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Image source: The Motley Fool. Thursday, Aug. 6, 2026 at 8:30 a.m. ET Investor Relations - Christina Kmetko President and CEO - John Butler Senior Vice President and Controller - Elizabeth Loveman Operator: Thank you for standing by. My name is Tina, and I will be your conference operator today. At this time, I would like to welcome everyone to the NACCO Industries Second Quarter 2026 Earnings Call. [Operator Instructions] It is now my pleasure to turn the call over to Christina Kmetko, Investor Relations. Please go ahead. Christina Kmetko: Good morning, everyone, and thank you for joining us for our 2026 second quarter earnings call. I'm Christina Kmetko, and I'm responsible for Investor Relations at NACCO. Joining me today are J.C. Butler, NACCO's President and CEO; and Elizabeth Loveman, our Senior Vice President and Controller. Yesterday, we released our second quarter results and filed our 10-Q with the SEC. Both documents are available on our website. During today's call, we will reference non-GAAP measures, which we believe provide additional insight into how we manage our business. Reconciliations to the most directly comparable GAAP measures are also available on our website. Before we begin, let me remind you that today's remarks include forward-looking statements. Actual results may differ materially from those indicated due to a variety of risks and uncertainties, which are described in our earnings release, 10-Q and other SEC filings. We undertake no obligation to update these statements. Now I'll turn the call over to J.C. for his opening remarks. J.C.? John Butler: Thanks, Christy, and good morning, everyone. I want to start by saying that from an operating standpoint, the second quarter showed meaningful progress across NACCO's businesses. Utility Coal Mining, Contract Mining and Minerals and Royalties all contributed nicely to strong year-over-year improvement in gross profit and adjusted EBITDA. As we disclosed in our earnings release, the second quarter included impairment charges related to solar development projects that more than offset the strong operating performance of our established businesses and resulted in a consolidated operating and net loss. During the quarter, additional information and developments regarding 2 solar development projects within ReGen Resources became available, which caused us to reassess the economics of these projects. This included updated information about increased costs and delays in connecting generation facilities to the grid. These negative developments collectively reached a tipping point in the quarter. Two key factors are at play. Tax law changes tied to the One Big Beautiful Bill Act, which was signed into law just over a year ago, created tremendous timing and related procurement challenges for renewable development projects like ours, which were started long before the One Big Beautiful Bill came into play. Those factors, coupled with intense short-term demand for generating equipment, EPC services and equipment required to connect projects to the grid and price increases linked to this demand and tariffs created a perfect storm. As part of our routine quarterly review, it became apparent that 2 impacted projects were veering off the path we anticipated, leading us to take the impairment. Our review of the situation resulted in impairment charges totaling $12 million in the quarter. We believe these impairments reflect a realistic view of the challenges in developing solar projects today, and we believe this was the right call for our business. We are not treating this as business as usual. We understand that the impairment raises questions about our capital allocation discipline, particularly in a business with risks that differ from our established mining and natural resources operations. We reassess these projects based on updated costs, timing, grid connection, regulatory and market information, and we are pursuing a range of alternatives to monetize these investments and reduce future exposure. These alternatives include potential asset sales, contract amendments and other strategic actions. Depending on the outcome, there could be additional curtailment charges, but our focus is on preserving value where possible and limiting future capital requirements. As many of you know, we have always taken a long-term approach to building this company. We invest in business and opportunities where we believe our operating expertise, core skills, patience and disciplined capital investments can create value over time. That approach has helped grow and diversify NACCO over the years, in most instances, with great success. However, an important part of that philosophy is continually evaluating investments as markets evolved. We assess opportunities against our financial objectives and expected returns, and we are willing to adjust our priorities when we see better paths to long-term value creation. Recent developments with our solar projects have reinforced the need to apply heightened scrutiny to investments outside our established operating platforms. With that, let's turn to our core businesses. At Utility Coal Mining, Mississippi Lignite Mining Company was a main driver of the operating profit increase in Utility Coal Mining as our team effectively responded to changing conditions. Operational issues at the customer's power plant affected production requirements and our team shifted resources to planned reclamation activities. This reduced our asset retirement obligation rather than having those costs be recognized as an expense that would have impacted second quarter earnings. This nimble response allowed them to continue working, while also advancing work that supports the long-term life cycle of the mine and is consistent with how our coal mining teams operate. We have long-standing customer relationships built around reliability, safety, environmental responsibility and the ability to adapt to situations require. Separately, we are actively engaged with the customer regarding the delayed payments disclosed in our 10-Q. We are focused on collecting amounts owed, preserving our contractual rights and evaluating all options available under the contract. While we will not discuss specific legal strategies on this call, we understand the importance of enforcing the economic protections in the contract if payment delays continue. Contract Mining continues to be our primary growth platform for mining with strong second quarter results reflecting the successful execution of this growth. The new dragline services work in Palm Beach County, Florida is ramping up. Our Limestone Mining operations continue to serve growing customer requirements, and we are preparing to begin operations at a new limestone quarry in Arizona later this year. This business builds on our existing expertise through geographic and mineral expansion and a growing portfolio of long-term contracts with strong customers, we are improving profitability, enhancing earnings visibility and creating long-term value. That kind of growth fits NACCO well. In Minerals and Royalties, we continue to successfully manage a diversified portfolio of oil and gas, mineral and royalty interest and related investments. This business aligns well with our core growth strategy by leveraging our core skills and assets to generate meaningful ongoing cash flows across the broad range of natural resource businesses. The team continues to take a disciplined data-driven approach to evaluating the portfolio and future opportunities. While second quarter results for Minerals and Royalties were strong, results in this segment can be affected by commodity prices, production timing and the pace of domestic development activity. We manage the portfolio with a long-term view and continue to build on the quality of the assets we own. We expect profits in this segment to moderate near term due to normal production declines on existing wells and a continuation of the current pace of domestic development activity, particularly in natural gas. Mitigation Resources continues to build its platform in natural resource restoration and reclamation services. We are pleased to see that Mitigation Resources is building a strong and sustainable business by leveraging our environmental and land management skills and experience. While performance is currently variable as this business grows, Mitigation Resources is on a very nice trajectory towards profitability that we believe will provide consistent results as the business expands. Stepping back, the first half of the year reinforced what we believe makes us unique. We have core legacy businesses that generate strong earnings and cash flow today, growth platforms that are expanding and a disciplined investment process that requires us to continually evaluate where capital can create the most value. Sometimes that means investing for growth. Sometimes it means adjusting course as facts and circumstances change. Both are part of responsible long-term investment discipline. As part of our disciplined investment approach, we remain focused on strengthening our balance sheet. We are prioritizing the use of free cash flow to enhance liquidity and reduce debt, while continuing to fund disciplined high-return investment opportunities. We anticipate investing up to $35 million in the remainder of the year, primarily for business development opportunities, but only if investment opportunities meet our capital investment criteria. Recent developments have reinforced our focus on investing where there are clear value creation pathways. We believe this approach positions us to execute our growth strategies while strengthening our balance sheet and creating long-term value for our shareholders. With that, I'll turn the call over to Liz to walk through the financial results and outlook in more detail. Liz? Elizabeth Loveman: Thank you, J.C. Building on J.C.'s operational comments, I'll provide an overview of our financial results. The key takeaway is that our operating businesses delivered strong quarterly year-over-year operating -- I'm sorry, strong quarterly year-over-year profit improvements, while reported GAAP results reflected the solar-related impairment charges J.C. discussed. Consolidated revenues were $72.3 million, up 6% from $68.2 million in the prior year quarter. Gross profit was $15.2 million, up 123% from $6.8 million last year, reflecting strong performance across each reportable segment. The consolidated operating loss was $2.3 million compared with an operating loss of less than $100,000 in the prior year quarter. The net loss was $1 million or $0.13 per diluted share compared with net income of $3.3 million or $0.44 per diluted share in the 2025 second quarter. Consolidated adjusted EBITDA was up 72% to $15.9 million from $9.3 million last year. This measure excludes the solar-related charges and highlights the improvement in the underlying operating businesses. At the segment level, Utility Coal Mining results were affected by operational issues at Mississippi Lignite Mining Company's customer's power plant. While revenues decreased due to lower customer requirements, operating profit increased to $6.3 million from $1.2 million in the prior year quarter and segment adjusted EBITDA increased to $8.7 million from $3.4 million. These improvements primarily reflect better Mississippi Lignite Mining Company results as resources were shifted to planned reclamation activities as well as increased earnings from unconsolidated operations and lower operating expenses. Looking forward, we expect full year Utility Coal Mining operating profit to increase year-over-year due to the strong first half performance. In the second half of 2026, we expect results at Mississippi Lignite Mining Company to decline from the first half due to lower customer demand, higher diesel fuel costs and an anticipated inventory impairment charge. We are also monitoring the customers' payment status closely, and our outlook reflects the need for continued caution around customer demand, collection timing and inventory valuation. Earnings at the unconsolidated mining operations are also expected to decrease due to the completion of reclamation services at the Sabine Mining Company on September 30, 2026. Segment profitability is expected to improve in 2027, is driven by increases in both the consolidated and unconsolidated mining operations. In the Contract Mining segment, current quarter results benefited from the commencement and ramp-up of the Palm Beach County dragline services contract. This contract, combined with increased customer requirements and deliveries at the Limestone Mining operations led to a 34% increase in revenues net of reimbursed costs and substantial year-over-year increases in both operating profit and segment adjusted EBITDA. Operating profit increased to $3.8 million from $1 million and segment adjusted EBITDA increased to $6.3 million from $3.9 million. For both the second half and full year of 2026, we expect substantial year-over-year growth in Contract Mining operating profit and segment adjusted EBITDA. Second half results are expected to moderate from the strong first half due to lower anticipated customer demand. In 2027, a full year of earnings contributions from Palm Beach dragline services contract, together with potential new deals in the pipeline are expected to lead to significant operating profit improvement. In the Minerals and Royalties segment, operating profit increased to $6.7 million from $5.2 million and segment adjusted EBITDA increased to $7.7 million from $6.1 million. The improvements were primarily due to a 46% increase in royalty revenues, driven by higher oil prices and a favorable adjustment to prior period pricing estimates, partly offset by lower second quarter earnings from our Eiger investment. For the remainder of 2026, we expect increased income from our Eiger investment and higher oil prices to be more than offset by anticipated production declines and a changing mix of production and development activity. As a result, operating profit and segment adjusted EBITDA are projected to decline compared with the first half of 2026 as well as the second half and full year 2025. In 2027, we expect the Minerals and Royalties segment to continue generating meaningful earnings and cash flow, although operating profit is expected to moderate