Exhibit 99
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For Immediate Release
Wednesday, July 23, 2003
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NACCO INDUSTRIES, INC. ANNOUNCES
2003 SECOND QUARTER RESULTS
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Mayfield Heights, Ohio, July 23, 2003 - NACCO Industries, Inc. (NC-NYSE)
today announced net income for the second quarter of 2003 of $9.6 million, or
$1.17 per share, compared to net income for the second quarter of 2002 of $2.8
million, or $0.34 per share. Revenues for the second quarter of 2003 were $637.5
million compared to $609.6 million for the second quarter of 2002.
Net income for the six months ended June 30, 2003, including a net benefit
of $1.2 million, or $0.15 per share, for the cumulative effect of a change in
accounting for mine-closing obligations in the first quarter of 2003, was $13.7
million, or $1.67 per share, compared to net income of $9.1 million, or $1.11
per share, for the first six months of 2002. Revenues for the first six months
of 2003 were $1.3 billion compared to $1.2 billion for the first six months of
2002.
Discussion of Results
---------------------
NMHG Wholesale
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NMHG Wholesale reported net income of $6.3 million on revenues of $389.2
million for the second quarter of 2003 compared to net income of $2.5 million on
revenues of $347.2 million for the second quarter of 2002.
Revenues for the second quarter of 2003 increased 12 percent, compared to
the second quarter of 2002, primarily due to increased unit volume in each
geographic division, a shift in mix to higher-priced lift trucks and favorable
foreign currency movements. Lift truck shipments increased 5 percent to 16,961
units for the second quarter of 2003 compared to 16,135 units for the second
quarter of 2002. NMHG Wholesale's worldwide backlog increased to 19,400 units at
the end of the second quarter of 2003 compared to 17,500 units at the end of the
second quarter of 2002 and 17,300 units at the end of the first quarter of 2003.
Net income improved in the second quarter of 2003, compared to the second
quarter of 2002, primarily as a result of a shift in mix of products sold to
higher margin units and increased unit and parts volume, partially offset by
unfavorable foreign currency effects largely as a result of the weakening of the
U.S. dollar against the euro. In the second quarter of 2003, net income also
benefited from a gain on the sale of idle property, a favorable adjustment
related to product liability experience and the lack of a charge which occurred
in the second quarter of 2002 for expenses related to interest rate swap
agreements which were subsequently terminated. These favorable items were
partially offset by increased product development costs and by costs related to
the Lenoir, North Carolina, and Irvine, Scotland, manufacturing restructuring
program announced in December 2002.
For the six months ended June 30, 2003, NMHG Wholesale reported net income
of $11.0 million on revenues of $771.8 million compared to net income of $8.1
million on revenues of $674.9 million for the first six months of 2002.
NMHG Wholesale - Outlook
------------------------
NMHG Wholesale expects overall lift truck shipments to increase moderately
in the second half of 2003 compared to the second half of 2002. While global
market prospects are currently more uncertain than usual, lift truck markets in
the Americas are anticipated to improve in the second half of 2003 while markets
in Europe and Asia-Pacific are expected to remain relatively flat.
NMHG Wholesale expects that results in the second half of 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's Wholesale and wholly owned retail
dealerships, reported a lower net loss of $0.6 million for the second quarter of
2003 on revenues of $39.2 million compared to a net loss of $3.7 million on
revenues of $41.5 million for the second quarter of 2002. The decline in
revenues was primarily due to the sale in January 2003 of NMHG Retail's Americas
operations.
The improvement in operating results was largely due to stronger operating
results in Asia-Pacific's retail operations.
For the six months ended June 30, 2003, NMHG Retail had a net loss of $2.0
million on revenues of $75.6 million compared to a net loss of $5.0 million on
revenues of $85.6 million for the first six months of 2002.
NMHG Retail - Outlook
---------------------
NMHG Retail expects to continue its programs to improve the performance of
its wholly owned dealerships in 2003 as part of its objective to achieve and
sustain at least break-even results.
NACCO Housewares Group
----------------------
NACCO Housewares Group, which includes NACCO's Hamilton Beach/Proctor-Silex
and Kitchen Collection subsidiaries, reported net income of $1.5 million for the
second quarter of 2003 on revenues of $118.3 million compared to net income of
$0.4 million for the second quarter of 2002 on revenues of $134.5 million.
Revenues in the second quarter of 2003 at Hamilton Beach/Proctor-Silex
declined compared to the second quarter of 2002 due to reduced consumer spending
as a result of the weak economy and certain retail customers' inventory
reduction programs. At Kitchen Collection, decreased revenues primarily
resulting from reduced customer visits due to the weak economy was partially
offset by revenues from an increase in the number of stores from 170 stores at
June 30, 2002 to 178 stores at June 30, 2003.
Net income at NACCO Housewares Group declined modestly in the second
quarter of 2003, compared to the second quarter of 2002, after excluding a $3.6
million, or $2.2 million after-tax, net of a tax benefit of $1.4 million,
write-off of Kmart pre-petition bankruptcy receivables in the second quarter of
2002. The decline resulted from reduced sales volume at both Hamilton
Beach/Proctor-Silex and Kitchen Collection, partially offset by the results of
continued emphasis on cost reduction and profit improvement programs.
