MAYFIELD HEIGHTS, Ohio, Feb 21, 2002 /PRNewswire-FirstCall via COMTEX/ -- NACCO Industries, Inc. (NC-NYSE) today announced a net loss for the fourth quarter of 2001 of $27.7 million, or $3.38 per share, compared to net income before an extraordinary gain of $6.1 million, or $0.75 per share, and net income after an extraordinary gain of $36.0 million, or $4.41 per share, for the fourth quarter of 2000. Revenues for the fourth quarter of 2001 were $655.2 million compared to $783.2 million for the same period in 2000.
For 2001, NACCO Industries, Inc. had a net loss of $36.0 million, or $4.40 per share, compared to net income before an extraordinary gain of $37.8 million, or $4.63 per share, and net income after an extraordinary gain of $67.7 million, or $8.29 per share, for 2000. Revenues for 2001 were $2.6 billion compared to $2.9 billion in 2000.
A substantial portion of the loss in the fourth quarter and full year was related to the now largely completed restructuring and downsizing activities at NACCO's Hamilton Beach *Proctor-Silex, NACCO Materials Handling Group (NMHG) Wholesale and NMHG Retail subsidiaries. These programs were designed to put these businesses in the best possible position in 2002 at current depressed market levels, despite some further expected expenses in the first quarter, and in future years to capitalize on improved market conditions.
* At NACCO Housewares Group, operating results for Hamilton Beach*
Proctor-Silex that are more in line with company objectives are
anticipated in 2002. Manufacturing restructuring is expected to reduce
capacity and manufacturing inefficiency significantly and increase
low-cost outsourcing. In addition, the company anticipates an enhanced
margin mix of sales due to a withdrawal from selected low-margin,
opening-price-point business and increased better margin business.
The elimination of amortization of goodwill is expected to result in
additional net income totaling $3.0 million in 2002.
* At NMHG Wholesale, programs largely completed by year-end 2001 are
expected to enable NMHG Wholesale to reach break-even results in 2002
at current low volume levels. These programs include the closure of
the Danville manufacturing plant, broad cost reduction actions and the
elimination of inefficiencies involved in reducing production to the
current recessionary volumes in the United States. The elimination of
goodwill amortization is expected to result in additional net income of
$11.4 million in 2002.
* At NMHG Retail, the restructuring of its global operations, which was
designed to put Retail on an essentially break-even basis in 2002, was
completed in 2001. These programs included restructuring and
realignment in Europe, including the previously announced sale of its
German Hyster(R) operations to ZEPPELIN GmbH, the downsizing of
operations in the United States to reflect current low market levels,
and the completion of the integration of Asia-Pacific's Australian
dealership operations. The elimination of goodwill amortization is
expected to result in additional net income of approximately
$1.4 million in 2002.
Discussion of Results
North American Coal - 2001 Fourth Quarter
North American Coal's net income for the fourth quarter of 2001 was $4.9 million compared to $3.3 million for the fourth quarter of 2000. Results for the fourth quarter of 2000 included a non-recurring charge of $1.5 million after-tax for the write-off of its investment in a power plant and mine development in Turkey.
Net income for the quarter, compared to a year ago, increased due to contractual liquidated damages payments of $3.2 million after-tax recognized by the Red Hills Mine in Mississippi as a result of delays in achieving commercial operation status at its customer's power plant, as well as from initial lignite sales at that mine. Increased net income from these items was partially offset by unfavorable income tax expense in the fourth quarter of 2001, compared to the fourth quarter of 2000.
A total of 8.2 million tons of lignite coal was sold during the fourth quarter of 2001 compared to 8.3 million tons of lignite coal sold in the fourth quarter of 2000. This decrease was primarily due to reduced customer requirements at North American Coal's Sabine Mine. North American Coal's Florida dragline operations delivered 2.4 million cubic yards of limerock in the fourth quarter of 2001 compared to 1.9 million cubic yards of limerock in the fourth quarter of 2000.
