MAYFIELD HEIGHTS, Ohio, Oct 24, 2002 /PRNewswire-FirstCall via COMTEX/ -- NACCO Industries, Inc. (NYSE: NC) today announced net income for the third quarter of 2002 of $8.0 million, or $0.98 per share, compared to a net loss for the third quarter of 2001 of $27.5 million, or $3.36 per share. Revenues for the third quarter of 2002 were $624.1 million compared to $597.5 million for the third quarter of 2001.
For the nine months ended September 30, 2002, net income was $17.1 million, or $2.09 per share, compared to a net loss of $8.3 million, or $1.01 per share, for the first nine months of 2001. Revenues for the first nine months of 2002 were $1.8 billion compared to $2.0 billion for the first nine months of 2001.
Discussion of Results
NMHG Wholesale
NMHG Wholesale reported net income of $0.8 million in the third quarter of 2002 compared to a net loss of $19.7 million in the third quarter of 2001.
Revenues for the third quarter of 2002 were $342.3 million, compared to $314.4 million for the third quarter of 2001. Revenues improved in the third quarter of 2002, compared to the third quarter of 2001, due primarily to increased unit volumes in the Americas and Europe and increased parts sales. Lift truck shipments increased to 15,299 units in the third quarter of 2002 compared to 14,452 units in the third quarter of 2001. Third quarter lift truck shipments are generally reduced due to summer vacation plant closings.
Net income of $0.8 million in the third quarter of 2002, compared to a net loss of $19.7 million in the third quarter of 2001, was the result of increased volume of units and parts, lower manufacturing costs driven by the completion of the Danville restructuring program in the fourth quarter of 2001, the positive impact of global procurement and cost control programs, a shift to sales of higher-margin lift trucks and the elimination of goodwill amortization of $2.9 million. Improvements in net income in the third quarter of 2002 were partially offset by increased interest expense and the negative effect of interest rate swap agreements resulting from the refinancing of NMHG's debt in the second quarter of 2002 and a $1.9 million after-tax impairment of certain investments in unconsolidated affiliates.
NMHG Wholesale's worldwide backlog increased 30 percent to 18,700 units in the third quarter of 2002 compared to 14,400 units at the end of the third quarter of 2001. Backlog increased 7 percent compared to 17,500 units at the end of the second quarter of 2002, and increased 15 percent compared to 16,300 units at the end of the first quarter of 2002.
For the nine months ended September 30, 2002, NMHG Wholesale reported net income of $8.9 million on revenues of $1.0 billion compared to a net loss of $2.4 million on revenues of $1.1 billion for the first nine months of 2001.
NMHG Wholesale - Outlook
NMHG Wholesale expects improved operating results in the fourth quarter of 2002, compared to the fourth quarter of 2001, due to increased lift truck shipments and lower operating expenses as a result of previously initiated cost reduction programs, including restructuring programs, procurement initiatives, and other strategic programs. NMHG Wholesale also expects to continue incurring increased interest expense and amortization of deferred financing fees as a result of the May 2002 refinancing of NMHG's debt.
NMHG Retail
NMHG Retail's operations, which include the required elimination of intercompany transactions between NMHG Wholesale and company owned retail dealerships, incurred a net loss for the third quarter of 2002 of $1.6 million compared to a net loss of $12.9 million for the third quarter of 2001. NMHG Retail's third quarter 2001 results included $4.7 million after tax of special adjustments and a $2.9 million after-tax restructuring charge.
Revenues for the third quarter of 2002 were $43.3 million compared to $45.7 million for the third quarter of 2001. Revenues decreased in the third quarter of 2002, compared to the third quarter of 2001, primarily due to the restructuring of NMHG Retail's European operations, including the sale of certain dealerships at the end of 2001.
Lower net loss for the third quarter of 2002 compared to the third quarter of 2001 was primarily the result of benefits from completing the restructuring of NMHG Retail's European operations, including the sale of certain dealerships at the end of 2001.
For the nine months ended September 30, 2002, NMHG Retail had a net loss of $6.6 million on revenues of $128.9 million compared to a net loss of $20.7 million on revenues of $151.1 million for the first nine months of 2001.
NMHG Retail - Outlook
NMHG Retail expects to continue its programs to improve the performance of its wholly owned dealerships as part of its objective for reaching at least break-even results.
NACCO Housewares Group
NACCO Housewares Group, which includes NACCO's Hamilton Beach*Proctor- Silex and Kitchen Collection subsidiaries, reported net income of $4.6 million for the third quarter of 2002 on revenues of $148.4 million compared to net income of $0.3 million for the third quarter of 2001 on revenues of $155.0 million.
Revenues at NACCO Housewares Group decreased in the third quarter of 2002, compared to the third quarter of 2001, due primarily to lower unit volumes at Hamilton Beach*Proctor-Silex as a result of the company's strategic decision to withdraw from selected low-margin, opening price point business. Decreased revenues were partially offset by increased sales of higher price point products and increased sales at Kitchen Collection.
