# Nacco Industries Inc: Form 10-Q for the period ended Mar 31, 2025

- Company: [Nacco Industries Inc](/companies/nc.md) (CIK 789933)
- Form: 10-Q
- Filed: 2025-04-30
- Accepted by EDGAR: Apr 30, 2025, 16:29 ET
- Period: 2025-03-31
- Accession: 0000789933-25-000023
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/789933/000078993325000023/nacco-20250331.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/789933/000078993325000023/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2025-03-31.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2025-01-01 to 2025-03-31 | $65.6m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Cost of revenue | 3 months, 2025-01-01 to 2025-03-31 | $55.9m | us-gaap:CostOfGoodsAndServicesSold |
| Gross profit | 3 months, 2025-01-01 to 2025-03-31 | $9.7m | us-gaap:GrossProfit |
| Selling, general and administrative | 3 months, 2025-01-01 to 2025-03-31 | $17.9m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Operating income | 3 months, 2025-01-01 to 2025-03-31 | $7.7m | us-gaap:OperatingIncomeLoss |
| Interest expense | 3 months, 2025-01-01 to 2025-03-31 | $1.8m | us-gaap:InterestExpenseNonoperating |
| Income tax | 3 months, 2025-01-01 to 2025-03-31 | $227.0k | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2025-01-01 to 2025-03-31 | $4.9m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2025-01-01 to 2025-03-31 | $0.66 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2025-01-01 to 2025-03-31 | $0.67 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2025-01-01 to 2025-03-31 | 7,447,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 3 months, 2025-01-01 to 2025-03-31 | $5.0m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Dividends paid | 3 months, 2025-01-01 to 2025-03-31 | $1.7m | us-gaap:PaymentsOfDividends |
| Share repurchases | 3 months, 2025-01-01 to 2025-03-31 | $695.0k | us-gaap:PaymentsForRepurchaseOfCommonStock |
| Cash and equivalents | at 2025-03-31 | $61.9m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2025-03-31 | $227.5m | us-gaap:AssetsCurrent |
| Total assets | at 2025-03-31 | $634.2m | us-gaap:Assets |
| Current liabilities | at 2025-03-31 | $66.6m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2025-03-31 | $225.1m | us-gaap:Liabilities |
| Shareholders' equity | at 2025-03-31 | $409.1m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 39,371 characters.

#### (Amounts in thousands, except as noted and per share data)

Management's Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based upon management's current expectations and are subject to various uncertainties and changes in circumstances. Important factors that could cause actual results to differ materially from those described in these forward-looking statements are set forth below under the heading Forward-Looking Statements.

Management's Discussion and Analysis of Financial Condition and Results of Operations include NACCO Industries, Inc.® (NACCO) and its wholly owned subsidiary, NACCO Natural Resources Corporation® (NACCO Natural Resources and with NACCO collectively, the Company, we, our or us). NACCO Natural Resources brings natural resources to life by delivering aggregates, minerals, reliable fuels and environmental solutions through our robust business portfolio. We operate under three business segments: Coal Mining, North American Mining® (NAMining) and Minerals Management. The Coal Mining segment operates surface coal mines for power generation companies. The NAMining segment is a trusted mining partner for producers of aggregates, activated carbon, lithium and other industrial minerals. The Minerals Management segment, which includes the Catapult Mineral Partners (Catapult) business, acquires and promotes the development of mineral interests and investments. Mitigation Resources of North America® (Mitigation Resources) provides stream and wetland mitigation solutions as well as comprehensive reclamation and restoration construction services. In addition, ReGen Resources is pursuing opportunities to develop new power generation resources. See Note 1 to the Unaudited Condensed Consolidated Financial Statements within this Form 10-Q for further discussion of our operating segments.

We have items not directly attributable to a reportable segment that are not included in the reported financial results of the operating segment. These items primarily include administrative costs related to public company reporting requirements, including management and board compensation, and the financial results of Bellaire Corporation (Bellaire), Mitigation Resources, ReGen Resources and other developing businesses. Bellaire manages our long-term liabilities related to former Eastern U.S. underground mining activities.

All financial statement line items below operating profit (other income, including interest expense and interest income, the provision (benefit) for income taxes and net income) are presented and discussed within this Form 10-Q on a consolidated basis.

