Nacco Industries, Inc. · NYSE:NC
Nacco Industries — Investor Presentation (April 2016)
58 slides from Nacco Industries's investor presentation, Apr 15, 2016
Slide 1: Investor Presentation
Exhibit 99 Exhibit 99 Investor Presentation
Slide 2: Safe Harbor Statement and Disclosure
SafeUnited the Refer information Guidance such 2This Harbor presentation guidance. to NACCO’s noted States reconciling Statement inof includes is the reports not America following & an financial Disclosure forward-looking offer filed (GAAP). to on slides measures sell Forms or wasa8-K solicitation t
Slide 3: NACCO Industries Overview
3NACCO Industries Overview
Slide 4: NACCO Industries at a Glance
NACCO industries? million(1)(2) Headquartered Approximately NACCO’s (1) reconciliations (2) results that 4comparability Adjusted Adjusted of Industries, Industries Centennial strategy Net Revenue, Revenue Revenue of in to income 3,600 results. Cleveland, GAAP is atInc. Natural to employees aand Adju
Slide 5: NACCO Industries Overview
NACCO ?million? flow (1) 5reconciliations Headquartered Net Adjusted from income Revenue Industries operations Revenue, $5.6 toinGAAP –million? Dallas, Overview $621.0 –Adjusted $95.9 measures Texas? million? Cash million? Income flow Headquartered start Revenue from Employees on andpage operations
Slide 6: Strong Cash Flow Generation
?NACCO 6–Strong NACCO Cash collective Significant Substantial flow Industries has sustainability management overall significant earnings Overview cash generation strengths and expertise (continued) low cashearnings in flow intoits operating support generation principal volatility growth each busines
Slide 7: NACCO's Investments and Capital Return Priorities
NACCO’s Investments Initiatives? Reduction Prudent 2013 ?R Stock 7(1) eturn Support Pursue $8.1m Dollars 2014 Repurchase Cash Investments complementary strategic $7.8m of Priorities 2015 represent Ensure in to Debt Core Individual Stockholders $7.3m $95.6m debt initiatives Subsidiary for in total Co
Slide 8: Experienced Management Team
Experienced Alfred Eaton Treasurer Reporting Administrative J.C. President 2015 Executive Coal Brands CEO Administration Mississippi 8Collection Butler, Corporation of Corporation M. Kitchen and Officer- Rankin Jr.? Operations Management CEO Chief Officer and President Project Jr.? since ?NACoal Joi
Slide 9: The History of NACCO
The History 1913 1925 1985 1988 9NACCO Cleveland Name NACoal NACCO acquires changed ofbuys purchases NACCO &controlling Western controlling to The Industries, Proctor-Silex, Coal North interest interest Company American Inc. ofin along and Hamilton Yale isSubsidiaries Coal founded with Materials Cor
Slide 10: North American Coal Overview
North American Coal Overview 10
Slide 11: North American Coal Overview
North ?Navajo 11 Mines 2.0 Known Unique Provides Power billion American Nation coal plants business for steady tons outstanding primarily (New served Coal of income model lignite Mexico)? (“NACoal”) are foroperational with and generally use coalcash largely inLargest reserves power Overview flow wel
Slide 12: NACoal's Excellent Safety Record
*1.NACoal’s 5.91 Rate 09 62 47 ident Inc 73 3.47 48 34 2015 96 61 1.48 0.73 NACoal *OSHA 12 58 91 5.139 49 67 .13.67 6Total 5 3 53 73 .54Top Rate 2015 55 0.91 Incident .5.53 .0 13.Incident 1 .2Cloud 00.96 174Excellent .Total 091 National . .4030Peak ..Rate Safety Arch Coal = Total Producers Peabody
Slide 13: North American Coal Environmental Responsibility
?Environmental 13 North American Responsibility Coal has received over 75 federal and state awards for successful and innovative reclamation projects
Slide 14: NACoal Operations
NACoal Operations CORPORATION Locations of Operations Coyote Creek Mine Falkirk Mine Freedom Mine South Hallsville No.1 Mine . Navajo Mine \! Marshall Mine} | Req Hills Mine A Liberty Mine Corporate Office Florida Dragline Operations Eagle Pass Mine Five Forks Mine
Slide 15: Bisti Fuels Company Contract Mining
In December 15 Bisti Annual NTEC Fuels will anticipates provides coal act Company deliveries as 2015, NTEC’s coal it will Bisti toare replace the contract Fuels expected third-party an Company, miner existing to owners beatbetween LLC, NTEC’s contract ofa the subsidiary 5.0 miner Navajo nearby to 6.
