InsuranceRecoveries−Thecompanyreportedbusinessinterruptioninsurancerecoveriesof20 million in the Minerals Management segment for Q4 2024, with future investments expected to be accretive[168] Insurance Recoveries - The company reported business interruption insurance recoveries of 13,612 thousand for the three months ended September 30, 2024[6] - The company recognized income of 13.6millioninQ32024relatedtobusinessinterruptioninsurancerecoveriesduetoaboileroutageattheRedHillsPowerPlant[21]StockholderEquity−AsofSeptember30,2024,totalstockholders′equitywas13.6 million in Q3 2024 related to business interruption insurance recoveries due to a boiler outage at the Red Hills Power Plant[21] Stockholder Equity - As of September 30, 2024, total stockholders' equity was 397,310,000, a decrease from 428,445,000onSeptember30,2023[15]−ThebalanceofretainedearningsasofSeptember30,2024,was428,445,000 on September 30, 2023[15] - The balance of retained earnings as of September 30, 2024, was 367,814,000, down from 404,478,000onSeptember30,2023[15]RevenueRecognition−Revenuefromgoodstransferredatapointintimedecreasedto404,478,000 on September 30, 2023[15] Revenue Recognition - Revenue from goods transferred at a point in time decreased to 17.134 million in Q3 2024 from 17.966millioninQ32023,whilerevenuefromservicestransferredovertimeincreasedto17.966 million in Q3 2023, while revenue from services transferred over time increased to 44.522 million from 28.580million[56]−RevenuefromtheMineralsManagementsegmentisrecognizedwhencontroloftheproductistransferred,withimmaterialdifferencesnotedbetweenestimatedandactualamountsreceivedforoilandnaturalgassales[52]−TheCompanyrecognizesrevenuefrommitigationcreditsatthepointcontroltransferstothecustomer,withfluctuationsinrevenueprimarilyduetochangesincustomerdemand[49]FutureOutlook−Thecompanyplanstocontinuefocusingonexpandingitsminingoperationsandenhancingitsmineralmanagementservicestodrivefuturegrowth[81]−Thecompanyanticipatessignificantyear−over−yearincreasesinCoalMiningoperatingprofitandSegmentAdjustedEBITDAinQ42024,primarilyduetohigherearningsfromunconsolidatedcoalminingoperations[161]−MitigationResourcesexpectstoachieveprofitabilitybeginningin2025basedoncurrentexpectationsfornewprojectsandtimingofpermitapprovals[176]OtherFinancialMetrics−TheeffectiveincometaxrateforQ32024was18.328.580 million[56] - Revenue from the Minerals Management segment is recognized when control of the product is transferred, with immaterial differences noted between estimated and actual amounts received for oil and natural gas sales[52] - The Company recognizes revenue from mitigation credits at the point control transfers to the customer, with fluctuations in revenue primarily due to changes in customer demand[49] Future Outlook - The company plans to continue focusing on expanding its mining operations and enhancing its mineral management services to drive future growth[81] - The company anticipates significant year-over-year increases in Coal Mining operating profit and Segment Adjusted EBITDA in Q4 2024, primarily due to higher earnings from unconsolidated coal mining operations[161] - Mitigation Resources expects to achieve profitability beginning in 2025 based on current expectations for new projects and timing of permit approvals[176] Other Financial Metrics - The effective income tax rate for Q3 2024 was 18.3%, compared to 34.5% in Q3 2023[113] - Interest expense increased to 1.386 million in Q3 2024, reflecting higher average borrowings and interest rates[114] - The debt to total capitalization ratio increased to 15% as of September 30, 2024, compared to 9% at December 31, 2023[131]