Exhibit 99
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For Immediate Release
Wednesday, April 23, 2003
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NACCO INDUSTRIES, INC. ANNOUNCES
2003 FIRST QUARTER RESULTS
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Mayfield Heights, Ohio, April 23, 2003 - NACCO Industries, Inc. (NC-NYSE)
today announced net income for the first quarter of 2003 of $4.1 million, or
$0.50 per share, compared to net income for the first quarter of 2002 of $6.3
million, or $0.77 per share.
The adoption of SFAS No. 143, "Accounting for Asset Retirement
Obligations," which became effective January 1, 2003 and is reported as a
cumulative effect of accounting change, resulted in a net benefit of $1.2
million, or $0.15 per share, for the first quarter of 2003.
On a quarter-to-quarter comparable basis, income before the cumulative
effect of accounting change for the first quarter of 2003 was $2.9 million, or
$0.35 per share, compared to $6.3 million, or $0.77 per share, for the first
quarter of 2002. Revenues for the first quarter of 2003 were $619.9 million
compared to $576.5 million for the same period in 2002.
Discussion of Results
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NMHG Wholesale
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NMHG Wholesale reported net income of $4.7 million on revenues of $382.6
million for the first quarter of 2003 compared to net income of $5.6 million on
revenues of $327.7 million for the first quarter of 2002.
Revenues for the first quarter of 2003 improved 17 percent, compared to the
first quarter of 2002, primarily due to increased volumes of lift trucks and
service parts in the Americas as a result of strong demand and due to favorable
currency movements in Europe. Increased revenues were partially offset by a
higher proportion of lower-priced lift trucks sold in the first quarter of 2003
compared to the first quarter of 2002.
Lift truck shipments increased 17 percent to 17,452 units for the first
quarter of 2003 compared to a relatively low 14,971 units for the first quarter
of 2002 and decreased 3 percent compared to 18,032 units shipped in the fourth
quarter of 2002. NMHG Wholesale's worldwide backlog was 17,300 units at the end
of the first quarter of 2003 compared to 16,300 units at the end of the first
quarter of 2002 and 18,800 units at the end of the fourth quarter of 2002. NMHG
Wholesale's bookings in the first quarter of 2003 were affected, like many
capital goods manufacturers, by pre-war purchasing conservatism by customers.
Operating income improved for the first quarter of 2003, compared to the
first quarter of 2002, as a result of increased volumes of lift trucks and
service parts and the positive impact of cost reduction and expense control
programs. However, these benefits were partially offset by increased interest
expense resulting from the refinancing of NMHG's debt in the second quarter of
2002. In addition, NMHG Wholesale recorded a $1.9 million tax benefit in the
first quarter of 2002 that did not recur in 2003.
NMHG Wholesale - Outlook
------------------------
NMHG Wholesale expects overall lift truck shipments to increase modestly in
2003 compared to 2002. While market prospects are currently unusually uncertain,
lift truck markets in the Americas are currently anticipated to improve in the
second half of 2003 while markets in Europe and Asia-Pacific are currently
expected to remain relatively flat.
NMHG Wholesale expects that results in 2003 will be affected by ongoing
costs for a product development program that is expected to mature in 2004-2006
and additional costs related to the Lenoir, North Carolina, and Irvine,
Scotland, manufacturing restructuring program announced in December 2002.
NMHG Retail
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NMHG Retail operations, which include the required elimination of
intercompany transactions between NMHG Wholesale and wholly owned retail
dealerships, incurred a net loss of $1.4 million for the first quarter of 2003
compared to a net loss of $1.3 million for the first quarter of 2002. The net
loss for the first quarter of 2003 includes $1.1 million, or $0.8 million
after-tax, net of a tax benefit of $0.3 million, of additional wind-down costs
related to dealers which have been sold. Excluding this charge, NMHG Retail's
net loss for the first quarter of 2003 was $0.6 million. This improvement,
compared to the first quarter of 2002, was primarily the result of improved
performance in Asia-Pacific.
Revenues for the first quarter of 2003 were $36.4 million compared to $44.1
million for the first quarter of 2002. The decline in revenues was primarily due
to the sale in January 2003 of NMHG Retail's only wholly owned U.S. dealer.
Revenues increased at NMHG Retail's remaining operations in Europe in the first
quarter of 2003, compared to the first quarter of 2002, primarily as a result of
currency effects.
NMHG Retail - Outlook
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NMHG Retail expects to continue its programs to improve the performance of
its wholly owned dealerships in 2003 as part of its program to reach at least
break-even results.
NACCO Housewares Group
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NACCO Housewares Group, which includes NACCO's Hamilton Beach/Proctor-Silex
and Kitchen Collection subsidiaries, reported revenues of $116.0 million and a
net loss of $3.4 million for the first quarter of 2003 compared to revenues of
$121.6 million and a net loss of $2.8 million for the first quarter of 2002.
Revenues at Hamilton Beach/Proctor-Silex were lower, compared to the first
quarter of 2002, due to a weak retail environment in the United States and
Canada and the company's strategic decision to withdraw, beginning in the fourth
quarter of 2001, from selected low-margin, opening price point business.