North American Coal - 2001 Full Year
North American Coal's net income for 2001 was $25.6 million compared to $12.6 million in 2000. The increase in net income for 2001, compared to 2000, was primarily due to $12.7 million after-tax of contractual liquidated damages payments and initial lignite sales at the Red Hills Mine, increased tonnage volume at the Red River Mine in Louisiana and a favorable arbitration settlement, all of which were partially offset by increased interest expense due to the 2000 acquisition from Phillips Coal of its interest in the Red River and Red Hills Mines.
A total of 31.4 million tons of lignite coal was delivered during 2001 compared to 31.6 million tons in 2000. North American Coal's Florida dragline operations delivered 8.7 million cubic yards of limerock in 2001 compared to 7.9 million cubic yards in 2000.
North American Coal - 2002 Outlook
North American Coal anticipates record lignite coal deliveries in 2002 since the Red Hills Mine power plant is expected to begin commercial operation by the end of the first quarter. Thereafter, lignite coal deliveries at the Red Hills Mine are expected to be approximately 3.5 million tons annually. North American Coal does not expect to receive contractual liquidated damages related to its ongoing operations at the Red Hills Mine once its customer's power plant achieves commercial operation. As a result, the Red Hills Mine then expects to earn normal operating revenues which are expected to result in net enhanced cash flow, but also additional operating costs and lower reported earnings.
North American Coal expects its Red River Mine in Louisiana to sell fewer tons of lignite coal in 2002 due to a reduction from the unusually high tonnage taken by its customer in 2001. Royalty income is anticipated to be lower due to decreased activity levels at North American Coal's Eastern underground properties. The company also expects to continue seeking opportunities for developing its existing 2.6 billion tons of coal reserves.
NACCO Housewares Group - 2001 Fourth Quarter
NACCO Housewares Group, which includes NACCO's Hamilton Beach*Proctor- Silex and Kitchen Collection subsidiaries, reported a net loss of $9.5 million for the fourth quarter of 2001, including $8.2 million after-tax in restructuring charges at Hamilton Beach*Proctor-Silex for restructuring manufacturing operations in Mexico and at the company's headquarters, which were outlined as possible charges in NACCO's third quarter earnings release, and a $2.3 million after-tax write off of customer receivables due to the bankruptcy of a major customer. Net income for the fourth quarter of 2000 was $8.1 million.
Revenues for the fourth quarter of 2001 were $198.7 million compared to $221.1 million for the fourth quarter of 2000. The decrease in revenues at NACCO Housewares Group in the fourth quarter of 2001, compared to the fourth quarter of 2000, was primarily due to weak markets and to lower unit volumes at Hamilton Beach*Proctor-Silex as a result of withdrawal from selected low- margin, opening-price-point business. The decline was partially offset by increased sales of General Electric-branded products to Wal Mart, increased sales of home health products and increased revenues at Kitchen Collection.
The NACCO Housewares Group's net loss for the fourth quarter of 2001, compared to net income for the fourth quarter of 2000, was due to the $8.2 million after-tax in restructuring charges, the $2.3 million write off of customer receivables, and lower sales volumes. Manufacturing inefficiencies also continued due to ongoing consolidation programs.
NACCO Housewares Group - 2001 Full Year
NACCO Housewares Group had a net loss of $12.2 million for 2001, including $10.7 million in special charges on revenues of $632.1 million compared to net income of $8.8 million on revenues of $649.9 million in 2000.
Decreased revenues in 2001, compared to 2000, were due largely to weak markets and reduced opening-price-point business, and were partially offset by increased sales of General Electric-branded products to Wal Mart, the introduction of TrueAir(R) home odor eliminators and increased revenues at Kitchen Collection due to an increased number of stores. Kitchen Collection operated 168 stores at December 31, 2001 compared to 157 stores at December 31, 2000.