primarily due to normal production declines and the continuation of the current moderate pace of domestic development activity. At the consolidated level, we expect a strong performance generated by our reportable segments during the first half of 2026 to drive year-over-year improvements in full year 2026 consolidated adjusted EBITDA, which excludes the solar impairment charges and a $7.8 million pretax pension settlement charge recorded in 2025. Given the effect of these changes and potential curtailment and impairment charges in the second half of 2026, we anticipate second half and full year operating profit and net income will be lower than in 2025. Consolidated adjusted EBITDA in the second half of 2026 is expected to remain strong, although the pace of growth is expected to moderate relative to both the first half of '26 and prior year periods. From a liquidity standpoint, at June 30, 2026, we had outstanding debt of $120.1 million. Total liquidity was $114.6 million, consisting of $45.5 million of cash and $69.1 million of availability under our revolving credit facility. While we anticipate a moderate year-over-year increase in cash generated from operations, cash flow before financing is projected to remain a use of cash in 2026, reflecting our planned investment activity. We expect cash flow before financing for 2026 to improve modestly over 2025, and we expect that improvement to continue into 2027. With that, I'll turn the call back to J.C. for closing remarks. John Butler: Thanks, Liz. To wrap up, the second quarter demonstrated the strength of our core operating businesses. Our teams are executing well. Contract mining continues to demonstrate the value of the long-term growth platform we are building, and our other businesses continue to expand capabilities that can contribute over time. At the same time, we are focused on directing capital only towards the opportunities we believe offer the strongest risk-adjusted returns. We remain focused on execution, liquidity, disciplined capital investments and long-term cash flow generation. As recent investments mature and new contracts contribute more fully, we expect our businesses to support improving results and stronger cash flows over time. We'll now turn the call over to any questions you may have. Operator: [Operator Instructions] And our first question comes from Douglas Weiss with DSW Investments. Douglas Weiss: So congrats on another good result. I guess starting with MLMC. What -- it seems like there are a few things going on at once there, and I was hoping to just get a little more clarity on each. I guess you alluded in the Q to reduce demand for MLMC's generation. My sense, I would have thought that demand would be pretty steady given the growing need for electricity. Could you just comment on that? John Butler: Yes, sure. It's a good question. So there's 3 things at play, right? One is we deliver the fuel, the power plant generates electrons and TVA takes the electrons to put on to the grid. We stand ready to deliver the fuel when it's needed as we're contractually obligated to do. The power plant operates when it is able to operate, although as you know, because you followed the company for a long time, the power plant goes through both planned outages when it's sort of periods of routine maintenance. Those are typically done during the spring and the fall when the weather is pretty moderate, and there's not the same level of demand on the grid in general because of less air conditioning needs and things like that in the South. So you got the planned outages, but then you also have unplanned outages. And as you know, over the last several years, the plant has had a number of periods of unplanned outages. During the second quarter, there was a pretty significant unplanned outage at the plant. We knew it was going to be down for a while when they were repairing it. So we diverted our work to reclamation activities that go through -- those costs get charged to the balance sheet as opposed to the income statement because we've got a reclamation liability. So you've got the plant that has planned and unplanned outages. But then the other piece of this is when the plant is up and available, is TVA taking the electrons or not. It's called dispatch. And there are times when generally, yes, from a macro standpoint, increasing demand for data and other things, certainly is increasing demand. There are periods of time when TVA finds itself with excess electrons, and it will choose which assets it's going to dispatch. Tax law convoluted, I think distorting tax law sometimes causes renewables to be dispatched ahead of baseload generation because of the tax credits. And then there are just other times when the weather turns out to be really mild or other things happen and TVA just doesn't need the electrons. So as we sit on the backside of this, we're subject to power plant being up and running and TVA needing the electrons. Our history is our history. The forecast is based on what are we hearing from our customer in TVA. But the indications that we get are general and not specific day by day or week by week. And so it can change from that. Our current expectation is what it is, and we're just going to have to see how that plays out with the power plants and TVA with respect to electrons. Does that explain it? Douglas Weiss: Yes. Yes. No, that's helpful. And as far as the receivable, it doesn't sound like from a practical standpoint, there's much in the near term to be done on that, except wait for the plant to come to be more fully utilized. John Butler: I can tell you, it's -- we're paying a lot of attention to it. We're keenly focused on it. And we're -- as we have, we will continue to enforce and pursue the clear rights to remedy that we've got in our contract. [indiscernible] 1995, it runs until 2032. It's been the same contract throughout. So we're pretty familiar with the terms. Douglas Weiss: Right, right. Okay. Let's see. I had a kind of bigger picture or longer-term question on power production in North Dakota. I was reading about proposals to extend the pipeline from the Bakken across North Dakota. I'm just curious how likely you think those projects are to go forward or that project is to go forward? And if that would have potentially introduced new gas-fired competition into the region over the next -- I guess, really over the next decade. John Butler: Well, so the pipeline -- I mean, there's multiple pipeline projects being discussed up there in North Dakota. We're not a party to that. So it's hard for me to really comment on the likelihood or any of that. I can tell you that it's an incredibly energy-rich state with tremendous coal and oil reserves and then the associated natural gas that comes with the oil. The state is an energy exporter. And I think there's lots of opportunities for the North Dakota generation industry to support more generation. There's a lot of data. There's a lot of other demand in the upper Midwest that can be served. And I don't know -- I don't think that we really view many of those projects as real competition for us. Doug, at the same time, there's also a lot of transmission being developed. Just as there's various stages of pipelines being developed, there's a lot of transmission work underway in the upper Midwest, North Dakota and beyond, which you can -- I think of transmission like a highway system. If you didn't keep expanding your highway system, you'd end up with congestion. But if you keep expanding your highway system, which in this case is transmission, you don't really have the congestion problems and the electrons can get to the markets they need. Douglas Weiss: Okay. As you continue your reinvestment program, I'm curious, and I've asked this from time to time, but I'm curious if you are seeing better returns in contract mining or oil and gas or mitigation resources. I'm just curious if you have one of those segments where you are beginning to feel like is the most fruitful place for you to reinvest your capital? John Butler: Well, I mean, it's an interesting question. It's one we think about a lot. We -- I would say is we've been on this reinvestment journey for about over 10 years now with most emphasis coming in the last 5. And I would say is each of our core businesses, as we've been working on investment thesis and business model, we keep refining those models, and we keep finding ways where we can capture efficiencies in our own operations, which enhance margins. We have modified contract structures. We've evolved our customer engagement and our customer relationships in ways that are mutually beneficial for them and for us. And if we can deliver more value to them, that's a good thing for us. And I kind of think of that across all of our core businesses. And over time, we are seeing new ways to enhance each of those. So that's -- I mean, that's one part of the answer. The other part of the answer is I'm a big believer, we're big believers that each of these businesses, these core businesses has its own attributes that make it attractive to us on its own, but it's also useful to us as part of the collective whole. Our mining business and our mitigation business very clearly benefits from the work that's done in our coal mining business. Honestly, our coal mining business and our mitigation business are benefiting from some things that we're doing on the North American mining side, and it's -- they're all helping each other. We call it a one-team approach. So there's synergies in all of these. And then I guess the third way I think about this is about the importance of diversification. We're seeing an energy renaissance in the United States around fossil fuels. But I want to make sure that we're doing things that are complementary to that -- to those businesses so that we've got strength if for whatever reason, the political forces really turn back against us. I think that basic consumer demands and industrial demand for electrons are going to help us in that way. There's been a big shift in sentiment the last several years around more generation, not less. But I think the improving business models, the synergies between the businesses and the desire for diversification to create a more stable, very long-term platform for us lead us to believe that it's really in the best interest of the company and its shareholders to take a diversified approach. So that's really how we think about the balanced approach to investing that we've been making. Douglas Weiss: Right. Yes, makes sense. Looking at your customers on the contract mining side, it does skew towards Cemex at the moment. How much of a priority is it for you to broaden the customer mix over the next few years? John Butler: Yes, that's a great question. So there's a number of factors at play in this industry. One is we've already got relationships with a number of the large -- the big players. If you think about aggregate production in the United States or cement production, we're doing business with some of the very largest names. We are finding that we are getting more opportunities to do business with them because they see the work that we do at one quarry or a couple of quarries and they ask us if we would come take a look at another place where they're operating and give them our thoughts on what we could do to help them. And not in every instance, but in a number of instances, that turns into additional projects. We're about to start operating a dragline later this year in Phoenix, Arizona for an existing customer. And that relationship, that contract and operating at that quarry came about exactly in that way because we were already doing business with one of the big players. That said, we're also -- we find that there's geographic relationships. We started in South Florida with one very successful long-term aggregates producer. And over time, we ended up doing business with a number of people in South Florida. As we went up into Central Florida, which was our first foray about 10 years ago with 1 or 2 quarry relationships, that's now expanded, and we're pushing into other areas across the United States as it seems appropriate. And most of that expansion has happened through our Dragline services, where we're providing the mining services for their operations. But for the last few years, we've also been using Wirtgen surface miners in test cases with other operators in other parts of the state, and we're seeing some success. In some instances, it's done what we thought it would do with the customer, but we all approached it as an experiment. And sometimes it's like, okay, well, we all learn something. But another instance, it's like, okay, well, that was really interesting here. Can you guys take that piece of equipment to a different quarry and try it there because we think it's got real potential. So we're seeing lots of opportunities to grow because of the relationships and contracts we've got as well as just being in the neighborhood. It's one of the reasons I'm so enthusiastic about being in the western part of the United States with this Phoenix quarry as well as our Limerock business -- sorry, lithium. We have too many minerals that start with L, our lithium operation in Northern Nevada. And I guess the other way that we expand is by finding new ways to apply our skills. The Palm Beach County, Florida project, where we've got a couple of draglines up and running now. We're in the process of commissioning a third dragline, and we've got a fourth dragline that will be up and running later this year. Putting 4 draglines on 1 project is a really big deal. We're very excited about that. It's going well. We're still ramping up our operations as we go along, but we feel very good about the trajectory we're on. To me, one of the really exciting things about this is we are not mining the aggregates, the limerock here for sales as construction materials by an aggregates producer. This is being used by our customer in a big infrastructure project related to Lake Okeechobee and the Everglades in really infrastructure development. Well, that's kind of opened up a new market for us in ways that we didn't -- we really hadn't figured out how to tap into this market. And this relationship, I think, is going to give us at least opportunities to explore other ways to apply our skills to help other people that might be in a different part of the work that we do, we can help them