NACCO Industries(NC) - 2019 Q1 - Quarterly Report

Financial Performance - Revenues for the three months ended March 31, 2019, increased to $40,097,000, up 28.4% from $31,200,000 in the same period of 2018[15] - Gross profit for the same period was $13,385,000, representing a significant increase of 147.1% compared to $5,424,000 in 2018[15] - Net income for Q1 2019 was $15,018,000, which is an increase of 83.5% from $8,176,000 in Q1 2018[17] - Basic earnings per share rose to $2.16 in Q1 2019, compared to $1.19 in Q1 2018, reflecting an increase of 81.5%[15] - Operating profit for Q1 2019 was $16,373,000, up 68.5% from $9,721,000 in Q1 2018[15] - The company reported a total comprehensive income of $15,119,000 for Q1 2019, compared to $8,316,000 in Q1 2018, an increase of 81.5%[17] - Total revenues for the three months ended March 31, 2019, were $40,097 million, a 28.5% increase from $31,200 million in the same period of 2018[44] - Operating profit for the same period was $16,373,000, up 68.5% from $9,721,000 in 2018[84] - Net income for the three months ended March 31, 2019, was $15,018,000, compared to $8,176,000 in 2018, reflecting an increase of 83.5%[84] Assets and Liabilities - Total assets as of March 31, 2019, were $393,787,000, up from $376,991,000 at the end of 2018, marking a growth of 4.3%[13] - Total liabilities increased to $129,520,000 as of March 31, 2019, compared to $126,287,000 at the end of 2018, a rise of 1.8%[13] - Cash and cash equivalents decreased to $79,058,000 from $85,257,000, a decline of 7.5%[13] - The balance of total stockholders' equity as of March 31, 2019, was $264,267,000, up from $250,704,000 at the beginning of the year, indicating a growth of 5.4%[22] - NACCO's total debt was $12.0 million as of March 31, 2019, a slight increase from $11.0 million at the end of 2018[98] Segment Performance - NACCO Industries, Inc. operates through three segments: Coal Mining, North American Mining (NAMining), and Minerals Management, with historical financial information recast to conform to the current presentation[22] - The Coal Mining segment generated revenue of $16,750,000, a decrease of 4.8% from $17,597,000 in 2018[84] - The NAMining segment reported revenues of $10,775,000, an increase of 5.5% from $10,213,000 in 2018[84] - The Minerals Management segment saw a significant revenue increase to $12,686,000, compared to $3,476,000 in 2018, representing a 264.5% growth[84] - The Coal Mining segment includes several operating mines, with management fee contracts that eliminate exposure to spot coal market price fluctuations[24][25] - NAMining is focused on expanding operations outside Florida and into other mining materials, with income before income taxes consolidated or unconsolidated based on contract structure[26] - The Minerals Management segment generates income primarily from royalty-based lease payments from third parties, leveraging existing oil, gas, and coal reserves[28] Cash Flow and Expenditures - Cash flow from operating activities improved significantly, with net cash used decreasing from $8,029,000 in 2018 to $544,000 in 2019, a change of $7,485,000[89] - Expenditures for property, plant, and equipment totaled $4,252,000 in 2019, an increase of $1,800,000 from $2,452,000 in 2018[89] - Capital expenditures are projected to be approximately $23 million in 2019, up from $20.9 million in 2018, with increased spending required for a new mine area[116] Revenue Recognition and Accounting Policies - Revenue recognition is based on distinct performance obligations, with fluctuations in revenue primarily driven by changes in customer demand[39][42] - The Company disaggregates revenue into major goods and service lines, aligning with ASC 606 to depict the nature and timing of revenue and cash flows[43] - NACCO adopted Accounting Standard Update 2016-02, Leases (Topic 842), on January 1, 2019, with no material effect on results of operations or cash flows[31][32] - The operating lease expense for the three months ended March 31, 2019, was $625,000, while the total net lease expense amounted to $744,000[36] - The Company has updated its lease accounting policy in connection with the adoption of ASC 842 as of January 1, 2019[83] Future Outlook - The company expects to recognize an additional $0.5 million in revenue related to contract liabilities remaining at March 31, 2019, in 2019[46] - The company expects a moderate decrease in overall coal deliveries in 2019 due to changes in customer requirements, with operating profit anticipated to decline as well[112] - NACCO expects 2019 consolidated net income to increase significantly compared to 2018, driven by higher earnings in the Minerals Management segment and reduced interest expenses[115] - The effective income tax rate is expected to be in the range of 13% to 15% based on the mix of earnings between entities[115]