**Government Regulation Update:** There have been no material changes to the Government Regulation previously disclosed on pages 9 through 17 in our Annual Report on Form 10-K for the year ended December 31, 2024, except as follows:

On April 9, 2025, President Trump signed four executive orders designed to boost the U.S. coal industry, outlining steps to protect coal-fired power plants and expedite leases for coal mining on U.S. land.

On March 12, 2025, the Trump Administration announced that the Environmental Protection Agency (EPA) will undertake 31 historic actions of deregulation, including, but not limited to:

- Reconsideration of regulations on power plants (Clean Power Plan 2.0);
- Reconsideration of regulations on the oil and gas industry;
- Reconsideration of Mercury and Air Toxics Standards (MATS);
- Reconsideration of mandatory Greenhouse Gas Reporting Program;
- Reconsideration of limitations, guidelines and standards for the Steam Electric Power Generating Industry to ensure low-cost electricity while protecting water resources;
- Reconsideration of wastewater regulations for oil and gas development to help unleash American energy;
- Reconsideration of the Risk Management Program rule;
- Reconsideration of the 2009 Endangerment Finding and regulations and actions that rely on that Finding;
- Reconsideration of Particulate Matter National Ambient Air Quality Standards;
- Reconsideration of multiple National Emission Standards for Hazardous Air Pollutants for American energy and manufacturing sectors;
- Restructuring the Regional Haze Program;
- Overhauling the Social Cost of Carbon;
- Redirecting enforcement resources to the EPA’s core mission;
- Ending the Good Neighbor Plan;
- Working with states and tribes to resolve massive backlog with State Implementation Plans and Tribal Implementation Plans;
- Prioritizing the coal ash program to expedite state permit reviews and update coal ash regulations (CCR Rule).

President Trump, paired with Republican control of Congress, is likely to continue to have a significant impact on the regulatory environment, particularly for fossil fuels. It is not yet clear how existing regulations affecting existing fossil fuel assets will be reconsidered or repealed.

The United States has recently enacted and proposed to enact significant new tariffs. Additionally, President Trump has directed various federal agencies to further evaluate key aspects of U.S. trade policy and there has been ongoing discussion and commentary regarding potential significant changes to U.S. trade policies, treaties and tariffs. There continues to exist significant uncertainty about the future relationship between the U.S. and other countries with respect to such trade policies, treaties and tariffs. These developments, or the perception that any of them could occur, could restrict our access to suppliers and increase the cost of equipment and supplies imported into the U.S.

### CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Refer to the discussion of our Critical Accounting Policies and Estimates as disclosed on pages 50 through 51 in our Annual Report on Form 10-K for the year ended December 31, 2024. Our Critical Accounting Policies and Estimates have not materially changed since December 31, 2024.

### CONSOLIDATED FINANCIAL SUMMARY

Our results of operations were as follows for the three months ended March 31:

| Revenues: | THREE MONTHS 2025 | 2024 |
| --- | ---: | ---: |
| Coal Mining | **$19,239** | $15,545 |
| NAMining | **31,526** | 24,483 |
| Minerals Management | **10,902** | 10,401 |
| Unallocated Items | **4,400** | 3,262 |
| Eliminations | **(496)** | (402) |
| Total revenue | **$65,571** | $53,289 |
| Operating profit (loss): |  |  |
| Coal Mining | **$3,791** | $(417) |
| NAMining | **1,970** | 2,355 |
| Minerals Management | **7,907** | 7,930 |
| Unallocated Items | **(6,002)** | (5,128) |
| Eliminations | **16** | 17 |
| Total operating profit | **7,682** | 4,757 |
| Interest expense | **1,774** | 1,111 |
| Interest income | **(865)** | (1,127) |
| Closed mine obligations | **473** | 455 |
| Loss (gain) on equity securities | **870** | (1,041) |
| Other, net | **303** | (214) |
| Other expense (income), net | **2,555** | (816) |
| Income before income tax provision | **5,127** | 5,573 |
| Income tax provision | **227** | 1,003 |
| Net income | **$4,900** | $4,570 |
| Effective income tax rate | **4.4%** | 18.0% |

The components of the change in revenues and operating profit are discussed below in Segment Results.

### First Quarter of 2025 Compared with First Quarter of 2024

### Other expense (income), net

Interest expense increased in the first quarter of 2025 compared with the first quarter of 2024 due to higher average borrowings, partially offset by a decrease in interest rates.

Interest income decreased in the first quarter of 2025 compared with the first quarter of 2024 due to lower earnings on reduced cash balances.

