# Nacco Industries Inc: Form 10-Q for the period ended Jun 30, 2025

- Company: [Nacco Industries Inc](/companies/nc.md) (CIK 789933)
- Form: 10-Q
- Filed: 2025-08-06
- Accepted by EDGAR: Aug 6, 2025, 16:39 ET
- Period: 2025-06-30
- Accession: 0000789933-25-000041
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/789933/000078993325000041/nacco-20250630.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/789933/000078993325000041/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2025-06-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2025-04-01 to 2025-06-30 | $68.2m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Revenue | 6 months, 2025-01-01 to 2025-06-30 | $133.8m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Cost of revenue | 3 months, 2025-04-01 to 2025-06-30 | $61.4m | us-gaap:CostOfGoodsAndServicesSold |
| Cost of revenue | 6 months, 2025-01-01 to 2025-06-30 | $117.3m | us-gaap:CostOfGoodsAndServicesSold |
| Gross profit | 3 months, 2025-04-01 to 2025-06-30 | $6.8m | us-gaap:GrossProfit |
| Gross profit | 6 months, 2025-01-01 to 2025-06-30 | $16.5m | us-gaap:GrossProfit |
| Selling, general and administrative | 3 months, 2025-04-01 to 2025-06-30 | $19.8m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Selling, general and administrative | 6 months, 2025-01-01 to 2025-06-30 | $37.6m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Operating income | 3 months, 2025-04-01 to 2025-06-30 | −$51.0k | us-gaap:OperatingIncomeLoss |
| Operating income | 6 months, 2025-01-01 to 2025-06-30 | $7.6m | us-gaap:OperatingIncomeLoss |
| Interest expense | 3 months, 2025-04-01 to 2025-06-30 | $1.9m | us-gaap:InterestExpenseNonoperating |
| Interest expense | 6 months, 2025-01-01 to 2025-06-30 | $3.7m | us-gaap:InterestExpenseNonoperating |
| Income tax | 3 months, 2025-04-01 to 2025-06-30 | −$1.3m | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 6 months, 2025-01-01 to 2025-06-30 | −$1.0m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2025-04-01 to 2025-06-30 | $3.3m | us-gaap:NetIncomeLoss |
| Net income | 6 months, 2025-01-01 to 2025-06-30 | $8.2m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2025-04-01 to 2025-06-30 | $0.44 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 6 months, 2025-01-01 to 2025-06-30 | $1.10 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2025-04-01 to 2025-06-30 | $0.44 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 6 months, 2025-01-01 to 2025-06-30 | $1.10 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2025-04-01 to 2025-06-30 | 7,445,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 6 months, 2025-01-01 to 2025-06-30 | 7,446,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 6 months, 2025-01-01 to 2025-06-30 | −$2.8m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Dividends paid | 6 months, 2025-01-01 to 2025-06-30 | $3.6m | us-gaap:PaymentsOfDividends |
| Share repurchases | 6 months, 2025-01-01 to 2025-06-30 | $695.0k | us-gaap:PaymentsForRepurchaseOfCommonStock |
| Cash and equivalents | at 2025-06-30 | $49.4m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2025-06-30 | $227.3m | us-gaap:AssetsCurrent |
| Total assets | at 2025-06-30 | $631.3m | us-gaap:Assets |
| Current liabilities | at 2025-06-30 | $58.2m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2025-06-30 | $218.2m | us-gaap:Liabilities |
| Shareholders' equity | at 2025-06-30 | $413.1m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 46,949 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: Utility Coal Mining, Contract Mining and Minerals and Royalties. The Utility Coal Mining segment, operated by North American Coal®, manages surface coal mines that are exclusive, long-term fuel providers for power generation companies. The Contract Mining segment, operated by North American Mining®, is a leading provider of a broad range of specialized contract mining services for producers of industrial minerals. The Minerals and Royalties segment, which includes the Catapult Mineral Partners (Catapult) business, acquires and promotes the development of mineral interests and related investments.

Mitigation Resources of North America® (Mitigation Resources) provides stream and wetland mitigation solutions as well as comprehensive reclamation and restoration construction services. 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, which are therefore excluded from the 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.

