<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended JUNE 30, 1999
OR
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
------------- -----------------
Commission file number 1-9172
NACCO INDUSTRIES, INC.
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 34-1505819
- -------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
5875 LANDERBROOK DRIVE, MAYFIELD HEIGHTS, OHIO 44124-4017
- -------------------------------------------------------------------------------
(Address of principal executive offices) Zip code
Registrant's telephone number, including area code (440) 449-9600
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Former name, former address and former fiscal year, if changed since last report
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months, and (2) has been subject to such filing requirements
for the last 90 days.
YES X NO ____
Number of shares of Class A Common Stock outstanding at July 31, 1999:
6,506,232
- ---------
Number of shares of Class B Common Stock outstanding at July 31, 1999:
1,649,038
- ---------
1
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NACCO INDUSTRIES, INC.
----------------------
TABLE OF CONTENTS
-----------------
PART I. FINANCIAL INFORMATION
Item 1 Financial Statements
------ --------------------
Condensed Consolidated Balance Sheets -
June 30, 1999 (Unaudited) and December 31, 1998
Unaudited Condensed Consolidated Statements of Income
for the Three and Six Months Ended June 30, 1999 and
1998
Unaudited Condensed Consolidated Statements of
Cash Flows for the Six Months Ended June 30, 1999
and 1998
Notes to Unaudited Condensed Consolidated
Financial Statements
Item 2 Management's Discussion and Analysis of Financial
------ -------------------------------------------------
Condition and Results of Operations
-----------------------------------
Item 3 Quantitative and Qualitative Disclosures About
------ ----------------------------------------------
Market Risk
-----------
PART II. OTHER INFORMATION
Item 1 Legal Proceedings
------ -----------------
Item 2 Changes in Securities and Use of Proceeds
------ -----------------------------------------
Item 3 Defaults Upon Senior Securities
------ -------------------------------
Item 4 Submission of Matters to a Vote of Security Holders
------ ---------------------------------------------------
Item 5 Other Information
------ -----------------
Item 6 Exhibits and Reports on Form 8-K
------ --------------------------------
Signature
Exhibit Index
2
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<TABLE>
<CAPTION>
PART I
ITEM 1 - FINANCIAL STATEMENTS
-----------------------------
CONDENSED CONSOLIDATED BALANCE SHEETS
NACCO INDUSTRIES, INC. AND SUBSIDIARIES
(UNAUDITED) (Audited)
JUNE 30 DECEMBER 31
1999 1998
-------- --------
(In millions)
ASSETS
CURRENT ASSETS
<S> <C> <C>
Cash and cash equivalents $ 23.7 $ 34.7
Accounts receivable, net 292.7 275.1
Inventories 365.2 356.2
Prepaid expenses and other 38.1 37.2
-------- --------
719.7 703.2
PROPERTY, PLANT AND EQUIPMENT, NET 616.2 593.4
DEFERRED CHARGES
Goodwill, net 443.9 441.0
Deferred costs and other 62.9 70.3
Deferred income taxes 34.7 31.9
-------- --------
541.5 543.2
OTHER ASSETS 65.3 58.5
-------- --------
TOTAL ASSETS $ 1,942.7 $ 1,898.3
======== =========
</TABLE>
See notes to unaudited condensed consolidated financial statements
3
<PAGE> 4
<TABLE>
<CAPTION>
CONDENSED CONSOLIDATED BALANCE SHEETS
NACCO INDUSTRIES, INC. AND SUBSIDIARIES
(UNAUDITED) (Audited)
JUNE 30 DECEMBER 31
1999 1998
--------------- ----------------
(In millions)
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
<S> <C> <C>
Accounts payable $ 248.4 $ 252.9
Revolving credit agreements 69.5 31.2
Current maturities of long-term debt 24.3 28.4
Income taxes 5.2 10.9
Accrued payroll 30.3 44.7
Other current liabilities 181.5 180.5
-------------- --------------
559.2 548.6
LONG-TERM DEBT- not guaranteed by
the parent company 283.7 256.4
OBLIGATIONS OF PROJECT MINING SUBSIDIARIES -
not guaranteed by the parent company or
its North American Coal subsidiary 303.0 313.2
SELF-INSURANCE RESERVES AND OTHER 238.6 238.9
MINORITY INTEREST 24.2 22.9
STOCKHOLDERS' EQUITY
Common stock:
Class A, par value $1 per share 6,505,752
shares outstanding (1998 - 6,468,620
shares outstanding) 6.5 6.5
Class B, par value $1 per share, convertible
into Class A on a one-for-one basis,
1,649,518 shares outstanding
(1998 - 1,651,615 shares outstanding) 1.6 1.6
Capital in excess of par value 2.6 .2
Retained earnings 529.4 504.9
Accumulated other comprehensive income:
Foreign currency translation adjustment (2.1) 8.9
Minimum pension liability adjustment (4.0) (3.8)
-------------- --------------
534.0 518.3
-------------- --------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,942.7 $ 1,898.3
============== ==============
</TABLE>
See notes to unaudited condensed consolidated financial statements.
4
<PAGE> 5
<TABLE>
<CAPTION>
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
NACCO INDUSTRIES, INC. AND SUBSIDIARIES
(Unaudited) (Unaudited)
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30 JUNE 30
------------------------ ----------------------------
1999 1998 1999 1998
----------- ----------- ------------- -------------
(In millions, except per share data)
<S> <C> <C> <C> <C>
Revenues $ 644.7 $ 614.2 $ 1,258.2 $ 1,213.5
Cost of sales 520.6 494.0 1,018.4 974.2
----------- ----------- ------------- -------------
GROSS PROFIT 124.1 120.2 239.8 239.3
Selling, administrative and general expenses 83.1 69.5 163.6 135.8
Amortization of goodwill 3.8 3.7 7.6 7.4
----------- ----------- ------------- -------------
OPERATING PROFIT 37.2 47.0 68.6 96.1
Other income (expense)
Interest expense (10.6) (8.2) (20.8) (16.3)
Other - net (.1) 4.2 (.5) 3.4
----------- ----------- ------------- -------------
(10.7) (4.0) (21.3) (12.9)
----------- ----------- ------------- -------------
INCOME BEFORE INCOME TAXES,
MINORITY INTEREST AND CUMULATIVE
EFFECT OF ACCOUNTING CHANGE 26.5 43.0 47.3 83.2
Provision for income taxes 10.2 16.1 18.1 31.7
----------- ----------- ------------- -------------
INCOME BEFORE MINORITY INTEREST AND
CUMULATIVE EFFECT OF ACCOUNTING
CHANGE 16.3 26.9 29.2 51.5
Minority interest --- (.6) --- (1.1)
----------- ----------- ------------- -------------
INCOME BEFORE CUMULATIVE EFFECT OF
ACCOUNTING CHANGE 16.3 26.3 29.2 50.4
Cumulative effect of accounting change (net
of $0.6 tax benefit) --- --- (1.2) ---
----------- ----------- ------------- -------------
NET INCOME $ 16.3 $ 26.3 $ 28.0 $ 50.4
=========== =========== ============= =============
COMPREHENSIVE INCOME $ 12.3 $ 26.8 $ 16.8 $ 49.3
=========== =========== ============= =============
BASIC EARNINGS PER SHARE:
Income Before Cumulative Effect of Accounting
Change $ 2.00 $ 3.22 $ 3.59 $ 6.18
Cumulative effect of accounting change (net
of $0.6 tax benefit) --- --- (.15) ---
----------- ----------- ------------- -------------
Net Income $ 2.00 $ 3.22 $ 3.44 $ 6.18
=========== =========== ============= =============
DILUTED EARNINGS PER SHARE:
Income Before Cumulative Effect of Accounting
Change $ 2.00 $ 3.21 $ 3.59 $ 6.16
Cumulative effect of accounting change (net
of $0.6 tax benefit) --- --- (.15) ---
----------- ----------- ------------- -------------
Net Income $ 2.00 $ 3.21 $ 3.44 $ 6.16
=========== =========== ============= =============
Dividends per share $ .2150 $ .2050 $ .4200 $ .4000
=========== =========== ============= =============
</TABLE>
See notes to unaudited condensed consolidated financial statements.
5
<PAGE> 6
<TABLE>
<CAPTION>
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
NACCO INDUSTRIES, INC. AND SUBSIDIARIES
(Unaudited)
SIX MONTHS ENDED
JUNE 30
--------------------------------
1999 1998
-------------- -------------
(In millions)
OPERATING ACTIVITIES
<S> <C> <C>
Net income $ 28.0 $ 50.4
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation, depletion and amortization 53.5 42.4
Deferred income taxes (1.6) (2.5)
Cumulative effect of accounting change 1.2 ---
Other non-cash items (1.3) 3.8
Working Capital Changes:
Accounts receivable (17.5) (21.1)
Inventories (7.4) (49.6)
Other current assets 1.0 4.6
Accounts payable and other liabilities (5.4) (3.2)
------------- -------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 50.5 24.8
INVESTING ACTIVITIES
Expenditures for property, plant and equipment (42.9) (41.1)
Proceeds from the sale of assets 3.0 1.8
Acquisitions of businesses (41.0) ---
Investments in unconsolidated affiliates (5.5) (7.6)
Other - net 1.1 (.3)
------------- -------------
NET CASH USED FOR INVESTING ACTIVITIES (85.3) (47.2)
FINANCING ACTIVITIES
Additions to long-term debt and revolving credit agreements 55.6 57.0
Reductions of long-term debt and revolving credit agreements (.1) (22.0)
Additions to obligations of project mining subsidiaries --- 41.2
Reductions of obligations of project mining subsidiaries (12.5) (41.7)
Financing of other short-term obligations (14.2) (7.0)
Cash dividends paid (3.4) (3.3)
Other - net 2.0 ---
------------- -------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 27.4 24.2
Effect of exchange rate changes on cash (3.6) (.3)
------------- -------------
CASH AND CASH EQUIVALENTS
Increase (decrease) for the period (11.0) 1.5
Balance at the beginning of the period 34.7 24.1
------------- -------------
BALANCE AT THE END OF THE PERIOD $ 23.7 $ 25.6
============= =============
</TABLE>
See notes to unaudited condensed consolidated financial statements.