with the same kind of services, but in a different way. We're not mining aggregates for sale. We're mining aggregates to support the development of the infrastructure directly. So I talk about this as investment horizon as we touch more places in this business, it gives us more opportunities for growth. And I think that's going to turn into -- we're already seeing them turn into expanded opportunities for growth in the future. Very long-winded answer, but it's one I'm really excited about. Douglas Weiss: Yes. No, that's great. Just circling quickly on Mississippi lignite and maybe you don't want to comment too much on legal issues. But I'm just curious if you're able to articulate what recourse you have a little more granularly? Are you -- do you have more recourse than a typical unsecured creditor? John Butler: We -- I mean, you're right. I'm not going to comment on legal strategies. But we have, I think, a pretty clear understanding of our contractual rights and other points of leverage in this relationship. And we are very active in understanding those and knowing what those levers are and how those can be deployed. But I really -- I don't think it'd be appropriate for me to comment further than that. Douglas Weiss: Enough. Congrats again on the good quarter and look forward to speaking in 3 months. John Butler: Doug, we appreciate your ongoing interest. Thanks for your questions. Operator: [Operator Instructions] With no further questions in queue, I will now turn the call back over to Christy Kmetko for closing remarks. Christina Kmetko: Okay. Thank you. We'll end the Q&A session there. Before we wrap up, I'd just like to provide a few reminders. A replay of our call will be available later this morning. We'll also post a transcript on our website when it becomes available. If you have any questions, please reach out to me. My phone number is on the earnings release. I hope you enjoy the rest of your day. And I'll turn it back to Tina to conclude the call. Thank you so much. Operator: Thank you again for joining us today. This concludes today's conference call. You may now disconnect. Before you buy stock in Nacco Industries, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Nacco Industries wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. 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As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. NACCO (NC) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Interested in NACCO Industries, Inc.? Here are five stocks we like better. Strong core operating performance lifted Q2 revenue 6% to $72.3 million and Adjusted EBITDA 72% to $15.9 million, with major gains in utility coal mining, contract mining and minerals and royalties. $12 million in solar-project impairment charges pushed NACCO to a $2.3 million operating loss and a $1 million net loss; management expects full-year operating profit and net income to decline from 2025 and is evaluating asset sales and other measures to limit further costs. Contract mining is positioned for substantial growth as the Palm Beach County project expands to four draglines, while NACCO plans to prioritize cash flow toward debt reduction and liquidity, with up to $35 million of investment planned for the rest of 2026. Royal Caribbean’s Best Quarter Ever Still Leaves a Big Question NACCO Industries (NYSE:NC) reported stronger operating performance across its utility coal mining, contract mining and minerals and royalties businesses in the second quarter of 2026, but solar-project impairment charges drove the company to a consolidated operating loss and net loss for the period. Revenue rose 6% year over year to $72.3 million, while gross profit more than doubled to $15.2 million from $6.8 million. Consolidated Adjusted EBITDA increased 72% to $15.9 million, compared with $9.3 million a year earlier. However, NACCO recorded $12 million in impairment charges tied to two solar development projects within its ReGen Resources business. → Sandisk Just Delivered a Blowout Quarter—Here's Why the Stock Is Falling Why These 2 Hotel Stocks Are Beating Travel Peers The company posted an operating loss of $2.3 million, compared with an operating loss of less than $100,000 in the prior-year quarter. NACCO reported a net loss of $1 million, or $0.13 per diluted share, versus net income of $3.3 million, or $0.44 per diluted share, in the second quarter of 2025. President and CEO J.C. Butler said the solar impairments followed a reassessment of project economics after the company received updated information on rising costs and delays in connecting generation facilities to the power grid. → 4 Oil and Gas ETF Plays as Prices Stay Sky-High MarketBeat Week in Review – 05/04 - 05/08 Butler cited tax-law changes associated with the One Big Beautiful Bill Act, demand for generating equipment and engineering, procurement and construction services, higher costs for grid-connection equipment, and tariff-related price increases. He said the developments created “a perfect storm” for renewable projects that had been initiated before the law’s enactment. “We are not treating this as business as usual,” Butler said, adding that the company is evaluating alternatives to monetize the investments and limit additional capital needs. Those alternatives include potential asset sales, contract amendments and other strategic actions. He said further curtailment charges could occur depending on the outcomes. → No Hangover: Revisiting Microsoft One Week After Earnings NACCO said the experience reinforced its intention to apply heightened scrutiny to investments outside its established operating platforms. The company expects second-half and full-year operating profit and net income to be lower than in 2025, reflecting the solar charges and the potential for additional curtailment or impairment charges. Utility coal mining operating profit rose to $6.3 million from $1.2 million in the prior-year quarter, while segment Adjusted EBITDA increased to $8.7 million from $3.4 million. Results were driven primarily by improved performance at Mississippi Lignite Mining Company, or MLMC. MLMC faced lower production requirements after operational issues at its customer’s power plant. Butler said the mining operation shifted resources to planned reclamation work during the outage. The move reduced the company’s asset retirement obligation rather than recording those costs as an expense in the quarter. Management said it remains engaged with the customer regarding delayed payments disclosed in NACCO’s 10-Q. Butler said the company is focused on collecting amounts owed, preserving its contractual rights and evaluating available options under the contract, which has been in place since 1995 and runs through 2032. For the full year, NACCO expects utility coal mining operating profit to increase from 2025 because of its strong first-half performance. Still, it expects MLMC results in the second half to decline from the first half amid lower customer demand, higher diesel costs and an anticipated inventory impairment charge. Earnings from unconsolidated mining operations are also expected to decline following the planned completion of reclamation services at Sibanye Mining Company on Sept. 30, 2026. Contract mining delivered substantial year-over-year gains as NACCO began and ramped up its Palm Beach County Dragline Services contract and served higher customer requirements at its limestone mining operations. Segment operating profit increased to $3.8 million from $1 million, while Adjusted EBITDA rose to $6.3 million from $3.9 million. Revenue, net of reimbursed costs, increased 34%. The company expects substantial growth in contract mining operating profit and Adjusted EBITDA for both the second half and full year, although second-half results are expected to moderate from the first half because of lower anticipated customer demand. NACCO is also preparing to begin operations at a new limestone quarry in Arizona later this year. Butler said the Palm Beach County project is expanding to four draglines, with two already operating, a third being commissioned and a fourth expected to begin later in 2026. He described the project as an opportunity to apply NACCO’s mining capabilities to infrastructure work related to Lake Okeechobee and the Everglades. In minerals and royalties, operating profit increased to $6.7 million from $5.2 million, while Adjusted EBITDA rose to $7.7 million from $6.1 million. Royalty revenue increased 46%, supported by higher oil prices and a favorable adjustment to prior-period pricing estimates. Lower earnings from NACCO’s Eiger investment partly offset those gains. Management expects the segment’s results to decline in the remainder of 2026 compared with the first half, the second half of 2025 and full-year 2025. Increased Eiger income and higher oil prices are expected to be more than offset by production declines and changes in production and development activity. As of June 30, NACCO had $120.1 million in outstanding debt and total liquidity of $114.6 million, including $45.5 million of cash and $69.1 million available under its revolving credit facility. The company said it plans to prioritize free cash flow toward liquidity improvement and debt reduction while selectively funding investments that meet its return criteria. NACCO expects to invest up to $35 million during the remainder of 2026, primarily in business-development opportunities. NACCO Industries, Inc is a Cleveland, Ohio–based diversified holding company with a history spanning more than a century. Through its principal subsidiaries, the company operates in two primary business areas: coal mining and material-handling system design and manufacturing. Originally incorporated in 1913, NACCO has maintained a presence on the New York Stock Exchange under the ticker symbol NC since the 1920s, evolving its portfolio to meet changing market demands while preserving its core expertise in bulk commodities and industrial services. The North American Coal Corporation, NACCO's coal mining segment, is among the largest producers of lignite coal in the United States. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "NACCO Industries Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Management attributed a consolidated net loss to $12 million in impairment charges for two solar projects, citing a 'perfect storm' of tax law changes, grid connection delays, and procurement challenges. The Utility Coal Mining segment improved profitability by shifting resources to reclamation activities at the Mississippi Lignite Mining Company, effectively reducing asset retirement obligations during customer power plant outages. Contract Mining is the primary growth platform, driven by the ramp-up of dragline services in Florida and expanding limestone operations to serve growing customer requirements. The Minerals and Royalties segment leveraged higher oil prices and prior period pricing adjustments to deliver strong cash flows, despite broader volatility in domestic natural gas development. Management is pursuing a range of alternatives to monetize solar investments, including potential asset sales and contract amendments, to limit future capital exposure. Strategic positioning remains focused on a 'one-team' approach, where core mining expertise is applied across coal, aggregates, lithium, and environmental restoration services. The company is enforcing contractual rights regarding delayed payments from a utility customer, emphasizing the importance of protecting the economic terms of long-term agreements. Full-year 2026 Utility Coal Mining profit is expected to increase, though second-half results may decline due to lower customer demand, higher fuel costs, and anticipated inventory impairments. Contract Mining is projected to see significant operating profit improvement in 2027, supported by a full year of Florida dragline contributions and a new limestone quarry in Arizona. Minerals and Royalties earnings are expected to moderate in the near term due to normal production declines on existing wells and a continued moderate pace in domestic natural gas development. Management anticipates investing up to $35 million in the remainder of 2026, strictly prioritized for business development opportunities that meet high-return capital criteria. The company expects cash flow before financing to improve modestly through 2027 as recent investments mature and new contracts contribute more fully to the bottom line. The $12 million solar impairment reflects a strategic reassessment of the ReGen Resources portfolio following unfavorable shifts in the renewable energy regulatory and procurement landscape. Reclamation services at the Sabine Mining Company are scheduled for completion on September 30, 2026, which will lead to a decrease in earnings from unconsolidated operations. Management flagged potential additional curtailment charges in the second half of 2026 depending on the outcome of solar asset monetization efforts. Ongoing monitoring of a utility customer's payment status remains a key risk, with the company evaluating all legal and contractual options to ensure collection. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management explained that demand is impacted by a combination of planned maintenance, unplanned plant outages, and TVA's 'dispatch' decisions. Renewables are sometimes dispatched ahead of baseload coal due to tax credit distortions, even during periods of high macro demand for electricity. The CEO emphasized that while fossil fuels are seeing a 'renaissance,' diversification provides a stable platform against potential shifts in political sentiment. Synergies exist between coal mining, contract mining, and mitigation resources, allowing the company to capture operational efficiencies across the 'one-team' framework. Growth is occurring by expanding relationships with existing large-scale aggregate and cement producers into new geographies like Phoenix, Arizona. The Palm Beach project represents a pivot into infrastructure-related mining (Everglades restoration) rather than traditional construction material sales, opening a new market for dragline services. Management declined to discuss specific legal strategies but asserted they have a clear understanding of contractual rights and 'points of leverage' in the 1995-2032 agreement. The company is actively evaluating how these levers can be deployed if payment delays persist.