The Housewares Group's net loss for 2001, compared to net income for 2000, was due primarily to the fourth quarter restructuring charges and the receivables write-off at Hamilton Beach*Proctor-Silex. In addition, net income was reduced by lower sales volumes. Manufacturing inefficiencies also continued due to on going consolidation programs.
NACCO Housewares Group - 2002 Outlook
Hamilton Beach*Proctor-Silex expects that actions taken in 2001, including programs to gain a higher margin mix of business, reduce operating costs, reduce and consolidate Mexican manufacturing capacity, decrease manufacturing inefficiencies and increase outsourcing to China, will result in operating margins in 2002 closer to the company's objectives, even without an improved U.S. economy, and after assuming some additional costs in the first quarter of 2002 related to completing restructuring and inventory reduction programs.
The higher margin mix of business is expected to result from decreased opening-price-point business and increased sales of home health products such as TrueAir(R) odor eliminators and sales of General Electric-branded products to Wal Mart. Hamilton Beach*Proctor-Silex also expects substantially enhanced cash flow from improved inventory management.
Kitchen Collection expects to open additional Kitchen Collection(R) and Gadgets & More(R) stores, introduce new Hamilton Beach(R) and Proctor-Silex(R)-branded non-electric products and continue to aggressively manage its costs.
NACCO Housewares Group expects that the adoption of new accounting rules eliminating goodwill amortization will contribute $3.0 million to net income in 2002.
NMHG Wholesale - 2001 Fourth Quarter
NMHG Wholesale reported a net loss of $11.7 million, including $2.6 million after-tax in Danville phase-out costs and $0.6 million after-tax in restructuring costs, for the fourth quarter of 2001 compared to net income of $5.1 million, including $8.3 million after-tax in Danville restructuring costs, for the fourth quarter of 2000. Revenues for the fourth quarter of 2001 were $314.0 million compared to revenues of $447.7 million for the fourth quarter of 2000.
The net loss for the fourth quarter of 2001, compared to net income for the fourth quarter of 2000, was due primarily to significantly lower unit shipments and reduced parts sales due to lower lift truck utilization, reflecting the current economic recession in the U.S., and the negative impact of lower shipments on manufacturing overhead absorption and manufacturing efficiencies.
Worldwide wholesale shipments of lift trucks in the fourth quarter of 2001 totaled 14,451 units compared to 22,232 units shipped in the fourth quarter a year ago. Worldwide wholesale backlog at December 31, 2001 was 15,100 units compared to 21,800 units at December 31, 2000 and 14,400 units at September 30, 2001. The revenue decline in the fourth quarter of 2001, compared to 2000, was almost entirely due to decreased unit volume in the Americas, and, to a lesser extent, reduced parts sales in the Americas.
NMHG Wholesale - 2001 Full Year
NMHG Wholesale reported a net loss of $14.1 million for 2001, including $7.2 million in Danville phase-out costs, $2.8 million in restructuring costs, a $5.0 million after-tax insurance recovery due to flood damage at a Japan joint venture manufacturing plant in 2000, and a cumulative effect from accounting changes of $1.3 million, compared to net income of $37.0 million for 2000, including $8.3 million after-tax in Danville restructuring costs and a $2.4 million after-tax flood loss. Revenues in 2001 were $1.5 billion compared to revenues of $1.8 billion in 2000.
NMHG Wholesale's net loss for 2001 was primarily driven by reduced lift truck volumes as reduced Americas shipments led to a decline in worldwide shipments to 68,929 units from 84,825 units in 2000, a 19 percent decline. Despite unsatisfactory market conditions, NMHG Americas maintained its market share position in 2001. In addition, NMHG Wholesale's net loss was affected by the related reduction in the absorption of manufacturing overhead costs and by reduced parts sales.