During the second quarter of 2025, we updated the names of our reportable segments to make it easier for our stakeholders to understand the business models within each segment. The Utility Coal Mining, Contract Mining and Minerals and Royalties segments were formerly the Coal Mining, North American Mining and Minerals Management segments, respectively. There were no changes to the composition of each segment and therefore no changes to historical segment reporting.

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:

#### The Environmental Protection Agency (EPA)

In July 2025, the EPA issued a final rule and companion proposal that will extend the compliance deadlines for coal combustion residual (CCR) management unit (CCRMU) requirements.

In June 2025, the EPA announced plans to repeal regulations on power plants (Clean Power Plan 2.0) and Mercury and Air Toxics Standards (MATS).

In May 2025, the EPA granted an administrative petition for reconsideration of the portion of the Clean Air Act’s regional haze rule which disapproved North Dakota's state implementation plan. The EPA is required to submit status reports every 120 days, with the first report due October 2, 2025.

In May 2025, the EPA proposed to approve North Dakota’s CCR program application, which would allow the state, rather than the federal government, to manage coal ash disposal in surface impoundments and landfills.

In March 2025, the Trump Administration announced that the EPA will undertake historic actions of deregulation, as discussed above, but also including:

- Reconsideration of regulations on the oil and gas industry;
- 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; and
- Working with states and tribes to resolve massive backlog with State Implementation Plans and Tribal Implementation Plans.

#### Federal Coal Leasing

In April 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.

We enter into leases of federally owned coal for a small portion of the coal mined at certain of our North Dakota mines. These lease applications require review under the National Environmental Policy Act (NEPA). The Department of Interior’s Bureau of Land Management (BLM) conducted the NEPA process for almost five years on two federal coal lease applications with no published Environmental Assessments. In April 2025 and June 2025, respectively, the BLM published the draft Environmental Assessments for the lease applications in the Federal Register subject to a 30-day public comment period for the April publication and a 15-day public comment period for the June publication.

#### Other Regulations

On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was signed into law. The OBBBA includes changes to U.S. tax law including provisions for bonus depreciation, current expensing of research expenditures and changes to the interest deductibility threshold. The changes resulting from the tax provisions in OBBBA are not expected to have a material impact on our results of operations.

The OBBBA includes substantial changes to U.S. solar energy tax policy which could have a material impact on the solar projects being developed by ReGen Resources. Our investments in solar and other energy projects are dependent, in part, upon current state regulatory incentives and federal tax credits in order for the projects to be economically viable. We have approximately $4.5 million of capitalized assets associated with our solar projects. We have incurred, and will continue to incur, costs in connection with these projects and the results of operations and/or return on investment could be lower than anticipated.

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 such policies, treaties or tariffs could be implemented, 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 and six months ended June 30:

| Revenues: | THREE MONTHS 2025 | 2024 | SIX MONTHS 2025 | 2024 |
| --- | ---: | ---: | ---: | ---: |
| Utility Coal Mining | **$28,626** | $14,996 | **$47,865** | $30,541 |
| Contract Mining | **30,723** | 27,920 | **62,249** | 52,403 |
| Minerals and Royalties | **7,268** | 5,593 | **18,170** | 15,994 |
| Unallocated Items | **2,223** | 4,566 | **6,623** | 7,828 |
| Eliminations | **(605)** | (730) | **(1,101)** | (1,132) |
| Total revenue | **$68,235** | $52,345 | **$133,806** | $105,634 |
| Operating (loss) profit: |  |  |  |  |
| Utility Coal Mining | **$1,222** | $2,767 | **$5,013** | $2,350 |
| Contract Mining | **1,010** | 3,085 | **2,980** | 5,440 |
| Minerals and Royalties | **5,205** | 7,591 | **13,112** | 15,521 |
| Unallocated Items | **(7,491)** | (6,080) | **(13,493)** | (11,208) |
| Eliminations | **3** | 3 | **19** | 20 |
| Total operating (loss) profit | **(51)** | 7,366 | **7,631** | 12,123 |
| Interest expense | **1,944** | 1,311 | **3,718** | 2,422 |
| Interest income | **(770)** | (1,038) | **(1,635)** | (2,165) |
| Closed mine obligations | **503** | 471 | **976** | 926 |
| (Gain) loss on equity securities | **(349)** | 264 | **521** | (777) |
| Gain on settlement of excess funding liability | **(3,590)** | — | **(3,590)** | — |
| Other, net | **217** | 130 | **520** | (84) |
| Other (income) expense, net | **(2,045)** | 1,138 | **510** | 322 |
| Income before income tax (benefit) provision | **1,994** | 6,228 | **7,121** | 11,801 |
| Income tax (benefit) provision | **(1,266)** | 256 | **(1,039)** | 1,259 |
| Net income | **$3,260** | $5,972 | **$8,160** | $10,542 |
| Effective income tax rate | **(63.5)%** | 4.1% | **(14.6)%** | 10.7% |