6
<PAGE> 7
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NACCO INDUSTRIES, INC. AND SUBSIDIARIES
(Tabular Amounts in Millions)
NOTE 1 - BASIS OF PRESENTATION
- ------------------------------
NACCO Industries, Inc. ("NACCO") is a holding company with four operating
subsidiaries that function in three principal business segments: lift trucks,
housewares and lignite mining. NACCO Materials Handling Group, Inc. ("NMHG")
designs, engineers and manufactures a full line of lift trucks and replacement
parts marketed worldwide under the Hyster(R) and Yale(R) brand names. NACCO
Housewares Group ("Housewares") consists of Hamilton Beach*Proctor-Silex, Inc.
("HB*PS"), a leading manufacturer and marketer of small electric motor and
heat-driven appliances as well as commercial products for restaurants, bars and
hotels, and The Kitchen Collection, Inc. ("KCI"), a national specialty retailer
of brand-name kitchenware, small electric appliances and related accessories.
The North American Coal Corporation ("NACoal") mines and markets lignite
primarily as fuel for power generation by electric utilities.
The accompanying unaudited condensed consolidated financial statements include
the accounts of NACCO and its majority owned subsidiaries ("NACCO Industries,
Inc. and Subsidiaries," or the "Company"). Intercompany accounts have been
eliminated.
These financial statements have been prepared in accordance with generally
accepted accounting principles for interim financial information and the
instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do
not include all of the information and footnotes required by generally accepted
accounting principles. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation of
the financial position of the Company as of June 30, 1999 and the results of its
operations and cash flows for the six month periods ended June 30, 1999 and 1998
have been included.
Operating results for the six month period ended June 30, 1999 are not
necessarily indicative of the results that may be expected for the remainder of
the year ended December 31, 1999. For further information, refer to the
consolidated financial statements and footnotes thereto included in the
Company's Annual Report on Form 10-K for the fiscal year ended December 31,
1998.
NOTE 2 - EARNINGS PER SHARE
- ---------------------------
Earnings per share is calculated in accordance with the provisions of SFAS No.
128, "Earnings per Share." For purposes of calculating the basic and diluted
earnings per share, no adjustments have been made to the reported amounts of net
income. The share amounts used are as follows:
<TABLE>
<CAPTION>
(Weighted Average Shares)
Three Months Ended Six Months Ended
June 30 June 30
------------------------- -------------------------
1999 1998 1999 1998
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Basic common shares 8.155 8.164 8.145 8.161
Dilutive stock options --- .020 .007 .020
======== ======== ========= =========
Diluted common shares 8.155 8.184 8.152 8.181
======== ======== ========= =========
</TABLE>
7
<PAGE> 8
NOTE 3 - INVENTORIES
- --------------------
Inventories are summarized as follows:
<TABLE>
<CAPTION>
JUNE 30 DECEMBER 31
1999 1998
---------------- ----------------
(UNAUDITED) (Audited)
Manufacturing inventories:
Finished goods and service parts-
<S> <C> <C>
NMHG $ 132.5 $ 125.3
Housewares 56.3 41.5
-------------- --------------
188.8 166.8
-------------- --------------
Raw materials and work in process-
NMHG 118.3 136.6
Housewares 20.1 17.5
-------------- --------------
138.4 154.1
-------------- --------------
LIFO reserve-
NMHG (13.3) (12.6)
Housewares 1.7 1.8
-------------- --------------
(11.6) (10.8)
-------------- --------------
Total manufacturing inventories 315.6 310.1
Coal - NACoal 10.6 9.5
Mining supplies - NACoal 20.1 19.4
Retail inventories - Housewares 18.9 17.2
-------------- --------------
$ 365.2 $ 356.2
============== ==============
</TABLE>
The cost of manufacturing inventories has been determined by the last-in,
first-out (LIFO) method for 73 percent and 72 percent of such inventories as of
June 30, 1999 and December 31, 1998, respectively.
NOTE 4 - RESTRUCTURING CHARGE
In 1998, HB*PS recorded a pre-tax charge of $3.2 million to recognize severance
payments to be made to approximately 450 manufacturing employees in connection
with transitioning activities to HB*PS' Mexican facilities. During the first
quarter of 1999, an additional $1.0 million pre-tax charge was made for
severance payments to be made to an additional 130 manufacturing employees in
connection with transitioning additional manufacturing activities to HB*PS'
Mexican facilities. Payments of $1.3 million have been made to approximately 330
employees during the first half of 1999. These payments reduced the reserve for
restructuring to $2.9 million as of June 30, 1999.
8
<PAGE> 9
NOTE 5 - NEW ACCOUNTING STANDARDS
- ---------------------------------
As of January 1, 1999, the Company adopted the American Institute of Certified
Public Accountants' ("AICPA") Statement of Position ("SOP") 98-1, "Accounting
for the Costs of Computer Software Developed or Obtained for Internal Use," and
SOP 98-5, "Reporting on the Costs of Start-Up Activities." SOP 98-1 requires
capitalization on a prospective basis of certain development costs of software
to be used internally. The Company does not expect the change to this new
accounting standard to have a material impact on its financial position or
results of operations in the foreseeable future.
SOP 98-5 requires start-up and organization costs to be expensed as incurred and
also requires previously deferred start-up costs to be recognized as a
cumulative effect adjustment in the statement of income upon adoption. Prior to
January 1, 1999, the Company's NACoal subsidiary had deferred certain start-up
costs related to the development of lignite mining activities and amortized
these costs over the estimated useful life of the related coal lands. Under the
new accounting standard, these costs, which are primarily training, travel and
administrative expenses, are no longer allowed to be deferred, but, rather, they
must be expensed as incurred. As such, the Company has recognized the effect of
expensing these previously deferred start-up costs of $1.2 million, net-of-tax,
as a cumulative effect of accounting change in the accompanying Statement of
Income for the six months ended June 30, 1999.
NOTE 6 - ACCOUNTING STANDARD NOT YET ADOPTED
- --------------------------------------------
In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities." This Statement
establishes accounting and reporting standards for derivative instruments and
for hedging activities. It requires companies to recognize all derivatives on
the balance sheet as assets and liabilities, measured at fair value. Gains or
losses resulting from changes in the values of those derivatives would be
accounted for depending on the use of the derivative and whether it qualifies
for hedge accounting. In June 1999, the FASB delayed the effective date of this
Statement for one year to fiscal years beginning after June 15, 2000. The FASB
cited the reason for this delay was to address concerns about companies' ability
to modify their information systems and educate their managers in time to apply
this Statement. The Company will adopt this Statement on January 1, 2001 and is
in the process of determining the effect that adoption will have on its
financial statements.
9
<PAGE> 10
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Tabular Amounts in Millions, Except Per Share Data)
FINANCIAL SUMMARY
NACCO's operations and financial condition are best discussed in terms of its
reportable segments, which function in distinct business environments.