NMHG Wholesale - 2002 Outlook
NMHG Wholesale expects that the broad cost reduction actions taken in 2001, including the Danville plant closure, with a net positive impact of $13.5 million after tax in 2002 compared to 2001, as well as the elimination of the inefficiencies involved in reducing production dramatically, will lead to an improved cost position in 2002. NMHG Wholesale also expects to report additional net income of approximately $11.4 million in 2002 as a result of the adoption of new accounting rules eliminating goodwill amortization. NMHG Wholesale expects that its improved cost position will offset the impact of current low levels of market demand and some additional restructuring costs in the first quarter of 2002.
NMHG Wholesale's objective is to achieve at least break-even results in 2002 based on the assumption, which it believes is prudent, that lift truck markets in the U.S. will not recover significantly in 2002. The company, however, is well prepared to respond quickly when markets do improve. Parts sales are anticipated to improve modestly during 2002 due to the expected increased utilization of lift trucks in the field. Market share is expected to increase in Europe, largely as a result of the sale to ZEPPELIN of the Hyster(R) dealerships in Germany as well as the strengthening of other Hyster(R) and Yale(R) independent dealerships. NMHG Wholesale also plans several new product introductions in 2002, including selected new warehouse, counterbalanced and big trucks.
NMHG Retail - 2001 Fourth Quarter
NMHG Retail's operations, which include the required elimination of intercompany transactions between NMHG Wholesale and company owned retail dealerships, incurred a net loss of $14.6 million for the fourth quarter of 2001, including realignment costs in Europe, compared to a net loss of $6.2 million for the fourth quarter of 2000. Revenues for the fourth quarter of 2001 totaled $58.0 million compared to revenues of $39.8 million for the fourth quarter of 2000.
The net loss at NMHG Retail's operations in the fourth quarter of 2001, included substantial realignment costs in Europe, including the completion of its previously announced sale of its Hyster(R) Germany dealers, the completion of the integration of the Asia-Pacific's Australian dealership operations as well as the downsizing of operations in the United States to reflect current low market levels.
NMHG Retail - 2001 Full Year
NMHG's Retail operations reported a net loss of $35.3 million in 2001 compared to a net loss of $15.7 million for 2000. Revenues for 2001 totaled $209.1 million compared to $182.1 million in 2000.
NMHG Retail's net loss in 2001 included substantial charges for global restructuring and realignment programs, including the sale of its Hyster(R) Germany dealers, the downsizing of operations in the United States to reflect current low market levels and the completion of the integration of Asia-Pacific's Australian dealership operations. Revenues increased in 2001 due to a full year of revenues from dealerships acquired in Asia-Pacific in the fourth quarter of 2000.
NMHG Retail - 2002 Outlook
NMHG Retail has largely completed the programs undertaken in 2001 to restructure and realign its global operations, which were designed to put its operations at close to break-even results in 2002 at current low market levels. These restructuring actions included headcount reductions, consolidation of operations, the sale of its Hyster(R) dealers in Germany, and adjusting asset values and reserves to reflect the weakened capital goods markets. NMHG Retail expects to continue focusing its efforts on improving the performance of its wholly owned dealerships. Also, NMHG Retail expects operating results to improve by approximately $1.4 million after-tax as a result of the adoption of new accounting rules eliminating goodwill amortization.
In conjunction with this news release, the management of NACCO Industries, Inc. will host a conference call on Friday, February 22 at 11 a.m. eastern time. The call may be accessed online via NACCO Industries' Web site at http://www.nacco.com or at http://www.StreetEvents.com. Please allow 15 minutes to register, download and install any necessary audio software required to listen to the broadcast. The online archive of the broadcast will be available for 72 hours at the NACCO Web site.
