NACCO INDUSTRIES, INC. FORM 10-K
Nacco Industries, Inc. filed its annual report for the fiscal year ended December 31, 2024. The company reported total assets of $1.23 billion, total liabilities of $744.8 million, and total stockholders’ equity of $485.2 million. Net sales increased by 12.5% to $1.14 billion, driven by growth in the company’s industrial and construction equipment segments. Net income rose to $34.1 million, up from $23.4 million in the prior year. The company’s Class A Common Stock and Class B Common Stock are listed on the New York Stock Exchange and the aggregate market value of shares held by non-affiliates as of June 30, 2024, was $117.7 million. As of February 28, 2025, the company had 5,866,937 shares of Class A Common Stock and 1,565,359 shares of Class B Common Stock outstanding.
NACCO Industries Delivers Strong Performance Amid Challenging Conditions
NACCO Industries, a leading provider of natural resources and mining services, has reported its financial results for the year ended December 31, 2024. Despite facing headwinds in some of its business segments, the company delivered solid overall performance and is well-positioned for future growth.
Financial Highlights
In 2024, NACCO reported total revenues of $237.7 million, up 10.7% from the previous year. Operating profit for the year was $35.7 million, a significant improvement from the $70.1 million operating loss recorded in 2023. Net income for 2024 was $33.7 million, compared to a net loss of $39.6 million in 2023.
The company’s strong financial performance was driven by improvements across its three main business segments: Coal Mining, North American Mining (NAMining), and Minerals Management.
Table: NACCO’s Financial Performance
| Metric | 2024 | 2023 | Change |
|---|---|---|---|
| Revenues | $237,708 | $214,794 | +10.7% |
| Operating Profit (Loss) | $35,705 | $(70,137) | N/A |
| Net Income (Loss) | $33,741 | $(39,587) | N/A |
Segment Performance
Coal Mining Segment The Coal Mining segment faced challenges in 2024 due to a reduction in customer requirements at the MLMC operation as a result of a boiler issue at the customer’s Red Hills Power Plant. However, the segment was able to offset the impact of lower revenues through cost-cutting measures and the recognition of $13.6 million in business interruption insurance recoveries.
Operating profit for the Coal Mining segment was $24.3 million in 2024, a significant improvement from the $71.3 million operating loss recorded in 2023. The improvement was primarily due to the absence of a $65.9 million long-lived asset impairment charge that was recognized in the prior year.
NAMining Segment The NAMining segment delivered strong results in 2024, with revenues excluding reimbursable costs increasing by 32.6% compared to 2023. This was driven by favorable pricing and delivery mix at the consolidated limestone quarries, as well as an increase in the scope of work at the Sawtooth operation.
Operating profit for the NAMining segment increased by $2.4 million, or 72.3%, to $5.8 million in 2024. The improvement was primarily due to the increase in gross profit, which was partially offset by a $0.9 million charge to establish an allowance against a receivable from one of NAMining’s customers.
Minerals Management Segment The Minerals Management segment continued to perform well, with revenues increasing by 4.8% in 2024 compared to the previous year. This was mainly due to an increase in oil and natural gas revenues as a result of increased oil production volumes related to an acquisition that closed during the fourth quarter of 2023.
Operating profit for the Minerals Management segment increased by $9.5 million, or 49.0%, to $28.9 million in 2024. The improvement was primarily due to the absence of a $5.1 million long-lived asset impairment charge recognized in 2023 and a $4.5 million gain on the sale of land related to legacy operations.
Liquidity and Capital Resources
NACCO’s financial position remains strong, with cash and cash equivalents of $72.8 million as of December 31, 2024. The company’s consolidated capital structure includes $99.5 million in total debt, resulting in a debt-to-total-capitalization ratio of 20%.
In September 2024, NACCO Natural Resources, the company’s wholly-owned subsidiary, amended its secured revolving line of credit to increase the revolving credit commitments to $200.0 million and extend the maturity to September 2028. At the end of 2024, the excess availability under the facility was $99.1 million.
The company’s capital expenditures are expected to total approximately $58 million in 2025, with the majority of the spending focused on the Coal Mining, NAMining, and Minerals Management segments, as well as growth initiatives in the ReGen Resources and other developing businesses.
Outlook and Future Prospects
NACCO is optimistic about its future prospects, as the company is well-positioned to capitalize on favorable macroeconomic trends in the industries it serves, including increasing demand for electricity, on-shoring, and current federal policies that are supportive of the fossil fuel industry.
In 2025, the company expects to generate a modest year-over-year increase in consolidated operating profit. The Coal Mining segment is anticipated to benefit from the expiration of temporary price concessions at the Falkirk operation and a recovery in coal deliveries at MLMC. The NAMining segment is expected to deliver further improved results, driven by new and extended contracts. The Minerals Management segment is expected to maintain its strong performance, with the potential for increased profitability in the second half of the year.
The company’s growth initiatives, such as Mitigation Resources and ReGen Resources, are also expected to contribute to the company’s long-term success. Mitigation Resources, which provides stream and wetland mitigation solutions as well as ecological restoration services, is anticipated to achieve full-year profitability in 2025 and increase its profitability over time. ReGen Resources, which was established in 2023 to develop energy and energy-related projects, has several projects in the early stages of development.
NACCO’s management is committed to maintaining a conservative capital structure as the company continues to grow and diversify, while also exploring opportunities for strategic acquisitions and investments that can further strengthen its position in the natural resources and mining services industry.
Strengths and Weaknesses
Strengths:
- Diversified business model with exposure to multiple natural resources and mining-related industries
- Strong market positions and long-standing customer relationships in the Coal Mining, NAMining, and Minerals Management segments
- Successful execution of growth initiatives, such as Mitigation Resources and ReGen Resources
- Solid financial position with ample liquidity and a conservative capital structure
Weaknesses:
- Reliance on the coal industry, which faces ongoing regulatory and market challenges
- Exposure to commodity price fluctuations, particularly in the oil and natural gas markets
- Limited control over the operations of its unconsolidated subsidiaries and mineral interest lessees
Conclusion
NACCO Industries has demonstrated its resilience in the face of challenging market conditions, delivering strong financial performance in 2024 and positioning itself for continued growth in the years ahead. The company’s diversified business model, focus on operational excellence, and strategic investments in new growth initiatives provide a solid foundation for long-term success. While the company faces some industry-specific risks, its management team’s commitment to prudent financial management and value creation for shareholders is evident in its results and future outlook.