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30 JUNE 30
----------------------- ------------------------
1999 1998 1999 1998
---------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
REVENUES
NMHG $ 452.6 $ 437.2 $ 891.1 $ 869.1
Housewares 127.0 112.9 238.4 211.9
NACoal 65.0 64.0 128.6 132.4
NACCO and Other .1 .1 .1 .1
---------- ---------- ----------- -----------
$ 644.7 $ 614.2 $1,258.2 $1,213.5
========== ========== =========== ===========
GROSS PROFIT
NMHG $ 84.4 $ 87.2 $ 167.9 $ 174.7
Housewares 28.1 21.5 47.8 39.4
NACoal 11.6 11.5 24.1 25.3
NACCO and Other --- --- --- (.1)
---------- ---------- ----------- -----------
$ 124.1 $ 120.2 $ 239.8 $ 239.3
========== ========== =========== ===========
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
NMHG $ 58.5 $ 45.6 $ 114.2 $ 88.9
Housewares 19.1 18.3 38.0 36.1
NACoal 3.0 2.9 6.3 5.8
NACCO and Other 2.5 2.7 5.1 5.0
---------- ---------- ----------- -----------
$ 83.1 $ 69.5 $ 163.6 $ 135.8
========== ========== =========== ===========
AMORTIZATION OF GOODWILL
NMHG $ 3.1 $ 2.9 $ 6.1 $ 5.8
Housewares .7 .8 1.5 1.6
---------- ---------- ----------- -----------
$ 3.8 $ 3.7 $ 7.6 $ 7.4
========== ========== =========== ===========
OPERATING PROFIT (LOSS)
NMHG $ 22.8 $ 38.7 $ 47.6 $ 80.0
Housewares 8.3 2.4 8.3 1.7
NACoal 8.6 8.6 17.8 19.5
NACCO and Other (2.5) (2.7) (5.1) (5.1)
---------- ---------- ----------- -----------
$ 37.2 $ 47.0 $ 68.6 $ 96.1
========== ========== =========== ===========
OPERATING PROFIT (LOSS) EXCLUDING
GOODWILL AMORTIZATION
NMHG $ 25.9 $ 41.6 $ 53.7 $ 85.8
Housewares 9.0 3.2 9.8 3.3
NACoal 8.6 8.6 17.8 19.5
NACCO and Other (2.5) (2.7) (5.1) (5.1)
---------- ---------- ----------- -----------
$ 41.0 $ 50.7 $ 76.2 $ 103.5
========== ========== =========== ===========
</TABLE>
10
<PAGE> 11
FINANCIAL SUMMARY - continued
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30 JUNE 30
----------------------- -----------------------
1999 1998 1999 1998
----------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
INTEREST EXPENSE
NMHG $ (4.3) $ (3.0) $ (8.6) $ (6.4)
Housewares (1.6) (1.8) (3.0) (3.2)
NACoal (.2) (.2) (.4) (.4)
NACCO and Other (.2) (.2) (.4) (.5)
Eliminations .2 .2 .4 .5
----------- ---------- ---------- -----------
(6.1) (5.0) (12.0) (10.0)
Project mining subsidiaries (4.5) (3.2) (8.8) (6.3)
----------- ---------- ---------- -----------
$ (10.6) $ (8.2) $ (20.8) $ (16.3)
=========== ========== ========== ===========
INTEREST INCOME
NMHG $ .8 $ .4 $ 1.7 $ .8
NACoal --- .1 .1 .3
Eliminations (.2) (.2) (.4) (.5)
----------- ---------- ---------- -----------
$ .6 $ .3 $ 1.4 $ .6
Project mining subsidiaries .1 .3 .2 .6
----------- ---------- ---------- -----------
$ .7 $ .6 $ 1.6 $ 1.2
=========== ========== ========== ===========
OTHER-NET, INCOME (EXPENSE)
NMHG $ (1.1) $ 3.4 $ (2.2) $ 2.1
Housewares (.4) .1 (.4) (.2)
NACoal .5 --- .3 (.4)
NACCO and Other .2 .1 .2 .7
---------- ---------- ----------- ----------
$ (.8) $ 3.6 $ (2.1) $ 2.2
=========== ========== ========== ===========
PROVISION FOR INCOME TAXES
NMHG $ 7.8 $ 14.9 $ 16.2 $ 29.6
Housewares 2.6 .3 2.0 (.8)
NACoal .9 1.6 1.8 3.8
NACCO and Other (1.1) (.7) (1.9) (.9)
---------- ---------- ----------- ----------
$ 10.2 $ 16.1 $ 18.1 $ 31.7
=========== ========== ========== ===========
NET INCOME (LOSS)
NMHG $ 10.7 $ 24.6 $ 22.8 $ 46.9
Housewares 3.7 .4 2.9 (.9)
NACoal 3.6 4.0 6.3 9.5
NACCO and Other (1.7) (2.7) (4.0) (5.1)
----------- ---------- ---------- -----------
$ 16.3 $ 26.3 $ 28.0 $ 50.4
=========== ========== ========== ===========
</TABLE>
11
<PAGE> 12
FINANCIAL SUMMARY - continued
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30 JUNE 30
------------------ ----------------
1999 1989 1999 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
DEPRECIATION, DEPLETION AND AMORTIZATION EXPENSE
NMHG $12.0 $ 8.7 $ 29.1 $ 17.8
Housewares 4.4 3.9 8.5 8.5
NACoal .6 .8 1.4 1.5
NACCO and Other .1 .2 .2 .2
----- ----- -------- -------
17.1 13.6 39.2 28.0
Project mining subsidiaries 7.2 7.2 14.2 14.3
----- ----- -------- --------
$24.3 $20.8 $ 53.5 $ 42.4
===== ===== ======== ========
CAPITAL EXPENDITURES
NMHG $13.9 $15.0 $ 29.7 $ 24.9
Housewares 4.0 4.5 6.2 9.5
NACoal 1.1 .4 2.6 1.8
----- ----- ------- -------
19.0 19.9 38.5 36.2
Project mining subsidiaries 1.8 4.0 4.4 4.9
----- ----- ------- ------
$20.8 $23.9 $ 42.9 $ 41.1
===== ===== ======== ========
</TABLE>
<TABLE>
<CAPTION>
JUNE 30 DECEMBER 31
1999 1998
--------------- -----------------
<S> <C> <C>
TOTAL ASSETS
NMHG $ 1,129.1 $ 1,100.4
Housewares 339.5 334.0
NACoal 61.1 43.1
NACCO and Other 26.4 53.6
--------------- -----------------
1,556.1 1,531.1
Project mining subsidiaries 401.2 418.6
--------------- -----------------
1,957.3 1,949.7
Consolidating eliminations (14.6) (51.4)
--------------- -----------------
$ 1,942.7 $ 1,898.3
=============== =================
</TABLE>
12
<PAGE> 13
NACCO MATERIALS HANDLING GROUP, INC.
NMHG, 98 percent-owned by NACCO, designs, manufactures and markets forklift
trucks and related service parts under the Hyster(R) and Yale(R) brand names.
FINANCIAL REVIEW
The results of operations for NMHG were as follows for the three and six months
ended June 30:
<TABLE>
<CAPTION>
Three Months Six Months
--------------------------- ---------------------------
1999 1998 1999 1998
------------ ------------- ------------ ------------
<S> <C> <C> <C> <C>
Revenues
Americas $ 306.0 $ 307.2 $ 610.3 $ 616.4
Europe, Africa and Middle East 118.7 115.4 236.1 222.1
Asia-Pacific 27.9 14.6 44.7 30.6
------------ ------------- ------------ ------------
$ 452.6 $ 437.2 $ 891.1 $ 869.1
============ ============= ============ ============
Operating profit (loss)
Americas $ 22.2 $ 29.6 $ 45.1 $ 61.7
Europe, Africa and Middle East 2.5 9.6 4.8 18.5
Asia-Pacific (1.9) (.5) (2.3) (.2)
------------ ------------- ------------ ------------
$ 22.8 $ 38.7 $ 47.6 $ 80.0
============ ============= ============ ============
Operating profit (loss) excluding
goodwill amortization
Americas $ 24.2 $ 31.6 $ 49.1 $ 65.6
Europe, Africa and Middle East 3.5 10.4 6.8 20.2
Asia-Pacific (1.8) (.4) (2.2) ---
------------ ------------- ------------ ------------
$ 25.9 $ 41.6 $ 53.7 $ 85.8
============ ============= ============ ============
Net income $ 10.7 $ 24.6 $ 22.8 $ 46.9
============ ============= ============ ============
</TABLE>
13
<PAGE> 14
NACCO MATERIALS HANDLING GROUP, INC. - continued
FINANCIAL REVIEW - continued
SECOND QUARTER OF 1999 COMPARED WITH SECOND QUARTER OF 1998
The following schedule identifies the components of the changes in revenues,
operating profit and net income for the second quarter of 1999 compared with the
second quarter of 1998:
<TABLE>
<CAPTION>
Operating Net
Revenues Profit Income
---------- ----------- ---------
<S> <C> <C> <C>
1998 $ 437.2 $ 38.7 $ 24.6
Increase (decrease) in 1999 from:
Unit volume (8.4) (1.1) (.7)
Sales mix (4.4) (.2) (.1)
Average sales price (9.3) (9.3) (6.0)
Service parts (.4) (.5) (.3)
Retail sales, net of intercompany 40.5 (3.2) (3.0)
Foreign currency (2.6) (5.7) (3.7)
Manufacturing cost --- --- ---
Other operating expense --- 4.1 2.7
Other income and expense --- --- (2.3)
Differences between effective
and statutory tax rates --- --- (.5)
---------- ----------- ---------
1999 $ 452.6 $ 22.8 $ 10.7
========== =========== =========
</TABLE>
At NMHG, revenues increased as a result of retail sales made by recently
acquired dealerships, partially offset by a decrease in revenue from wholesale
operations. Wholesale revenue declined largely due to a decrease in the average
sales price, primarily in the Americas, lower unit volume in Europe and a shift
in mix to lower-priced units. Excluding the effect of retail activity, NMHG's
worldwide volume decreased 2 percent to 19,905 units shipped during the second
quarter of 1999 from 20,334 units shipped during the second quarter of 1998.
Overall, unit sales volume, including retail sales, remained relatively flat at
20,575 units sold in 1999 compared with 20,334 units sold in 1998. Retail sales
from recently acquired dealerships and increased wholesale unit volume in
Asia-Pacific and China were offset by decreased wholesale demand in the Americas
and Europe.