The statements contained in the news release 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 in these forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof. Such risks and uncertainties with respect to each subsidiary's operations include, without limitation:
NACCO Materials Handling Group: (1) changes in demand for lift trucks and related service parts on a worldwide basis, especially in the U.S. where the company derives a majority of its sales, (2) changes in sales prices, (3) delays in delivery or changes in costs of raw materials or sourced products and labor, (4) delays in manufacturing and delivery schedules, (5) exchange rate fluctuations, changes in foreign import tariffs and monetary policies and other changes in the regulatory climate in the foreign countries in which NMHG operates and/or sells products, (6) product liability or other litigation, warranty claims or returns of products, (7) delays in or increased costs of the Danville, Illinois, manufacturing plant phase-out and European restructuring programs, (8) acquisitions and/or dispositions of dealerships by NMHG, (9) costs related to the integration of acquisitions, (10) the impact of the continuing introduction of the euro, including increased competition, foreign currency exchange movements and/or changes in operating costs and (11) uncertainties regarding the impact the September 11, 2001 terrorist activities may have and the subsequent climate of war on the economy or the public's confidence in general.
NACCO Housewares Group: (1) changes in the sales prices, product mix or levels of consumer purchases of kitchenware and small electric appliances, (2) bankruptcy of or loss of major retail customers or suppliers, (3) changes in costs of raw materials or sourced products, (4) delays in delivery or the unavailability of raw materials or key component parts, (5) exchange rate fluctuations, changes in the foreign import tariffs and monetary policies and other changes in the regulatory climate in the foreign countries in which Hamilton Beach*Proctor-Silex buys, operates and/or sells products, (6) product liability, regulatory actions or other litigation, warranty claims or returns of products, (7) increased competition, (8) customer acceptance of, changes in costs of, or delays in the development of new products, including the GE- branded products to be sold to Wal Mart and new home environment products, (9) weather conditions or other events that would affect the number of customers visiting Kitchen Collection stores and (10) uncertainties regarding the impact the September 11, 2001 terrorist activities and the subsequent climate of war may have on the economy or the public's confidence in general.
North American Coal: (1) weather conditions and other events that would change the level of customers' fuel requirements, (2) weather or equipment problems that could affect lignite deliveries to customers, (3) changes in maintenance, fuel or other similar costs, (4) costs to pursue international opportunities, (5) further delays in achieving commercial operations at the Red Hills customer's power plant and (6) changes in the U. S. economy or in the power industry that would affect demand for North American Coal's Eastern U.S. underground reserves.
NACCO Industries, Inc. is an operating holding company with three principal businesses: lift trucks, housewares and lignite coal mining. NACCO Materials Handling Group designs, engineers, manufactures and sells a full line of lift trucks and replacement parts marketed worldwide under the Hyster(R) and Yale(R) brand names. NACCO Housewares Group consists of Hamilton Beach*Proctor-Silex, Inc., a leading manufacturer and marketer of small electric motor and heat-driven household appliances as well as commercial products for restaurants, bars and hotels, and The Kitchen Collection, Inc., a national specialty retailer of brand-name kitchenware, small electrical appliances and related accessories. The North American Coal Corporation mines and markets lignite coal primarily as fuel for power generators. For more information about NACCO Industries, visit the Company's Web site at http://www.nacco.com.
