NACCO Industries, Inc. Class A press release

NACCO INDUSTRIES ANNOUNCES THIRD QUARTER 2026 RESULTS

2026-11-04

NYSE - New York Stock Exchange · Coal · Limestone · Phosphate · Lithium · Oil · Natural Gas · United States · Corporate Finance

PR Newswire

CLEVELAND, Nov. 4, 2026/PRNewswire/ --

Consolidated Q3 2026 Highlights:

Gross profit of $11.8 million improved 18% year over year on increased revenue Income before taxes of $12.5 million improved $6.6 million over Q3 2025 Operating profit of $9.3 million, which includes solar curtailment costs of $3.4 million, rose $2.5 million, or 37%, over Q3 2025 Other income includes a $4.5 million excess funding liability settlement gain

Net income of $10.9 million decreased from $13.3 million in Q3 2025 due to higher income tax expense Adjusted EBITDA of $20.4 million increased 63% over Q3 2025 and 28% sequentially

NACCO Industries®(NYSE: NC) today announced consolidated results for the three and nine months ended September 30, 2026.

"NACCO's third-quarter results reflect continued progress in strengthening the performance of our businesses," said J.C. Butler, NACCO President and Chief Executive Officer. "Strong improvements in operating profitability and Adjusted EBITDA demonstrate the momentum we are building across the organization, even as we incur costs associated with the curtailment of certain solar development activities. We delivered solid results with increasing contributions from newer projects and contracts and remain focused on building on this progress to create a stronger foundation for future growth and long-term shareholder value."

| | Three Months Ended | | | | | | ($ in thousands) | 9/30/2026 | 9/30/2025 | Year/Year % Change | 6/30/2026 | Sequential % Change | | Revenues | $80,494 | $76,614 | 5 % | $72,310 | 11 % | | Gross profit | $11,783 | $9,971 | 18 % | $15,202 | (22) % | | Solar curtailment costs (Q3) / Asset impairment charges (Q2) | $3,375 | $— | n/m | $11,984 | n/m | | Operating profit (loss) | $9,257 | $6,777 | 37 % | $(2,267) | n/m | | Other (income) expense, net | $(3,279) | $820 | (500) % | $906 | n/m | | Income before taxes | $12,536 | $5,957 | 110 % | $(3,173) | n/m | | | | | | | | | | Three Months Ended | | | | | | ($ in thousands, except per share amounts) | 9/30/2026 | 9/30/2025 | Year/Year % Change | 6/30/2026 | Sequential % Change | | Income before taxes | $12,536 | $5,957 | 110 % | $(3,173) | n/m | | Income tax provision (benefit) | $1,628 | $(7,297) | n/m | $(2,210) | n/m | | Net Income (loss) | $10,908 | $13,254 | (18) % | $(963) | n/m | | Diluted EPS | $1.44 | $1.78 | (19) % | $(0.13) | n/m | | Consolidated Adjusted EBITDA* | $20,374 | $12,530 | 63 % | $15,908 | 28 % |

*Non-GAAP financial measures are defined and reconciled on page 9. / n/m = not meaningful

Third-quarter operating performance improved over the prior-year quarter, led by higher operating profit in the Contract Mining and Utility Coal Mining segments. The improvement in these segments more than offset lower Unallocated results, which included $3.4 million of solar curtailment-related costs. Minerals and Royalties' results were comparable year over year, with higher equity earnings largely offsetting lower royalty revenues.

Income before taxes improved year over year, driven by higher operating profit and an approximately $4 million improvement in other income (expense), primarily attributable to a $4.5 million gain associated with the settlement of an excess pension funding liability. A substantial increase in income tax expense more than offset the improvement in income before tax resulting in lower net income year over year.

Liquidity

At September 30, 2026, the Company had outstanding debt of $124.8 million. Total liquidity was $115.2 million, which consisted of $56.5 million of cash and $58.7 million of availability under our revolving credit facility. We remain focused on maintaining a strong balance sheet by enhancing liquidity and reducing debt over time, while preserving the flexibility to fund disciplined, high-return investment opportunities.

Detailed Discussion of 2026 Third Quarter Compared to 2025 Third Quarter

Utility Coal Mining Results

| | 2026 | | 2025 | | | | Tons of coal delivered | (in thousands) | | | | | | Unconsolidated operations | | 5,644 | | | 5,469 | | Consolidated operations | | 572 | | | 609 | | Total deliveries | | 6,216 | | | 6,078 | | | | | | | | | | 2026 | | 2025 | | | | | (in thousands) | | | | | | Revenues | $ | 20,766 | | $ | 19,654 | | Gross profit (loss) | $ | (55) | | $ | (1,857) | | Earnings of unconsolidated operations | $ | 14,333 | | $ | 14,311 | | Operating expenses(1) | $ | 7,671 | | $ | 7,467 | | Operating profit | $ | 6,607 | | $ | 4,987 | | Segment Adjusted EBITDA(2) | $ | 8,919 | | $ | 7,122 |

| | | (1)Operating expenses consist of Selling, general and administrative expenses, Amortization of intangible assets and (Gain) loss on sale of assets. | | (2)Segment Adjusted EBITDA is a non-GAAP measure and should not be considered in isolation or as a substitute for GAAP. See non-GAAP explanation and the related reconciliations to GAAP on page 10. |

Utility Coal Mining delivered improved year-over-year operating profit and Segment Adjusted EBITDA, benefiting from improved contractual pricing and lower inventory impairment charges at Mississippi Lignite Mining Company.