This article first appeared on GuruFocus. Revenue: $72.3 million, up 6% from $68.2 million in the prior year quarter. Gross Profit: $15.2 million, up 123% from $6.8 million last year. Operating Loss: $2.3 million, compared with an operating loss of less than $100,000 in the prior year quarter. Net Loss: $1 million, or $0.13 per diluted share, compared with net income of $3.3 million, or $0.44 per diluted share in the 2025 second quarter. Adjusted EBITDA: $15.9 million, up 72% from $9.3 million last year. Utility Coal Mining Operating Profit: $6.3 million, up from $1.2 million in the prior year quarter. Utility Coal Mining Adjusted EBITDA: $8.7 million, up from $3.4 million. Contract Mining Revenue (net of reimbursed costs): Increased 34% year-over-year. Contract Mining Operating Profit: $3.8 million, up from $1 million. Contract Mining Adjusted EBITDA: $6.3 million, up from $3.9 million. Minerals and Royalties Operating Profit: $6.7 million, up from $5.2 million. Minerals and Royalties Adjusted EBITDA: $7.7 million, up from $6.1 million. Royalty Revenues: Increased 46% driven by higher oil prices and a favorable adjustment to prior period pricing estimates. Impairment Charges: $12 million related to two solar development projects within ReGen Resources. Outstanding Debt: $120.1 million at June 30, 2026. Total Liquidity: $114.6 million, consisting of $45.5 million of cash and $69.1 million of availability under the revolving credit facility. Warning! GuruFocus has detected 6 Warning Signs with NC. Is NC fairly valued? Test your thesis with our free DCF calculator. Release Date: August 06, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Consolidated Adjusted EBITDA increased 72% year-over-year to $15.9 million, driven by strong performance across all reportable segments. Utility coal mining operating profit surged to $6.3 million from $1.2 million, aided by a nimble shift to reclamation activities that reduced asset retirement obligations. Contract mining revenues rose 34% and operating profit jumped to $3.8 million from $1.0 million, with the Palm Beach County dragline contract ramping up and new limestone operations starting in Arizona. Minerals and royalties operating profit increased to $6.7 million from $5.2 million, supported by a 46% rise in royalty revenues due to higher oil prices. Management is actively pursuing monetization alternatives for solar projects, including asset sales and contract amendments, to preserve value and limit future exposure. The company expects full-year 2026 consolidated Adjusted EBITDA to improve year-over-year, with continued growth anticipated into 2027. The company recorded $12 million in impairment charges related to two solar development projects, leading to a consolidated operating and net loss for the quarter. Solar projects face significant headwinds from tax law changes (One Big Beautiful Bill Act), grid connection delays, and cost increases from tariffs and equipment demand. Mississippi Lignite Mining Company faces reduced customer demand, higher diesel fuel costs, and an anticipated inventory impairment charge in the second half of 2026. There are delayed payments from the MLMC customer, and the company is evaluating contractual rights and potential legal actions if payment delays continue. Minerals and royalties segment profits are expected to moderate in the second half due to production declines and a slower pace of domestic development activity. Cash flow before financing is projected to remain a use of cash in 2026, reflecting planned investment activity, and second-half operating profit and net income are expected to be lower than 2025. Q: Can you provide more clarity on the factors impacting Mississippi Lignite Mining Company (MLMC), particularly the reduced demand for its generation? A: J.C. Butler, President and CEO, explained that three factors are at play: planned and unplanned outages at the customer's power plant, and dispatch decisions by TVA. During the second quarter, a significant unplanned outage occurred, prompting NACCO to shift resources to reclamation activities, which are charged to the balance sheet rather than the income statement. Additionally, TVA may choose not to dispatch the plant during periods of excess electricity supply, sometimes due to tax credits favoring renewables. The company's outlook is based on general indications from the customer and TVA, which can change frequently. Q: What recourse does NACCO have regarding the delayed payments from the MLMC customer, and does it have more leverage than a typical unsecured creditor? A: J.C. Butler declined to comment on specific legal strategies but stated that the company has a clear understanding of its contractual rights and other points of leverage in the relationship. He emphasized that NACCO is actively evaluating these options and will enforce the economic protections in the contract if payment delays continue. Q: Are you seeing better returns in contract mining, oil and gas, or mitigation resources, and where is the most fruitful place to reinvest capital? A: J.C. Butler stated that NACCO is refining business models across all core businesses to capture efficiencies and enhance margins. He highlighted the synergies between the businesses, noting that mining and mitigation benefit from coal mining operations and vice versa. He emphasized the importance of diversification to create a stable, long-term platform, especially given the current energy renaissance in fossil fuels and the need to hedge against potential political shifts. Q: How much of a priority is it to broaden the customer mix in the contract mining segment, given the current skew towards Cameco? A: J.C. Butler explained that NACCO already has relationships with some of the largest players in aggregate and cement production. Growth often comes from existing customers asking NACCO to expand to new sites, as seen with the upcoming Phoenix, Arizona dragline project. The company is also expanding geographically and exploring new applications for its skills, such as the Palm Beach County project, which involves mining aggregates for infrastructure development rather than for sale as construction materials. Q: How likely are the proposed pipeline projects in North Dakota to go forward, and would they introduce new gas-fired competition? A: J.C. Butler noted that NACCO is not a party to those pipeline discussions, making it difficult to comment on their likelihood. However, he emphasized that North Dakota is an energy-rich state with significant coal, oil, and natural gas reserves. He does not view these projects as real competition, as there is substantial demand for generation in the upper Midwest, and ongoing transmission development will help deliver electrons to markets. Q: Can you elaborate on the impairment charges related to the solar development projects and the decision to take them? A: J.C. Butler explained that the impairments, totaling $12 million, were driven by a "perfect storm" of factors: tax law changes from the One Big Beautiful Bill Act, intense short-term demand for generating equipment and EPC services, and price increases linked to tariffs. These developments caused two projects to veer off their anticipated path. NACCO is pursuing alternatives such as asset sales and contract amendments to monetize investments and reduce future exposure, though additional curtailment charges are possible. Q: What is the outlook for the minerals and royalties segment for the remainder of 2026 and into 2027? A: Elizabeth Loveman, Principal Financial Officer, stated that while second quarter results were strong, the company expects profits to moderate in the second half of 2026 due to normal production declines on existing wells and the current pace of domestic development activity, particularly in natural gas. For 2027, the segment is expected to continue generating meaningful earnings and cash flow, though operating profit is projected to moderate due to similar factors. Q: Can you provide more detail on the expected financial performance for the second half of 2026 and full year? A: Elizabeth Loveman noted that the strong first-half performance is expected to drive year-over-year improvements in full-year 2026 consolidated Adjusted EBITDA, which excludes the solar impairment charges and a $7.8 million pre-tax pension settlement charge from 2025. However, due to the impairment charges and potential additional curtailments, second-half and full-year operating profit and net income are expected to be lower than 2025. Cash flow before financing is projected to improve modestly over 2025, with continued improvement into 2027. Q: What is the company's capital allocation strategy and investment outlook for the remainder of the year? A: J.C. Butler stated that NACCO remains focused on strengthening its balance sheet, prioritizing free cash flow to enhance liquidity and reduce debt. The company anticipates investing up to $35 million in the remainder of 2026, primarily for business development opportunities, but only if they meet strict capital investment criteria. Recent developments have reinforced the need for heightened scrutiny on investments outside established operating platforms. Q: How is the Palm Beach County Dragline Services contract performing, and what is the outlook for contract mining? A: J.C. Butler reported that the Palm Beach County project is ramping up well, with two draglines operating, a third being commissioned, and a fourth expected to be operational later this year. This project is unique as it involves mining aggregates for a major infrastructure project related to Lake Okeechobee and the Everglades, rather than for sale as construction materials. The company expects substantial year-over-year growth in contract mining operating profit and Adjusted EBITDA for the second half and full year of 2026, with further improvement in 2027 driven by a full year of contributions from this contract and potential new deals. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

CLEVELAND, Aug. 5, 2026 /PRNewswire/ -- Consolidated Q2 2026 Highlights: Gross profit of $15.2 million improved 123% over Q2 2025 on 6% revenue increase Operating loss of $2.3 million includes $12.0 million of solar asset impairment charges Net loss of $1.0 million, or $0.13 per share, versus Q2 2025 net income of $3.3 million, or $0.44 per share Adjusted EBITDA of $15.9 million up 72% over Q2 2025; down 3% sequentially NACCO Industries® (NYSE: NC) today announced consolidated results for the three and six months ended June 30, 2026. "NACCO delivered significant year-over-year improvement in both gross profit and Adjusted EBITDA," said J.C. Butler, NACCO President and Chief Executive Officer. "While consolidated results included asset impairment charges related to solar projects, underlying momentum across our segments during the first half of 2026 remained strong. We expect operating performance to moderate in the second half, but the growth opportunities underway and our disciplined capital criteria give us confidence in our trajectory as we move into 2027. We will continue to focus on executing our business plan, strengthening our balance sheet and creating long-term value for our shareholders." Strong second-quarter 2026 performance across each reportable segment led to substantial year-over-year improvements in gross profit. This strong operating performance was more than offset by impairment charges related to certain solar development projects within ReGen Resources. Excluding the effect of the impairment charges, operating results decreased moderately from the first quarter of 2026. The decline was primarily due to lower earnings than anticipated from an equity investment in the Minerals and Royalties segment. In the Coal Mining segment, operational issues at Mississippi Lignite Mining Company's customer's power plant and reduced earnings of unconsolidated mines also contributed to the decline. Liquidity At June 30, 2026, the Company had outstanding debt of $120.1 million. Total liquidity was $114.6 million, which consisted of $45.5 million of cash and $69.1 million of availability under our revolving credit facility. Consistent with our focus on balance sheet strength, we are prioritizing the use of free cash flow to enhance liquidity and reduce debt while continuing to fund disciplined, high-return investment opportunities. Detailed Discussion of 2026 Second Quarter Compared to 2025 Second Quarter Utility Coal Mining Results Utility Coal Mining revenues decreased 25% from the prior year. Operational issues at Mississippi Lignite Mining Company's customer's power plant during the 2026 second quarter resulted in a decline in consolidated tons delivered. Favorable contractual pricing partly offset the effect of reduced deliveries. Despite lower revenues, operating profit and Segment Adjusted EBITDA improved significantly year over year. These gains primarily reflect improved Mississippi Lignite Mining Company results, increased earnings of unconsolidated operations and decreased operating expenses. Mississippi Lignite Mining Company results benefited from redeploying crews to execute planned reclamation activities during power plant outages. These factors drove a meaningful improvement in gross profit compared with the prior year, when results were affected by a $1.3 million inventory impairment charge. Earnings of unconsolidated operations improved year over year primarily due to increased customer requirements at Coteau and Coyote Creek. Contract Mining Results Second-quarter 2026 results benefited from the commencement and ramp up of a new dragline services contract, reflecting continued progress in the strategic expansion of Contract Mining's business model. This contract combined with increased customer requirements