NACCO INDUSTRIES ANNOUNCES THIRD QUARTER 2025 RESULTS

Core Insights - NACCO Industries reported improved consolidated results for Q3 2025, with revenues increasing by 24% year-over-year to $76.6 million, driven by growth in Contract Mining and Minerals and Royalties segments, despite a decline in operating profit due to prior-year insurance recoveries [1][9][2] Financial Performance - Revenues for Q3 2025 reached $76,614,000, up from $61,656,000 in Q3 2024, marking a 24% increase [2] - Gross profit improved to $9,971,000, a 38% increase from $7,244,000 in the previous year [2] - Operating profit decreased to $6,777,000 from $19,699,000 year-over-year, primarily due to a $13.6 million insurance recovery in 2024 [2][9] - Net income for Q3 2025 was $13,254,000, down 15% from $15,635,000 in Q3 2024 [2][9] - Diluted EPS decreased to $1.78 from $2.14 year-over-year [2] Segment Performance Utility Coal Mining - Revenues increased to $19,654,000 in Q3 2025 from $17,706,000 in Q3 2024, an 11% rise [5][6] - Operating profit for this segment fell to $4,987,000 from $19,938,000, influenced by the absence of prior-year insurance recoveries [5][6] - Tons of coal delivered increased to 6,078,000 from 5,809,000 year-over-year [5] Contract Mining - Revenues grew significantly to $45,611,000 from $32,326,000, a 41% increase [10] - Operating profit improved to $1,929,000 from a loss of $474,000 in the previous year [10] - The segment benefited from increased customer demand and higher parts sales [11] Minerals and Royalties - Revenues rose to $9,313,000 from $8,849,000, with operating profit increasing to $7,968,000 from $6,188,000 [13] - The growth was driven by improved earnings from equity investments and higher royalty revenues due to rising natural gas prices [14] Liquidity and Capital Structure - As of September 30, 2025, total debt was $80.2 million, with total liquidity of $152.0 million, including $52.7 million in cash [3] - The company paid $1.9 million in dividends during Q3 2025 and has $7.8 million remaining under its share repurchase program [3] Strategic Outlook - The company is positioned for long-term growth, focusing on capitalizing on increasing demand for electricity and favorable macroeconomic trends [15] - Anticipated improvements in profitability for the Utility Coal Mining segment in 2026, driven by operational efficiencies and better pricing [18] - The Contract Mining segment is expected to continue its growth trajectory with new contracts and geographic expansion [19][21] - The Minerals and Royalties segment is projected to see a full-year operating profit increase in 2026, despite expected declines in Q4 2025 [23]