Slide 16: Unconsolidated Mines
Unconsolidated NACoal’s 16 Customer NACoal Fees Contracts Long-term Theseadjust mines iseliminate pays provides, unconsolidated paid contracts over produce 100% aMines time modest exposure or expiring strong with ofprovides cost agreed mines indices cash of to 2018 operating support spot operate pro
Slide 17: Unconsolidated Mines (continued)
Unconsolidated Mine-Mouth Active Mine Target Stable Outlook Minimal Goal Tons 17 delivered of incash transitioning production mines pretax development capital flows operations –earnings are Coteau, Mines investments from of expected to~5-6 ~2.5 NACoal: : (continued) Coyote long-term Falkirk, growth
Slide 18: Consolidated Mines
Consolidated ?plant, mine 18Mississippi Outlook adjacent o Recent Lignite Mine to mine –substantial Mississippi Mining o Contractually Company’s decline Lignite in agreed Mining Red diesel Hills price fuel Company Mine per index ton supplies prices adjusts iscoal monthly expected underprimarily to a
Slide 19: Value-Added Services
Value-Added –?NACoal 19 Fee-based Customers NACoal 20.9 Ohio,million Pennsylvania, provides employees dragline arrangement pay Mining cubic all selected operating yards mining Services operate North todelivered value operate services Dakota, equipment costs and added Other aplus inTexas, for coal 20
Slide 20: NACoal Strategy Overview
NACoal Strategic ?Using Seek 20 Additional Opportunities aaminimum disciplined Key initiatives opportunities Strategy inreturn to non-coal expand approach, forOverview growth onvalue-added to capital mining serve and employed using as operations, a services contract NACoal’s of such 13% miner core a
Slide 21: NACoal Operational Highlights
NACoal Tons 35.0 27.9 30.0 Cubic (millions 25.0 2011 0.0 5.0 10.0 15.0 13.7 20.0 18.8 21 29.9 28.4 22.1 of 2012 Yards Coal Operational of 30.2 21.0 2013 tons) cubic of Delivered 30.6 20.9 Limerock 2014 yards) Highlights 2015 Delivered
Slide 22: Annual Coal Production from Current Operations
Annual Millions 25 30 35 10 Other 515 1994 Note: 22Falkirk Red1995 the Hills Coal 20 Coteau annual 1996 Sabine Production 1998 coal 0 production 1999 from 2000 Current of 2001 legacy Operations 2002operations 2003 1994—2015 2004(Centennial, 2005 2006 San 2007Miguel 2008 2009 and Red 2010River) 2011
Slide 23: NACoal Financial Highlights
NACoal Net $45 ($20) ($40) ($60) -$35 -$75 2011 Adjusted ($ $60 25% 13.0% $40 $20 -15% -14.9% (1) including Income financial (2) and 23 in Adjusted Cash Income the $29.4 $5.6 $21.0 17.0% $32.8 -5% ($50.2) millions) 2012 $(51.0) ($6.1) ($26.7) 2011 $42.2 related assists Financial flow measures. Incom
Slide 24: Hamilton Beach Brands Overview
Hamilton Beach Brands Overview 24
Slide 25: Hamilton Beach Brands Overview
?Hamilton product Wolf Note—All logos, 25Strong Gourmet®, and line heritage Beach brands product expansion Brands Jamba®, brands does names, and not (“HBB”) with logos, Weston® imply new leading product endorsement. and Overview and brands market innovation…we Hamilton are shares? property Beach® St
Slide 26: HBB Business Highlights
