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NACCO Industries(NC) - 2018 Q4 - Earnings Call Transcript
NCNACCO Industries(NC)2019-03-07 15:16
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Financial Data and Key Metrics Changes - Revenues increased by 47.7% to 39.1million,upfrom39.1 million, up from 26.4 million in the previous year's fourth quarter [7] - Consolidated pretax income from continuing operations more than doubled to 14.9million,comparedto14.9 million, compared to 5.8 million in 2017 [7] - Consolidated income from continuing operations rose by 13.8% to 11millionor11 million or 1.57 per share, compared to 9.7millionor9.7 million or 1.40 per share in the same quarter last year [8] Business Line Data and Key Metrics Changes - Coal deliveries increased to 10 million tons in the fourth quarter, up from 9.2 million tons last year [10] - Limestone deliveries at the North American Mining division rose to 8.9 million yards from 7.9 million yards in the fourth quarter of 2017 [10] - The increase in tons delivered and recognition of 3millionfromcontractualsettlementscontributedtorevenueandpretaxincomegrowth[11]MarketDataandKeyMetricsChanges−Theeffectiveincometaxrateforthefullyearwas17.53 million from contractual settlements contributed to revenue and pretax income growth [11] Market Data and Key Metrics Changes - The effective income tax rate for the full year was 17.5%, which was higher than previously anticipated due to a shift in the mix of earnings [9] - Royalty income has significantly increased in both 2017 and 2018, primarily due to the development of gas wells in Ohio [15] Company Strategy and Development Direction - The company expects consolidated pretax income to increase in 2019 compared to 2018, with an effective income tax rate projected to be between 13% to 15% [12] - Anticipated increases in revenue from Mississippi Lignite Mining Company are expected due to contractually agreed prices and a decline in diesel prices, which will reduce costs [14] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the potential for increased revenue due to favorable indices affecting coal prices and strong deliveries to power plants [24] - The company expects capital expenditures to rise to approximately 23 million in 2019, compared to 20.9millionlastyear,whilecashflowbeforefinancingactivitiesisexpectedtoincreasesignificantly[17]OtherImportantInformation−Thecompanyendedthefourthquarterwithconsolidatedcashonhandof20.9 million last year, while cash flow before financing activities is expected to increase significantly [17] Other Important Information - The company ended the fourth quarter with consolidated cash on hand of 85.3 million and debt of 11million,comparedto11 million, compared to 101.6 million in cash and 58.1millionindebtattheendof2017[18]−Approximately28,700sharesofClassAcommonstockwererepurchasedforabout58.1 million in debt at the end of 2017 [18] - Approximately 28,700 shares of Class A common stock were repurchased for about 1 million under the stock repurchase program [19] Q&A Session Summary Question: Clarification on MLMC pretax income increase - Management confirmed that MLMC pretax income is expected to grow year-over-year excluding special items from 2018 [22] Question: Positive developments at MLMC for 2019 - Management highlighted that fixed price contracts and anticipated strong deliveries to power plants would contribute positively to MLMC's performance in 2019 [24]