Contract Mining Results

| | 2026 | | 2025 | | | (in thousands) | | | | Tons delivered | 14,288 | | 14,385 | | | | | | | | 2026 | | 2025 | | | (in thousands) | | | | Total revenues | $ 48,254 | | $ 45,611 | | Reimbursable costs | 26,103 | | 32,959 | | Revenues excluding reimbursable costs | $ 22,151 | | $ 12,652 | | Operating profit | $ 4,912 | | $ 1,929 | | Segment Adjusted EBITDA(1) | $ 7,625 | | $ 4,706 |

| | | (1)Segment Adjusted EBITDA is a non-GAAP measure and should not be considered in isolation or as a substitute for GAAP. See non-GAAP explanation and the related reconciliations to GAAP on page 10. |

Third-quarter 2026 results improved substantially with the continued ramp up of the new dragline services contract in Palm Beach County, Florida, reflecting ongoing progress in the strategic expansion of Contract Mining's business model. Contributions from this new contract more than offset lower customer requirements at the limestone mining operations, resulting in a 75% increase in revenues excluding reimbursable costs, and substantial year-over-year and sequential improvements in operating profit and Segment Adjusted EBITDA.

Minerals and Royalties Results

| | 2026 | | 2025 | | | (in thousands) | | | | Revenues | $ 6,133 | | $ 9,313 | | Operating profit | $ 7,675 | | $ 7,968 | | Segment Adjusted EBITDA(1) | $ 8,717 | | $ 8,903 |

| | | (1)Segment Adjusted EBITDA is a non-GAAP measure and should not be considered in isolation or as a substitute for GAAP. See non-GAAP explanation and the related reconciliations to GAAP on page 10. |

At Minerals and Royalties, a substantial increase in third-quarter earnings from an equity investment supported comparable year-over-year operating profit and Segment Adjusted EBITDA, largely offsetting lower royalty revenues. Lower natural gas production and pricing primarily drove the royalty revenue decline, while an increase in oil production and pricing partly offset the decrease.

Unallocated

| | 2026 | | 2025 | | | | | (in thousands) | | | | | | Revenues | $ | 5,341 | | $ | 2,036 | | Solar curtailment costs | $ | 3,375 | | $ | — | | Operating loss | $ | (9,937) | | $ | (8,107) | | Segment Adjusted EBITDA(1) | $ | (9,676) | | $ | (7,760) |

| | | (1)Segment Adjusted EBITDA is a non-GAAP measure and should not be considered in isolation or as a substitute for GAAP. See non-GAAP explanation and the related reconciliations to GAAP on page 10. |

Unallocated primarily includes the financial results of Mitigation Resources of North America®and other developing businesses that are not directly attributable to our reportable segments, as well as Bellaire Corporation, solar development and public company administrative costs.

Unallocated revenues increased over the prior-year quarter primarily as a result of higher restoration and reclamation service revenue, as well as stream and wetland credit sales at Mitigation Resources, while results were affected by $3.4 million of solar curtailment costs. Excluding these costs, the Unallocated operating loss and Segment Adjusted EBITDA improved year over year.

Outlook

NACCO Industries is a 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 purposefully 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 entrepreneurial, yet patient approach. We have methodically built distinctive 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, as evidenced by our reportable segments each contributing over $7 million of Segment Adjusted EBITDA in third-quarter 2026.

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 over time.

While these long-term agreements and investments are intended to strengthen our earnings base over time, we continually evaluate whether individual projects or initiatives remain aligned with our strategic and financial objectives. During the second quarter of 2026, changing market conditions, regulatory developments and project-specific challenges led us to reassess certain solar investments. We continue to evaluate strategic alternatives for our solar development projects, including project sales, contract amendments and other transactions intended to monetize project value. We recognized $3.4 million of curtailment costs in third-quarter 2026. We expect to incur certain additional costs in fourth-quarter 2026 and may incur further costs associated with these projects in future years; however, the amount and timing of such costs will depend on ongoing discussions with counterparties and our efforts to transfer ownership of, or otherwise monetize, the projects.

At our Utility Coal Mining segment, operated by North American Coal®, full-year 2026 operating profit is expected to increase over 2025. At Mississippi Lignite Mining Company, full-year operating results are expected to improve primarily due to the shift in focus to reclamation activities in the first half of 2026 and lower year-over-year inventory impairment charges, while earnings at the unconsolidated mining operations are anticipated to be comparable to 2025.

Full-year Utility Coal Mining operating profit is anticipated to improve, while fourth-quarter operating results are expected to be lower than the prior-year quarter due to reduced customer demand and higher diesel fuel costs at Mississippi Lignite Mining Company. Earnings at the unconsolidated mining operations are also expected to contribute to the decline primarily due to Sabine Mining Company's owner assuming reclamation activities effective October 1, 2026.