Loss (gain) on equity securities represents changes in the market price of invested assets reported at fair value. The change in the first quarter of 2025 compared with the first quarter of 2024 was due to fluctuations in the market prices of the exchange-traded equity securities. See Note 5 to the Unaudited Condensed Consolidated Financial Statements for further discussion of equity securities.

### Income Taxes

We evaluate and update our estimated annual effective income tax rate on a quarterly basis based on current and forecasted operating results and tax laws. For the three months ended March 31, 2024, the effective income tax rate was impacted by a $0.8 million discrete tax item. Without the discrete tax item, the effective income tax rate for the three months ended March 31, 2024 would have been 4.1%. There were no discrete tax items for the three months ended March 31, 2025. Historically, our actual effective tax rates have differed from the statutory effective tax rate primarily due to the benefit received from percentage depletion. The benefit from percentage depletion varies based upon the mix and timing of actual earnings compared to projections of earnings between entities that benefit from percentage depletion and those that do not, and as such the effective tax rate may vary quarterly and may make quarterly comparisons not meaningful. The benefit of percentage depletion is not directly related to the amount of consolidated pre-tax income recorded in a period. Accordingly, in periods where income before tax is relatively small, the proportional effect of the benefit from percentage depletion on the effective tax rate may be significant. Each quarter, we update our estimate of the annual effective tax rate, and the cumulative impact of the change in the estimated annual tax rate is recorded, which can make quarterly comparisons not meaningful.

### LIQUIDITY AND CAPITAL RESOURCES OF NACCO

### Cash Flows

The following tables detail the changes in cash flow for the three months ended March 31:

| Operating activities: | 2025 | 2024 | Change |
| --- | ---: | ---: | ---: |
| **Net cash provided by (used for) operating activities** | **$5,023** | $(9,758) | $14,781 |
| **Investing activities:** |  |  |  |
| Expenditures for property, plant and equipment and acquisition of mineral interests | **(8,808)** | (14,483) | 5,675 |
| Other | **279** | (152) | 431 |
| **Net cash used for investing activities** | **(8,529)** | (14,635) | 6,106 |
| **Cash flow before financing activities** | **$(3,506)** | $(24,393) | $20,887 |

The $14.8 million change in net cash provided by (used for) operating activities was primarily due to a net favorable change in working capital. The favorable change in working capital was mainly the result of a change in timing of insurance payments as well as a larger decrease in Trade accounts receivable during the first quarter of 2025 when compared with the first quarter of 2024. The decrease in Trade accounts receivable is primarily due to the timing of payments. These favorable working capital changes were partially offset by an increase in Deposits with vendors.

| Financing activities: | 2025 | 2024 | Change |
| --- | ---: | ---: | ---: |
| Net (reductions) additions to long-term debt and revolving credit agreements | **$(5,057)** | $7,032 | $(12,089) |
| Cash dividends paid | **(1,691)** | (1,630) | (61) |
| Purchase of treasury shares | **(695)** | (4,274) | 3,579 |
| **Net cash (used for) provided by financing activities** | **$(7,443)** | $1,128 | $(8,571) |

19

The change in net cash (used for) provided by financing activities was primarily due to reductions in debt borrowings during the first three months of 2025 compared with additions during the first three months of 2024, partially offset by a decrease in share repurchases during the first three months of 2025.

### Financing Activities

In September 2024, NACCO Natural Resources amended the secured revolving line of credit (Facility) to increase the revolving credit commitments to $200.0 million and extend the maturity to September 2028. Borrowings outstanding under the Facility were $65.0 million at March 31, 2025. At March 31, 2025, the excess availability under the Facility was $90.5 million, which reflects a reduction for outstanding letters of credit of $44.5 million.

NACCO has not guaranteed any borrowings of NACCO Natural Resources. The Facility allows for the payment to NACCO of dividends and advances under certain circumstances. Dividends (to the extent permitted by the Facility) and management fees are the primary sources of cash for NACCO and enable us to pay dividends to stockholders and repurchase shares.

The Facility has performance-based pricing, which sets interest rates based upon NACCO Natural Resources achieving various levels of debt to EBITDA ratios, as defined in the Facility. Borrowings bear interest at a floating rate plus a margin based on the level of debt to EBITDA ratio achieved. The applicable margins, effective March 31, 2025, for base rate and Term Secured Overnight Financing Rate loans were 1.75% and 2.75%, respectively. The Facility has a commitment fee which is based upon achieving various levels of debt to EBITDA ratios. The commitment fee was 0.45% on the unused commitment at March 31, 2025. During the three months ended March 31, 2025, the average borrowing under the Facility was $59.5 million and the weighted-average annual interest rate was 6.87%.