For the six months ended June 30, 2003, NACCO Housewares Group had a net
loss of $1.9 million on revenues of $234.3 million compared to a net loss of
$2.4 million on revenues of $256.1 million for the first six months of 2002.
NACCO Housewares Group - Outlook
--------------------------------
NACCO Housewares Group is cautiously optimistic that the current weak
retail environment will improve in the second half of 2003.
Hamilton Beach/Proctor-Silex continues to implement programs, begun in
earlier years, which are designed to reduce operating costs and enhance
manufacturing and distribution efficiencies. Also, Hamilton Beach/Proctor-Silex
believes that new product offerings, such as the Hamilton Beach(R)
BrewStation(TM) coffeemaker, the Hamilton Beach(R) WaffleStix(TM) waffle baker
and an expanded line of TrueAir(TM) home health products, will enhance revenues
over the remainder of 2003.
Kitchen Collection expects to continue programs designed to enhance its
operating results, including improving its merchandise mix, closing
non-performing stores and prudently opening new stores, expanding the offerings
of Hamilton Beach(R) and Proctor-Silex(R)-branded products and aggressively
managing its costs.
North American Coal
-------------------
North American Coal reported net income of $3.2 million for the second
quarter of 2003 compared to net income of $4.2 million for the second quarter of
2002. A total of 8.1 million tons of lignite coal was delivered during the
second quarter of 2003 compared to 7.7 million tons of lignite coal delivered in
the second quarter of 2002. North American Coal's Florida dragline operations
delivered 2.4 million cubic yards of limerock in the second quarter of 2003
compared to 2.8 million cubic yards of limerock in the second quarter of 2002.
Net income for the second quarter of 2003 declined compared to the second
quarter of 2002, primarily due to a non-comparable gain of $1.4 million, or $0.8
million after-tax, net of a tax provision of $0.6 million, from the sale of
undeveloped coal reserves that was included in net income in the second quarter
of 2002. In addition, at the Mississippi Lignite Mining Company net income
declined as a result of decreased demand for lignite coal due to mild spring
weather and increased operating costs. This decrease in net income was partially
offset by increased deliveries of lignite coal at the company's project mining
subsidiaries.
During the second quarter of 2003, North American Coal refinanced $15.8
million of equipment operating leases at the Mississippi Lignite Mine with
collateralized debt.
For the six months ended June 30, 2003, North American Coal's income before
the cumulative effect of a change in accounting was $7.8 million, compared to
$10.6 million for the first six months of 2002.
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.
Further, maintenance requirements and the adoption of SFAS No. 143 will continue
to increase costs in 2003 compared to 2002.
As outlined in NACCO Industries, Inc.'s Form 10-Q for the quarter ended
March 31, 2003, the company expects to deconsolidate its project mining
subsidiaries pursuant to the requirements of FASB Interpretation No. 46,
"Consolidation of Variable Interest Entities." Subsequent to the adoption of
this Interpretation, the company will account for its 100 percent equity
ownership in these entities using the equity method of accounting. This change
in accounting, however, will not affect the consolidated reported net earnings
of the company.
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.
# # #
In conjunction with this news release, the management of NACCO Industries,
Inc. will host a conference call on Thursday, July 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, and (11) the uncertain impact on the economy or the
public's confidence in general from terrorist activities and the impact of the
situation 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 situation
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, marketer and distributor 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 Six Months Ended
June 30 June 30
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2003 2002 2003 2002
---------- ---------- ------------ ------------
(In millions, except per share data)
Total revenues $ 637.5 $ 609.6 $ 1,257.4 $ 1,186.1
Income before cumulative effect of accounting change $ 9.6 $ 2.8 $ 12.5 $ 9.1
Cumulative effect of accounting change, net-of-tax --- --- 1.2 ---
---------- ---------- ------------ ------------
Net income $ 9.6 $ 2.8 $ 13.7 $ 9.1
========== ========== ============ ============
Earnings before cumulative effect of accounting change per share $ 1.17 $ 0.34 $ 1.52 $ 1.11
Cumulative effect of accounting change, net-of-tax --- --- 0.15 ---
---------- ---------- ------------ ------------
Earnings per share $ 1.17 $ 0.34 $ 1.67 $ 1.11
========== ========== ============ ============
Cash dividends per share $ 0.255 $ 0.245 $ 0.500 $ 0.480
Average shares outstanding 8.204 8.197 8.203 8.196
(All amounts are subject to annual audit by independent auditors.)