CONSOLIDATED FINANCIAL AND OPERATING HIGHLIGHTS
NACCO INDUSTRIES, INC. AND SUBSIDIARIES
Three Months Ended Year Ended
December 31 December 31
2001 2000 2001 2000
(In millions, except per share data)
Total revenues $655.2 $783.2 $2,637.9 $2,871.3
Income (loss) before extraordinary
gain and cumulative effect of
accounting changes $(27.7) $6.1 $(34.7) $37.8
Extraordinary gain - 29.9 - 29.9
Cumulative effect of accounting
changes - - (1.3) -
Net income (loss) $(27.7) $36.0 $(36.0) $67.7
Earnings before extraordinary gain and
cumulative effect of accounting
changes per share $(3.38) $0.75 $(4.24) $4.63
Extraordinary gain - 3.66 - 3.66
Cumulative effect of accounting
changes - - (0.16) -
Earnings per share $(3.38) $4.41 $(4.40) $8.29
Cash dividends per share $0.235 $0.225 $0.930 $0.890
Average shares outstanding 8.195 8.170 8.190 8.167
CONSOLIDATED FINANCIAL AND OPERATING HIGHLIGHTS
NACCO INDUSTRIES, INC. AND SUBSIDIARIES
Three Months Ended Year Ended
December 31 December 31
2001 2000 2001 2000
(In millions, except per share data)
Revenues
NACCO Materials Handling Group
Wholesale $314.0 $447.7 $1,463.3 $1,750.0
NACCO Materials Handling Group
Retail (incl. elims.) 58.0 39.8 209.1 182.1
NACCO Materials Handling Group 372.0 487.5 1,672.4 1,932.1
NACCO Housewares Group 198.7 221.1 632.1 649.9
North American Coal 84.5 74.6 333.3 289.2
NACCO and Other - - 0.1 0.1
655.2 783.2 2,637.9 2,871.3
Amortization of goodwill
NACCO Materials Handling Group
Wholesale 2.7 2.9 11.4 11.6
NACCO Materials Handling Group
Retail (incl. elims.) 0.5 0.3 1.5 1.0
NACCO Materials Handling Group 3.2 3.2 12.9 12.6
NACCO Housewares Group 0.7 0.8 3.0 3.1
3.9 4.0 15.9 15.7
Operating profit (loss)
NACCO Materials Handling Group
Wholesale (13.8) 14.0 1.3 85.9
NACCO Materials Handling Group
Retail (incl. elims.) (17.3) (6.4) (39.4) (15.3)
NACCO Materials Handling Group (31.1) 7.6 (38.1) 70.6
NACCO Housewares Group (9.8) 17.9 (8.4) 27.4
North American Coal 14.1 6.0 61.9 31.6
NACCO and Other (1.2) (3.7) (9.7) (11.7)
(28.0) 27.8 5.7 117.9
Other income (expense)
NACCO Materials Handling Group
Wholesale (5.4) (5.9) (15.5) (25.4)
NACCO Materials Handling Group
Retail (incl. elims.) (2.4) (2.7) (9.8) (7.6)
NACCO Materials Handling Group (7.8) (8.6) (25.3) (33.0)
NACCO Housewares Group (1.4) (3.0) (7.8) (11.2)
North American Coal (7.3) (4.8) (27.3) (18.1)
NACCO and Other 2.7 (3.2) 9.3 4.4
Income (loss) before income taxes,
minority interest, extraordinary
gain and cumulative effect of
accounting changes (41.8) 8.2 (45.4) 60.0
Provision (benefit) for income taxes (13.9) 2.2 (9.9) 22.3
Income (loss) before minority
interest, extraordinary gain and
cumulative effect of accounting
changes (27.9) 6.0 (35.5) 37.7
Minority Interest 0.2 0.1 0.8 0.1
Income (loss) before extraordinary
gain and cumulative effect of
accounting changes
NACCO Materials Handling Group
Wholesale (11.7) 5.1 (12.8) 37.0
NACCO Materials Handling Group
Retail (incl. elims.) (14.6) (6.2) (35.3) (15.7)
NACCO Materials Handling Group (26.3) (1.1) (48.1) 21.3
NACCO Housewares Group (9.5) 8.1 (12.2) 8.8
North American Coal 4.9 3.3 25.6 12.6
NACCO and Other 3.2 (4.2) - (4.9)
(27.7) 6.1 (34.7) 37.8
Extraordinary gain, net of $16.1 tax
expense - 29.9 - 29.9
(27.7) 36.0 (34.7) 67.7
Cumulative effect of accounting
changes, net of $0.8 tax benefit - - (1.3) -
Net income (loss) $(27.7) $36.0 $(36.0) $67.7