*-?–HBB ** 26 Wolf HBB New Hamilton Leading Powerful Small Commercial In Strong Jamba® Wolf U.S. Business brands, Gourmet® has electric Gourmet® share &designer, is been heritage Beach Canada, a Weston® registered products in Highlights household aCanada, critical (licensed), Commercial is marketer
Slide 27: HBB Business Highlights (continued)
HBB Business Broad return Focused Shareholder Invest Deliver 27 for product toconsistent on ensure years the focused assortment Highlights long to wecome profits have term…think aand distributed (continued) meaningful strong andreturn through act “reason strategically… onmass capital for being” merc
Slide 28: Broad Product Offering
BroadMixers Comprehensive Coffeemakers Hand 28 ProductCan Kettles Offering offering Openers Toasters of Blenders high-quality Irons Toaster Slow consumer Cookers Ovenshousewares Meat Grinders Bag Sealers
Slide 29: HBB Global Footprint
HBBPaulo, Chicago, Markham, Picton, Minneapolis, Shanghai, Olive Southern Customer Tultitlan, Miami, Jundiai, Distribution Sao Sales 29 Global Sales ,Richmond, & Branch, Engineering, Ontario, Florida Brazil Marketing IL Pines, Mexico Call China Ontario, Brazil &Independence, Center Footprint MN Mark
Slide 30: HBB Strategy: Core Business Deliverables
–?Core Achieve 30 Achieve Attract Lead Invest Leverage Maintain Continually Deliver Ensure Strengthen Business with in $750 and operational we best-in-class organizational deep amarketing product have strong, brands retain reduce million Deliverables understanding industry-leading, passionate throug
Slide 31: HBB Strategic Initiatives
HBB The 700 500 ?2010 –Internet? Achieve 31Enhance The Incremental Provide Understand Increase Strengthen Build following 2011 Strategic Hamilton distribution $750 Expand consumer-driven best-in-class international placements 2012 food local placements million 5Initiatives Beach® strategic 2013 inte
Slide 32: HBB International Opportunity
HBB Goal 0International G –Increase ?A 32 Actively Continue Purse Work U.S. Some Using Investing U.S. International is International 80% 55% to other with of an resources shift targeting the appropriate to inlocal markets expand developing fastest international partners allocated Opportunity fast gr
Slide 33: Recent Product Launches
Recent EXPEDITOR™ ?Eclipse™ Better vegetables 33 xxx These The Hamilton EXPEDITOR™ Eclipse Flex toProduct blenders Best advanced and Brew® Beach’s blender and fruit Launches build leveraging single 3-in-1 quietest Quiet launched Family on serve Support the Shield™ Spiralizer commercial the heritage
Slide 34: Recent Product Launches (continued)
Recent Weston® Butcher Grinders™ Hamilton purees. Beach® vide ?Brew®? 34 xxx Hamilton HBB Innovative // Slow is Product ItSeries Professional Favorably updating also ?Beach® The Beach® ?cooker, design Heavy features Launches Weston® its received provides Professional Quiet duty, brings rice simple B
Slide 35: HBB Financial Highlights
HBB Revenue $25.1 Operating ($ $80 6.9% 7% 5.6% $41.0 $33.8 $40 $0 2011 35 in $0 0% 6.4% 8% 4% millions) 2012 Financial 6.9% 6% $600 5% $35.8 7.5% 3% Net Profit 2013 $521.6 2% $35.8 Income ($ Highlights 1% 2014 Operating in$34.8 $547.8 millions) 2015$559.7 Profit 2011 $7002012 Margin $25 $621.0 $23.