Operating profit declined primarily due to (i) a reduction in the average sales
price, (ii) a strengthening of the Japanese yen resulting in increased costs of
Japanese-sourced products and (iii) a loss from retail operations due to
start-up and acquisition costs at recently acquired retail dealerships. The
decline in operating profit was partially offset by a reduction in other
operating expenses, primarily due to reduced variable compensation expense and
reduced headcount resulting from the 1997/1998 restructuring plan. Net income
declined as a result of these factors and due to non-recurring income recognized
in the second quarter of 1998 from legal settlements of $2.9 million after-tax.
14
<PAGE> 15
NACCO MATERIALS HANDLING GROUP, INC. - continued
FINANCIAL REVIEW - continued
The backlog level at June 30, 1999 of 18,000 has remained relatively constant
with the March 31, 1999 level of 18,100. However, compared to the June 30, 1998
level of 20,800, the backlog level has decreased, indicating a declining trend
in volume, as production remains steady, but the rate of incoming orders slows.
This decline is consistent with the Company's expectation that the worldwide
demand for lift trucks in 1999 will fall moderately below 1998's record levels.
During 1998, NMHG began a strategy of acquiring Hyster and Yale retail
dealerships on a permanent basis to strengthen its position in the lift truck
business. This newly adopted strategy resulted in the acquisition and
consolidation of several lift truck dealerships in 1998 and in the first half of
1999. The acquisition of retail dealerships during the first half of 1999 was
not material to the financial position or operating results of the Company.
Retail dealerships, both those acquired in 1998 and during the first half of
1999, increased NMHG's revenue by $40.5 million, decreased operating profit by
$3.2 million and decreased net income by $3.0 million, net of intercompany
transactions, in the second quarter of 1999. NMHG expects that it may be
necessary to acquire additional retail dealerships over the next several years
with the goal of continuing to strengthen its distribution network.
FIRST SIX MONTHS OF 1999 COMPARED WITH FIRST SIX MONTHS OF 1998
The following schedule identifies the components of the changes in revenues,
operating profit and net income for the first six months of 1999 compared with
the first six months of 1998:
<TABLE>
<CAPTION>
Operating Net
Revenues Profit Income
---------- ----------- ---------
<S> <C> <C> <C>
1998 $ 869.1 $ 80.0 $ 46.9
Increase (decrease) in 1999 from:
Unit volume (16.6) (3.7) (2.4)
Sales mix (7.8) (2.0) (1.3)
Average sales price (16.4) (16.4) (10.7)
Service parts 1.7 (.4) (.2)
Foreign currency (.8) (10.4) (6.8)
Retail sales, net of intercompany 61.9 (6.6) (5.8)
Manufacturing cost --- 1.8 1.1
Other operating expense --- 5.3 3.4
Other income and expense --- --- (3.5)
Differences between effective
and statutory tax rates --- --- 2.1
---------- ----------- ---------
1999 $ 891.1 $ 47.6 $ 22.8
========== =========== =========
</TABLE>
At NMHG, revenues increased as a result of retail sales made by recently
acquired dealerships, partially offset by a decrease in revenue from wholesale
operations. Wholesale revenue declined largely due to a decrease in volume,
primarily in Europe, and a decrease in the average sales price, predominately in
the Americas. Excluding the effect of retail activity, NMHG's worldwide volume
decreased 2 percent to 39,224 units shipped during the first half of 1999 from
40,091 units shipped during the first half of 1998. Overall, unit sales volume,
including retail sales, remained relatively flat at 40,323 units sold in 1999
compared with 40,091 units sold in 1998. Retail sales from recently acquired
dealerships and increased wholesale unit volume in Asia-Pacific and China were
offset by decreased wholesale demand in the Americas and Europe.
15
<PAGE> 16
NACCO MATERIALS HANDLING GROUP, INC. - continued
FINANCIAL REVIEW - continued
Operating profit declined primarily due to: (i) a reduction in the average sales
price, (ii) a strengthening of the Japanese yen resulting in increased costs of
Japanese-sourced products and (iii) a loss from retail operations due to
start-up and acquisition costs at recently acquired retail dealerships. The
decline in operating profit was partially offset by a reduction in other
operating expenses, primarily due to reduced variable compensation expense and
reduced headcount resulting from the 1997/1998 restructuring plan. Net income
declined as a result of these factors and due to non-recurring income recognized
in the second quarter of 1998 from legal settlements of $2.9 million after-tax.
OTHER INCOME AND EXPENSE AND INCOME TAXES
The components of other income (expense) and the effective tax rate for the
three and six months ended June 30 are as follows:
<TABLE>
<CAPTION>
Three Months Six Months
--------------------------- ---------------------------
1999 1998 1999 1998
------------ ------------- ------------ ------------
<S> <C> <C> <C> <C>
Interest expense $ (4.3) $ (3.0) $ (8.6) $ (6.4)
Other-net (.3) 3.8 (.5) 2.9
------------ ------------ ----------- ------------
$ (4.6) $ .8 $ (9.1) $ (3.5)
============ ============= ============ ============
Effective tax rate 42.9 % 37.7 % 42.1 % 38.7 %
</TABLE>
Interest expense for the three and six month periods ended June 30, 1999
increased as compared with the same periods last year primarily due to increased
debt levels necessary to finance acquisitions of retail dealerships and an
intercompany loan to NACCO. Other-net for the three and six month periods ended
June 30, 1999 declined due to a $4.6 million pre-tax non-recurring legal
settlement received in the second quarter of 1998.
The increase in the effective tax rate for the three and six months ended June
30, 1999 compared with the same periods in 1998 is due to the effect of a higher
level of nondeductible expenses, including goodwill amortization, on a lower
comparable level of pre-tax income.
LIQUIDITY AND CAPITAL RESOURCES
Expenditures for property, plant and equipment were $29.7 million during the
first six months of 1999. These capital expenditures include investments in
tooling for new products, machinery and equipment and investments in existing
retail dealerships, including $7.0 million for lease and rental fleet. It is
estimated that NMHG's capital expenditures for the remainder of 1999 will be
approximately $37.2 million. These planned expenditures relate primarily to
additional investments in the newly constructed China facility, and machinery
and equipment for other existing facilities. During the remainder of 1999, NMHG
anticipates continuing investments in business acquisitions in amounts which may
exceed the first six months of acquisition investment of $41.0 million. The
principal sources of financing for these capital expenditures are internally
generated funds and bank borrowings.
16
<PAGE> 17
NACCO MATERIALS HANDLING GROUP, INC. - continued
LIQUIDITY AND CAPITAL RESOURCES - continued
NMHG has a $350.0 million revolving credit facility that expires June 2002, but
may be extended annually, for one-year periods, upon the mutual consent of NMHG
and the bank group. In addition, the NMHG facility has performance-based pricing
which sets interest rates based upon the achievement of certain financial
performance targets. At June 30, 1999, NMHG had available $128.1 million of its
$350.0 million revolving credit facility. NMHG also has separate facilities
totaling $44.5 million, of which $34.8 million was available at June 30, 1999
and maintains additional uncommitted lines of credit, of which $43.2 million was
available at June 30, 1999. NMHG believes that funds available under its credit
facilities and operating cash flows are sufficient to finance all of its
operating needs and commitments arising during the foreseeable future.
NMHG's capital structure is presented below:
<TABLE>
<CAPTION>
JUNE 30 DECEMBER 31
1999 1998
--------------- --------------
<S> <C> <C>
Total net tangible assets $ 346.0 $ 300.0
Advances to parent company 7.0 18.0
Goodwill at cost 465.3 454.0
--------------- --------------
Total assets before goodwill amortization 818.3 772.0
Accumulated goodwill amortization (112.8) (105.9)
Total debt (227.6) (200.2)
Minority Interest (4.7) (3.9)
--------------- --------------
Stockholders' equity $ 473.2 $ 462.0
=============== ==============
Debt to total capitalization 32% 30%
</TABLE>
The increase in net tangible assets of $46.0 million is primarily due to
acquisitions of retail dealerships, which increased net tangible assets by
approximately $28.6 million. The remaining $17.4 million increase in net
tangible assets is primarily due to an increase in accounts receivable due to a
reduction in the amount of receivables sold in the Americas and Europe.
Goodwill and debt have increased due to acquisitions of retail dealerships
during the first half of 1999.
17
<PAGE> 18
NACCO HOUSEWARES GROUP
Because the housewares business is seasonal, a majority of revenues and
operating profit occurs in the second half of the year when sales of small
electric appliances to retailers and consumers increase significantly for the
fall holiday selling season.