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

**Second Quarter of 2025 Compared with Second Quarter of 2024, and First Six Months Ended June 30, 2025 Compared with First Six Months Ended June 30, 2024**

### Other (income) expense, net

Interest expense increased in the second quarter of 2025 and the first six months of 2025 compared with the respective 2024 periods due to higher average borrowings, partially offset by lower average interest rates.

Interest income decreased in the second quarter of 2025 and the first six months of 2025 compared with the respective 2024 periods due to lower earnings on reduced invested cash balances.

(Gain) loss on equity securities represents changes in the market price of invested assets reported at fair value. The change in the second quarter of 2025 and the first six months of 2025 compared with the respective 2024 periods 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.

During the first quarter of 2025, $14.5 million of excess funds from the terminated Falkirk pension plan were directly transferred to the NACCO 401(k) plan. The NACCO 401(k) plan is a qualified replacement plan; therefore, these funds will be utilized to offset future profit sharing contributions to 401(k) plan participants. During the second quarter of 2025, NACCO and

Falkirk’s former customer agreed to settle the corresponding liability for $10.9 million, resulting in a $3.6 million Gain on settlement of excess funding liability.

### 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. Historically, our actual effective tax rates have differed from the statutory effective tax rate primarily due to the benefit received from percentage depletion. The effective rate 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. This contributed to the income tax benefit recorded for the three and six months ended June 30, 2025. 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 six months ended June 30:

| Operating activities: | 2025 | 2024 | Change |
| --- | ---: | ---: | ---: |
| **Net cash used for operating activities** | **$(2,753)** | $(5,698) | $2,945 |
| **Investing activities:** |  |  |  |
| Expenditures for property, plant and equipment and acquisition of mineral interests | **(11,950)** | (22,401) | 10,451 |
| Other | **915** | (874) | 1,789 |
| **Net cash used for investing activities** | **(11,035)** | (23,275) | 12,240 |
| **Cash flow before financing activities** | **$(13,788)** | $(28,973) | $15,185 |

The $2.9 million change in net cash used for operating activities was primarily due to a favorable change in non-cash items. The Company’s non-cash items primarily include Gain on sale of assets, deferred income taxes, depreciation, depletion and amortization and stock-based compensation.

| Financing activities: | 2025 | 2024 | Change |
| --- | ---: | ---: | ---: |
| Net (reductions) additions to long-term debt and revolving credit agreements | **$(5,378)** | $17,090 | $(22,468) |
| Cash dividends paid | **(3,570)** | (3,306) | (264) |
| Purchase of treasury shares | **(695)** | (7,559) | 6,864 |
| **Net cash (used for) provided by financing activities** | **$(9,643)** | $6,225 | $(15,868) |

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

### Financing Activities

In September 2024, NACCO Natural Resources amended its 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 June 30, 2025. At June 30, 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 June 30, 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 June 30, 2025. During the three and six months ended June 30, 2025, the average borrowing under the Facility was $66.0 million and $62.7 million, respectively, and the weighted-average annual interest rate was 7.05% and 7.00%, respectively.

