NACCO Industries (NC) investor relations material

Executive summary

• Q1 2026 saw strong earnings growth, with net income up 80% year-over-year to $8.8 million and EPS of $1.17–$1.18, driven by Utility Coal and Contract Mining segments.

• Operating profit rose 43% year-over-year and 45% sequentially to $11.0 million, with adjusted EBITDA up 28% year-over-year and 15% sequentially.

• Revenues declined 4% to $62.8 million, mainly due to lower demand at Utility Coal Mining, partially offset by higher Contract Mining revenues.

• Strategic expansion in contract mining and mitigation resources included new projects in Florida and Arizona, and a major land acquisition in Tennessee.

• Cash flow from operations increased to $12.4 million, with $33–$33.4 million invested in property, plant, equipment, and mineral interests.

Financial highlights

• Gross profit was $14.3 million, up 48% year-over-year, with gross margin improving to 22.8% from 14.7%.

• Operating expenses rose to $19.8 million from $18.0 million in Q1 2025.

• Adjusted EBITDA reached $16.4 million, a 28% increase from $12.8 million in the prior year, with margin up to 26.1% from 19.6%.

• Cash and cash equivalents at quarter-end were $53.2 million, with total liquidity of $102.7 million.

• Debt at March 31, 2026 was $126.4 million, with a debt-to-total capitalization ratio of 22%.

Outlook and guidance

• Expect continued year-over-year improvements in consolidated operating profit, net income, and adjusted EBITDA for 2026.

• Utility Coal Mining anticipates higher operating profit in the first half of 2026, aided by improved pricing and lower costs.

• Contract Mining projects substantial profit growth from new contracts and expanded operations, including a new limestone quarry and Thacker Pass lithium project.

• Minerals and Royalties expects lower operating profit due to production declines, despite higher oil prices and increased equity income.

• Planned capital expenditures for the remainder of 2026 are approximately $57 million, with increased use of cash before financing.