Slide 36: HBB Financial Highlights (continued)
HBB Net $40 $9.2 $50 $0 -$10 Return ($ 40% 27.7% 19.1% 2011 0% 10% (1) GAAP 36 in 0% Net Working $38.5 10% $10 34.9% millions) 2012 Financial ($10.9) 29.3% 20% items On working $0 $150 Capital 2013 and Capital 28.7% Net 2011 Highlights 30% capital, 2014 the Employed Working 2012 30% related (1) $110
Slide 37: Kitchen Collection Overview
Kitchen Collection Overview 37
Slide 38: Kitchen Collection Overview
?–Kitchen 38 A Outlet 229 About Located Challenging leading stores Collection mall 75% inspecialty throughout outlet niche offorstores larger and (“KC”) focus retailer are traditional the retailers differentiates inOverview U.S. of outlet kitchen at tomalls December malls compete Kitchen and through
Slide 39: Kitchen Collection Locations
Kitchen Collection Locations 39
Slide 40: KC Business Highlights
KC Strong closing Number Total –Reduced 40Focus Continue Implemented Improved Ongoing Business “go core underperforming on of home forward” merchandising stores outlet to store inventory Highlights optimize office theformat segment reduced “KC count and control store Bright” stores projected distrib
Slide 41: KC Strategy Overview
KC is interactions store sales Achieve 41 Key displays ofdealing higher-margin Strategy a minimum toand with generate Overview appearances a operating difficult products greaterenvironment profit Selectively average o Maintain margin saleand open inventory transaction target evolving newof Kitchen 5
Slide 42: KC Operational Highlights
KC Store 312 337 400 300 02229 100 Sales ($ 2011 $0 $250 42 011 inOperational 304 248 200 thousands) 2012 Count Per Store 2013 Highlights $1,000 2014 2015 $720.2 $679.4 $750 $656.4 $644.7 $659.4 $500
Slide 43: KC Financial Highlights
KCin ($3) ($7.1) Cash ($ $3 $15 $10 $5 $0 ($0.1) ($6) ($5) ($15) ($6.9) ($10) 2011 (1) million, (2) GAAP 43 2011 $1.1 $2.6 ($3) 2012, Cash Financial $10.8 $6.3 ($0.2) ($4.6) millions) 2012 Flow ($10.9) ($12.2) ($3.1) measures ($0.4) respectively. 2012 flow $0 2013 2013 Before $100 ($9) Highlights (1
Slide 44: NACCO Industries Financial Update
NACCO Industries Financial Update 44
Slide 45: 2015 Results and Outlook
($NACoal 2015 As Reported Operating Net EBITDA(1) Operations ?NACoal Initiatives, diesel expected million growth (1) items 45KC in As Adjusted Income thousands)? Highlights Results Full made and prices initiatives inOutlook to % Year the sales Profit expects HBB significant be $21,984 Adjusted(1) $5
Slide 46: Why NACCO?
?Why –Leading NACCO 46 North Wide Provides Long-standing Highly Diversification Strong Expansion Extensive Economies Differentiated Focused Invest variety American retail heritage represents offers efficient on mining in market into of comparable market NACCO? of strong scale in relationships via ad
Slide 47: Appendix
47 Appendix
Slide 48: Risk Factors
Risk The North geological that problems areas, of Hamilton or effective operates products, Collection: adversely (3) stores, 48 assets loss changes could risks Factors American (8) the ofand/or at suppliers, and (10) costs that major Beach: affect affect ability conditions, the (1) inuncertainties c
Slide 49: Non-GAAP Measures
Non-GAAP This 49 accordance from associated presentation NACCO measures EBITDA Cash Return debt Net debt working less presentation financial flow onis LTM Industries, is as capital before with defined with defined Disclosure follows: are capital results average the provided U.S. financing employed c
Slide 50: Non-GAAP Reconciliations: EBITDA
Non-GAAP ($ Calculation Net Income EBITDA 50 inincome millions) tax reconciliation $54.9 provision of $22.0 Reconciliations EBITDA 2.82015 Interest Fullexpense Year 6.9 Interest income (0.5) Depreciation, depletion and amortization expense 23.7
Slide 51: Non-GAAP Reconciliations: EBITDA by Segment
Non-GAAP ($ 2015 American Net Depreciation, EBITDA 51 inincome millions) Full$19.3 reconciliation Year Beach (loss) Reconciliations depletion North $38.0 Kitchen $5.6Hamilton $1.6 $19.7 –and NACCO by$(4.0) amortization (continued) segment $(0.4)&$(3.0) Coal17.1 Income Brands 4.8 1.5 Collection tax0.
