NACCO Industries (NC) investor relations material

Executive summary

• Gross profit and Adjusted EBITDA rose sharply year-over-year, but a $12 million solar project impairment led to a consolidated operating and net loss, with net loss at $1 million ($0.13 per share) versus prior year net income of $3.3 million.

• Solar project impairments resulted from increased costs, grid connection delays, and regulatory changes, prompting a reassessment of capital allocation and efforts to monetize or reduce exposure.

• Core mining, minerals, and mitigation businesses showed resilience and growth, with contract mining and minerals/royalties segments delivering robust results.

Financial highlights

• Q2 2026 revenues were $72.3 million, up 6% year-over-year; gross profit increased 123% to $15.2 million.

• Adjusted EBITDA (excluding solar impairments) rose 72% to $15.9 million; reported operating loss was $2.3 million.

• Six-month revenue reached $135.1 million, a 1% increase year-over-year.

• Net cash provided by operating activities improved by $23.4 million in the first half of 2026 compared to 2025.

• Debt at June 30, 2026: $120.1 million; total liquidity $114.6 million (cash $45.5 million, revolver $69.1 million).

Outlook and guidance

• Full-year 2026 Adjusted EBITDA expected to improve year-over-year, excluding solar impairment and 2025 pension charges.

• Second-half 2026 operating profit and net income projected to decline due to potential further solar curtailment costs and inventory write-downs.

• 2027 profitability expected to improve, driven by better performance at Mississippi Lignite Mining and new contract contributions.

• Contract Mining segment anticipates substantial year-over-year growth in operating profit and Adjusted EBITDA for 2026 and 2027.

• Minerals and Royalties segment profits expected to moderate in the second half of 2026 due to production declines and development pace.