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 June 30, 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 $12.0 million during the first six months of 2025, primarily for equipment in the Contract Mining segment. Planned expenditures for the remainder of 2025 are expected to be approximately $74 million. This amount includes $11 million in the Utility Coal Mining segment, $31 million in the Contract Mining segment, $20 million in the Minerals and Royalties segment and $12 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:

|  | JUNE 30 2025 | DECEMBER 31 2024 | Change |
| --- | ---: | ---: | ---: |
| Cash and cash equivalents | **$49,402** | $72,833 | $(23,431) |
| Other net tangible assets | **479,858** | 451,962 | 27,896 |
| Intangible assets, net | **5,068** | 5,475 | (407) |
| Net assets | **534,328** | 530,270 | 4,058 |
| Total debt | **(95,506)** | (99,514) | 4,008 |
| Bellaire closed mine obligations | **(25,702)** | (25,809) | 107 |
| Total equity | **$413,120** | $404,947 | $8,173 |
| Debt to total capitalization | **19%** | 20% | (1)% |

The increase in other net tangible assets at June 30, 2025 compared with December 31, 2024 was mainly the result of:

- An increase in Prepaid insurance due to the timing of payments;
- A decrease in Accrued payroll for payments made during the first six months of 2025 related to our incentive compensation plans; and
- An increase in Deposits with vendors.

These changes were partially offset by a decrease in Trade accounts receivable during the first six months of 2025 due to the timing of payments.

### 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

### UTILITY COAL MINING SEGMENT

### FINANCIAL REVIEW

Tons of coal delivered by the Utility Coal Mining segment were as follows for the three and six months ended June 30:

|  | THREE MONTHS 2025 | 2024 | SIX MONTHS 2025 | 2024 |
| --- | ---: | ---: | ---: | ---: |
| Unconsolidated operations | **3,736** | 4,930 | **9,352** | 10,410 |
| Consolidated operations | **890** | 423 | **1,481** | 878 |
| Total tons delivered | **4,626** | 5,353 | **10,833** | 11,288 |

The results of operations for the Utility Coal Mining segment were as follows for the three and six months ended June 30:

|  | THREE MONTHS 2025 | 2024 | SIX MONTHS 2025 | 2024 |
| --- | ---: | ---: | ---: | ---: |
| Revenues | **$28,626** | $14,996 | **$47,865** | $30,541 |
| Cost of sales | **30,327** | 16,138 | **52,897** | 37,081 |
| Gross loss | **(1,701)** | (1,142) | **(5,032)** | (6,540) |
| Earnings of unconsolidated operations(a) | **11,656** | 12,006 | **26,119** | 24,013 |
| Selling, general and administrative expenses | **8,502** | 8,060 | **15,753** | 14,970 |
| Amortization of intangible assets | **245** | 116 | **407** | 242 |
| Gain on sale of assets | **(14)** | (79) | **(86)** | (89) |
| Operating profit | **$1,222** | $2,767 | **$5,013** | $2,350 |

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

### Second Quarter of 2025 Compared with Second Quarter of 2024

Revenues increased 90.9% in the second quarter of 2025 compared with the second quarter of 2024 primarily due to an increase in customer requirements at MLMC. A boiler issue at the customer's Red Hills Power Plant reduced customer requirements in 2024.

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

|  | Operating Profit |
| --- | ---: |
| 2024 | $2,767 |
| Increase (decrease) from: |  |
| Gross loss | (559) |
| Selling, general and administrative expenses | (442) |
| Earnings of unconsolidated operations | (350) |
| Amortization of intangibles | (129) |
| Net change on sale of assets | (65) |
| **2025** | **$1,222** |

Operating profit decreased by $1.5 million in the second quarter of 2025 compared with the second quarter of 2024, primarily due to an increase in gross loss, higher selling, general and administrative expenses and a decrease in earnings of unconsolidated operations.

Gross loss was unfavorable at MLMC during the second quarter of 2025 compared with the 2024 period. Although the cost per ton delivered improved during the second quarter of 2025, the contractual sales price per ton decreased. In addition, the number of tons sold exceeded tons mined resulting in the recognition of costs previously capitalized into inventory. In comparison, during the second quarter of 2024, inefficiencies at the customer's power plant created mining inefficiencies, and thus higher mining costs. The tons mined exceeded tons sold resulting in a portion of production costs being capitalized into inventory during the 2024 period.

