# Nacco Industries Inc: Form 10-Q for the period ended Mar 31, 2026

- Company: [Nacco Industries Inc](/companies/nc.md) (CIK 789933)
- Form: 10-Q
- Filed: 2026-05-05
- Accepted by EDGAR: May 5, 2026, 16:32 ET
- Period: 2026-03-31
- Accession: 0000789933-26-000117
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/789933/000078993326000117/nacco-20260331.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/789933/000078993326000117/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2026-03-31.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2026-01-01 to 2026-03-31 | $62.8m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Cost of revenue | 3 months, 2026-01-01 to 2026-03-31 | $48.5m | us-gaap:CostOfGoodsAndServicesSold |
| Gross profit | 3 months, 2026-01-01 to 2026-03-31 | $14.3m | us-gaap:GrossProfit |
| Selling, general and administrative | 3 months, 2026-01-01 to 2026-03-31 | $19.7m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Operating income | 3 months, 2026-01-01 to 2026-03-31 | $11.0m | us-gaap:OperatingIncomeLoss |
| Interest expense | 3 months, 2026-01-01 to 2026-03-31 | $1.7m | us-gaap:InterestExpenseNonoperating |
| Income tax | 3 months, 2026-01-01 to 2026-03-31 | $991.0k | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2026-01-01 to 2026-03-31 | $8.8m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2026-01-01 to 2026-03-31 | $1.17 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2026-01-01 to 2026-03-31 | $1.18 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2026-01-01 to 2026-03-31 | 7,552,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 3 months, 2026-01-01 to 2026-03-31 | $12.4m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Dividends paid | 3 months, 2026-01-01 to 2026-03-31 | $1.9m | us-gaap:PaymentsOfDividends |
| Share repurchases | 3 months, 2026-01-01 to 2026-03-31 | $0 | us-gaap:PaymentsForRepurchaseOfCommonStock |
| Cash and equivalents | at 2026-03-31 | $53.2m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2026-03-31 | $203.2m | us-gaap:AssetsCurrent |
| Total assets | at 2026-03-31 | $685.7m | us-gaap:Assets |
| Current liabilities | at 2026-03-31 | $61.5m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2026-03-31 | $248.5m | us-gaap:Liabilities |
| Shareholders' equity | at 2026-03-31 | $437.1m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 33,949 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 portfolio of businesses. We operate under three reportable 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, long-term contract mining services. The Minerals and Royalties segment, which includes the Catapult Mineral Partners® (Catapult) business, acquires and promotes the development of mineral and royalty interests and other related investments.

In addition to the reportable segments discussed above, we also operate other businesses that are not currently reported as separate segments. These businesses complement our existing operations and support our long-term growth strategic objectives. Mitigation Resources of North America® (Mitigation Resources) provides natural resource restoration and reclamation services that include stream and wetland mitigation solutions. 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 reportable segments.

We also have items not directly attributable to an operating segment. These items primarily include administrative costs related to public company reporting requirements, including management and board compensation, the financial results of developing businesses and Bellaire Corporation (Bellaire). Bellaire manages long-term liabilities related to former Eastern U.S. underground mining activities.

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

**Government Regulation and Environmental Matters:** Refer to the discussion of Government Regulation and Environmental Matters as disclosed on pages 9 through 14 in our Annual Report on Form 10-K for the year ended December 31, 2025. The Government Regulation and Environmental Matters have not materially changed since December 31, 2025.

**Critical Accounting Policies and Estimates:** Refer to the discussion of our Critical Accounting Policies and Estimates as disclosed on pages 46 through 47 in our Annual Report on Form 10-K for the year ended December 31, 2025. Our Critical Accounting Policies and Estimates have not materially changed since December 31, 2025.

### CONSOLIDATED FINANCIAL SUMMARY

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

| Revenues: | THREE MONTHS 2026 | 2025 |
| --- | ---: | ---: |
| Utility Coal Mining | **$16,691** | $19,239 |
| Contract Mining | **32,639** | 31,526 |
| Minerals and Royalties | **9,546** | 10,902 |
| Unallocated Items | **4,831** | 4,400 |
| Eliminations | **(932)** | (496) |
| Total revenue | **$62,775** | $65,571 |
| Operating profit (loss): |  |  |
| Utility Coal Mining | **$7,424** | $3,791 |
| Contract Mining | **3,988** | 1,970 |
| Minerals and Royalties | **7,736** | 7,907 |
| Unallocated Items | **(8,143)** | (6,002) |
| Eliminations | **11** | 16 |
| Total operating profit | **11,016** | 7,682 |
| Interest expense | **1,658** | 1,774 |
| Interest income | **(595)** | (865) |
| Closed mine obligations | **489** | 473 |
| (Gain) loss on equity securities | **(455)** | 870 |
| Other, net | **92** | 303 |
| Other expense, net | **1,189** | 2,555 |
| Income before income tax provision | **9,827** | 5,127 |
| Income tax provision | **991** | 227 |
| Net income | **$8,836** | $4,900 |
| Effective income tax rate | **10.1%** | 4.4% |