FINANCIAL REVIEW
The results of operations for NACCO Housewares Group were as follows for the
three and six months ended June 30:
<TABLE>
<CAPTION>
Three Months Six Months
--------------------------- ---------------------------
1999 1998 1999 1998
------------ ------------- ------------ ------------
<S> <C> <C> <C> <C>
Revenues $ 127.0 $ 112.9 $ 238.4 $ 211.9
Operating profit $ 8.3 $ 2.4 $ 8.3 $ 1.7
Operating profit excluding
goodwill amortization $ 9.0 $ 3.2 $ 9.8 $ 3.3
Net income (loss) $ 3.7 $ .4 $ 2.9 $ (.9)
</TABLE>
SECOND QUARTER OF 1999 COMPARED WITH SECOND QUARTER OF 1998
The following schedule identifies the components of the changes in revenues,
operating profit and net income for the second quarter of 1999 compared with the
second quarter of 1998:
<TABLE>
<CAPTION>
Operating Net
Revenues Profit Income
------------ ------------ -----------
<S> <C> <C> <C>
1998 $ 112.9 $ 2.4 $ .4
Increase (decrease) in 1999 from:
Unit volume and sales mix 15.7 5.7 3.5
Average sales price (2.0) (2.0) (1.3)
Retail sales .4 .4 .3
Manufacturing cost --- 2.7 1.8
Other operating expense --- (.9) (.7)
Differences between effective
and statutory tax rates --- --- (.3)
------------ ------------ -----------
1999 $ 127.0 $ 8.3 $ 3.7
============ ============ ===========
</TABLE>
18
<PAGE> 19
NACCO HOUSEWARES GROUP - continued
FINANCIAL REVIEW - continued
Housewares' revenues improved in the second quarter of 1999 due primarily to
unit volume growth at HB*PS, especially for blenders, indoor grills, irons and
slow cookers. Operating profit and net income increased during the second
quarter as compared with the second quarter of 1998 due to unit volume growth, a
more profitable sales mix and reduced manufacturing costs. Manufacturing costs
declined primarily due to increased production at lower-cost Mexican plants and
a non-recurring $3.1 million pre-tax restructuring charge recognized in the
second quarter of 1998, partially offset by: (i) unabsorbed fixed overhead costs
at some U.S. manufacturing facilities resulting from the transfer of production
to Mexico and the phase-down of production in North Carolina, (ii) start-up
costs of increased production in Mexico and (iii) costs associated with
consolidating warehouse operations into a new facility in Memphis, Tennessee.
KCI's revenues increased and net loss decreased as a result of increases in the
size of an average sale transaction and improved gross margins. KCI operated 143
stores at June 30, 1999, compared with 145 stores at the end of the second
quarter of 1998.
FIRST SIX MONTHS OF 1999 COMPARED WITH FIRST SIX MONTHS OF 1998
The following schedule identifies the components of the changes in revenues,
operating profit and net income (loss) for the first six months of 1999 compared
with the first six months of 1998:
<TABLE>
<CAPTION>
Net
Operating Income
Revenues Profit (Loss)
------------ ------------ -----------
<S> <C> <C> <C>
1998 $ 211.9 $ 1.7 $ (.9)
Increase (decrease) in 1999 from:
Unit volume and sales mix 28.2 10.0 6.5
Average sales price (3.4) (3.4) (2.2)
Retail sales 1.7 .7 .5
Manufacturing cost --- 1.0 .6
Other operating expense --- (1.7) (1.1)
Differences between effective
and statutory tax rates --- --- (.5)
------------ ------------ -----------
1999 $ 238.4 $ 8.3 $ 2.9
============ ============ ===========
</TABLE>
Housewares' revenues improved in the first half of 1999 due primarily to unit
volume growth at HB*PS, especially for blenders, coffeemakers, irons and indoor
grills. Operating profit and net income increased during the first half of 1999
due to unit volume growth and a more profitable sales mix, partially offset by a
decrease in the average sales price as a result of increased competition,
primarily from Chinese imports. Manufacturing costs declined primarily due to
increased production at lower-cost Mexican plants and a non-recurring $3.1
million pre-tax restructuring charge recognized in the second quarter of 1998,
partially offset by: (i) unabsorbed fixed overhead costs at some U.S.
manufacturing facilities, (ii) costs associated with moving additional
manufacturing assembly operations to HB*PS plants in Mexico, including a $1.0
million pre-tax charge for severance and (iii) costs associated with
consolidating warehouse operations into a new facility in Memphis, Tennessee.
KCI's revenues increased and net loss decreased as a result of increases in the
size of an average sale transaction and improved gross margins.
19
<PAGE> 20
NACCO HOUSEWARES GROUP - continued
OTHER INCOME AND EXPENSE AND INCOME TAXES
The components of other income (expense) and the effective tax rate for the six
months ended June 30 are as follows:
<TABLE>
<CAPTION>
Three Months Six Months
----------------------------- -----------------------------
1999 1998 1999 1998
-------------- ------------ -------------- ------------
<S> <C> <C> <C> <C>
Interest expense $ (1.6) $ (1.8) $ (3.0) $ (3.2)
Other-net (.4) .1 (.4) (.2)
============== ============ ============ ==========
$ (2.0) $ (1.7) $ (3.4) $ (3.4)
============== ============ ============ ==========
Effective tax rate 41.7% 45.9% 41.5% 44.6%
</TABLE>
The decrease in the effective tax rate is primarily due to the effect of a
constant level of nondeductible goodwill amortization on a higher comparable
level of pre-tax income.
LIQUIDITY AND CAPITAL RESOURCES
Housewares' expenditures for property, plant and equipment were $6.2 million
during the first six months of 1999 and are estimated to be $16.9 million for
the remainder of 1999. The primary purpose of these capital expenditures is to
purchase equipment intended to reduce manufacturing costs and increase
efficiency and to purchase tooling for new and existing products. These
expenditures are funded primarily from internally generated funds and short-term
borrowings.
HB*PS' credit agrcceement provides for a revolving credit facility ("HB*PS
Facility") that: (i) permits advances up to $160.0 million, (ii) is secured by
substantially all of HB*PS' assets, (iii) provides lower interest rates if HB*PS
achieves certain interest coverage ratios and (iv) allows for interest rates
quoted under a competitive bid option. The HB*PS Facility expires in May 2003.
At June 30, 1999, HB*PS had $60.4 million available under this facility. In
addition, HB*PS has separate uncommitted facilities that permitted $18.7 million
of additional borrowings at June 30, 1999.
In 1998, the HB*PS Facility was amended to allow advances of up to $10.0 million
from HB*PS to KCI. Subsequent to this amendment, KCI's cash requirements have
been financed through advances from HB*PS. Accordingly, in 1998, KCI terminated
its external revolving credit facility. Housewares believes that funds available
under its credit facilities and operating cash flows are sufficient to finance
all of its operating needs and commitments arising during the foreseeable
future.
20
<PAGE> 21
NACCO HOUSEWARES GROUP - continued
LIQUIDITY AND CAPITAL RESOURCES - continued
Housewares' capital structure is presented below:
<TABLE>
<CAPTION>
JUNE 30 DECEMBER 31
1999 1998
--------------- --------------
<S> <C> <C>
Total net tangible assets $ 165.8 $ 153.3
Goodwill at cost 123.5 123.5
--------------- --------------
Total assets before goodwill amortization 289.3 276.8
Accumulated goodwill amortization (32.1) (30.6)
Total debt (108.7) (96.0)
--------------- --------------
Stockholder's equity $ 148.5 $ 150.2
=============== ==============
Debt to total capitalization 42% 39%
</TABLE>
Because of the seasonal nature of the housewares business, inventory, accounts
payable and debt levels of this segment reach seasonal peaks in the second and
third quarters.
21
<PAGE> 22
THE NORTH AMERICAN COAL CORPORATION
NACoal mines and markets lignite for use primarily as fuel for power generation
by electric utilities. The lignite is surface mined in North Dakota, Texas and
Louisiana. Total coal reserves approximate 2.0 billion tons, with 1.2 billion
tons committed to electric utility customers pursuant to long-term contracts.
NACoal operates five lignite mines, including three project mining subsidiaries
("Coteau," "Falkirk" and "Sabine"), a NACoal division ("San Miguel") and a joint
venture ("Red River"). NACoal also provides dragline mining services ("Florida
dragline operations") for a limerock quarry near Miami, Florida. The operating
results for the Florida dragline operations, San Miguel and Red River are
included in Other mining operations.
During 1997, the Mississippi Lignite Mining Company was formed as a joint
venture between NACoal and Phillips Coal Company. The new company, in which
NACoal has a 25 percent interest, will develop the Red Hills lignite mine near
Ackerman, Mississippi. Development of the mine site has begun and will continue
through 1999, with initial production scheduled for the second half of 2000.
FINANCIAL REVIEW
NACoal's three project mining subsidiaries (Coteau, Falkirk and Sabine), which
represent a significant portion of NACoal's operations, mine lignite for utility
customers pursuant to long-term contracts at a price based on actual cost plus
an agreed pretax profit per ton. Due to the cost-plus nature of these contracts,
revenues and operating profits are affected by increases and decreases in
operating costs, as well as by tons sold. Net income of these project mines,
however, is not significantly affected by changes in such operating costs, which
include costs of operations, interest expense and certain other items. Because
of the nature of the contracts at these mines, operating results are best
analyzed in terms of lignite tons sold, income before taxes and net income.
Lignite tons sold by NACoal's operating lignite mines were as follows for the
three and six months ended June 30:
<TABLE>
<CAPTION>
THREE MONTHS SIX MONTHS
------------------------ ------------------------
1999 1998 1999 1998
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Coteau Properties 3.8 3.8 8.1 8.0
Falkirk Mining 1.3 1.1 3.1 3.1
Sabine Mining 1.0 .9 1.5 1.4
Red River Mining .1 .3 .2 .5
San Miguel 1.0 1.0 1.8 1.8
----------- ----------- ----------- -----------
Total Lignite 7.2 7.1 14.7 14.8
=========== =========== =========== ===========
</TABLE>
The Florida dragline operations delivered 2.0 million and 4.1 million cubic
yards of limerock in the three and six months ended June 30, 1999, respectively.
