Aug 31, 2026, 6:43 AM ETBasic Materials

NACCO Industries — Q2 2026 Earnings Summary

NCNACCO INDUSTRIES INC

Financial Performance

Consolidated Adjusted EBITDA for the trailing twelve months (TTM) ended June 30, 2026, was $59.144 million, compared to $56.767 million for the TTM ended June 30, 2025.
Net Income for the TTM ended June 30, 2026, was $17.287 million, down from $31.359 million in the prior year period.
Asset impairment charges for the TTM ended June 30, 2026, totaled $11.984 million, with no such charges in the prior year period.
Pension settlement charges for the TTM ended June 30, 2026, were $7.804 million, compared to zero in the prior year period.
Depreciation, depletion, and amortization expense for the TTM ended June 30, 2026, was $24.010 million, down from $24.837 million in the prior year period.
Segment Adjusted EBITDA for the TTM ended June 30, 2026, was $35.227 million for Utility Coal Mining, $20.266 million for Contract Mining, and $34.137 million for Minerals and Royalties.
Total liquidity as of June 30, 2026, was $114.6 million, comprising $45.5 million in cash and $69.1 million available under a revolving credit facility.
Total debt as of June 30, 2026, was $120.1 million.
The company has maintained consistent dividend payments since 1956, with a 4% increase in 2026 and approximately 33% growth over the last five years.

Expected recurring EBITDA from current businesses is $50 million per year.
Projects signed in 2025 are expected to add $11 million of annual EBITDA starting in 2026.
Ecological Solutions is expected to achieve profitability in 2027.
The company targets a $20 million annual investment deployment for the Minerals and Royalties platform.
The company anticipates adding new long-term projects annually to layer onto a recurring cash flow base, creating a compounding effect.
Solar development is removed from expectations due to changing market and regulatory dynamics eliminating anticipated revenues.
Mitigation credit sales timing has been pushed into later years due to slower regulatory approvals, deferring revenues rather than eliminating them.

Utility Coal Mining (North Dakota): Operates three active mines (Coteau, Falkirk, Coyote) with long-term customer relationships averaging 40+ years; Texas reclamation work is scheduled to end in Q3 2026.
Utility Coal (Mississippi Lignite Mining Company - MLMC): Exclusive lignite supplier to Red Hills Power Plant through April 2032; performance is linked to customer power plant conditions and TVA dispatch.
Contract Mining: Operates 34 draglines and 22 mining locations as of June 30, 2026, representing 225% and 200% growth respectively over the last 10 years.
Contract Mining Projects: Includes work at Thacker Pass (world's largest proven lithium reserve) and a Florida Everglades contract to move over 25 million yards of material for a 17.75-mile embankment dam.
Minerals and Royalties: As of June 30, 2026, the portfolio includes 64,400 net royalty acres, 2,451 net well count, and $105 million in capital deployed since 2020.
Ecological Solutions: Expanded from 3 mitigation projects in 2019 to 13 projects in 2026, operating across Alabama, Florida, Georgia, Kentucky, Mississippi, Pennsylvania, Tennessee, Texas, and Virginia.

The company positions itself as a diversified natural resource platform with minimal competition or peers.
The U.S. oil and gas royalty and mineral interest market is described as a multi-billion-dollar asset class with significant growth opportunities.
The mitigation credit market features significant barriers to entry, creating competitive moats.
The company serves several of the top 10 U.S. aggregates producers and maintains exclusive mine-mouth supplier status for adjacent power plants.
The company notes a market environment described as "voraciously hungry for power to fuel tech-driven future," supporting the strategic importance of U.S. baseload power generation.

Risks include significant reductions in customer demand, weather conditions, extended power plant outages, and liquidity events affecting coal or aggregates requirements.
Potential impacts from changes in hydrocarbon prices (diesel, natural gas, oil) due to OPEC actions, geopolitical developments, and vehicle electrification.
Regulatory changes affecting fossil fuels, mining emissions, health and safety, and tax laws, including potential reductions in percentage depletion deductions.
Supply chain disruptions, including price increases and shortages of parts and materials, and tariff effects.
Permit delays and slower regulatory approvals impacting the timing of mitigation credit sales and revenue recognition.
Variable plant availability and contractual price mechanics affecting MLMC performance.
Customer collectibility issues and the ability of lessees to obtain financing for well-development operations.

Management describes the company as a "unique domestic natural resource investment opportunity" that is not speculative, cyclical, or trend-dependent.
The tone emphasizes a "compounding effect" where each year long-term projects add layers of recurring cash flow.
Management states they are "more selective" on capital allocation, focusing on expertise-driven opportunities with higher returns.
The company highlights a "different kind of stock" focused on long-term investment horizons rather than 1- to 3-year timeframes.
Management notes that while the pace of value creation may differ, the method of compounding value remains unchanged.

No specific analyst questions or answers were included in the provided press release text.

The company added over $165 million of Net Present Value (NPV) from 2019 through 2025.
In 2025, the company made approximately $1 million in donations to support community organizations.
The company operates under a fee-based model for Utility Coal Mining that eliminates exposure to commodity price risk.
The Minerals and Royalties platform closed on less than 1% of opportunities screened, adhering to disciplined underwriting standards.
The company's balance sheet strategy focuses on enhancing liquidity, reducing debt, and investing with discipline.
The company has a history of adapting through market cycles, evolving from a single-industry focus to a diversified platform since 1961.