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

### First Quarter of 2026 Compared with First Quarter of 2025

### Other expense, net

Interest income decreased in the first quarter of 2026 compared with the 2025 period 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 favorable change in the first quarter of 2026 compared with the 2025 period is 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. 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.

### LIQUIDITY AND CAPITAL RESOURCES

### Cash Flows

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

| Operating activities: | 2026 | 2025 | Change |
| --- | ---: | ---: | ---: |
| **Net cash provided by operating activities** | **$12,374** | $5,023 | $7,351 |
| **Investing activities:** |  |  |  |
| Expenditures for property, plant and equipment and acquisition of mineral interests | **(33,430)** | (8,808) | (24,622) |
| Other | **905** | 279 | 626 |
| **Net cash used for investing activities** | **(32,525)** | (8,529) | (23,996) |
| **Cash flow before financing activities** | **$(20,151)** | $(3,506) | $(16,645) |

The $7.4 million favorable change in net cash provided by operating activities was primarily due to changes in operating assets and liabilities. This improvement was mainly attributable to an increase in Accounts payable during the first quarter of 2026, primarily due to purchases related to ReGen Resources' solar projects, whereas Accounts payable decreased during the first quarter of 2025 due to the timing of expenditures in the Coal Mining and Contract Mining segments. In addition, a decrease in Accounts receivable, mainly attributable to lower revenues at MLMC, contributed to the improvement but was partially offset by cash payments associated with reclamation work at MLMC during the first quarter of 2026.

| Financing activities: | 2026 | 2025 | Change |
| --- | ---: | ---: | ---: |
| Net additions (reductions) to long-term debt and revolving credit agreements | **$25,507** | $(5,057) | $30,564 |
| Cash dividends paid | **(1,903)** | (1,691) | (212) |
| Purchase of treasury shares | **—** | (695) | 695 |
| **Net cash provided by (used for) financing activities** | **$23,604** | $(7,443) | $31,047 |

The change in net cash provided by (used for) financing activities was primarily due to additions in debt borrowings during the first three months of 2026 compared with reductions during the first three months of 2025 as well as a decrease in share repurchases during the first three months of 2026.

### Financing Activities

NACCO Natural Resources has a $200.0 million secured revolving line of credit (Facility) that matures in September 2028. Borrowings outstanding under the Facility were $100.0 million at March 31, 2026. At March 31, 2026, the excess availability under the Facility was $49.5 million, which reflects a reduction for outstanding letters of credit of $50.5 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, 2026, 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, 2026. During the three months ended March 31, 2026, the average borrowing under the Facility was $84.7 million and the weighted-average annual interest rate was 6.52%.

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, 2026, 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

Actual expenditures were $33.4 million during the first three months of 2026, primarily for land in Tennessee at Mitigation Resources and a dragline in the Contract Mining segment.

Planned expenditures for the remainder of 2026 are expected to be approximately $57 million. This amount includes $6 million in the Utility Coal Mining segment, $25 million in the Contract Mining segment, $20 million in the Minerals and Royalties segment and $6 million in growth businesses included in Unallocated Items. The majority of these expenditures relate to business development opportunities and will only be made if the projects meet our growth investment criteria. 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 2026 | DECEMBER 31 2025 | Change |
| --- | ---: | ---: | ---: |
| Cash and cash equivalents | **$53,161** | $49,708 | $3,453 |
| Other net tangible assets | **530,477** | 500,411 | 30,066 |
| Intangible assets, net | **4,574** | 4,725 | (151) |
| Net assets | **588,212** | 554,844 | 33,368 |
| Total debt | **(126,402)** | (100,895) | (25,507) |
| Bellaire closed mine obligations | **(24,699)** | (24,706) | 7 |
| Total equity | **$437,111** | $429,243 | $7,868 |
| Debt to total capitalization | **22%** | 19% | 3% |

The change in other net tangible assets at March 31, 2026 compared with December 31, 2025 was mainly the result of an increase in Property, plant and equipment and a decrease in Accrued payroll for incentive compensation payments made during the first quarter of 2026. These increases were partially offset by a decrease in Trade accounts receivable primarily due to lower revenue at MLMC during the first quarter of 2026 compared with the fourth quarter of 2025.