The Facility contains restrictive covenants, which require, among other things, NACCO Natural Resources to maintain a maximum net debt to EBITDA ratio of 2.75 to 1.00 and an interest coverage ratio of not less than 4.00 to 1.00. The Facility provides the ability to make loans, dividends and advances to NACCO, with some restrictions based on maintaining a maximum debt to EBITDA ratio of 1.50 to 1.00, or if greater than 1.50 to 1.00, a Fixed Charge Coverage Ratio of 1.10 to 1.00. At March 31, 2025, NACCO Natural Resources was in compliance with all financial covenants in the Facility.

The obligations under the Facility are guaranteed by certain of NACCO Natural Resources' direct and indirect, existing and future domestic subsidiaries, and is secured by certain assets of NACCO Natural Resources and the guarantors, subject to customary exceptions and limitations.

We believe funds available from cash on hand, the Facility and operating cash flows will provide sufficient liquidity to meet our operating needs and commitments arising during the next twelve months and until the expiration of the Facility in September 2028.

### Expenditures for property, plant and equipment and mineral interests

Expenditures for property, plant and equipment were $8.8 million during the first three months of 2025, primarily for equipment in the NAMining segment. Planned expenditures for the remainder of 2025 are expected to be approximately $55 million. This amount includes $12 million in the Coal Mining segment, $16 million in the NAMining segment, $20 million in the Minerals Management segment and $7 million in growth businesses included in Unallocated Items. Expenditures are expected to be funded from internally generated funds and/or bank borrowings.

### Capital Structure

NACCO's consolidated capital structure is presented below:

|  | MARCH 31 2025 | DECEMBER 31 2024 | Change |
| --- | ---: | ---: | ---: |
| Cash and cash equivalents | **$61,884** | $72,833 | $(10,949) |
| Other net tangible assets | **463,558** | 451,962 | 11,596 |
| Intangible assets, net | **5,313** | 5,475 | (162) |
| Net assets | **530,755** | 530,270 | 485 |
| Total debt | **(95,827)** | (99,514) | 3,687 |
| Bellaire closed mine obligations | **(25,811)** | (25,809) | (2) |
| Total equity | **$409,117** | $404,947 | $4,170 |
| Debt to total capitalization | **19%** | 20% | (1)% |

20

The increase in other net tangible assets at March 31, 2025 compared with December 31, 2024 was mainly the result of:

- A decrease in Accrued payroll for payments made during the first quarter of 2025 related to our incentive compensation plans;
- An increase in Deposits with vendors for equipment; and
- An increase in Property, plant and equipment during the first quarter of 2025.

These changes were partially offset by a decrease in Trade accounts receivable during the first quarter of 2025 due to the timing of payments, as well as lower revenue in the first quarter of 2025 compared with the fourth quarter of 2024.

### Contractual Obligations, Contingent Liabilities and Commitments

Since December 31, 2024, other than the changes identified above, there have been no significant changes in the total amount of NACCO's contractual obligations, contingent liabilities or commercial commitments, or the timing of cash flows in accordance with those obligations as reported on pages 56 and 57 in our Annual Report on Form 10-K for the year ended December 31, 2024. See Note 6 to the Unaudited Condensed Consolidated Financial Statements for a discussion of certain guarantees related to Coyote Creek.

### SEGMENT RESULTS

### COAL MINING SEGMENT

### FINANCIAL REVIEW

Tons of coal delivered by the Coal Mining segment were as follows for the three months ended March 31:

|  | THREE MONTHS 2025 | 2024 |
| --- | ---: | ---: |
| Unconsolidated operations | **5,616** | 5,480 |
| Consolidated operations | **591** | 455 |
| Total tons delivered | **6,207** | 5,935 |

The results of operations for the Coal Mining segment were as follows for the three months ended March 31:

|  | THREE MONTHS 2025 | 2024 |
| --- | ---: | ---: |
| Revenues | **$19,239** | $15,545 |
| Cost of sales | **22,570** | 20,943 |
| Gross loss | **(3,331)** | (5,398) |
| Earnings of unconsolidated operations(a) | **14,463** | 12,007 |
| Selling, general and administrative expenses | **7,251** | 6,910 |
| Amortization of intangible assets | **162** | 126 |
| Gain on sale of assets | **(72)** | (10) |
| Operating profit (loss) | **$3,791** | $(417) |

(a) See Note 6 to the Unaudited Condensed Consolidated Financial Statements for a discussion of our unconsolidated subsidiaries.