Net income at NACCO Housewares Group increased during the third quarter of 2002, compared to the third quarter of 2001, primarily due to improved manufacturing and distribution efficiencies and general cost reductions at Hamilton Beach*Proctor-Silex as a result of prior restructuring activities. Results also benefited from the favorable resolution of certain product liability claims and the elimination of goodwill amortization of $0.8 million. Improved sales volumes at Kitchen Collection also contributed to improved net income at NACCO Housewares Group. Kitchen Collection recorded increases in comparable store sales, average sales transactions per store and the total number of sales transactions per store for the third quarter of 2002, compared to the third quarter of 2001. Kitchen Collection operated 174 stores at September 30, 2002, compared to 165 stores at September 30, 2001.
For the nine months ended September 30, 2002, NACCO Housewares Group had net income of $2.2 million on revenues of $404.5 million compared to a net loss of $2.7 million on revenues of $433.4 million for the first nine months of 2001.
NACCO Housewares Group - Outlook
Hamilton Beach*Proctor-Silex anticipates that ongoing programs to reduce manufacturing overhead costs and improve manufacturing efficiency, product quality and customer service will continue to have a positive impact on results in the fourth quarter of 2002. Hamilton Beach*Proctor-Silex is cautiously optimistic that markets for consumer goods will improve in the fourth quarter of 2002 compared to the fourth quarter of 2001. Shipments in the fourth quarter of 2002 at both Hamilton Beach*Proctor-Silex and Kitchen Collection could possibly be reduced by delays due to congestion at West Coast ports.
North American Coal
North American Coal's net income for the third quarter of 2002 was $3.7 million compared to $6.1 million for the third quarter of 2001. The decline in net income for the third quarter of 2002 reflected $3.4 million after-tax of contractual liquidated damages payments received in the third quarter of 2001 by North American Coal's Red Hills Mine in Mississippi as a result of delays in achieving commercial operation status at its customer's Red Hills Power Plant. No contractual liquidated damages were recognized in the third quarter of 2002. As a result, the Red Hills Mine recorded substantially lower profits in the third quarter of 2002. However, the Red Hills Mine had improved cash flow as a result of more normalized lignite coal deliveries in the third quarter of 2002, compared to the third quarter of 2001, following the start-up of the Red Hills Power Plant. Customer requirements for lignite coal at Red River in Louisiana were lower in the third quarter of 2002, compared to unusually high requirements in the third quarter of 2001.
Lignite coal deliveries increased to 8.9 million tons during the third quarter of 2002, compared to 8.3 million tons of lignite coal delivered in the third quarter of 2001, primarily due to increased customer requirements at the Red Hills Mine. North American Coal's Florida dragline operations delivered 2.7 million cubic yards of limerock in the third quarter of 2002 compared to 2.3 million cubic yards of limerock in the third quarter of 2001.
For the nine months ended September 30, 2002, North American Coal's net income was $14.3 million compared to an unusually high $20.7 million for the first nine months of 2001, which included $10.0 million after-tax of contractual liquidated damages payments received by the Red Hills Mine and unusually high lignite coal sales at Red River.
North American Coal - Outlook
North American Coal anticipates that coal deliveries in the fourth quarter of 2002 will increase, compared to the fourth quarter of 2001, although wet conditions at several mines and some customers' power plant outages that extended into October 2002 could mitigate the amount of the increase. Increased customer requirements at the Red Hills Mine in the fourth quarter are expected to result in improved lignite coal deliveries compared to the fourth quarter of 2001. Red River is expected to deliver fewer tons in the fourth quarter of 2002 due to lower customer requirements.
In conjunction with this news release, the management of NACCO Industries, Inc. will host a conference call on Friday, October 25, at 11 a.m. eastern time. The call may be accessed by dialing (800) 915-4836 or over the Internet through NACCO Industries' Web site at www.nacco.com or at www.ccbn.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 aftermarket parts and service 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 restructuring programs, (8) the effectiveness of the cost reduction programs implemented globally, including the successful implementation of procurement initiatives, (9) acquisitions and/or dispositions of dealerships by NMHG, (10) costs related to the integration of acquisitions, (11) the impact of the introduction of the euro, including increased competition, foreign currency exchange movements and/or changes in operating costs and (12) the uncertain impact on the economy or the public's confidence in general from terrorist activities and the consequent climate of war.
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, including delays due to congestion at West Coast ports, (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 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) the uncertain impact on the economy or the public's confidence in general from terrorist activities and the consequent climate of war.
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 and (5) changes in the U.S. economy or in the power industry that would affect demand for North American Coal's 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 www.nacco.com .
UNAUDITED CONSOLIDATED FINANCIAL AND OPERATING HIGHLIGHTS
NACCO INDUSTRIES, INC. AND SUBSIDIARIES
Three Months Nine Months
Ended Ended
September 30 September 30
2002 2001 2002 2001
(In millions, except per share data)
Total revenues $624.1 $597.5 $1,810.2 $1,982.7
Income (loss) before cumulative effect
of accounting changes * $8.0 $(27.5) $17.1 $(7.0)
Cumulative effect of accounting
changes - - - (1.3)
Net income (loss) * $8.0 $(27.5) $17.1 $(8.3)
Earnings before cumulative effect of
accounting changes per share * $0.98 $(3.36) $2.09 $(0.85)
Cumulative effect of accounting
changes - - - (0.16)
Earnings per share * $0.98 $(3.36) $2.09 $(1.01)
Cash dividends per share $0.245 $0.235 $0.725 $0.695
Average shares outstanding 8.198 8.194 8.197 8.189
(All amounts are subject to annual audit by independent public auditors.)