### Contractual Obligations, Contingent Liabilities and Commitments

Since December 31, 2025, 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 page 52 in our Annual Report on Form 10-K for the year ended December 31, 2025. 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 months ended March 31:

|  | THREE MONTHS 2026 | 2025 |
| --- | ---: | ---: |
| Unconsolidated operations | **5,514** | 5,616 |
| Consolidated operations | **491** | 591 |
| Total tons delivered | **6,005** | 6,207 |

21

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

|  | THREE MONTHS 2026 | 2025 |
| --- | ---: | ---: |
| Revenues | **$16,691** | $19,239 |
| Cost of sales | **15,950** | 22,570 |
| Gross profit (loss) | **741** | (3,331) |
| Earnings of unconsolidated operations(a) | **14,108** | 14,463 |
| Selling, general and administrative expenses | **7,274** | 7,251 |
| Amortization of intangible assets | **151** | 162 |
| Gain on sale of assets | **—** | (72) |
| Operating profit | **$7,424** | $3,791 |

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

During the first quarter of 2026, MLMC's customer's power plant experienced a maintenance outage. As a result, revenues decreased 13.2% in the first quarter of 2026 compared with the first quarter of 2025 due to lower customer requirements. This decrease was partially offset by an increase in the contractually determined per ton sales price at MLMC.

The following table identifies the components of change in Operating profit for the first quarter of 2026 compared with the first quarter of 2025:

|  | Operating Profit |
| --- | ---: |
| 2025 | $3,791 |
| Increase (decrease) from: |  |
| Gross profit (loss) | 4,072 |
| Amortization of intangibles | 11 |
| Earnings of unconsolidated operations | (355) |
| Net change on sale of assets | (72) |
| Selling, general and administrative expenses | (23) |
| **2026** | **$7,424** |

Operating profit increased by $3.6 million in the first quarter of 2026 compared with the first quarter of 2025, primarily due to a reduction in cost per ton delivered at MLMC. Lower demand during the Red Hills Power Plant outage resulted in a shift of certain costs from inventory and cost of sales to reduce MLMC’s asset retirement obligation, which favorably impacted quarterly results. In addition, the first quarter of 2025 included a $3.0 million inventory impairment charge to write down MLMC's coal inventory to its net realizable value.

The increase in operating profit was partially offset by a decrease in earnings of unconsolidated operations primarily due to a lower management fee at Sabine during the first quarter of 2026.

### CONTRACT MINING SEGMENT

### FINANCIAL REVIEW

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

|  | THREE MONTHS 2026 | 2025 |
| --- | ---: | ---: |
| Total tons delivered | **14,960** | 12,853 |

22

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

|  | THREE MONTHS 2026 | 2025 |
| --- | ---: | ---: |
| Total revenues | **$32,639** | $31,526 |
| Reimbursable costs | **16,865** | 19,547 |
| Revenues excluding reimbursable costs | **$15,774** | $11,979 |
| Total revenues | **$32,639** | $31,526 |
| Cost of sales | **27,744** | 28,378 |
| Gross profit | **4,895** | 3,148 |
| Earnings of unconsolidated operations(a) | **1,502** | 969 |
| Selling, general and administrative expenses | **2,414** | 2,147 |
| Gain on sale of assets | **(5)** | — |
| Operating profit | **$3,988** | $1,970 |

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

Revenues excluding reimbursable costs increased 31.7% in the first quarter of 2026 compared with the 2025 period primarily due to a new dragline mining service contract as well as higher customer requirements at the consolidated limestone quarries. Reimbursable costs have an offsetting amount in cost of sales and have no impact on gross profit.

The following table identifies the components of change in Operating profit for the first quarter of 2026 compared with the first quarter of 2025:

|  | Operating Profit |
| --- | ---: |
| 2025 | $1,970 |
| Increase (decrease) from: |  |
| Gross profit | 1,747 |
| Earnings of unconsolidated operations | 533 |
| Net change on sale of assets | 5 |
| Selling, general and administrative expenses | (267) |
| **2026** | **$3,988** |

Operating profit improved by $2.0 million in the first quarter of 2026 compared with the first quarter of 2025, primarily due to increases in gross profit and earnings of unconsolidated operations. These improvements were mainly the result of an increase in tons delivered, improved margins at limestone quarries and contributions from a new dragline mining service contract, partially offset by lower profit on part sales.