Revenues increased 23.8% in the first quarter of 2025 compared with the first quarter of 2024 due to an increase in customer requirements at MLMC. The first quarter of 2024 was impacted by lower customer requirements as a result of a boiler issue at the customer's Red Hills Power Plant.

The following table identifies the components of change in Operating profit (loss) for the first quarter of 2025 compared with the first quarter of 2024:

|  | Operating Profit (Loss) |
| --- | ---: |
| 2024 | $(417) |
| Increase (decrease) from: |  |
| Gross loss, excluding inventory impairment charges | 2,638 |
| Earnings of unconsolidated operations | 2,456 |
| Net change on sale of assets | 62 |
| Inventory impairment charges | (571) |
| Selling, general and administrative expenses | (341) |
| Amortization of intangibles | (36) |
| **2025** | **$3,791** |

Operating profit (loss) improved by $4.2 million in the first quarter of 2025 compared with the first quarter of 2024, primarily due to a decrease in the gross loss, excluding inventory impairment charges, and an increase in earnings of unconsolidated operations.

The decrease in gross loss at MLMC was primarily due to a decrease in the cost per ton delivered during the first quarter of 2025 compared with the first quarter of 2024. The reduction in cost per ton delivered was primarily attributable to an increase in the number of tons severed and tons sold at MLMC in the first quarter of 2025 as the boiler issue that impacted the customer's Red Hills Power Plant has been resolved. The first quarter of 2025 and 2024 included a $3.0 million and a $2.5 million inventory impairment charge, respectively, to write down MLMC's coal inventory to its net realizable value.

The increase in earnings of unconsolidated operations was primarily due to improved results at Falkirk, mainly due to a higher per ton management fee beginning in June 2024 when temporary price concessions ended. An increase in demand at Coteau also contributed to the increase in earnings of unconsolidated operations.

### NORTH AMERICAN MINING (NAMining) SEGMENT

### FINANCIAL REVIEW

Tons delivered by the NAMining segment were as follows for the three months ended March 31:

|  | THREE MONTHS 2025 | 2024 |
| --- | ---: | ---: |
| Total tons delivered | **12,853** | 15,173 |

The results of operations for the NAMining segment were as follows for the three months ended March 31:

|  | THREE MONTHS 2025 | 2024 |
| --- | ---: | ---: |
| Total revenues | **$31,526** | $24,483 |
| Reimbursable costs | **19,547** | 12,855 |
| Revenues excluding reimbursable costs | **$11,979** | $11,628 |
| Total revenues | **$31,526** | $24,483 |
| Cost of sales | **28,378** | 21,671 |
| Gross profit | **3,148** | 2,812 |
| Earnings of unconsolidated operations(a) | **969** | 1,365 |
| Selling, general and administrative expenses | **2,147** | 1,823 |
| Gain on sale of assets | **—** | (1) |
| Operating profit | **$1,970** | $2,355 |

(a) See Note 6 to the Unaudited Condensed Consolidated Financial Statements for a discussion of our unconsolidated subsidiaries.

Total revenues increased 28.8% in the first quarter of 2025 compared with the first quarter of 2024, primarily due to an increase in reimbursable costs, which have an offsetting amount in cost of sales and have no impact on gross profit. Revenues excluding reimbursable costs were comparable in the first quarter of 2025 compared with the 2024 period, as an increase in part sales was largely offset by fewer tons delivered due to reduced customer requirements.

The following table identifies the components of change in Operating profit for the first quarter of 2025 compared with the first quarter of 2024:

|  | Operating Profit |
| --- | ---: |
| 2024 | $2,355 |
| Increase (decrease) from: |  |
| Earnings of unconsolidated operations | (396) |
| Selling, general and administrative expenses | (324) |
| Gross profit | 336 |
| Gain on sale of assets | (1) |
| **2025** | **$1,970** |

Operating profit decreased $0.4 million in the first quarter of 2025 compared with the first quarter of 2024. The change in Operating profit was primarily due to a decrease in earnings of unconsolidated operations and an increase in selling, general and administrative expenses, partially offset by an increase in gross profit. The decrease in earnings of unconsolidated operations was primarily due to a reduction in tons delivered. The increase in selling, general and administrative expenses was mainly the result of higher employee-related costs. The improvement in gross profit was mainly the result of an increase in part sales, partially offset by a reduction in tons delivered.