* Prior year's results reflect the amortization of goodwill of
$4.0 million or $0.49 per share and $12.0 million or $1.47 per share
in the three and nine months ended September 30, 2001, respectively.
UNAUDITED CONSOLIDATED FINANCIAL AND OPERATING HIGHLIGHTS
NACCO INDUSTRIES, INC. AND SUBSIDIARIES
Three Months Nine Months
Ended Ended
September 30 September 30
2002 2001 2002 2001
(In millions, except per share data)
Revenues
NACCO Materials Handling Group
Wholesale $342.3 $314.4 $1,017.2 $1,149.3
NACCO Materials Handling Group
Retail (incl. elims.) 43.3 45.7 128.9 151.1
NACCO Materials Handling Group 385.6 360.1 1,146.1 1,300.4
NACCO Housewares Group 148.4 155.0 404.5 433.4
North American Coal 90.1 82.4 259.5 248.8
NACCO and Other - - 0.1 0.1
624.1 597.5 1,810.2 1,982.7
Depreciation, depletion and
amortization
NACCO Materials Handling Group
Wholesale 7.4 11.1 22.6 33.3
NACCO Materials Handling Group
Retail (incl. elims.) 3.0 3.9 8.5 10.8
NACCO Materials Handling Group 10.4 15.0 31.1 44.1
NACCO Housewares Group 3.4 5.3 10.5 16.3
North American Coal 9.6 9.2 28.5 26.9
NACCO and Other 0.1 0.1 0.1 0.2
23.5 29.6 70.2 87.5
Operating profit (loss)
NACCO Materials Handling Group
Wholesale 13.5 (18.5) 34.3 15.1
NACCO Materials Handling Group
Retail (incl. elims.) 0.2 (15.9) (2.4) (22.1)
NACCO Materials Handling Group 13.7 (34.4) 31.9 (7.0)
NACCO Housewares Group 10.5 3.2 11.1 1.4
North American Coal 12.1 16.1 39.5 47.8
NACCO and Other (1.0) (2.4) (2.8) (8.5)
35.3 (17.5) 79.7 33.7
Other income (expense)
NACCO Materials Handling Group
Wholesale (13.2) (7.4) (25.5) (10.1)
NACCO Materials Handling Group
Retail (incl. elims.) (2.4) (2.3) (7.3) (7.4)
NACCO Materials Handling Group (15.6) (9.7) (32.8) (17.5)
NACCO Housewares Group (2.8) (2.9) (7.4) (6.4)
North American Coal (7.3) (7.9) (21.5) (20.0)
NACCO and Other 0.6 2.1 1.9 6.6
Income (loss) before income taxes,
minority interest and cumulative
effect of accounting changes 10.2 (35.9) 19.9 (3.6)
Income tax provision (benefit) 2.6 (8.2) 3.7 4.0
Income (loss) before minority interest
and cumulative effect of accounting
changes 7.6 (27.7) 16.2 (7.6)
Minority interest 0.4 0.2 0.9 0.6
Income (loss) before cumulative effect
of accounting changes
NACCO Materials Handling Group
Wholesale 0.8 (19.7) 8.9 (1.1)
NACCO Materials Handling Group
Retail (incl. elims.) (1.6) (12.9) (6.6) (20.7)
NACCO Materials Handling Group (0.8) (32.6) 2.3 (21.8)
NACCO Housewares Group 4.6 0.3 2.2 (2.7)
North American Coal 3.7 6.1 14.3 20.7
NACCO and Other 0.5 (1.3) (1.7) (3.2)
8.0 (27.5) 17.1 (7.0)
Cumulative effect of accounting
changes - - - (1.3)
Net income (loss) $8.0 $(27.5) $17.1 $(8.3)
(All amounts are subject to annual audit by independent public auditors.)
SELECTED FINANCIAL INFORMATION
NMHG HOLDING CO.**
(UNAUDITED) (AUDITED)
September 30 December 31
2002 2001
Cash and cash equivalents $27.5 $59.6
Debt
Senior notes $247.0 $-
Revolving credit agreements 46.8 301.2
Capital lease agreements and other
debt 42.6 61.2
Total debt $336.4 $362.4
Stockholder's equity $382.2 $382.0
(UNAUDITED) (UNAUDITED)
Three Months Nine Months
Ended Ended
September 30 September 30
2002 2002
Capital expenditures $3.0 $12.1
** NMHG Holding Co. is a wholly owned subsidiary of NACCO Industries,
Inc. that owns NMHG Wholesale and NMHG Retail. On May 9, 2002, NMHG
Holding Co. issued $250.0 million of 10% Senior Notes, which are
registered with the SEC.
(All amounts are subject to annual audit by independent public auditors.)