The improved margins were partially due to $0.9 million in lower depreciation expense. Effective January 1, 2026, the Company’s Contract Mining segment changed its depreciation method for certain assets (primarily draglines and other large mining equipment) from the straight-line method to the units-of-production method. See Note 1 to the Unaudited Condensed Consolidated Financial Statements for further discussion of this change.

### MINERALS AND ROYALTIES SEGMENT

### FINANCIAL REVIEW

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

|  | March 31, 2026 Gross | Net | March 31, 2025 Gross | Net |
| --- | ---: | ---: | ---: | ---: |
| Oil and Natural Gas Wells | **2,542** | **24.1** | 2,328 | 23.3 |

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

|  | THREE MONTHS 2026 | 2025 |
| --- | ---: | ---: |
| West Texas Intermediate Average Crude Oil Price | **$71.98** | $71.84 |
| Henry Hub Average Natural Gas Price | **$4.79** | $4.15 |

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 months ended March 31:

|  | THREE MONTHS 2026 | 2025 |
| --- | ---: | ---: |
| Oil and natural gas revenues | **$7,827** | $9,117 |
| Other revenues | **1,719** | 1,785 |
| Total Revenues | **$9,546** | $10,902 |
| Total Revenues | **$9,546** | $10,902 |
| Cost of sales | **1,121** | 2,244 |
| Gross profit | **8,425** | 8,658 |
| Earnings from unconsolidated operations | **961** | 554 |
| Selling, general and administrative expenses | **1,651** | 1,305 |
| Gain on sale of assets | **(1)** | — |
| Operating profit | **$7,736** | $7,907 |

Revenues decreased 12.4% in the first quarter of 2026 compared with the first quarter of 2025 primarily due to lower natural gas revenue as a result of decreased production.

The following table identifies the components of change in Operating profit for the first quarter of 2026 compared with the first quarter of 2025:

|  | Operating Profit |
| --- | ---: |
| 2025 | $7,907 |
| Increase (decrease) from: |  |
| Selling, general and administrative expenses, including Gain on sale of assets | (345) |
| Gross profit | (233) |
| Earnings of unconsolidated operations | 407 |
| **2026** | **$7,736** |

Operating profit decreased by $0.2 million in the first quarter of 2026 compared with the first quarter of 2025 primarily due to an increase in selling, general and administrative expenses and lower gross profit. The increase in selling, general and administrative expenses was primarily due to higher employee-related costs. The decrease in gross profit was mainly due to lower production, partially offset by a decrease in depletion expense.

These decreases were partially offset by an improvement in earnings of unconsolidated operations related to an additional investment in Eiger Resources during the fourth quarter of 2024. Due to the timing and availability of financial information, earnings or losses from this investment are recorded on a one quarter lag.

### UNALLOCATED ITEMS AND ELIMINATIONS

### FINANCIAL REVIEW

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

|  | THREE MONTHS 2026 | 2025 |
| --- | ---: | ---: |
| Operating loss | **$(8,132)** | $(5,986) |

The operating loss increased in the first quarter of 2026 compared to the first quarter of 2025 primarily due to higher operating expenses at Mitigation Resources and a $0.5 million long-lived asset impairment charge for an office building in North Dakota that is held for sale.

### NACCO Industries, Inc. Outlook

NACCO Industries is a growing diversified natural resources company with a unique business model strategically positioned to deliver stable and growing financial returns over the long term. Our business model is purposely built for durability and resilience with an expanding portfolio of long-term contracts, relationships and investments that leverage our proven operational expertise, disciplined capital allocation and an entrepreneurial yet patient approach. We have methodically built unique capabilities and clear competitive advantages that allow us to pursue a wide range of growth opportunities, often completely integrated into customers’ operations in partnership-based relationships. We have multiple vectors for value creation, and we are steadfastly committed to delivering compounding returns and expanding investor value over the long term.

Our foundation rests on a stable base of long-term coal-mining contracts and legacy mineral and royalty assets, which generate dependable recurring cash flows. As new long-term contracts and investments are added across the Company, these new multi-year agreements create a “layering effect" as their contributions compound. The momentum our operations experienced in the second half of 2025 and the first quarter of 2026 is expected to continue throughout the remainder of 2026, resulting in meaningful year‑over‑year improvements in consolidated operating profit, net income and Adjusted EBITDA. Excluding the effect of a $6 million after-tax pension settlement charge in 2025, year‑over‑year growth is expected to moderate in the second half of 2026 as anticipated results are compared against stronger prior-year operational performance.