### MINERALS MANAGEMENT SEGMENT

### FINANCIAL REVIEW

The following table sets forth our estimate of the number of gross and net productive wells:

|  | March 31, 2025 Gross | Net | March 31, 2024 Gross | Net |
| --- | ---: | ---: | ---: | ---: |
| Oil | **1,441** | **4.8** | 1,740 | 8.8 |
| Natural Gas | **887** | **18.5** | 261 | 12.9 |
| Total | **2,328** | **23.3** | 2,001 | 21.7 |

Gross wells are the total wells in which an interest is owned. Net wells are calculated based on our net royalty interest, factoring in both ownership percentage of gross wells and royalty rate.

The table below shows the average prices as reported by the United States Energy Information Administration for the three months ended March 31:

|  | THREE MONTHS 2025 | 2024 |
| --- | ---: | ---: |
| West Texas Intermediate Average Crude Oil Price | **$71.84** | $77.56 |
| Henry Hub Average Natural Gas Price | **$4.15** | $2.13 |

These indicated prices do not necessarily reflect the contract terms for our sales. As an owner of royalty and mineral interests, our access to information concerning activity and operations of our royalty and mineral interests is limited. We do not have information that would be available to a company with working interests in oil and natural gas operations because detailed information is not generally available to owners of royalty and mineral interests.

The results of operations for the Minerals Management segment were as follows for the three months ended March 31:

|  | THREE MONTHS 2025 | 2024 |
| --- | ---: | ---: |
| Oil and natural gas revenues | **$9,117** | $8,236 |
| Other revenues | **1,785** | 2,165 |
| Total Revenues | **$10,902** | $10,401 |
| Total Revenues | **$10,902** | $10,401 |
| Cost of sales | **2,244** | 1,364 |
| Gross profit | **8,658** | 9,037 |
| Earnings (loss) from unconsolidated operations | **554** | (65) |
| Selling, general and administrative expenses | **1,305** | 1,042 |
| Operating profit | **$7,907** | $7,930 |

Revenues increased 4.8% in the first quarter of 2025 compared with the first quarter of 2024, primarily due to an increase in natural gas revenue as a result of higher natural gas prices. These improvements were partially offset by a reduction in oil revenues and other revenues, primarily coal royalty income.

The following table identifies the components of change in Operating profit for the first quarter of 2025 compared with the first quarter of 2024:

|  | Operating Profit |
| --- | ---: |
| 2024 | $7,930 |
| Increase (decrease) from: |  |
| Gross profit | (379) |
| Selling, general and administrative expenses | (263) |
| Earnings of unconsolidated operations | 619 |
| **2025** | **$7,907** |

Operating profit in the first quarter of 2025 was comparable to the first quarter of 2024. A decrease in gross profit and an increase in selling, general and administrative expenses was offset by an increase in earnings of unconsolidated operations. The $0.6 million increase in earnings of unconsolidated operations was primarily related to an additional $15.7 million investment in Eiger, LLC during the fourth quarter of 2024.

### UNALLOCATED ITEMS AND ELIMINATIONS

### FINANCIAL REVIEW

Unallocated Items and Eliminations were as follows for the three months ended March 31:

|  | THREE MONTHS 2025 | 2024 |
| --- | ---: | ---: |
| Operating loss | **$(5,986)** | $(5,111) |

The operating loss increased in the first quarter of 2025 compared to the first quarter of 2024, primarily due to higher employee-related and outside service costs, partially offset by higher earnings at Mitigation Resources.

### NACCO Industries, Inc. Outlook

NACCO's businesses provide critical inputs for electricity generation, construction and development, and the production of industrial minerals and chemicals. Increasing demand for electricity, on-shoring and current federal policies are creating favorable macroeconomic trends within these industries. We are confident in our trajectory and business prospects in 2025, and we continue to prepare for longer-term growth opportunities. Specifically for 2025, we expect to generate a moderate year-over-year increase in consolidated operating profit.

In 2025, the Coal Mining segment anticipates solid customer demand, with deliveries expected to increase modestly from 2024. We expect a more favorable near-term regulatory environment for the fossil fuel industry moving forward. These developments are expected to further support coal as an essential part of the energy mix in the United States for the foreseeable future.