The increase in selling, general and administrative expenses was mainly the result of higher employee-related costs.

The decrease in earnings of unconsolidated operations was primarily due to lower customer demand at Coteau, Coyote and Falkirk, partially offset by higher per ton management fees, mainly the result of temporary price concessions ending at Falkirk in June 2024.

### First Six Months of 2025 Compared with First Six Months of 2024

Revenues increased 56.7% in the first six months of 2025 compared with the first six months of 2024 primarily due to an increase in customer requirements at MLMC. A boiler issue at the customer's Red Hills Power Plant reduced customer requirements in 2024.

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

|  | Operating Profit |
| --- | ---: |
| 2024 | $2,350 |
| Increase (decrease) from: |  |
| Earnings of unconsolidated operations | 2,106 |
| Gross loss | 1,508 |
| Selling, general and administrative expenses | (783) |
| Amortization of intangibles | (165) |
| Net change on sale of assets | (3) |
| **2025** | **$5,013** |

Operating profit increased by $2.7 million in the first six months of 2025 compared with the first six months of 2024 primarily due to an increase in earnings of unconsolidated operations and a decrease in gross loss. These improvements were partially offset by higher selling, general and administrative expenses.

The increase in earnings of unconsolidated operations was primarily due to higher per ton management fees, mainly the result of temporary price concessions ending at Falkirk in June 2024, partially offset by lower customer demand at Coteau, Coyote and Falkirk.

The improvement in gross loss at MLMC was primarily due to a reduction in the cost per ton delivered during the first six months of 2025 compared with the 2024 period. The reduction in cost per ton delivered was primarily attributable to an increase in the tons sold at MLMC in the first six months of 2025 due to the resolution of the boiler issue that impacted the customer's Red Hills Power Plant during 2024.

The increase in selling, general and administrative expenses was mainly the result of higher employee-related costs.

### CONTRACT MINING SEGMENT

### FINANCIAL REVIEW

Tons delivered by the Contract Mining segment were as follows for the three and six months ended June 30:

|  | THREE MONTHS 2025 | 2024 | SIX MONTHS 2025 | 2024 |
| --- | ---: | ---: | ---: | ---: |
| Total tons delivered | **13,947** | 16,000 | **26,800** | 31,173 |

23

The results of operations for the Contract Mining segment were as follows for the three and six months ended June 30:

|  | THREE MONTHS 2025 | 2024 | SIX MONTHS 2025 | 2024 |
| --- | ---: | ---: | ---: | ---: |
| Total revenues | **$30,723** | $27,920 | **$62,249** | $52,403 |
| Reimbursable costs | **18,503** | 16,043 | **38,050** | 28,898 |
| Revenues excluding reimbursable costs | **$12,220** | $11,877 | **$24,199** | $23,505 |
| Total revenues | **$30,723** | $27,920 | **$62,249** | $52,403 |
| Cost of sales | **28,659** | 24,254 | **57,037** | 45,925 |
| Gross profit | **2,064** | 3,666 | **5,212** | 6,478 |
| Earnings of unconsolidated operations(a) | **1,232** | 1,448 | **2,201** | 2,813 |
| Selling, general and administrative expenses | **2,286** | 2,030 | **4,433** | 3,853 |
| Gain on sale of assets | **—** | (1) | **—** | (2) |
| Operating profit | **$1,010** | $3,085 | **$2,980** | $5,440 |

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

### Second Quarter of 2025 Compared with Second Quarter of 2024

Total revenues increased in the second quarter of 2025 compared with the second 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 increased 2.9% in the second quarter of 2025 compared with the 2024 period, as an increase in part sales was partially offset by fewer tons delivered due to reduced customer requirements, in part due to operational delays at several quarries.