At our Utility Coal Mining segment, operated by North American Coal, we expect a meaningful increase in operating profit compared with 2025, primarily in the first half of 2026. We anticipate improved results at MLMC if the customer's power plant is able to operate as planned. An expected increase in the contractually determined per ton sales price and a lower cost per ton delivered are also anticipated to contribute to this improvement. We expect these operating profit improvements to be partly offset by lower earnings at the unconsolidated mining operations due to reduced income associated with the wind down of reclamation services at Sabine.

The Contract Mining segment, operated by North American Mining, serves as our mining growth platform. We are building a growing portfolio of long-term contracts through geographic and mineral expansion that are expected to strengthen the foundation for sustained profitability in this segment. In early 2026, we commenced activities under a multi-year dragline services contract as part of a U.S. Army Corps of Engineers construction project in Palm Beach County, Florida. We also anticipate commencing operations at a new limestone quarry in Arizona during the second half of 2026.

Sawtooth, a North American Mining subsidiary, provides exclusive comprehensive mining services at Thacker Pass, which is owned by a joint venture led by Lithium Americas Corp. Sawtooth will supply all of the lithium-bearing ore requirements for our customer's Thacker Pass lithium processing facility, which is currently under construction. This project is providing stable income during construction and is expected to contribute increased income and long-term cash flows once lithium production commences, which is targeted for late 2027.

As a result of earnings contributions from new contracts and continued momentum from 2025 activities, we anticipate a substantial year-over-year increase in operating profit and Segment Adjusted EBITDA in the Contract Mining segment.

The Minerals and Royalties segment, managed by Catapult, has constructed a high-quality, diversified portfolio of oil and gas mineral and royalty interests in the United States. The Catapult team is expanding its portfolio by leveraging a data-driven approach to capital deployment that incorporates a longer-term view of production and development. This segment also holds a meaningful equity investment in a company that has operating and non-operating working interests in oil and natural gas assets. Anticipated increases in income from our equity holding combined with higher oil prices are expected to be more than offset by anticipated production declines and a changing mix of production and development activity, resulting in an overall year-over-year decrease in Minerals and Royalties' operating profit and Segment Adjusted EBITDA. Changes in commodity prices or production and development assumptions, including as a result of the ongoing Middle East conflict, could alter current expectations.

Mitigation Resources provides natural resource restoration and reclamation services that include stream and wetland mitigation solutions. Mitigation Resources is successfully leveraging its strong reputation and clear competitive strengths to expand into additional mitigation, restoration and reclamation markets. Mitigation Resources is expected to deliver increasing profitability over time from the sale of mitigation credits and as reclamation and restoration services expand. This business, while currently variable in performance due to permit and project timing, is expected to generate a profit in the second half of 2026 and move toward more consistent and improving results over time as the business expands.

We continue to invest in our businesses to support future growth. Capital expenditures totaled $33 million in the first quarter of 2026. We anticipate additional spending of up to $57 million over the remainder of the year, primarily for business development opportunities. These expenditures will be made only if projects meet our growth investment criteria. As a result, we anticipate a greater use of cash before financing in 2026 compared with 2025.

Our businesses provide essential inputs for electricity generation, construction and development, and industrial production. As demand for reliable uninterrupted energy continues to grow, natural resources fundamentals remain strong, reinforcing the importance of dependable baseload generation. Recent policy developments, including the re-establishment of the National Coal Council, highlight coal’s ongoing strategic role in supporting grid reliability, economic competitiveness and national security. This development, along with a favorable regulatory environment, reinforces our confidence in our near-term outlook and long-term growth trajectory.

Our conservative approach to maintaining a strong capital structure and operating discipline minimizes risk, while the compounding effect of a growing portfolio of long-term contracts and strategic growth investments create a robust foundation for cash flow growth. With a perspective that spans decades, we are methodically building a strong, stable business that is expected to deliver annuity-like returns. This long-term view allows us to leverage our core skills for strategic, measured expansion and pursue opportunities with longer-term horizons and higher returns. We pursue opportunities that other companies with shorter time horizons might overlook. Our commitment is to generate increasing cash flows and return value to stockholders, whether through reinvestment for growth or direct returns such as share repurchases and payment of dividends. We remain confident in our ability to drive growth, expand our capabilities and reward shareholders over the long run.

### 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) 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, (3) weather conditions, extended power plant outages, liquidity events or other events that would change the level of customers' coal or aggregates requirements, (4) changes to or termination of customer or other third-party contracts, or a customer or other third party default under a contract, (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, 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 2026, 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, 2026, 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, 2025.

Filed May 5, 2026.
Source: SEC EDGAR, the filing index for accession 0000789933-26-000117. Last ingested by Listed: Nov 4, 2026, 18:21 ET. No prices; not investment advice.