The Coal Mining segment expects to benefit from the expiration of temporary price concessions at Falkirk and increased customer requirements at Coteau. In addition, MLMC continues to recover from inefficiencies experienced while its customer's Red Hills Power Plant operated on one of two generation units for more than half of 2024. With the power plant now anticipated to operate at a level consistent with historical averages, coal deliveries are expected to return to more normal levels, resulting in moderate cost efficiencies. However, an anticipated reduction in the 2025 contractually determined per ton sales price compared with 2024 is expected to offset these improvements, causing MLMC results to decline from prior year levels. An expected increase in operating expenses will contribute to an overall anticipated moderate year-over-year decrease in Coal Mining segment operating profit.

NAMining is expected to generate increasing levels of operating profit over time as benefits of new and extended contracts add to the profitability of existing contracts. During 2024, NAMining executed three new or amended existing contracts, which are expected to deliver net present value after-tax cash flows of approximately $20 million over contract terms that range from 6 to 20 years. NAMining is expected to deliver improved results in 2025, with anticipated lower first half results offset by expected performance gains in the second half of the year. While customer demand is projected to remain relatively stable year-over-year, profitability improvements will be driven by operational efficiencies and an increased focus on part sales. NAMining is continuously seeking to enter into new or amended contracts to solidify its position as the foundation for NACCO's mining-related growth initiatives.

NAMining's subsidiary, Sawtooth, is the exclusive provider of comprehensive mining services at Thacker Pass, which is owned through a joint venture between Lithium Americas Corp. (TSX: LAC) (NYSE: LAC) and General Motors Holdings LLC. Sawtooth will supply all of the lithium-bearing ore requirements for Thacker Pass, which is currently under construction. We expect to continue to recognize moderate income at Sawtooth while it assists with certain construction services. Once the mine is operating, Sawtooth will be reimbursed for costs of mining, capital expenditures and mine closure and will recognize a contractually agreed upon production fee. In addition to providing comprehensive mining services, Sawtooth will receive a fee to transport clay tailings once lithium production commences. Phase 1 lithium production is estimated to begin in late 2027.

The Minerals Management segment, through its Catapult business, has constructed a high-quality, diversified portfolio of oil and gas mineral and royalty interests in the United States. In late 2024, Minerals Management invested an additional $15.7 million in Eiger, a company that holds non-operated working interests in oil and natural gas assets in the Kansas and Oklahoma portions of the Hugoton basin. This investment, accounted for under the equity method, is expected to be accretive and contribute to the anticipated improvement in 2025 operating profit compared with 2024. First-half earnings are expected to be comparable to prior year results with an anticipated significant improvement in the second half given expected trends in oil and natural gas prices and projected volumes.

Minerals Management continues to build its portfolio with a mix of producing wells, near-term development opportunities and undeveloped acreage. We believe our data-driven approach to acquisitions and our long-term perspective provides a competitive advantage as undeveloped assets provide additional upside potential over the life of the reserve. While we continue to budget up to $20 million annually to expand our portfolio and provide long-term stable cash flow generation, our business model allows flexibility regarding the cadence and type of investment based on available opportunities that we believe will create long-term value and generate increasing profitability.

Mitigation Resources provides stream and wetland mitigation solutions as well as comprehensive reclamation and restoration construction services. This business is an avenue for growth and diversification in an area where NACCO has built a strong reputation based on its substantial knowledge and expertise. Mitigation Resources continues to expand, and as of March 31, 2025, has projects located in Alabama, Florida, Georgia, Mississippi, Pennsylvania, Tennessee and Texas.

Mitigation Resources also provides ecological restoration services for abandoned surface mines and plans to pursue other environmental restoration projects. It was named a designated provider of abandoned mine land restoration by the State of Texas, and in January 2025 secured a restoration project in Kentucky that is expected to be accretive to earnings beginning in 2026.

Mitigation Resources reported its second consecutive quarter of profitability in the first quarter of 2025 and is expected to achieve full-year 2025 profitability based on current expectations for the timing of permit approvals and mitigation credit releases, as well as income generated from service-related projects. Mitigation Resources is expected to increase profitability over time, and provide a return on capital employed in the mid-teens as the business matures.