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

|  | Operating Profit |
| --- | ---: |
| 2024 | $3,085 |
| Increase (decrease) from: |  |
| Gross profit | (1,602) |
| Selling, general and administrative expenses | (256) |
| Earnings of unconsolidated operations | (216) |
| Gain on sale of assets | (1) |
| **2025** | **$1,010** |

Operating profit decreased $2.1 million in the second quarter of 2025 compared with the second quarter of 2024. The change in Operating profit was primarily due to a decrease in gross profit, an increase in selling, general and administrative expenses and a decrease in earnings of unconsolidated operations. The reduction in gross profit was mainly the result of a decrease in tons delivered and higher operating costs, including unexpected equipment repairs and maintenance costs, partially offset by an increase in part sales. The increase in selling, general and administrative expenses was mainly the result of higher employee-related costs. The decrease in earnings of unconsolidated operations was primarily due to a reduction in tons delivered.

### First Six Months of 2025 Compared with First Six Months of 2024

Total revenues increased in the first six months of 2025 compared with the first six months 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 increased 3.0% in the first six months of 2025 compared with the 2024 period, as an increase in part sales was partially offset by fewer tons delivered due to reduced customer requirements, in part due to operational delays at several quarries.

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

|  | Operating Profit |
| --- | ---: |
| 2024 | $5,440 |
| Increase (decrease) from: |  |
| Gross profit | (1,266) |
| Earnings of unconsolidated operations | (612) |
| Selling, general and administrative expenses | (580) |
| Gain on sale of assets | (2) |
| **2025** | **$2,980** |

Operating profit decreased $2.5 million in the first six months of 2025 compared with the first six months of 2024. The change in Operating profit was primarily due to a decrease in gross profit, a decrease in earnings of unconsolidated operations and an increase in selling, general and administrative expenses. The reduction in gross profit was mainly the result of a decrease in tons delivered and higher operating costs, including unexpected repairs and maintenance costs, partially offset by an increase in part sales. 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.

### MINERALS AND ROYALTIES SEGMENT

### FINANCIAL REVIEW

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

|  | June 30, 2025 Gross | Net | June 30, 2024 Gross | Net |
| --- | ---: | ---: | ---: | ---: |
| Oil and Natural Gas Wells | **2,377** | **23.3** | 1,986 | 22.2 |

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.

Oil and natural gas prices have been historically volatile and may continue to be volatile in the future. The table below demonstrates such volatility and shows the average prices as reported by the United States Energy Information Administration for the three and six months ended June 30:

|  | THREE MONTHS 2025 | 2024 | SIX MONTHS 2025 | 2024 |
| --- | ---: | ---: | ---: | ---: |
| West Texas Intermediate Average Crude Oil Price | **$64.63** | $81.71 | **$68.23** | $79.64 |
| Henry Hub Average Natural Gas Price | **$3.19** | $2.08 | **$3.67** | $2.11 |

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 and Royalties segment were as follows for the three and six months ended June 30:

|  | THREE MONTHS 2025 | 2024 | SIX MONTHS 2025 | 2024 |
| --- | ---: | ---: | ---: | ---: |
| Oil and natural gas revenues | **$5,981** | $3,995 | **$15,098** | $12,231 |
| Other revenues | **1,287** | 1,598 | **3,072** | 3,763 |
| Total Revenues | **$7,268** | $5,593 | **$18,170** | $15,994 |
| Total Revenues | **$7,268** | $5,593 | **$18,170** | $15,994 |
| Cost of sales | **986** | 1,501 | **3,230** | 2,865 |
| Gross profit | **6,282** | 4,092 | **14,940** | 13,129 |
| Earnings from unconsolidated operations | **251** | 138 | **805** | 73 |
| Selling, general and administrative expenses | **1,328** | 1,151 | **2,633** | 2,193 |
| Gain on sale of assets | **—** | (4,512) | **—** | (4,512) |
| Operating profit | **$5,205** | $7,591 | **$13,112** | $15,521 |

Revenues increased 29.9% and 13.6% in the second quarter and the first six months of 2025, respectively, compared with the 2024 periods, primarily due to an increase in natural gas revenue as a result of higher natural gas prices, partially offset by decreased production volumes.