This compares to 2.1 million and 4.0 million cubic yards delivered during the
three and six months ended June 30, 1998, respectively.
22
<PAGE> 23
THE NORTH AMERICAN COAL CORPORATION - continued
FINANCIAL REVIEW - continued
Revenues, income before taxes, provision for taxes and net income were as
follows for the three and six months ended June 30:
<TABLE>
<CAPTION>
THREE MONTHS SIX MONTHS
------------------------ ------------------------
1999 1998 1999 1998
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Revenues
Project mines $ 56.8 $ 52.8 $ 111.8 $ 109.8
Other mining operations 7.2 9.7 15.3 19.1
----------- ----------- ----------- -----------
64.0 62.5 127.1 128.9
Royalties and other 1.0 1.5 1.5 3.5
----------- ----------- ----------- -----------
$ 65.0 $ 64.0 $ 128.6 $ 132.4
=========== =========== =========== ===========
Income before taxes
Project mines $ 5.5 $ 5.0 $ 12.0 $ 11.4
Other mining operations .6 1.4 1.2 2.8
----------- ----------- ----------- -----------
Total from operating mines 6.1 6.4 13.2 14.2
Royalties and other income, net (.2) 1.2 .2 3.0
Other operating expenses (1.4) (2.0) (4.1) (3.9)
----------- ----------- ----------- -----------
4.5 5.6 9.3 13.3
Provision for taxes .9 1.6 1.8 3.8
----------- ----------- ----------- -----------
Income before cumulative effect of accounting change 3.6 4.0 7.5 9.5
Cumulative effect of accounting change --- --- (1.2) ---
----------- ----------- ----------- -----------
Net income $ 3.6 $ 4.0 $ 6.3 $ 9.5
=========== =========== =========== ===========
</TABLE>
SECOND QUARTER OF 1999 COMPARED WITH SECOND QUARTER OF 1998
The following schedule identifies the components of the changes in revenues,
income before taxes and net income for the second quarter of 1999 compared with
the second quarter of 1998:
<TABLE>
<CAPTION>
Income
Before Net
Revenues Taxes Income
--------- ------- --------
<S> <C> <C> <C>
1998 $ 64.0 $ 5.6 $ 4.0
Increase (decrease) in 1999 from:
Project mines
Tonnage volume 2.9 .3 .2
Agreed profit per ton .2 .2 .1
Pass-through costs .9 --- ---
Other mining operations
Tonnage volume (2.6) (2.4) (1.6)
Average selling price .1 .1 .1
Operating costs --- .9 .6
Other expense --- .6 .4
---------- --------- ----------
Changes from operating mines 1.5 (.3) (.2)
Royalties and other income, net (.5) (1.4) (.9)
Other operating expenses --- .6 .4
Differences between effective and
statutory tax rates --- --- .3
---------- --------- ----------
1999 $ 65.0 $ 4.5 $ 3.6
========== ========= ==========
</TABLE>
23
<PAGE> 24
THE NORTH AMERICAN COAL CORPORATION - continued
FINANCIAL REVIEW - continued
Revenues for the second quarter of 1999 increased as compared with the second
quarter of 1998 primarily due to increased tons sold at Falkirk. The revenue
increase was partially offset by decreased tons sold at Red River and reduced
royalties. Income before taxes and net income for the second quarter of 1999
declined as compared with the second quarter of 1998 primarily due to decreased
tons sold at Red River, but also due to reduced royalty income and increased
labor costs at San Miguel, partially offset by increased tons sold at Falkirk.
Tons were down at Red River due to the customer's plant outage, while tons
increased at Falkirk due to customer requirements. Royalty income continued to
decline due to decreased demand for coal from NACoal's eastern underground
reserves.
FIRST SIX MONTHS OF 1999 COMPARED WITH FIRST SIX MONTHS OF 1998
The following schedule identifies the components of the changes in revenues,
income before taxes and net income for the first six months of 1999 as compared
with the first six months of 1998:
<TABLE>
<CAPTION>
Income
Before Net
Revenues Taxes Income
---------- --------- ---------
<S> <C> <C> <C>
1998 $ 132.4 $ 13.3 $ 9.5
Increase (decrease) in 1999 from:
Project mines
Tonnage volume 1.3 .2 .1
Agreed profit per ton .4 .4 .3
Pass-through costs .3 --- ---
Other mining operations
Tonnage volume (4.0) (4.0) (2.6)
Average selling price .2 .2 .2
Operating costs --- 1.2 .8
Other expense --- 1.0 .6
---------- --------- ---------
Changes from operating mines (1.8) (1.0) (.6)
Royalties and other income, net (2.0) (2.8) (1.8)
Other operating expenses --- (.2) (.1)
Cumulative effect of accounting change --- --- (1.2)
Differences between effective and
statutory tax rates --- --- .5
---------- --------- ---------
1999 $ 128.6 $ 9.3 $ 6.3
========== ========= =========
</TABLE>
Revenues for the first half of 1999 decreased as compared with the first half of
1998 primarily due to decreased tons sold at Red River and reduced royalties,
partially offset by a slight increase in tons sold at Coteau. Income before
taxes and net income for the first half of 1999 declined as compared with the
first half of 1998 due to reduced royalty income, a one-time cumulative effect
charge recognized in the first quarter of 1999 for a change in accounting for
start-up costs and decreased tons sold at Red River. Tons were down at Red River
due to the customer's plant outage, while tons increased slightly at Coteau due
to customer requirements. Royalty income continued to decline due to decreased
demand for coal from NACoal's eastern underground reserves.
24
<PAGE> 25
THE NORTH AMERICAN COAL CORPORATION - continued
OTHER INCOME AND EXPENSE AND INCOME TAXES
The components of other income (expense) and the effective tax rate for the
three and six months ended June 30 are as follows:
<TABLE>
<CAPTION>
Three Months Six Months
--------------------------- ---------------------------
1999 1998 1999 1998
------------ ------------ ------------- ------------
<S> <C> <C> <C> <C>
Interest expense
Project mining subsidiaries $ (4.5) $ (3.2) $ (8.8) $ (6.3)
Other mining operations (.2) (.2) (.4) (.4)
----------- ------------ ------------- ------------
$ (4.7) $ (3.4) $ (9.2) $ (6.7)
============ ============ ============= ============
Other-net
Project mining subsidiaries $ .1 $ .7 $ .2 $ .8
Other mining operations .5 (.3) .4 (.3)
----------- ------------ ------------- ------------
$ .6 $ .4 $ .6 $ .5
============ ============ ============= ============
Effective tax rate 20.0% 27.7% 19.9% 28.3%
</TABLE>
The decrease in the effective tax rate primarily results from additional
percentage depletion eligible to reduce NACoal's effective tax.
LIQUIDITY AND CAPITAL RESOURCES
Expenditures for property, plant and equipment were $7.0 million during the
first six months of 1999. It is estimated that NACoal's capital expenditures for
the remainder of 1999 will be $19.1 million, of which $19.0 million relates to
the development, establishment and improvement of the project mining
subsidiaries' mines and are financed or guaranteed by the utility customers.
Also during the first six months of 1999, NACoal invested $5.5 million in a
joint venture with Phillips Coal Company to develop a new lignite mine in
Mississippi. During the remainder of 1999, NACoal anticipates investing an
additional $9.1 million in this joint venture.
NACoal has in place a $50.0 million revolving credit facility. The expiration
date of this facility, which currently is September 2002, can be extended one
additional year, on an annual basis, upon the mutual consent of NACoal and the
bank group. NACoal had $28.6 million of its revolving credit facility available
at June 30, 1999.
The financing of the project mining subsidiaries, which is either provided or
guaranteed by the utility customers, includes long-term equipment leases, notes
payable and non-interest-bearing advances from customers. The obligations of the
project mining subsidiaries do not affect the short-term or long-term liquidity
of NACoal and are without recourse to NACCO or NACoal. These arrangements allow
the project mining subsidiaries to pay dividends to NACoal in amounts equal to
their earnings.
25
<PAGE> 26
THE NORTH AMERICAN COAL CORPORATION - continued
LIQUIDITY AND CAPITAL RESOURCES - continued
NACoal's capital structure, excluding the project mining subsidiaries, is
presented below:
<TABLE>
<CAPTION>
JUNE 30 DECEMBER 31
1999 1998
--------------- --------------
<S> <C> <C>
Investment in project mining subsidiaries $ 2.7 $ 3.6
Other net tangible assets 33.9 14.2
--------------- --------------
Total tangible assets 36.6 17.8
Advances to (from) parent company 1.4 (2.5)
Debt related to parent advances (1.4) ---
Other debt (20.0) (.2)
--------------- --------------
Total debt (21.4) (.2)
--------------- --------------
Stockholder's equity $ 16.6 $ 15.1
=============== ==============
Debt to total capitalization 56 % 1 %
</TABLE>
The increase in Other net tangible assets is primarily due to advances of $9.5
million related to the Mississippi Lignite joint venture, a $5.5 million
increase in the investment in the Mississippi Lignite joint venture and a $2.5
million reduction in accounts payable. Borrowings increased to finance
investments in the Mississippi Lignite joint venture and loans made to NACCO.