at the limestone mining operations led to a 34% increase in revenues, net of reimbursed costs, and substantial year-over-year increases in both operating profit and Segment Adjusted EBITDA. Minerals and Royalties Results Minerals and Royalties revenues, operating profit and Segment Adjusted EBITDA increased primarily due to a 46% increase in royalty revenues. The improvements were primarily driven by higher oil prices and a favorable adjustment to prior period pricing estimates. The revenue growth was partially offset by lower second-quarter 2026 earnings from an equity investment. Unallocated Unallocated primarily includes the financial results of Mitigation Resources of North America®, ReGen Resources and other developing businesses that are not directly attributable to our reportable segments, as well as Bellaire Corporation and public company administrative costs. Unallocated revenues increased over the prior year quarter primarily as a result of higher restoration and reclamation service revenue at Mitigation Resources. The significant increase in the operating loss is due to the impairment charges of $12 million for certain solar development projects within ReGen Resources. Excluding these impairment charges, the Unallocated operating loss and Segment Adjusted EBITDA improved moderately year over year. Outlook NACCO Industries is a diversified natural resources company with a unique business model strategically positioned to deliver stable and growing financial returns over the long term. Our business model is purposefully built for durability and resilience with an expanding portfolio of long-term contracts, relationships and investments that leverage our proven operational expertise, disciplined capital allocation and an entrepreneurial yet patient approach. We have methodically built unique capabilities and clear competitive advantages that allow us to pursue a wide range of growth opportunities, often completely integrated into customers' operations in partnership-based relationships. We have multiple vectors for value creation, and we are steadfastly committed to delivering compounding returns and expanding investor value over the long term. Our foundation rests on a stable base of long-term coal mining contracts and legacy mineral and royalty assets, which generate dependable recurring cash flows. As new long-term contracts and investments are added across the Company, these new multi-year agreements create a "layering effect" as their contributions compound over time. While these long-term agreements and investments are intended to strengthen our earnings base over time, we continually evaluate whether individual projects or initiatives remain aligned with our strategic and financial objectives. As part of this process, changing market conditions, regulatory developments and project-specific challenges led us to reassess certain solar investments during the 2026 second quarter. In early July, we began pursuing a range of alternatives, including potential asset sales, contract amendments and other strategic actions, to monetize these investments and reduce our exposure. Depending on the outcome of these activities, additional curtailment costs could be incurred. Strong first-half 2026 operating performance across our reportable segments is expected to drive year‑over‑year improvements in full-year 2026 Consolidated Adjusted EBITDA, which excludes the solar impairment charges and a $7.8 million pre-tax pension settlement charge recorded in 2025. While we expect Consolidated Adjusted EBITDA to remain strong in the second half of 2026, growth is expected to moderate relative to both the first half of 2026 and prior-year periods. We also expect second-half consolidated operating profit and net income to decline from first-half 2026 and prior-year levels. Expectations for lower second-half operating profit are primarily driven by potential additional solar project curtailment costs and expected inventory write-downs at Mississippi Lignite Mining Company. Given the effect of the realized and anticipated 2026 charges, we expect full-year operating profit and net income will be significantly lower than in 2025. Comparisons to prior-year net income also reflect a $6.0 million after-tax pension settlement charge recognized in the second half of 2025. At our Utility Coal Mining segment, operated by North American Coal®, full-year customer demand is expected to be comparable and operating profit is expected to increase year over year due to a shift in focus to reclamation activities in the first half of 2026. During the second half of 2026, customer demand is expected to decline modestly compared with the prior-year period, provided Mississippi Lignite Mining Company's customer's power plant operates as currently planned. Operating results at Mississippi Lignite Mining Company are expected to decline from the first half of 2026, particularly in the third quarter, due to lower customer demand, higher diesel fuel costs and an anticipated inventory impairment charge. A higher contractually determined per ton sales price is anticipated to mitigate the lower demand. Earnings at the unconsolidated mining operations are also expected to decline primarily due to reclamation services at the Sabine Mining Company concluding as of September 30, 2026. Looking ahead to 2027, overall customer demand for coal is expected to remain consistent with 2026, while profitability is expected to improve. This increase is driven by anticipated improvements at Mississippi Lignite Mining Company if the customer's power plant is able to operate more consistently, as well as continued stable earnings at our unconsolidated operations. Anticipated improved results at the remaining unconsolidated mining locations should mostly offset the absence of reclamation income at the Sabine Mining Company. The Contract Mining segment, operated by North American Mining®, serves as our mining growth platform. We are building a growing portfolio of long-term contracts through geographic and mineral expansion that are expected to strengthen the foundation for sustained profitability in this segment. In early 2026, we commenced activities under a new dragline services contract as part of a U.S. Army Corps of Engineers construction project in Palm Beach County, Florida. We also anticipate commencing operations at a new limestone quarry in Arizona during fourth-quarter 2026. Sawtooth Mining, a North American Mining subsidiary, provides exclusive comprehensive mining services at Thacker Pass, which is owned by a joint venture led by Lithium Americas Corp. Sawtooth will supply all of the lithium-bearing ore requirements for our customer's Thacker Pass lithium processing facility, which is currently under construction. This project is providing stable income during construction and is expected to contribute increased income and long-term cash flows as lithium production commences and ramps up to full production, which is targeted for 2028. As a result of earnings contributions from new contracts, we anticipate substantial year-over-year growth in Contract Mining operating profit and Segment Adjusted EBITDA for both the second half and full year of 2026. Second-half results are expected to moderate from the strong first-half levels as customer demand is projected to decline, primarily in the fourth quarter. We expect significant operating profit improvement in the Contract Mining segment in 2027. This growth is driven by a full year of the dragline services contract in Palm Beach County, Florida, and contributions from operations at the Arizona quarry as well as potential new deals in the pipeline. The Minerals and Royalties segment, managed by Catapult Mineral Partners®, has constructed a high-quality, diversified portfolio of oil and gas mineral and royalty interests in the United States. The Catapult team is expanding its portfolio by leveraging a data-driven approach to capital deployment that incorporates a longer-term view of production and development. This segment also holds a meaningful equity investment in Eiger Resources that has working interests in oil and natural gas assets. Anticipated increases in income from Eiger and the benefit of higher oil prices are projected to be more than offset by anticipated production declines and a changing mix of production and development activity. As a result, operating profit and Segment Adjusted EBITDA are expected to decline compared with the first half of 2026 as well as the second-half and full-year 2025. The Minerals and Royalties segment is projected to continue generating meaningful earnings and cash flow in 2027, while operating profit is expected to moderate primarily due to normal production declines and a continuation of the current moderate pace of domestic development activity. Changes in commodity prices or production and development assumptions, including effects of the ongoing Middle East conflict, could alter current expectations. Mitigation Resources of North America® provides natural resource restoration and reclamation services that include stream and wetland mitigation solutions. Mitigation Resources is successfully leveraging its strong reputation and clear competitive strengths to expand into additional mitigation, restoration and reclamation markets. Mitigation Resources is expected to deliver increasing profitability over time from the sale of mitigation credits and as reclamation and restoration services expand. This business, while currently variable in performance due to permit and project timing, is expected to generate a profit in 2027 and move toward more consistent and improving results over time as the business expands and its portfolio of mitigation projects matures. We continue to invest in our businesses to support future growth. Based on the current project pipeline, we anticipate investing up to $35 million in the remainder of the year, primarily for business development opportunities. These expenditures will be made only if projects meet our disciplined capital investment criteria. While we anticipate a moderate year-over-year increase in cash generated from operations, cash flow before financing is projected to remain a use of cash in 2026, reflecting our planned investment activity. We expect full-year 2026 cash flow before financing to improve modestly over 2025, and continue to improve into 2027. We remain confident in our ability to deliver improving results and increasing cash flow over time. Earnings are expected to benefit from continued expansion in Contract Mining and Mitigation Resources, along with improved operating performance across our other businesses. Looking ahead, as our recent investments mature, they are expected to support sustained earnings growth and stronger cash flow. Our businesses provide essential inputs for electricity generation, construction and development, and industrial production. As demand for reliable uninterrupted energy continues to grow, natural resources fundamentals remain strong, reinforcing the importance of dependable baseload generation. Recent policy developments, including the re-establishment of the National Coal Council, highlight coal's ongoing strategic role in supporting grid reliability, economic competitiveness and national security. This development, along with a favorable regulatory environment, reinforces our confidence in our near-term outlook and long-term growth trajectory. Our conservative approach to maintaining a strong capital structure and operating discipline minimizes risk, while the compounding effect of a growing portfolio of long-term contracts and strategic growth investments create a robust foundation for cash flow growth. With a perspective that spans decades, we are methodically building a strong, stable business that is expected to deliver annuity-like returns. This long-term view allows us to leverage our core skills for strategic, measured expansion and pursue opportunities with longer-term horizons and higher returns. We pursue opportunities that other companies with shorter time horizons might overlook. Our commitment is to generate increasing cash flows and return value to stockholders, whether through reinvestment for growth or direct returns such as share repurchases and payment of dividends. We remain confident in our ability to drive growth, expand our capabilities and reward shareholders over the long run. **** Conference Call In conjunction with this news release, the management of NACCO Industries will host a conference call on Thursday, August 6, 2026 at 8:30 a.m. Eastern Time. The call may be accessed by dialing (888) 880-3330 (North America Toll Free) or (646) 357-8766 (International), Conference ID:3241028, or over the Internet through NACCO Industries' website at ir.nacco.com/overview. For those not planning to ask a question of management, the Company recommends listening to the call via the online webcast. Please allow 15 minutes to register, download and install any necessary audio software required to listen to the webcast. A replay of the call will be available shortly after the call ends through August 13, 2026. An archive of the webcast will also be available on the Company's website approximately two hours after the live call ends. Non-GAAP and Other Measures This release contains non-GAAP financial measures within the meaning of Regulation G promulgated by the Securities and Exchange Commission. Included in this release are reconciliations of these non-GAAP financial measures to the most directly comparable financial measures calculated in accordance with U.S. generally accepted accounting principles (GAAP). Adjusted EBITDA and Segment Adjusted EBITDA are provided solely as supplemental non-GAAP disclosures of operating results. Management believes that Adjusted EBITDA and Segment Adjusted EBITDA assist investors in understanding the results of operations of NACCO Industries. In addition, management evaluates results using these non-GAAP measures. Forward-looking Statements Disclaimer The statements contained in this news release that are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements are made subject to certain risks and uncertainties, which could cause actual results to differ materially from those presented. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof. Among the factors that could cause plans, actions and results to differ materially from current expectations are, without limitation: (1) a significant reduction in demand by the Company's customers from extended power plant outages, weather conditions or other events that would change the level of customers' coal or aggregates requirements, (2) customer liquidity constraints that could increase exposure to customer credit risk, (3) changes in the prices of hydrocarbons, particularly diesel fuel, natural gas, natural gas liquids and oil as a result of factors such as OPEC and/or government actions, geopolitical developments, economic conditions and regulatory changes, as well as supply and demand dynamics, (4) changes to or termination of customer or other third-party contracts, or a customer or other third party default under a contract, (5) costs to pursue and develop new mining, mitigation, oil and gas and power generation development opportunities and other value-added service opportunities, (6) the ability to successfully evaluate investments and achieve intended financial results in new business and growth initiatives, (7) changes in development plans by third-party lessees of the Company's mineral interests, (8) failure or delays by the Company's lessees in achieving expected production of natural gas and other hydrocarbons; the availability and cost of transportation and processing services in the areas where the Company's oil and gas reserves are located; and the ability of lessees to obtain capital or financing needed for well-development operations and leasing and development of oil and gas reserves on federal lands, (9) any customer's premature facility closure or extended project development delay, (10) federal and state legislative and regulatory actions affecting fossil fuels, (11) supply chain disruptions, including price increases and shortages of parts and materials, inclusive of tariff effects, (12) changes in tax laws or regulatory requirements, including the elimination of, or reduction in, the percentage depletion tax deduction, changes in mining or power plant emission regulations and health, safety or environmental legislation, (13) impairment charges, (14) changes in costs related to geological and geotechnical conditions, repairs and maintenance, new equipment and replacement parts, fuel or other similar items, (15) equipment problems that could affect deliveries to customers, (16) changes in the costs to reclaim mining areas, (17) disruptions from natural or human causes, including severe weather, accidents, fires, earthquakes and terrorist acts, any of which could result in suspension of operations or harm to people or the environment, and (18) the ability to attract, retain, and replace workforce. About NACCO Industries NACCO Industries® brings natural resources to life by delivering aggregates, minerals, reliable fuels and environmental solutions through its robust portfolio of NACCO Natural Resources® businesses. Learn more about our companies at nacco.com, or get investor information at ir.nacco.com. ***** View original content to download multimedia:https://www.prnewswire.com/news-releases/nacco-industries-announces-second-quarter-2026-results-302844225.html

Interested in NACCO Industries, Inc.? Here are five stocks we like better. NACCO Industries posted a strong first quarter, with operating profit up 43% year over year and net income rising 80% to $8.8 million. Revenue fell 4% to $62.8 million, but gross profit, operating profit, and adjusted EBITDA all improved significantly. Utility coal mining and contract mining were the main growth drivers. Utility coal profit jumped on better Mississippi Lignite performance and efficiency actions, while contract mining benefited from a new multi-year Florida dragline project and higher customer demand. Management remains bullish on 2026, but spending and segment trends will vary. NACCO expects meaningful full-year improvement, though capital expenditures and debt are rising, and the Minerals and Royalties segment faces natural gas-related headwinds even as Mitigation Resources expands in Tennessee. MarketBeat Week in Review – 05/04 - 05/08 NACCO Industries (NYSE:NC) reported a stronger first quarter of 2026, with management citing gains in its utility coal mining and contract mining segments as the main drivers of improved profitability. President and Chief Executive Officer J.C. Butler said the company “delivered a strong start to 2026,” with first-quarter operating profit up 43% from the prior year and 45% sequentially. He said the year-over-year improvement was driven by “meaningful growth” in utility coal and contract mining, while sequential growth was led by contract mining, primarily from the start of a new construction project in Florida. → Beyond NVIDIA: Picks-and-Shovels AI Plays with Strong Momentum Norwegian Cruise Line Cuts Outlook as Headwinds Build Senior Vice President and Controller Elizabeth Loveman said consolidated gross profit rose 48% year over year to $14.3 million, even as revenue declined 4% to $62.8 million. Consolidated operating profit increased to $11 million from $7.7 million in the prior-year period. Net income rose 80% to $8.8 million, or $1.17 per share, compared with $4.9 million, or $0.66 per share, in the first quarter of 2025. Consolidated adjusted EBITDA increased 28% to $16.4 million from $12.8 million. Butler said NACCO’s utility coal mining segment remains “the foundation” of the business, with Mississippi Lignite Mining Company among the main contributors to the quarter’s operating profit increase. He said the company responded to a customer power plant outage that began in mid-February by redeploying crews to planned reclamation activities. → MercadoLibre Boldly Invests in Growth: Discount Deepens Comparing 3 Cruise Stocks: Which Has the Most Upside in 2026? That work reduced the company’s asset retirement obligation rather than being recorded as an expense, which Butler said helped limit the impact on first-quarter earnings. Lower cost per ton also helped offset reduced deliveries during the outage. Loveman said the utility coal mining segment reported operating profit of $7.4 million, up from $3.8 million in the first quarter of 2025. Segment adjusted EBITDA increased to $9.7 million from $5.8 million. She said the improvement reflected efficiency actions and reclamation progress at Mississippi Lignite Mining Company, as well as comparison against a prior-year period that included a $3 million inventory impairment charge. → 3 Ways to Target the Resources Powering AI and Data Centers For 2026, Loveman said NACCO expects a meaningful increase in utility coal mining operating profit compared with 2025, primarily in the first half of the year. Improvements at Mississippi Lignite Mining Company are expected to come from an increase in the contractually determined per-ton sales price and lower cost per ton delivered, partly offset by lower earnings at unconsolidated mining operations. She said lower second-half earnings at unconsolidated operations are expected due to reduced income from The Sabine Mining Company tied to the wind down of reclamation services. In response to a question from Doug Weiss of DSW Investment, Butler said the earlier outage at the Mississippi Lignite customer’s plant had been completed and that the plant was “running pretty well.” He said steady mining rates allow NACCO to operate most efficiently. Butler described contract mining as NACCO’s primary mining growth platform. He said first-quarter operating profit in the segment reflected benefits from strategic initiatives to expand the business. During the quarter, NACCO began work under a multi-year dragline services contract tied to a U.S. Army Corps of Engineers construction project in Palm Beach County, Florida. Butler said the project advances the company’s expansion into large-scale infrastructure work and demonstrates the efficiency and environmental advantages of NACCO’s electric-drive MTECK draglines. The company had two MTECK draglines on site during the call and planned to add a third later in the year. Loveman said the Florida contract, combined with increased customer requirements and deliveries at limestone mining operations, led to a 32% increase in revenues net of reimbursed costs for the contract mining segment and “substantial” year-over-year increases in operating profit and segment adjusted EBITDA. She also noted that contract mining changed its depreciation method for draglines and other large mining equipment from straight line to units of production, which added about $900,000 to first-quarter operating profit. As activity increases, including in Florida and at a limestone quarry in Arizona expected to begin operations in the second half of 2026, depreciation expense is expected to rise. Loveman said full-year depreciation is expected to be generally in line with 2025. Butler said the Arizona project will involve operating a dragline for an existing customer and will expand NACCO’s footprint into a new U.S. region. He said the segment is building a growing portfolio of long-term contracts through geographic and mineral expansion. NACCO’s Minerals and Royalties segment produced operating profit comparable with the prior year. Butler said first-quarter results exceeded the company’s forecast, but management still expects a year-over-year decline in operating profit and segment adjusted EBITDA for 2026. Loveman said higher earnings from NACCO’s Eiger equity investment largely offset lower natural gas revenue in the quarter. For the full year, she said increased income from the equity holding and higher oil prices are expected to be more than offset by anticipated production declines in natural gas assets and a changing mix of production and development activity. Butler said natural gas remains the primary driver of near-term results for the segment. While higher oil prices help, he said they do not have the same level of impact. In the question-and-answer session, Butler said producers appear cautious about increasing drilling activity despite higher oil prices, adding that sustained higher prices could eventually lead to increased development. Butler said NACCO expects Mitigation Resources to generate increasing profitability over time from mitigation credit sales and expanded reclamation and restoration services. He said results can be variable due to permit and project timing, but the business is expected to generate profit in the second half of 2026 and move toward more consistent performance as it expands. In mid-April, Mitigation Resources acquired 958 acres in Wilson County, Tennessee, east of Nashville. Butler said the project represents an expansion into an area experiencing steady economic growth and is expected to create a mitigation bank with stream and wetland mitigation credits. Credit availability is anticipated in 2029, serving residential, industrial and infrastructure development in a 14-county area around Greater Nashville. During the Q&A session, Butler said Mitigation Resources initially contracted out dirt work but later brought that work in-house to better control costs and schedules. He said the business also performs restoration and reclamation projects for third parties. NACCO made $33 million of capital expenditures in the first quarter. Butler and Loveman said the spending primarily reflected the Tennessee land acquisition and dragline expenditures tied to the Florida project, along with other items. Loveman said NACCO had $126.4 million of outstanding debt at March 31, up from $100.9 million at Dec. 31, 2025. Total liquidity was $102.7 million, consisting of $53.2 million in cash and $49.5 million of availability under the company’s revolving credit facility. She said NACCO expects a greater use of cash before financing in 2026 than in 2025 due to anticipated capital investments. At the consolidated level, Loveman said NACCO anticipates meaningful year-over-year improvements in operating profit, net income and adjusted EBITDA in 2026. Excluding the effect of a $6 million after-tax pension settlement charge in 2025, she said growth is expected to moderate in the second half as results are compared against stronger prior-year operational performance. Butler said NACCO entered 2026 with “clear opportunities” to build on 2025 momentum and remains focused on long-term relationships, long-term contracts and investment in long-term assets. NACCO Industries, Inc is a Cleveland, Ohio–based diversified holding company with a history spanning more than a century. Through its principal subsidiaries, the company operates in two primary business areas: coal mining and material-handling system design and manufacturing. Originally incorporated in 1913, NACCO has maintained a presence on the New York Stock Exchange under the ticker symbol NC since the 1920s, evolving its portfolio to meet changing market demands while preserving its core expertise in bulk commodities and industrial services. The North American Coal Corporation, NACCO's coal mining segment, is among the largest producers of lignite coal in the United States. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "NACCO Industries Q1 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for May 2026.