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

|  | Operating Profit |
| --- | ---: |
| 2024 | $7,591 |
| Increase (decrease) from: |  |
| Gain on sale of assets | (4,512) |
| Selling, general and administrative expenses | (177) |
| Gross profit | 2,190 |
| Earnings of unconsolidated operations | 113 |
| **2025** | **$5,205** |

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

|  | Operating Profit |
| --- | ---: |
| 2024 | $15,521 |
| Increase (decrease) from: |  |
| Gain on sale of assets | (4,512) |
| Selling, general and administrative expenses | (440) |
| Gross profit | 1,811 |
| Earnings of unconsolidated operations | 732 |
| **2025** | **$13,112** |

Operating profit decreased $2.4 million in both the second quarter and the first six months of 2025 compared with 2024 periods, primarily due to the absence of a $4.5 million prior year gain on sale of land. These decreases were partially offset by improvements in gross profit due to higher natural gas prices.

### UNALLOCATED ITEMS AND ELIMINATIONS

### FINANCIAL REVIEW

Unallocated Items and Eliminations were as follows for the three and six months ended June 30:

|  | THREE MONTHS 2025 | 2024 | SIX MONTHS 2025 | 2024 |
| --- | ---: | ---: | ---: | ---: |
| Operating loss | **$(7,488)** | $(6,077) | **$(13,474)** | $(11,188) |

The operating loss increased in the second quarter and first six months of 2025 compared to the 2024 periods primarily due to higher employee-related and outside service costs. The increase in outside services is mainly attributable to developing businesses.

### NACCO Industries, Inc. Outlook

NACCO is a growing diversified natural resource company, strategically positioned to deliver consistent financial returns. Our businesses operate exclusively in the U.S. and provide critical inputs for electricity generation, construction and development, and the production of industrial minerals and products. Increasing demand for electricity, on-shoring and current federal policies are creating favorable macroeconomic trends within these industries. We continue to capitalize on these tailwinds, pursuing longer-term growth opportunities. Through disciplined capital allocation, operational expertise and an entrepreneurial yet cautious approach to growth, we have unique capabilities and clear competitive advantages that enable us to capture a wide range of attractive growth opportunities. Our platform is supported by multiple vectors for value creation, and we are steadfastly committed to delivering compounding returns and expanding investor value over the long term.

While the current quarter presented some unexpected operational challenges, our business model is purposely built for durability and resilience. Our foundation rests on a stable base of long-term coal-mining contracts, generating dependable recurring cash flows. As new long-term contracts are added each year in our other businesses, these multi-year agreements create a “layering” effect as their contributions compound. This, combined with income generated by our Mineral and Royalty assets, provide cash flow stability. We remain confident in our ability to deliver improving results during the second half of 2025, with momentum building as we move into 2026.

Over the remainder of the year, we anticipate a substantial increase in consolidated operating profit compared to the first half, although full-year results will be lower than the prior year due in part to $13.6 million of business interruption insurance income recognized in the third quarter of 2024. In addition, we intend to terminate our defined benefit pension plan in the fourth quarter of 2025. Although the plan is currently over funded, a significant non-cash settlement charge is anticipated upon termination. The pension settlement charge and lower operating profit are expected to lead to a substantial year-over-year decrease in net income and EBITDA compared with the 2024 second half and full year.

Our Utility Coal Mining segment, operated by North American Coal, constitutes the foundation of our business, anchored by a stable portfolio of long-term mining contracts. We anticipate customer demand to remain steady in the second half of 2025 and throughout 2026 at the unconsolidated mining operations. At MLMC, results for the 2025 second half are expected to improve over the first half of 2025. However, a reduction in the 2025 contractually determined per ton sales price compared with 2024 is anticipated to continue to offset expected improvements in cost efficiencies, causing MLMC's and the Utility Coal Mining segment's 2025 second half and full year results to decline from the respective prior year levels, which include the business interruption insurance income. Looking ahead, we expect improving profitability for this segment in 2026, driven by continued stable earnings at our unconsolidated operations and anticipated improvements at MLMC in both sales price and cost per ton delivered, particularly if the customer's power plant is able to operate more consistently.