26
<PAGE> 27
NACCO AND OTHER
FINANCIAL REVIEW
NACCO and Other includes the parent company operations and Bellaire Corporation
("Bellaire"), a non-operating subsidiary of NACCO. While Bellaire's results are
immaterial, it has significant long-term liabilities related to closed mines,
primarily from former eastern U.S. underground coal-mining activities. Cash
payments related to Bellaire's obligations, net of internally generated cash,
are funded by NACCO and historically have not been material.
The results of operations at NACCO and Other were as follows for the three and
six months ended June 30:
<TABLE>
<CAPTION>
Three Months Six Months
--------------------------- ---------------------------
1999 1998 1999 1998
------------ ------------- ------------ ------------
<S> <C> <C> <C> <C>
Revenues $ .1 $ .1 $ .1 $ .1
Operating loss $ (2.5) $ (2.7) $ (5.1) $ (5.1)
Other income (expense), net $ --- $ (.1) $ (.2) $ .2
Net loss $ (1.7) $ (2.7) $ (4.0) $ (5.1)
</TABLE>
LIQUIDITY AND CAPITAL RESOURCES
Although NACCO's subsidiaries have entered into substantial borrowing
agreements, NACCO has not guaranteed the long-term debt or any borrowings of its
subsidiaries.
The borrowing agreements at NMHG and Housewares allow for the payment to NACCO
of dividends and advances under certain circumstances. There are no restrictions
on the transfer of assets from NACoal. Dividends, advances and management fees
from its subsidiaries are the primary sources of cash for NACCO.
NACCO's consolidated capital structure is presented below:
<TABLE>
<CAPTION>
JUNE 30 DECEMBER 31
1999 1998
--------------- --------------
<S> <C> <C>
Total net tangible assets $ 545.3 $ 473.2
Goodwill at cost 588.8 577.5
--------------- --------------
Total assets before goodwill amortization 1,134.1 1,050.7
Accumulated goodwill amortization (144.9) (136.5)
Total debt, excluding current and long-term portion of
obligations of project mining subsidiaries (357.7) (296.4)
Closed mine obligations (Bellaire), including the
United Mine Worker retirees' medical fund, net-of-tax (73.3) (76.6)
Minority interest (24.2) (22.9)
--------------- --------------
Stockholders' equity $ 534.0 $ 518.3
=============== ==============
Debt to total capitalization 39% 35%
</TABLE>
27
<PAGE> 28
NACCO AND OTHER - continued
FINANCIAL REVIEW - continued
The Company believes it can adequately meet all of its current and long-term
commitments and operating needs. This outlook stems from amounts available under
revolving credit facilities and the utility customers' funding of the project
mining subsidiaries.
EFFECTS OF FOREIGN CURRENCY
NMHG and Housewares operate internationally and enter into transactions
denominated in foreign currencies. As such, the Company is subject to the
variability that arises from exchange rate movements. The effects of foreign
currency fluctuations on revenues, operating income and net income at NMHG are
disclosed above. At Housewares, foreign currency effects had an immaterial
impact on operating results between comparable periods of 1999 and 1998. See
Item 3, "Quantitative and Qualitative Disclosures About Market Risk."
YEAR 2000 ISSUE
Year 2000 ("Y2K") issues exist because many information technology ("IT") and
non-information technology ("non-IT") systems were designed to recognize years
by reference to only the last two digits of the year. As a result, these systems
assume the relevant year begins with "19." These systems could fail or produce
erroneous information if they are not modified to recognize dates beginning with
"20."
STATE OF READINESS
Each of the Company's subsidiaries has developed a formal compliance plan to
address the Y2K issue. The audit committee of the Board of Directors is
periodically updated on the Company's progress in addressing the Y2K issue. The
subsidiaries' compliance plans encompass the evaluation of IT systems and non-IT
systems, as well as an assessment of third parties' compliance and the extent to
which third party representations can be relied upon. Furthermore, the execution
of the Company's compliance plans has been prioritized in terms of significance
to the Company's ability to generate revenues, income and cash flows. The
following discussion addresses IT and non-IT systems that may have a material
effect on the Company's ability to generate revenues, income and cash flows. The
compliance plans are categorized into one of four phases: (i) awareness, (ii)
assessment, (iii) renovation, and (iv) validation and implementation (testing).
IT SYSTEMS The Company has completed its assessment of all of its IT systems
and the renovation and testing of substantially all of its IT systems. NMHG and
HB*PS have completed renovation and testing of all mission-critical IT systems.
NACoal has substantially completed renovation and testing of all
mission-critical IT systems.
NON-IT SYSTEMS The Company's Y2K compliance plan also addresses non-IT systems
with date-sensitive operating controls such as computer-controlled manufacturing
and mining equipment, heating, ventilating and cooling systems, fire alarms,
phone, voice mail, security and other similar systems. At NMHG, the assessment,
renovation and testing of non-IT systems is targeted to be completed by
September 1999. All of HB*PS' computer-controlled manufacturing equipment and
other non-IT systems have been validated to be Y2K compliant, with the exception
of certain computer-controlled equipment in its Mexican plants which are
targeted to be compliant by September 1999. At NACoal, assessment and testing of
critical computer-controlled equipment and other non-IT systems are scheduled to
be completed by December 1999. Preliminary testing at NACoal has indicated that
no significant Y2K issues are expected in its mining equipment and other non-IT
systems.
28
<PAGE> 29
YEAR 2000 ISSUE - continued
THIRD PARTIES The Company has contacted substantially all of its third-party,
critical-component suppliers. At NMHG, supplier surveys have been returned and
evaluated, indicating that approximately 80 percent of NMHG's critical suppliers
are currently Y2K compliant or have a plan in place to be compliant by the end
of 1999. The remainder of NMHG's critical suppliers have not yet responded to
the survey. NMHG plans to build a safety stock in Europe to mitigate the risk
that suppliers will not be Y2K ready. At HB*PS, supplier surveys have been
returned and evaluated, indicating that approximately 85 percent of HB*PS'
critical suppliers are currently Y2K compliant or have a plan in place to be
compliant by the end of 1999. HB*PS has developed contingency plans for those
suppliers who may not become Y2K compliant. NACoal has surveyed its critical
vendors, but only 50 percent have responded. NACoal plans to pursue responses
and create contingency plans to mitigate any problems with critical vendors. Of
those who have responded, approximately 80 percent have indicated that they have
a plan to be Y2K ready by the end of 1999.
The Company has contacted its critical utility providers, financial institutions
and customers to assess their Y2K readiness. The majority of these third-party
partners have indicated that they are ready or have a plan in place to be Y2K
ready by December 31, 1999. The Company continues to monitor their progress and
remains in contact with critical partners, such as NACoal's power plant
customers. The Company will develop contingency plans as it becomes aware of the
potential for critical third-party partners' non-compliance.
COSTS TO ADDRESS Y2K ISSUES
The Company received and implemented computer software upgrades, under normal
maintenance agreements with third-party vendors, that enabled substantially all
of the Company's IT systems to be Y2K ready. As such, costs to address the Y2K
issue have not been, and are not expected to be, material to the Company.
Internal and external costs incurred to date have been approximately $5.2
million. The Company estimates an additional $2.0 million will be expended
during the remainder of 1999 relating to this issue. These costs have been and
are expected to be funded by cash flows from operations.
CONTINGENCY PLANS
While some contingency plans have been formalized, other contingency plans
continue to be formulated. Such contingency plans, both those formalized and
those under discussion, include, if necessary, building a safety stock of
critical components prior to January 1, 2000, requiring certain suppliers to
maintain a safety stock or locating alternate suppliers that are Y2K ready. The
Company may incur additional interest expense during the fourth quarter of 1999
and the first quarter of 2000 to finance any safety stock deemed necessary. The
Company plans to replace, to the extent possible, those vendors who have not
responded to surveys or have indicated "no plan in place" by September 1999. The
Company plans to develop a risk assessment guide that will enable the Company to
identify customers who may have cash flow troubles due to non-compliance. The
Company may need to reduce the extension of credit, selling terms or amount of
shipments to those customers.
The Company's Y2K efforts are ongoing and its overall plan, as well as the
consideration of contingency plans, will continue to evolve as new information
becomes available. While the Company anticipates continuity of its business
activities, that continuity will be dependent upon its ability, and the ability
of third parties on which the Company relies, directly and indirectly, to be Y2K
ready.
29
<PAGE> 30
YEAR 2000 ISSUE - continued
RISKS OF THE COMPANY'S Y2K ISSUES
Although the Company believes that it has a compliance plan that will mitigate
the risk that the Y2K issue will have a material adverse effect on the Company,
the ultimate impact of this issue on the Company is uncertain. Suppliers'
failure to deliver critical components, third-parties' failure to supply power
and/or telecommunication systems to manufacturing plants or mines, or the
Company's failure to complete, in a timely manner, the updating of
computer-controlled manufacturing equipment could result in delayed delivery of
products to customers, which could have a material adverse effect on earnings
and cash flow. In addition, customers' non-compliance could result in the loss
of customers or a customer's inability to purchase or pay for products, which
could have a material adverse effect on earnings and cash flow.