Image source: The Motley Fool. Thursday, May 7, 2026 at 8:30 a.m. ET President and Chief Executive Officer — John C. Butler Senior Vice President and Controller — Elizabeth R. Loveman Investor Relations — Christina Kmetko Need a quote from a Motley Fool analyst? Email [email protected] Operator: Thank you for standing by. My name is Tina, and I will be your conference operator today. At this time, I would like to welcome everyone to the NACCO Industries First Quarter 2026 Earnings Call. [Operator Instructions] It is now my pleasure to turn the call over to Christina Kmetko, Investor Relations. You may begin. Christina Kmetko: Thank you. Good morning, everyone, and thank you for joining us for our 2026 first quarter earnings call. I'm Christina Kmetko, and I'm responsible for Investor Relations at NACCO. Joining me today are J.C. Butler, NACCO's President and CEO; and Elizabeth Loveman, our Senior Vice President and Controller. Yesterday, we released our first quarter results and filed our 10-Q with the SEC. Both documents are available on our website. During today's call, we will reference several non-GAAP measures, which we believe provide additional insight into how we manage our business. Reconciliations to the most directly comparable GAAP measures are also available on our website. Before we begin, let me remind you that today's remarks include forward-looking statements. Actual results may differ materially from those indicated due to a variety of risks and uncertainties, which are described in our earnings release, 10-Q and other SEC filings. We undertake no obligation to update these statements. With that, I'll turn the call over to J.C. for his opening remarks. J.C. John Butler: Thanks, Christy, and good morning, everyone. I'm pleased to say that we delivered a strong start to 2026, reporting significant growth and profitability. First quarter operating profit increased 43% over last year and 45% sequentially. Meaningful growth in our utility coal and contract mining segments drove the year-over-year improvement, while contract mining led the sequential growth, primarily due to the commencement of a new construction project in Florida. These operating results contributed to the 28% year-over-year and 15% sequential increases in adjusted EBITDA. These results reflect the business executing well and delivering as expected. Let me walk through each of our businesses in more detail. Our Utility Coal Mining segment remains the foundation of our business. And this quarter, Mississippi Lignite Mining Company was one of the main drivers of our operating profit increase. During our year-end earnings call, I discussed the customers' power plant outage that began in mid-February. During the outage, we pivoted effectively and redeployed crews to work on planned reclamation activities. This reduced our asset retirement obligation rather than being recognized as an expense, which would have impacted first quarter earnings. Lower cost per ton helped minimize the effect of reduced deliveries in the first quarter. I'm confident that as long as the customers' power plant operates as planned, the team will continue to mine effectively and control costs, driving improvement in year-over-year results at Mississippi Lignite Mining Company. Our Contract Mining segment is our primary growth platform for mining and its strong first quarter operating profit reflects the benefits of our strategic initiatives to expand this business. During the quarter, we commenced activities under a multiyear dragline services contract as part of a U.S. Army Corps of Engineers construction project in Palm Beach County, Florida. We are excited about this opportunity because it advances our growth in the large-scale infrastructure projects, and it showcases the efficiency and environmental advantages of our new electric drive MTech dragline. We have 2 MTech draglines on site and plan to add a third to this project later this year. We're encouraged by the early progress on this project. In addition to the Florida project, we expect to commence operations during the second half of 2026 on the limestone quarry in Arizona, where we will be operating a dragline for an existing customer. This is a great opportunity that expands our footprint into a new region of the United States. Contract Mining continues to build a growing portfolio of long-term contracts through geographic and mineral expansion, which is expected to lead to increasing profitability in this segment. Turning to Minerals and Royalties. This segment reported comparable year-over-year operating profit. While first quarter results exceeded our forecast, we continue to expect year-over-year decrease in operating profit and segment adjusted EBITDA in 2026 despite higher oil prices. Natural gas remains the primary driver of our near-term results, so higher oil prices certainly contribute to our results, but they do not have the same level of impact. That said, there's a lot of uncertainty in the oil and gas market, so we'll have to see how the situation in the Middle East plays out. At Mitigation Resources, we expect increasing profitability over time from the sale of mitigation credits and as reclamation and restoration services expand. While performance is currently variable due to permit and project timing, Mitigation Resources is expected to generate profit in the second half of 2026 and move toward more consistent results as the business expands. In mid-April, Mitigation Resources acquired 958 acres in Wilson County, Tennessee, which is east of Nashville. This marks an important step in their growth strategy, representing significant expansion into an area experiencing steady economic growth. The project is expected to deliver a new mitigation bank with high-quality stream and wetland mitigation credits with availability anticipated in 2029. These credits will support continued residential, industrial and infrastructure development in the 14-county area around Greater Nashville. We are very excited about this project because it allows us to serve twice the typical service range for similar mitigation projects, and we will be serving an area that has experienced steady economic growth. Across the board, we continue to invest in our businesses to drive future growth. We made capital expenditures of $33 million during the first quarter, and we anticipate making additional capital investments through the remainder of 2026, primarily in business development opportunities that meet our strict investment criteria. Overall, I continue to believe we are well positioned for meaningful growth. We entered 2026 with clear opportunities to build on our 2025 momentum, and we are executing. I remain confident in our businesses and our ability to deliver strong 2026 results as we continue to execute our growth strategies and create long-term value for our shareholders through long-term relationships, long-term contracts and investment in long-term assets. With that, I'll turn the call over to Liz to provide a more detailed view of our financial results and outlook. Liz? Elizabeth Loveman: Thank you, J.C. I'll start with some high-level comments about our consolidated first quarter 2026 results compared to the 2025 first quarter. We generated consolidated gross profit of $14.3 million, an increase of 48% year-over-year despite first quarter revenues of $62.8 million, decreasing 4%. Consolidated operating profit of $11 million increased from $7.7 million in 2025, driven by improvements in both our Utility Coal Mining and Contract Mining segments. These favorable results were partly offset by higher unallocated expenses. These strong operating profit results, combined with an improvement in other investment income, resulted in net income of $8.8 million or $1.17 per share. This was an 80% increase over first quarter 2025 net income of $4.9 million or $0.66 per share. Consolidated adjusted EBITDA increased 28% to $16.4 million versus $12.8 million for the same period last year. Turning to the segments. The Utility Coal Mining segment reported operating profit of $7.4 million in 2026, a substantial increase over the $3.8 million generated in the 2025 first quarter. Segment adjusted EBITDA increased to $9.7 million from $5.8 million in the prior year. Efficiency actions and reclamation progress at Mississippi Lignite Mining Company during the power plant outage drove a meaningful improvement in gross profit compared with the prior year when results were affected by a $3 million inventory impairment charge. Looking ahead, we expect a meaningful increase in operating profit compared with 2025, primarily in the first half of 2026. Improvements at Mississippi Lignite Mining Company driven by an increase in the contractually determined per ton sales price and a lower cost per ton delivered are expected to be partly offset by lower earnings at the unconsolidated mining operations. The lower unconsolidated mining earnings in the second half of 2026 are due to reduced income from the Sabine Mining Company associated with the wind-down of reclamation services. In the Contract Mining segment, current quarter results benefited from the commencement of the Army Corps of Engineers Dragline services contract J.C. discussed. This contract, combined with increased customer requirements and deliveries at the Limestone mining operations led to a 32% increase in revenues net of reimbursed costs and substantial year-over-year increases in both operating profit and segment adjusted EBITDA. During the quarter, Contract Mining changed its depreciation method for draglines and other large mining equipment from straight line to units of production to better align depreciation with asset usage. This change contributed approximately $900,000 to first quarter operating profit. As activity increases, particularly with the Dragline services project in Florida and the commencement of operations in Arizona, depreciation expense will increase accordingly, and we expect full year depreciation to be generally in line with 2025. Looking forward, as a result of earnings contributions from new contracts and continued momentum from 2025 activities, we anticipate a substantial year-over-year increase in both operating profit and segment adjusted EBITDA at the Contract Mining segment. In the Minerals & Royalties segment, higher first quarter 2026 earnings from our Eiger equity investment mostly offset lower natural gas revenues, reflecting the benefits of our diversified portfolio and resulting in comparable year-over-year operating profit. For full year 2026, we expect the increases in income from our equity holding, combined with higher oil prices will be more than offset by anticipated production declines in our natural gas assets and a changing mix of production and development activity, resulting in an overall year-over-year decrease in Minerals and Royalties operating profit and segment adjusted EBITDA. At the consolidated level, we anticipate meaningful year-over-year improvements in consolidated operating profit, net income and adjusted EBITDA in 2026. Excluding the effect of a $6 million after-tax pension settlement charge in 2025, we expect year-over-year growth to moderate in the second half of the year as anticipated results are compared against stronger prior year operational performance. Looking at our liquidity. At March 31, we had outstanding debt of $126.4 million, up from $100.9 million at December 31, 2025. Our total liquidity was $102.7 million, consisting of $53.2 million of cash and $49.5 million of availability under our revolving credit facility. As a result of the anticipated capital investments, we expect a greater use of cash before financing in 2026 compared with 2025. With that, I'll turn the call back to J.C. for closing remarks. John Butler: Thanks, Liz. To wrap up, our first quarter 2026 results reflect continued execution of our business model and the strength of our operations. As we move forward, we plan to build on this momentum through additional investments in our growth platforms that are expected to deliver improvements in profitability and cash generation. I am encouraged by our performance and remain confident in our ability to generate long-term value for shareholders. We'll now turn to any questions you may have. Operator: [Operator Instructions] And our first question comes from the line of Doug Weiss with DSW Investment. Douglas Weiss: So congrats on the good quarter. I guess starting with Mississippi Lignite. It sounds like the plant maintenance has been completed and it's back to business as usual. John Butler: Yes. Yes. The outage that occurred, the unplanned outage that occurred earlier in the year has been completed and the plant is actually running pretty well, which helps us because the best situation for us is to be mining at a steady rate so we can operate most efficiently. So that's a net positive. Douglas Weiss: Right. Is that plant -- are you able to say whether that plant is now providing attractive returns to its owners given the evolution of electricity markets? John Butler: We don't have a lot of exposure to the electricity side of that equation. So it would be -- I think it would be reckless for me to speculate on how exactly that's playing out right now. I mean generally, there's high demand for electrons that's supportive of prices. But you got to -- you'd have to work through the mechanics of the PPA that they have the power purchase agreement that they have with TVA in order to really figure out how that works. So, I just cannot -- private to those details. Douglas Weiss: On the contract on the North American mining, so you've had a contract to start this quarter and then you have a couple more starting through the year. Last year, I guess, there was a big drop-off in the second half, and I think that was partly weather related. Would you anticipate a more a steady sort of cadence through this year and even growth through the year? John Butler: Yes. I mean it's always subject to what could happen in the interim that would cause something to go directions we don't anticipate. But as we added, we're ramping up production at the new project in Palm Beach County, the U.S. Army Corps of Engineers project. We've got one dragline operating and another one is just on -- it's either just been commissioned or will be shortly. Third dragline is going to be in there later in the year. So, we're going to see increasing levels of production there in support of that project, which is great. Then in the second half of the year, we're going to start operating the dragline in