Kitchen Collection reported lower comparable store sales for the first
quarter of 2003, compared to the first quarter of 2002, due to a weak retail
environment which was further compounded by severe winter weather. Kitchen
Collection operated 172 stores at March 31, 2003 compared to 167 stores at March
31, 2002.
Net loss increased in the first quarter of 2003, compared to the first
quarter of 2002, due primarily to a $1.5 million, or $0.9 million after-tax, net
of a tax benefit of $0.6 million, write-off of accounts receivable, primarily
Kmart pre-petition bankruptcy receivables, at Hamilton BeachoProctor-Silex,
partially offset by an improved sales mix of higher margin products and lower
manufacturing costs at Hamilton BeachoProctor-Silex. Net loss increased at
Kitchen Collection due primarily to lower sales.
NACCO Housewares Group - Outlook
--------------------------------
Hamilton Beach/Proctor-Silex expects that programs begun in 2002 designed
to reduce operating costs and enhance manufacturing and distribution
efficiencies will improve results in 2003. However, revenues for 2003 could be
affected by the continuing weak retail environment and by Kmart's store closing
program. Hamilton Beach/Proctor-Silex believes lower sales to Kmart could be
offset by incremental sales to other customers and to other distribution
channels and through sales of innovative new products, such as the Hamilton
Beach(R) BrewStation(TM) coffeemaker. In addition, Hamilton Beach/Proctor-Silex
expects to continue improving working capital efficiency.
Kitchen Collection expects to continue programs designed to enhance
operating results, including improving its merchandise mix, closing
non-performing stores and prudently opening new Kitchen Collection(R) and
Gadgets & More(R) stores, expanding the offerings of Hamilton Beach and
Proctor-Silex-branded products and aggressively managing its costs during 2003.
North American Coal
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North American Coal's income before the cumulative effect of accounting
change for the first quarter of 2003 was $4.6 million compared to $6.4 million
for the first quarter of 2002. A total of 9.2 million tons of lignite coal was
delivered during the first quarter of 2003, compared to 8.3 million tons of
lignite coal delivered in the first quarter of 2002. North American Coal's
Florida Dragline Operations delivered 2.8 million cubic yards of limerock in the
first quarter of 2003 compared to 2.4 million cubic yards of limerock in the
first quarter of 2002.
Income before the cumulative effect of accounting change for the first
quarter of 2003 was lower primarily due to a $3.3 million, or $2.2 million
after-tax, net of a tax expense of $1.1 million, decrease in liquidated damages
payments received by the Mississippi Lignite Mining Company in the first quarter
of 2003, compared to the first quarter of 2002 and increased maintenance costs
due to the timing of repairs at certain mines. These factors were partially
offset by increased lignite coal volume primarily at the Mississippi Lignite
Mining Company.
North American Coal - Outlook
-----------------------------
North American Coal anticipates increased lignite coal deliveries in 2003,
compared to 2002, primarily due to an expected increase in lignite coal
production at the Mississippi Lignite Mining Company. However, certain favorable
items which improved financial results in 2002, including liquidated damages
payments and related settlements, are not expected to be repeated in 2003.
Furthermore, the adoption of SFAS No. 143 is expected to reduce future operating
results modestly compared to operating results in 2002.
In the first quarter of 2003, North American Coal reached an agreement on a
new limerock mining contract which has minimum deliveries of 3.0 million cubic
yards annually. This operation is expected to begin late in 2003. North American
Coal expects to continue its efforts to develop other new domestic mining
projects.
Cumulative Effect of Accounting Change
--------------------------------------
The Bellaire Corporation, a wholly owned non-operating subsidiary, which
manages ongoing liabilities related largely to the Company's closed Eastern U.S.
underground coal mines, recorded a $2.5 million after-tax benefit to net income
due to the adoption of SFAS No. 143 in the first quarter of 2003. This benefit
was partially offset by a $1.3 million after-tax charge recognized at North
American Coal, also for the adoption of SFAS No. 143, in the first quarter of
2003. The net cumulative effect of this accounting change was an increase in net
income of $1.2 million.
# # # #
In conjunction with this news release, the management of NACCO Industries,
Inc. will host a conference call on Thursday, April 24, 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 at the NACCO Web site.
For certain pre-tax disclosures included in this earnings release, the
resulting after-tax amount and the related income tax expense or benefit have
been included. This after-tax amount might be considered a non-GAAP measure in
accordance with Regulation G. Management believes that after-tax information is
useful in analyzing the Company's net income (loss).
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) customer acceptance of, changes in costs of, or
delays in the development of new products, (10) acquisitions and/or dispositions
of dealerships by NMHG, (11) the impact 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 impact of the war in Iraq.
NACCO Housewares Group: (1) changes in the sales prices, product mix or
levels of consumer purchases of kitchenware and small electric appliances, (2)
bankruptcy of or loss of major retail customers or suppliers, (3) changes in
costs of raw materials or sourced products, (4) delays in delivery or the
unavailability of raw materials or key component parts, (5) exchange rate
fluctuations, changes in the foreign import tariffs and monetary policies and
other changes in the regulatory climate in the foreign countries in which
Hamilton Beach/Proctor-Silex buys, operates and/or sells products, (6) product
liability, regulatory actions or other litigation, warranty claims or returns of
products, (7) increased competition, (8) customer acceptance of, changes in
costs of, or delays in the development of new products, (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 impact of the war in
Iraq.