Slide 52: Non-GAAP Reconciliations: Cash Flow Before Financing
Non-GAAP ($ North Hamilton For 2011 Net Cash K 2F N C 520oaeitc in1rsthe tcash millions) th c2012 he 1h Flow American a2FFiscal ensprovided 0lo FBeach C h2013 1before Before isw pReconciliations o2cYear ro blle 2ae2014 Coal 0Brands vlcfo Financing Y 1by Financing id tio Ended 3re eeoperating (used 2
Slide 53: Non-GAAP Reconciliations: Working Capital
Non-GAAP Net ($ 2D A N 530cein1ctWorking millions) W 1oe 2m uo0nbrk1tseReconciliations in 2Capital re r 23gc01Ce1,aiv3–pa2Hamilton ita b0 le 1l $4,(continued) n92 e80tBeach .3 1$5$8 93 6.7 Brands .9$ $9 94 3.9.5$ $1 10 10 0.7.2$ $1 10 18 6.9.8$ 1 0 0 .9 In v e n to rie s , n e t 7 5 .6 8 4 .8 9 0 .7
Slide 54: Non-GAAP Reconciliations: Return on Capital Employed
Non-GAAP ($ 2011’s 2011 Total 2012 Return (1) 2012’s 54 inTax millions) Average Net 2011 2012 quarter effective on rate Income Capital total average of Reconciliations Equity ends) 38% Coal capital income $29.4 $32.8 Employed total represents Brands (2.7) (5.7) (12/31/2010 (12/31/2011 employed $18.4
Slide 55: Non-GAAP Reconciliations: Return on Capital Employed
Non-GAAP North ($ 2013 2014’s Total 2014 Return (1) 2013’s 55 inTax millions) Average Net 2013 2014 Hamilton quarter effective on Return rate Income Capital total average of Reconciliations Equity 38% on 2013 ends) capital American income $31.9 (loss) total Employed total represents (1.2) (0.1) (12/
Slide 56: Non-GAAP Reconciliations: Return on Capital Employed
Non-GAAP ($ North 2015’s Total 2015 Return (1) 56 inTax millions) Average Net 2015 Hamilton quarter on rate Income Capital total average of Reconciliations Equity 38% ends) capital American $5.6 Employed total represents (2.9) (12/31/2014 employed $19.7 capital (1.4) Beach (continued) Plus: – the 20
Slide 57: Non-GAAP Reconciliations: Adjusted Revenue and Operating Profit
Non-GAAP (NACCO Year December Revenue, Operating Reconciliation Net Adjusted the 57$ in 2015 results Income, Ended thousands) charges Consolidated Revenue Operating Income Revenue, as Profit, of 31, Reconciliations reported as operations 2015 of reported associated as Adjusted $43,668 $881,263 Adjus
Slide 58: Non-GAAP Reconciliations: NACoal Adjusted Revenue and Income
Non-GAAP NACoal ($ Revenue, Year Reconciliation Net Adjusted impairment results 58 inIncome Ended thousands) ofReconciliations Income Revenue operations ascharge December (Loss), Reconciliations reported ofYear Adjusted $42,242 $113,401 and and asof $147,998 Ended reported Adjusted 31 NACCO the “As
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