We established ReGen Resources in 2023 to address the rapidly increasing demand for additional power generation sources in the United States through development of energy and energy-related projects that utilize multiple-generation technologies, such as solar combined with gas-fired generation, primarily on reclaimed mining properties. These projects could be developed by ReGen Resources directly or through joint ventures that include partners with expertise in energy development projects. Current projects include solar arrays, solar-gas hybrid projects and carbon capture projects on reclaimed mine land in Mississippi and Texas. Additional projects in other states are in early-stage review.

We are taking actions to terminate our defined benefit pension plan in 2025, which will eliminate future earnings volatility from changes in the pension obligation. Once complete, obligations under the terminated plan will be transferred to a third-party insurance provider. Surplus assets are expected to be utilized to fund a qualified replacement plan, reducing future cash funding requirements. Although the plan is currently over funded, a significant non-cash settlement charge is anticipated upon termination, which is expected to lead to a substantial year-over-year decrease in net income and EBITDA compared with 2024. Excluding the anticipated settlement charge, net income is expected to decrease moderately from the prior year.

Consolidated capital expenditures are expected to total approximately $64 million in 2025, which includes approximately $13 million for Coal Mining, $23 million for NAMining, $20 million for Minerals Management and $8 million predominantly for ReGen Resources and other growth businesses. Based on our current business plan, we project a steady increase in annual cash flow generation beginning in 2025.

We believe that each of our businesses has competitive advantages that provide value to customers and create long-term value for stockholders. We are pursuing organic growth and diversification by strategically leveraging our core natural resources management skills to build a robust portfolio of affiliated businesses. Opportunities for growth remain strong and are increasing amid recent successes and a significant positive change in the regulatory environment, particularly for fossil fuels. Acquisitions of additional mineral interests and improvements in the outlook for Coal Mining segment customers, as well as new contracts at Mitigation Resources and NAMining should be accretive to the longer-term outlook.

We are committed to maintaining a conservative capital structure as we continue to grow and diversify, while avoiding unnecessary risk. We believe strategic diversification will generate cash that can be re-invested to strengthen and expand the businesses or distributed to investors in the form of share repurchases or dividends. We continue to maintain the highest levels of customer service and operational excellence with an unwavering focus on safety and environmental stewardship.

### FORWARD-LOOKING STATEMENTS

The statements contained in this Form 10-Q 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. We undertake 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) changes to or termination of customer or other third-party contracts, or a customer or other third party default under a contract, (2) any customer's premature facility closure or extended project development delay, (3) federal and state legislative and regulatory actions affecting fossil fuels, (4) a significant reduction in purchases by the Company's customers, including as a result of changes in coal consumption patterns of U.S. electric power generators, or changes in the power industry that would affect demand for the Company's coal and other mineral reserves, (5) supply chain disruptions, including price increases and shortages of parts and materials, inclusive of tariff effects, (6) 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, (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) failure to obtain adequate insurance coverages at reasonable rates, (10) 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, (11) impairment charges, (12) changes in costs related to geological and geotechnical conditions, repairs and maintenance, new equipment and replacement parts, fuel or other similar items, (13) weather conditions, extended power plant outages, liquidity events or other events that would change the level of customers' coal or aggregates requirements, (14) weather or equipment problems that could affect deliveries to customers, (15) changes in the costs to reclaim mining areas, (16) costs to pursue and develop new mining, mitigation, oil and gas and power generation development opportunities and other value-added service opportunities, (17) delays or reductions in coal or aggregates deliveries, (18) the ability to successfully evaluate investments and achieve intended financial results in new business and growth initiatives, (19) 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 (20) the ability to attract, retain, and replace workforce and administrative employees.

## Market risk

As filed, 144 characters.

As a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934, we are not required to provide this information.

## Controls and procedures

As filed, 786 characters.

**Evaluation of disclosure controls and procedures:** An evaluation was carried out under the supervision and with the participation of our management, including the principal executive officer and the principal financial officer, of the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, these officers have concluded that our disclosure controls and procedures are effective.

**Changes in internal control over financial reporting:** During the first quarter of 2025, there have been no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

### PART II

### OTHER INFORMATION

## Risk factors

As filed, 189 characters.

During the quarter ended March 31, 2025, there have been no material changes to the risk factors previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024.

Filed Apr 30, 2025.
Source: SEC EDGAR, the filing index for accession 0000789933-25-000023. Last ingested by Listed: Nov 4, 2026, 18:21 ET. No prices; not investment advice.