UNAUDITED CONSOLIDATED FINANCIAL AND OPERATING HIGHLIGHTS
NACCO INDUSTRIES, INC. AND SUBSIDIARIES
Three Months Ended Six Months Ended
June 30 June 30
--------------------- -----------------------
2003 2002 2003 2002
-------- ---------- ---------- ----------
(In millions)
Revenues
NACCO Materials Handling Group Wholesale $ 389.2 $ 347.2 $ 771.8 $ 674.9
NACCO Materials Handling Group Retail (incl. elims.) 39.2 41.5 75.6 85.6
-------- ---------- ---------- ----------
NACCO Materials Handling Group 428.4 388.7 847.4 760.5
NACCO Housewares Group 118.3 134.5 234.3 256.1
North American Coal 90.7 86.3 175.6 169.4
NACCO and Other 0.1 0.1 0.1 0.1
-------- ---------- ---------- ----------
637.5 609.6 1,257.4 1,186.1
Depreciation, depletion and amortization
NACCO Materials Handling Group Wholesale 6.6 7.6 13.2 15.2
NACCO Materials Handling Group Retail (incl. elims.) 2.4 2.5 4.3 5.5
-------- ---------- ---------- ----------
NACCO Materials Handling Group 9.0 10.1 17.5 20.7
NACCO Housewares Group 3.2 2.9 6.4 7.1
North American Coal 11.1 9.1 21.8 18.9
NACCO and Other --- --- 0.1 ---
-------- ---------- ---------- ----------
23.3 22.1 45.8 46.7
Operating profit (loss)
NACCO Materials Handling Group Wholesale 15.5 13.8 29.2 20.8
NACCO Materials Handling Group Retail (incl. elims.) 0.1 (2.8) (0.9) (2.6)
-------- ---------- ---------- ----------
NACCO Materials Handling Group 15.6 11.0 28.3 18.2
NACCO Housewares Group 4.4 3.2 0.6 0.6
North American Coal 9.6 12.4 21.4 27.4
NACCO and Other --- (1.0) (0.1) (1.8)
-------- ---------- ---------- ----------
29.6 25.6 50.2 44.4
Other income (expense)
NACCO Materials Handling Group Wholesale (6.3) (10.2) (13.3) (12.3)
NACCO Materials Handling Group Retail (incl. elims.) (1.0) (3.0) (2.1) (4.9)
-------- ---------- ---------- ----------
NACCO Materials Handling Group (7.3) (13.2) (15.4) (17.2)
NACCO Housewares Group (1.8) (2.6) (3.7) (4.6)
North American Coal (6.4) (6.8) (12.7) (14.2)
NACCO and Other (0.6) 0.7 (1.1) 1.3
-------- ---------- ---------- ----------
Income before income taxes, minority interest
and cumulative effect of accounting change 13.5 3.7 17.3 9.7
Income tax provision 4.1 1.2 5.3 1.1
-------- ---------- ---------- ----------
Income before minority interest and cumulative
effect of accounting change 9.4 2.5 12.0 8.6
Minority interest 0.2 0.3 0.5 0.5
-------- ---------- ---------- ----------
Income (loss) before cumulative effect of accounting change
NACCO Materials Handling Group Wholesale 6.3 2.5 11.0 8.1
NACCO Materials Handling Group Retail (incl. elims.) (0.6) (3.7) (2.0) (5.0)
-------- ---------- ---------- ----------
NACCO Materials Handling Group 5.7 (1.2) 9.0 3.1
NACCO Housewares Group 1.5 0.4 (1.9) (2.4)
North American Coal 3.2 4.2 7.8 10.6
NACCO and Other (0.8) (0.6) (2.4) (2.2)
-------- ---------- ---------- ----------
9.6 2.8 12.5 9.1
Cumulative effect of accounting change, net of $ 0.7 tax expense --- --- 1.2 ---
-------- ---------- ---------- ----------
Net income $ 9.6 $ 2.8 $ 13.7 $ 9.1
======== ========== ========== ==========
(All amounts are subject to annual audit by independent auditors.)
SELECTED FINANCIAL INFORMATION
NMHG HOLDING CO.*
(Unaudited) (Unaudited)
Three Months Ended Six Months Ended
June 30 June 30
--------------------- -------------------
2003 2002 2003 2002
--------- --------- -------- --------
(In millions)
Detail of other income (expense):
Interest expense $ (8.7) $ (8.6) $ (17.3) $ (14.1)
Interest income 0.7 0.6 1.3 1.2
Loss on interest rate swap agreements (0.3) (3.1) (0.7) (2.8)
Income from unconsolidated affiliates 1.0 0.1 1.7 1.1
Other income (expense) - net --- (2.2) (0.4) (2.6)
--------- --------- -------- --------
Total other income (expense) $ (7.3) $ (13.2) $ (15.4) $ (17.2)
========= ========= ======== ========
Capital expenditures $ 7.3 $ 2.9 $ 10.8 $ 9.1
========= ========= ======== ========
(Unaudited) (Audited)
June 30 December 31
2003 2002
--------- ---------
Cash and cash equivalents $ 28.7 $ 54.9
========= =========
Debt
Senior notes $ 247.3 $ 247.1
Revolving credit agreements 15.6 31.3
Capital lease agreements and other debt 44.1 46.4
--------- ---------
Total debt $ 307.0 $ 324.8
========= =========
Stockholder's equity $ 402.6 $ 382.3
========= =========
* NMHG Holding Co., a wholly owned subsidiary of NACCO Industries, Inc., issued
$250.0 million of 10% Senior Notes, on May 9, 2002 which are registered with the
SEC.
(All amounts are subject to annual audit by independent auditors.)