Looking ahead to 2027, overall customer demand for coal is expected to remain consistent with 2026, while profitability is expected to improve. This increase is driven by anticipated improvements at Mississippi Lignite Mining Company if the customer's power plant is able to operate more consistently, as well as continued stable earnings at our unconsolidated operations. Improved results at Coteau and Falkirk are expected to largely offset the absence of reclamation income at the Sabine Mining Company.

The Contract Mining segment, operated by North American Mining®, serves as our mining growth platform. We are building a 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 new multi-year dragline services contract as part of a U.S. Army Corps of Engineers construction project in Palm Beach County, Florida. In early October, we also commenced operations at a new limestone quarry in Arizona under a contract mining agreement that spans over a decade.

Sawtooth Mining, 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 the lithium-bearing ore requirements for our customer's Thacker Pass lithium processing facility, which is currently under construction. This project provides stable income during construction and is expected to contribute increased income and long-term cash flows as lithium production commences and ramps up to full production under a 20-year contract mining agreement. Lithium Americas is targeting mechanical completion of Thacker Pass Phase 1 in late 2027, with ramp-up to commercial production through 2028.

As a result of earnings contributions from new long-term contracts, we anticipate substantial year-over-year growth in Contract Mining operating profit and Segment Adjusted EBITDA in both the fourth-quarter and full-year 2026. We expect continued Contract Mining operating profit growth in 2027, which will include a full year of contributions from the Palm Beach County, Florida and Arizona quarry contracts.

The Minerals and Royalties segment, managed by Catapult Mineral Partners®, 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 Eiger Resources, which holds working interests in oil and natural gas assets.

We expect fourth-quarter and full-year 2026 operating profit and Segment Adjusted EBITDA at Minerals and Royalties to decline from the respective prior-year periods, primarily as a result of lower anticipated royalty income, partially offset by higher expected income from Eiger Resources. In 2027, the Minerals and Royalties segment is expected to continue generating meaningful earnings and cash flow, although operating profit is expected to moderate from 2026 levels.

Mitigation Resources of North America®provides natural resource restoration and reclamation services that include stream and wetland mitigation solutions. Mitigation Resources is 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 2026 fourth quarter and in 2027. We expect the business to move toward more consistent and improving results over time as its portfolio of mitigation projects matures.

Overall, full-year consolidated operating profit is expected to be comparable to the prior year, including approximately $15 million of solar-related impairment and curtailment costs recognized through third-quarter 2026. Strong underlying business performance through the first nine months of 2026 positions NACCO to deliver a substantial year-over-year increase in full-year consolidated Adjusted EBITDA, which excludes solar impairment charges recognized in second-quarter 2026 and a $7.8 million pension settlement charge, $6.0 million after tax, recorded in fourth-quarter 2025. Income before income taxes and net income are also expected to increase year over year.

In the fourth quarter, net income is expected to increase year over year, primarily due to the absence of the pension settlement charge. Fourth-quarter 2026 consolidated operating profit and Adjusted EBITDA could be lower than the prior-year quarter depending on the timing of solar project curtailment costs.

We remain confident in our ability to deliver improving results and increasing cash flow over time. We expect meaningful year-over-year improvements in operating profit, net income and Consolidated EBITDA in 2027. Earnings are expected to benefit from continued expansion in Contract Mining and Mitigation Resources, along with improved operating performance across our other businesses. Looking ahead, our recent investments are expected to support sustained earnings growth and stronger cash flow as they mature.

NACCO continues to invest in its businesses to support future growth. We anticipate investing up to $32 million during the remainder of 2026 and up to $56 million in 2027. Both periods include Minerals and Royalties' annual budget of $20 million for growth investments. In addition, the 2027 estimate includes approximately $16 million related to Sawtooth that will be recovered from the customer over a five- year period. The remaining 2027 balance primarily relates to ongoing operations and other business development opportunities. Growth investments will be made only if new project proposals meet our disciplined investment criteria. While cash generated from operations is expected to increase moderately year over year, cash flow before financing is projected to remain a use of cash in 2026, reflecting our planned investment activity. We expect the full-year 2026 use of cash before financing to improve modestly over 2025. In 2027, cash flow before financing is expected to improve as recent investments contribute to earnings.

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 creates 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 shareholders, 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.

Conference Call

NACCO Industries will host a conference call on Thursday, November 5, 2026, at 8:30 a.m. Eastern Time to discuss the results. The call may be accessed by dialing (888) 880-3330 (North America Toll Free) or (646) 357-8766 (International), Conference ID: 6737879, or over the Internet through the Company's website at ir.nacco.com/overview. For those not planning to ask a question of management, we recommend listening to the call via the online webcast. Please allow 15 minutes to register, download and install any necessary audio software required to listen to the webcast. A replay of the call will be available shortly after the call ends through November 12, 2026. An archive of the webcast will also be available on the Company's website approximately two hours after the live call ends.