The Contract Mining segment, operated by North American Mining, represents our mining growth platform, benefiting from ongoing geographic and mineral expansion and the signing of new, more favorable long-term contracts. Each new contract perpetuates the compounding effect that underpins our growth strategy—much like building an annuity portfolio over time. For example, in 2024, the Contract Mining segment executed three new or amended contracts, which are projected to generate approximately $20 million in after-tax net present value cash flows over contract terms ranging from 6 to 20 years. Our expanding pipeline of potential deals and continued engagement with customers position this segment as a key pillar for future growth.

Sawtooth, a North American Mining subsidiary, 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. This project is currently providing stable income during the construction phase and will contribute enhanced income and long-term cash flows once lithium production commences. Phase 1 lithium production is estimated to begin in late 2027.

Near term, while overall customer demand within the Contract Mining segment is expected to remain stable year-over-year, profitability improvements in the 2025 second half and full year are expected to be driven by operational efficiencies and an increased focus on parts sales. This momentum is expected to continue into 2026.

The Minerals and Royalties segment, led by Catapult, has constructed a high-quality, diversified portfolio of oil and gas mineral and royalty interests in the United States. The business is a scalable platform for growth, with its data-driven approach to portfolio expansion and disciplined capital deployment providing a distinct competitive advantage in the U.S. market.

In July 2025, Catapult completed a $4.2 million acquisition of mineral interests within the Midland Basin which included 10,500 gross acres and approximately 400 net royalty acres. The acquisition includes a mix of producing wells, as well as additional upside opportunities through future development with existing operators in the area. This business also has an investment in a company that holds non-operated working interests in oil and natural gas assets. These investments are expected to contribute to the anticipated improvement in second-half operating profit compared with both the first half of 2025 and second half of 2024. Improvements in operating profit are expected to continue into 2026.

Mitigation Resources provides stream and wetland mitigation solutions, as well as comprehensive reclamation and restoration construction services. Mitigation Resources, underpinned by a strong reputation and clear competitive strengths, is an avenue for continued expansion into new markets. This business, while currently variable in performance due to permit and project timing, is expected to achieve key milestones in profitability in 2026 and move toward more consistent results over time as new projects are layered on top of existing projects.

We continue to invest in our businesses to drive future growth. Based on the current project pipeline, we anticipate capital expenditures of up to a total of $86 million in 2025, with the majority earmarked for future business development— the kind of prudent reinvestment that generates exponential, long-term value creation. We project a substantially lower use of cash for the 2025 full year compared with 2024 as we begin to harvest returns from prior investments and expect a steady increase in annual cash flow generation beginning in 2026.

Our conservative approach to maintaining a strong capital structure and operating discipline minimizes risk, while the compounding effect of layered long-term contracts and deliberate 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, that others 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.

### 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) a significant reduction in demand by the Company's customers, (2) weather conditions, extended power plant outages, liquidity events or other events that would change the level of customers' coal or aggregates requirements, (3) changes to or termination of customer or other third-party contracts, or a customer or other third party default under a contract, (4) 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, vehicle electrification, as well as supply and demand dynamics, (5) changes in development plans by third-party lessees of the Company's mineral interests, (6) 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, (7) any customer's premature facility closure or extended project development delay, (8) federal and state legislative and regulatory actions affecting fossil fuels, (9) supply chain disruptions, including price increases and shortages of parts and materials, inclusive of tariff effects, (10) failure to obtain adequate insurance coverages at reasonable rates, (11) 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, (12) impairment charges, (13) changes in costs related to geological and geotechnical conditions, repairs and maintenance, new equipment and replacement parts, fuel or other similar items, (14) 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) the ability to successfully evaluate investments and achieve intended financial results in new business and growth initiatives, (18) 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 (19) 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, 787 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 second 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, 188 characters.

During the quarter ended June 30, 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 Aug 6, 2025.
Source: SEC EDGAR, the filing index for accession 0000789933-25-000041. Last ingested by Listed: Nov 4, 2026, 18:21 ET. No prices; not investment advice.