The Company has not yet fully implemented its Y2K compliance plan. Therefore,
there can be no assurance that the Y2K issue will not have a material adverse
effect on the Company's financial position, results of operations or cash flows.
See "Outlook" for additional risks and uncertainties associated with Y2K
compliance.
EURO CONVERSION
See the Company's 1998 Annual Report, which is incorporated by reference into
the Company's Form 10-K for the fiscal year ended December 31, 1998, for a
summary of the Euro Conversion. The Company does not anticipate that the use of
the Euro will materially affect the Company's foreign exchange and hedging
activities or the Company's use of derivative instruments, or will have a
material adverse effect on operating results or cash flows. However, the
ultimate effect of the Euro on competition due to price transparency and foreign
currency risk cannot yet be determined and may have an adverse effect, possibly
material, on the Company's operations, financial position or cash flows.
Conversely, the Euro may also have positive effects, such as reduced foreign
currency risk, lower costs due to reduced hedging activity, and reduced prices
of raw materials resulting from increased competition among suppliers. The
Company continues to monitor and assess the potential risks imposed by the Euro.
OUTLOOK
NMHG: NMHG anticipates that industry lift truck bookings in the Americas market
will decline moderately from record 1998 levels during the last six months of
1999. The European lift truck market is also expected to decline in the next six
months from record demand in 1998. Demand in the Asia-Pacific market, which
currently represents less than 5 percent of sales, is expected to recover
modestly. NMHG anticipates that it will continue to expand its retail operations
and to incur related costs over the next six months, but expects strong
operational leadership will improve the performance of its company-owned
dealerships over time.
As previously announced, NACCO Industries, Inc. and NMHG entered into a
memorandum of understanding on May 17, 1999 with Nissan Motor Co., Ltd. for the
purchase by NMHG of Nissan's global lift truck business. NMHG estimates that the
value of this transaction is likely to be in excess of $300 million, a portion
of which will be assumed by NMHG's 50 percent-owned joint venture in Japan. The
transaction is expected to be completed later this year.
30
<PAGE> 31
OUTLOOK - continued
HOUSEWARES: HB*PS has been asked by Wal+Mart to help it develop and produce
a new line of General Electric-branded kitchen electric and garment care
appliances to be sold exclusively at Wal+Mart. HB*PS expects to work closely
with Wal+Mart to maximize the GE brand's potential in the small electric
appliance market over the next several years. HB*PS' Mexican facilities are
expected to continue increasing production capacity this year as additional
operations are transferred from the U.S. HB*PS also expects increased cost
benefits from reduced start-up inefficiencies in its Mexican facilities and from
the phase down of operations in North Carolina. HB*PS also expects the start-up
of its new distribution center in Memphis to result in improved distribution
efficiencies in the second half of 1999.
NACoal: NACoal expects that customer demand for lignite over the remaining six
months of 1999 will be consistent with 1998 levels. NACoal also expects royalty
income in the second half of 1999 to be moderately below first half levels.
The statements contained in "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and elsewhere throughout this Form 10-Q
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 which speak only as of the date hereof. 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 includes without limitation:
NMHG: (1) changes in demand for lift trucks and related service parts on a
worldwide basis, (2) changes in sales prices, (3) delays in delivery or
increased 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 other returns of
products, (7) costs related to acquisitions and integration of retail
dealerships, (8) increased competition, foreign currency risk and/or operating
costs resulting from the introduction of the Euro and (9) delays, costs
associated with the acquisition, or failure to consummate the acquisition, of
Nissan's worldwide lift truck business.
HOUSEWARES: (1) delays or increased costs of transferring additional operations
into Mexican plants during 1999, (2) bankruptcy of or loss of major retail
customers, (3) changes in the sales price, product mix or levels of consumer
purchases of kitchenware and small electric appliances, (4) 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 HB*PS
buys, operates and/or sells products, (5) product liability or other litigation,
warranty claims or other returns of products, (6) increased competition from
Chinese imports, (7) weather conditions that would affect the number of
customers visiting KCI stores and (8) start-up costs related to the development
and production of General Electric-branded products for Wal+Mart.
NACoal: (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) costs to pursue international mining
opportunities and (4) delays or increases in the cost of the start-up of the Red
Hills lignite mine.
31
<PAGE> 32
OUTLOOK - continued
Y2K COMPLIANCE: (1) delays in the completion of the Company's Y2K compliance
plan within the expected time frames disclosed above, (2) inability of the
Company's suppliers or vendors (including utility providers and financial
institutions) to be Y2K ready when necessary, (3) inability of NACoal's
customers to be Y2K ready when necessary, (4) increased costs to address Y2K
issues, (5) the Company's inability to replace vendors that are not, or that
cannot give assurances that they will be, Y2K ready and (6) the Company's
inability to formulate in a timely manner any required contingency plan that
will solve or mitigate problems arising from any of the foregoing.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
------------------------------------------------------------------
See pages 37 and 38 of the Company's 1998 Annual Report, which is incorporated
by reference into the Company's Form 10-K for the fiscal year ended December 31,
1998, for a discussion of its derivative hedging policies and use of financial
instruments. There have been no material changes in the Company's market risk
exposures since December 31, 1998.
32
<PAGE> 33
PART II
Item 1 Legal Proceedings
- ------ -----------------
None
Item 2 Change in Securities and Use of Proceeds
- ------ ----------------------------------------
None
Item 3 Defaults Upon Senior Securities
- ------ -------------------------------
None
Item 4 Submission of Matters to a Vote of Security Holders
- ------ ---------------------------------------------------
The following matters were submitted to a vote of security
holders at the Annual Meeting of Stockholders held May 12, 1999,
with the results indicated:
<TABLE>
<CAPTION>
Outstanding Shares Entitled to Vote Number of Votes
------------------------------------------------ ---------------------
<S> <C>
Class A Common 6,502,766
Class B Common 16,512,970
---------------------
23,015,736
=====================
</TABLE>
<TABLE>
<CAPTION>
Item A. Election of eleven directors for the ensuing year.
Votes Votes
Director Nominee For Withheld Total
------------------------------ --------------- --------------- ----------------
<S> <C> <C> <C>
Owsley Brown II 20,368,763 39,281 20,408,044
Robert M. Gates 20,368,522 39,522 20,408,044
Leon J. Hendrix, Jr. 20,368,663 39,381 20,408,044
Dennis W. LaBarre 20,343,477 64,567 20,408,044
Richard de J. Osborne 20,367,062 40,982 20,408,044
Alfred M. Rankin, Jr. 20,368,422 39,622 20,408,044
Ian M. Ross 20,366,801 41,243 20,408,044
John C. Sawhill 20,366,752 41,292 20,408,044
Britton T. Taplin 20,367,202 40,842 20,408,044
David F. Taplin 20,368,822 39,222 20,408,044
John F. Turben 20,368,461 39,583 20,408,044
Item B. Confirming the appointment of Arthur Andersen LLP as the
independent certified public accountants of the Company for the current fiscal
year.
For Against Abstain Total
------------------ ------------------- -------------------- ------------------
20,373,259 19,498 15,287 20,408,044
</TABLE>
ITEM 5 OTHER INFORMATION
- ------ -----------------
None
ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K
- ------ --------------------------------
(a) Exhibits. See Exhibit Index on page 35 of this
quarterly report on Form 10-Q.
(b) Reports on Form 8-K. On May 18, 1999, the Company filed
a report on Form 8-K, (dated May 17, 1999), reporting
under Item 5 that it had issued a press release
announcing the execution of a memorandum of
understanding with Nissan.
33
<PAGE> 34
Signature
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
NACCO Industries, Inc.
------------------------------------
(Registrant)
Date August 12, 1999 /s/ Kenneth C. Schilling
-------------------------- ------------------------------------
Kenneth C. Schilling
Vice President and Controller
(Authorized Officer and Principal
Financial and Accounting Officer)
34
<PAGE> 35
Exhibit Index
Exhibit
Number* Description of Exhibits
- ------- -----------------------
(27) Financial Data Schedule
*Numbered in accordance with Item 601 of Regulation S-K.
35
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-1-1999
<PERIOD-END> JUN-30-1999
<CASH> 24
<SECURITIES> 0
<RECEIVABLES> 293
<ALLOWANCES> 0
<INVENTORY> 365
<CURRENT-ASSETS> 720
<PP&E> 616
<DEPRECIATION> 579
<TOTAL-ASSETS> 1,943
<CURRENT-LIABILITIES> 559
<BONDS> 0
0
0
<COMMON> 8
<OTHER-SE> 526
<TOTAL-LIABILITY-AND-EQUITY> 1,943
<SALES> 1,258
<TOTAL-REVENUES> 1,258
<CGS> 1,018
<TOTAL-COSTS> 1,018
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 21
<INCOME-PRETAX> 47
<INCOME-TAX> 18
<INCOME-CONTINUING> 29
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> (1)
<NET-INCOME> 28
<EPS-BASIC> 3.44
<EPS-DILUTED> 3.44
</TABLE>