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 and develop new
mining opportunities and (5) changes in the U.S. economy, in U.S. regulatory
requirements 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, sells, services and leases a
full line of lift trucks and service 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 providers. For more information about
NACCO Industries, visit the Company's Web site at www.nacco.com.
# # #
FOR FURTHER INFORMATION, CONTACT:
NACCO Industries, Inc.
Ira Gamm
Manager-Investor Relations
(440) 449-9676
UNAUDITED CONSOLIDATED FINANCIAL AND OPERATING HIGHLIGHTS
NACCO INDUSTRIES, INC. AND SUBSIDIARIES
Three Months Ended
March 31
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2003 2002
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(In millions, except per share data)
Total revenues $ 619.9 $ 576.5
Income before cumulative effect of accounting change $ 2.9 $ 6.3
Cumulative effect of accounting change 1.2 -
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Net income $ 4.1 $ 6.3
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Earnings before cumulative effect of accounting change per share $ 0.35 $ 0.77
Cumulative effect of accounting change 0.15 -
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Earnings per share $ 0.50 $ 0.77
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Cash dividends per share $ 0.245 $ 0.235
Average shares outstanding 8.202 8.196
(All amounts are subject to annual audit by independent public auditors.)
UNAUDITED CONSOLIDATED FINANCIAL AND OPERATING HIGHLIGHTS
NACCO INDUSTRIES, INC. AND SUBSIDIARIES
Three Months Ended
March 31
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2003 2002
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(In millions)
Revenues
NACCO Materials Handling Group Wholesale $ 382.6 $ 327.7
NACCO Materials Handling Group Retail (incl. elims.) 36.4 44.1
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NACCO Materials Handling Group 419.0 371.8
NACCO Housewares Group 116.0 121.6
North American Coal 84.9 83.1
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619.9 576.5
Depreciation, depletion and amortization
NACCO Materials Handling Group Wholesale 6.6 7.6
NACCO Materials Handling Group Retail (incl. elims.) 1.9 3.0
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NACCO Materials Handling Group 8.5 10.6
NACCO Housewares Group 3.2 4.2
North American Coal 10.7 9.8
NACCO and Other 0.1 -
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22.5 24.6
Operating profit (loss)
NACCO Materials Handling Group Wholesale 13.7 7.0
NACCO Materials Handling Group Retail (incl. elims.) (1.0) 0.2
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NACCO Materials Handling Group 12.7 7.2
NACCO Housewares Group (3.8) (2.6)
North American Coal 11.8 15.0
NACCO and Other (0.1) (0.8)
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20.6 18.8
Other income (expense)
NACCO Materials Handling Group Wholesale (7.0) (2.1)
NACCO Materials Handling Group Retail (incl. elims.) (1.1) (1.9)
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NACCO Materials Handling Group (8.1) (4.0)
NACCO Housewares Group (1.9) (2.0)
North American Coal (6.3) (7.4)
NACCO and Other (0.5) 0.6
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Income before income taxes, minority interest
and cumulative effect of accounting change 3.8 6.0
Income tax provision (benefit) 1.2 (0.1)
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Income before minority interest and cumulative
effect of accounting change 2.6 6.1
Minority interest 0.3 0.2
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Income (loss) before cumulative effect of accounting change
NACCO Materials Handling Group Wholesale 4.7 5.6
NACCO Materials Handling Group Retail (incl. elims.) (1.4) (1.3)
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NACCO Materials Handling Group 3.3 4.3
NACCO Housewares Group (3.4) (2.8)
North American Coal 4.6 6.4
NACCO and Other (1.6) (1.6)
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2.9 6.3
Cumulative effect of accounting change, net of $ 0.7 tax expense 1.2 -
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Net income $ 4.1 $ 6.3
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(All amounts are subject to annual audit by independent public auditors.)
UNAUDITED SELECTED FINANCIAL INFORMATION
NMHG HOLDING CO.**
Three Months Ended
March 31
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2003 2002
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(In millions)
Detail of other income (expense):
Interest expense $ (8.6) $ (5.5)
Interest income 0.6 0.6
Income (loss) on interest rate swap agreements (0.4) 0.3
Income from unconsolidated affiliates 0.7 1.0
Other income (expense)- net (0.4) (0.4)
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Total other income (expense) $ (8.1) $ (4.0)
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Capital expenditures $ 3.5 $ 6.2
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(Unaudited) (Audited)
March 31 December 31
2003 2002
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Cash and cash equivalents $ 48.1 $ 54.9
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Debt
Senior notes $247.2 $ 247.1
Revolving credit agreements 14.0 31.3
Capital lease agreements and other debt 45.1 46.4
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Total debt $306.3 $ 324.8
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Stockholder's equity $382.2 $ 382.3
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** NMHG Holding Co. is a wholly owned subsidiary of NACCO Industries, Inc.
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.)