Arizona, which is great. Those are the main 2 new contracts that we're layering on to our existing contracts this year. Douglas Weiss: And then you had a large -- sorry, one other question on North American Mining. In terms of how you account for capital expenditure on that division, what is the sort of decision point on whether something gets expensed in the quarter as opposed to allocated to capital? Elizabeth Loveman: Yes. I mean normal repairs and maintenance are expensed. If it's something that is going to benefit us over the long-term, like a dragline, rebuild on a dragline hub, those kinds of things that are expected to generate -- we're going to be able to use those over a longer period and they meet our capitalization criteria, we would capitalize those. So just general repairs and maintenance is expensed, other things are capitalized. John Butler: Major component, I guess, is the way you can think of it. For a large dragline, the tub is the base that the dragline sits on. These things, the big ones walk, which is fascinating in technology, but it sits and rotates on a tub. Others are on very large tracks kind of like you've seen on a mobile crane or a bulldozer kind of thing, operates on track. So large components get capitalized, everything else gets expensed. Elizabeth Loveman: If it's going to extend the useful life, it gets capitalized, I guess, is another way to it. John Butler: Like if you take a boom down and do a complete boom rebuild, that probably gets capitalized. Douglas Weiss: Then you had a large -- John Butler: Doug, just on that point. We talk about the fact that we pursue contracts that may -- not all contracts have capital upfront, but we do contracts that have initial capital upfront when we may put a dragline in place or mitigation resources, we're buying mineral interest or sorry, in Minerals and Royalties for buying mineral interest, mitigation resources we might buy land. But generally, the maintenance CapEx that we have in our projects going forward is a low number as a percentage of the original. So I don't want you to think that any of these things that Liz was describing, tub repairs, boom rebuilds, I mean, they come up ever so often, but they're a small portion of the depreciation expense that we incur over the life of a contract. Douglas Weiss: And in terms of Thacker Pass, I believe that's supposed to ramp next year. Any -- I think lithium prices have come up quite a bit. Anything you're seeing there that's worth updating on? John Butler: I'm actually headed out there next week. The plant is progressing very nicely. We're doing initial work on mine development. We've got our office trailers established for the mine side will be, which is directly adjacent to the processing plant. I mean that project is moving along nicely. I look forward to being out there next week to see it. You're right, later this year, early next year is when we anticipate -- it's really late next year, and I'm off a year. It's late 2027 is when we anticipate making lithium deliveries to them, which they'll then be processing, but everything seems to be on target. Elizabeth Loveman: And they do a very nice job of updating their website with what's going on. So if you wanted to look there, they have that update. John Butler: They've done a great job giving the project updates. Elizabeth Loveman: And I think they just filed their annual report today. So probably good information out there. Douglas Weiss: Good. Yes, I'll check that out. Let's see. You had a large expenditure this quarter for mitigation resources. I think that's independent of your comments on buying land in Tennessee. What was the $32 million? What did that relate to? John Butler: So our total CapEx for the quarter was $33 million, right, Christy? That was made up of the purchase of land in Tennessee and expenditures on the drag lines for the project in Florida that we just discussed, the Army Corps of Engineers project. That's really what makes up that $33 million. There are other things in there, too. That's not 100% of it, but it's certainly a majority of those expenditures are related to the land purchase for mitigation resources and the draglines for contract mining. Douglas Weiss: I see. And when you make a large land purchase like that, what's the payoff in terms of time? When do you start to see cash realizations from that? John Butler: I mean, the nature of our projects typically, there's always exceptions. But typically, we expect to get assets deployed pretty quickly and start generating cash returns. If you look at -- I'll give you one example in our minerals business, we, for the most part, look at projects that have payback -- complete payback within 5 years. And then these assets deliver for decades after that. So we always look at -- as we're measuring NPV and IRR on these projects, the speed with which you get your capital back is a big factor in all of this. And of course, as we discuss internally all the time, the faster we can get our capital back means we have capital that we can then redeploy into other assets, other contracts, other opportunities that build on this long-term business model that we've described in our investor deck. Elizabeth Loveman: And if you were asked about the Tennessee land, we had issued a press release when we acquired the land, and we noted that credits we anticipate will be available in 2029. There's a permitting that has to happen before the credits are available. Douglas Weiss: I see. I see. When you buy an asset, like does that improve the utilization of your heavy equipment that you're using to improve that land? John Butler: Yes. So within the Mitigation Resources business, when we started, we were just really doing the credits and contracting the dirt work. Very quickly, we realized that we should be doing our own dirt work because we can better control our costs and our schedule. And honestly, we're pretty good at what we do. So we established a business inside Mitigation Resources that we call NIPRA Services that does dirt work not only for Mitigation Resources own projects, but from time to time, we go identify -- that team identifies other restoration and reclamation projects that can be done for third parties. So we're able to utilize the equipment. And this is smaller equipment. This is not like stuff that we would operate in big coal mines. This is smaller kind of things you can haul over the road. So we do not only our own work, we do work for third parties as well, which has turned out to be a really interesting business with a huge addressable market and I think a lot of opportunity. Douglas Weiss: Great. I guess last question on the minerals business. So given the increase in oil prices and appreciating that there's a lot of volatility in those prices, do you -- are you getting any indications on whether that's going to lead to more wells over the rest of the year in terms of your partners or? John Butler: Yes. I mean they, like everybody else, are watching what's going on with caution. Several years ago, we went through the period where all -- many of the producers were -- it's almost like an Internet business where it's all about the clicks. It was about how many rigs do they have going and how many wells we were drilling and not what was going on with their cash flows. And a bunch of them got burned by that. So amongst the more sophisticated producers, which are primarily the folks that we work with, they're being cautious not to get out over their skis by taking on too much debt or bringing in private equity money that they need in order to fund a huge drilling program. Now I think that it's sustained. And look, I mean, I read the same stuff you probably read in the Wall Street Journal and other places. But if we have continued higher oil prices, they don't necessarily have to be at the level they are. Would that probably lead to future increases in development? It probably would. But I think they're all waiting to see how this plays out and what really happens to oil prices over the long-term. My own view is if all of a sudden somebody waved a magic wand in the Middle East and everything was settled, which I don't think is going to happen, oil prices are going to drop because the immediate stress will come out of the system. Oil will begin flowing more regularly. But I think there's going to be a risk premium added to global oil prices for quite a while. And that's going to affect how people think about drilling in the Permian and other oil-producing regions in the United States. Purely my opinion based on what I've been reading, but it feels like how it plays out. And ultimately, that should be good for the oil reserves that we own. I think ultimately, that spills over into natural gas to some extent, although we really haven't seen much movement in natural gas prices thus far, even though what's going on in the Middle East has disrupted LNG shipments. But my own opinion is, over time, this is a positive for U.S. LNG exports. And we're heavily weighted toward -- we're less heavily than we used to be, but we're still significantly weighted towards natural gas. So ultimately, that should play into a really nice long-term benefit for our natural gas asset. Douglas Weiss: Congrats on the good quarter. John Butler: We'll talk to you next quarter. We appreciate your interest and your questions. Operator: [Operator Instructions] And with no further questions in queue, I'll now hand the call back over to Christie for closing remarks. Christina Kmetko: Okay. Thank you. We'll conclude our Q&A session. Before we wrap up the call, I'd like to provide a few reminders. A replay of our call will be available online later this morning. We will also post a transcript on our website when it becomes available. If you have any questions, please reach out to me. My phone number is on the press release. I hope you enjoy the rest of your day, and I'll turn it back to Tina to conclude the call. Thank you. Operator: An audio recording of the event will be available via the Echo Replay platform. To access the platform by phone, please dial in using one of the numbers listed and input playback ID 1-6-1-0-2-0-3 followed by the pound key. The replay will expire on Wednesday, May 13th, 2026 at 11:59 p.m. Thank you very much for joining us today. 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See the 10 stocks » *Stock Advisor returns as of May 7, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Nacco (NC) Q1 2026 Earnings Call Transcript was originally published by The Motley Fool

Operating profit growth of 43% year-over-year was primarily driven by the commencement of a new construction project in Florida and improved efficiency in the Utility Coal segment. Management effectively mitigated a customer power plant outage at Mississippi Lignite by redeploying crews to planned reclamation, reducing asset retirement obligations rather than incurring immediate expenses. The Contract Mining segment is being positioned as the primary growth platform, utilizing new electric drive MTech draglines to improve environmental and operational efficiency for large-scale infrastructure projects. Strategic geographic expansion is underway with a new limestone quarry operation in Arizona, marking the company's entry into a new U.S. region during the second half of 2026. The Minerals and Royalties segment remains heavily influenced by natural gas dynamics; while oil prices are higher, they do not yet offset anticipated production declines in gas assets. Mitigation Resources is transitioning toward more consistent profitability by expanding into high-growth regions like Greater Nashville and vertically integrating dirt work services to control costs. Full-year 2026 guidance anticipates meaningful improvements in consolidated operating profit and adjusted EBITDA, though growth is expected to moderate in the second half against strong 2025 comparisons. The company expects a greater use of cash before financing in 2026 due to significant capital investments in business development opportunities that meet strict investment criteria. Contract Mining profitability is expected to increase as a third dragline is added to the Florida project and the Arizona operations commence in late 2026. The Thacker Pass lithium project remains on target for initial deliveries in late 2027, with current activities focused on mine development and infrastructure adjacent to the processing plant. Management assumes a continued risk premium in global oil prices due to Middle East tensions, which may eventually support increased development in the Permian Basin and U.S. LNG exports. The company changed its depreciation method for large mining equipment from straight-line to units-of-production to better align expenses with actual asset usage, contributing $900,000 to Q1 profit. A $33 million capital expenditure in Q1 was primarily directed toward a 958-acre land acquisition in Tennessee and dragline equipment for the Florida Army Corps of Engineers project. The Sabine Mining Company is expected to see lower earnings in the second half of 2026 as it winds down reclamation services. The new Tennessee mitigation project is expected to have credits available starting in 2029, following a multi-year permitting and development phase. Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Management confirmed the unplanned power plant outage is over and the plant is running well, which allows for steady-state mining and maximum operational efficiency. The company noted it does not have direct exposure to electricity market returns but benefits from the high demand for power through steady delivery requirements. Capitalization is reserved for major components like dragline tubs or boom rebuilds that extend the useful life of the asset, while routine maintenance is expensed. Management emphasized that maintenance CapEx remains a low percentage of original cost over the life of a contract. The $33 million Q1 CapEx included land for a new mitigation bank serving the Nashville area, which offers twice the typical service range of similar projects. The company has internalized 'dirt work' through its NIPRA Services unit to control costs and schedules, while also taking on third-party restoration projects. Producers remain cautious about over-leveraging for new drilling despite higher oil prices, focusing more on cash flow than rig counts. Management believes sustained geopolitical tension will maintain a risk premium on oil and eventually benefit U.S. natural gas and LNG exports. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here.