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, 1996 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 (Address of principal executive offices) Zip code Registrant's telephone number, including area code (216) 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, 1996: 7,277,460 Number of shares of Class B Common Stock outstanding at July 31, 1996: 1,707,066
NACCO INDUSTRIES, INC. TABLE OF CONTENTS Part I. FINANCIAL INFORMATION Item 1 Financial Statements Consolidated Balance Sheets - June 30, 1996 and December 31, 1995 Unaudited Consolidated Statements of Income for the Three Months Ended and Six Months Ended June 30, 1996 and 1995 Unaudited Consolidated Statements of Cash Flows for the Six Months Ended June 30, 1996 and 1995 Notes to Unaudited Consolidated Financial Statements Item 2 Management's Discussion and Analysis of Results of Operations and Financial Condition Part II. OTHER INFORMATION Item 6 Exhibits and Reports on Form 8-K Exhibit Index
PART I Item 1 - Financial Statements CONSOLIDATED BALANCE SHEETS NACCO INDUSTRIES, INC. AND SUBSIDIARIES <TABLE> <CAPTION> (Unaudited) (Audited) JUNE 30 DECEMBER 31 1996 1995 --------- ----------- ASSETS (In thousands) Current Assets <S> <C> <C> Cash and cash equivalents ...................... $ 29,817 $ 30,924 Accounts receivable, net ....................... 268,094 284,235 Inventories .................................... 411,970 388,819 Prepaid expenses and other ..................... 24,139 18,027 ---------- ---------- 734,020 722,005 Other Assets ....................................... 39,166 38,289 Property, Plant and Equipment, Net ................. 541,379 534,477 Deferred Charges Goodwill, net .................................. 458,188 465,051 Deferred costs and other ....................... 57,617 56,725 Deferred income taxes .......................... 14,980 17,290 ---------- ---------- 530,785 539,066 ---------- ---------- Total Assets ... $1,845,350 $1,833,837 ========== ========== </TABLE> See notes to unaudited consolidated financial statements.
CONSOLIDATED BALANCE SHEETS NACCO INDUSTRIES, INC. AND SUBSIDIARIES <TABLE> <CAPTION> (Unaudited) (Audited) JUNE 30 DECEMBER 31 1996 1995 ---------- ---------- (In thousands) LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities <S> <C> <C> Accounts payable ................................. $ 249,687 $ 250,662 Revolving credit agreements ...................... 101,373 95,736 Current maturities of long-term obligations ...... 20,245 19,864 Income taxes ..................................... -- 4,672 Accrued payroll .................................. 27,094 29,827 Other current liabilities ........................ 122,923 122,961 ---------- ---------- 521,322 523,722 Notes Payable - not guaranteed by the parent company ............................. 320,513 320,200 Obligations of Project Mining Subsidiaries - not guaranteed by the parent company or its North American Coal subsidiary ............ 341,775 346,472 Self-insurance Reserves and Other .................... 229,697 229,302 Minority Interest .................................... 40,793 44,014 Stockholders' Equity Common stock: Class A, par value $1 per share, 7,277,063 shares outstanding (1995 - 7,256,971 shares outstanding) ........................ 7,277 7,257 Class B, par value $1 per share, convertible into Class A on a one-for-one basis, 1,707,463 shares outstanding (1995 - 1,709,453 shares outstanding) ...... 1,707 1,709 Capital in excess of par value ................... 4,600 3,591 Retained income .................................. 370,196 350,301 Foreign currency translation adjustment and other ..................................... 7,470 7,269 ---------- ---------- 391,250 370,127 ---------- ---------- Total Liabilities and Stockholders' Equity .... $1,845,350 $1,833,837 ========== ========== </TABLE> See notes to unaudited consolidated financial statements.
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME NACCO INDUSTRIES, INC. AND SUBSIDIARIES <TABLE> <CAPTION> THREE MONTHS ENDED SIX MONTHS ENDED JUNE 30 JUNE 30 ============================ ============================ 1996 1995 1996 1995 ----------- ----------- ----------- ----------- (In thousands, except per share data) <S> <C> <C> <C> <C> Net sales ...................................................... $ 560,535 $ 514,288 $ 1,118,069 $ 1,014,254 Other operating income ......................................... 356 3,311 2,299 5,716 ----------- ----------- ----------- ----------- Total Revenues ........................................ 560,891 517,599 1,120,368 1,019,970 Cost of sales .................................................. 452,558 417,890 904,731 819,510 ----------- ----------- ----------- ----------- Gross Profit .......................................... 108,333 99,709 215,637 200,460 Selling, administrative and general expenses ........................................... 69,820 64,099 141,737 127,201 Amortization of goodwill ....................................... 3,776 3,422 7,551 6,845 ----------- ----------- ----------- ----------- Operating Profit ...................................... 34,737 32,188 66,349 66,414 Other income (expense) Interest income ............................................ 383 1,898 684 2,291 Interest expense ........................................... (12,991) (12,385) (25,991) (26,407) Other - net ................................................ 3,409 963 4,220 1,257 ----------- ----------- ----------- ----------- (9,199) (9,524) (21,087) (22,859) ----------- ----------- ----------- ----------- Income Before Income Taxes, Minority Interest and Extraordinary Charge .......................... 25,538 22,664 45,262 43,555 Provision for income taxes ..................................... 10,946 7,448 17,603 15,326 ----------- ----------- ----------- ----------- Income Before Minority Interest and Extraordinary Charge ................. 14,592 15,216 27,659 28,229 Minority interest .............................................. (580) (484) (728) (692) ----------- ----------- ----------- ----------- Income Before Extraordinary Charge .................... 14,012 14,732 26,931 27,537 Extraordinary charge, net-of-tax ............................... -- -- -- (1,280) ----------- ----------- ----------- ----------- Net Income ............................................ $ 14,012 $ 14,732 $ 26,931 $ 26,257 =========== =========== =========== =========== Per Share: Income Before Extraordinary Charge ......................... $ 1.56 $ 1.64 $ 3.00 $ 3.07 Extraordinary charge, net-of-tax ........................... -- -- -- (0.14) ----------- ----------- ----------- ----------- Net Income ................................................. $ 1.56 $ 1.64 $ 3.00 $ 2.93 =========== =========== =========== =========== Dividends per share ........................................ $ 0.1875 $ 0.1800 $ 0.3675 $ 0.3500 =========== =========== =========== =========== See notes to unaudited consolidated financial statements ....... </TABLE>
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS NACCO INDUSTRIES, INC. AND SUBSIDIARIES <TABLE> <CAPTION> SIX MONTHS ENDED JUNE 30 ---------------------- 1996 1995 --------- --------- (In thousands) Operating Activities <S> <C> <C> Net income ............................................ $ 26,931 $ 26,257 Adjustments to reconcile net income to net cash provided (used) by operating activities: Extraordinary charge, net-of-tax .................. -- 1,280 Depreciation, depletion and amortization .......... 41,756 39,603 Deferred income taxes ............................. (3,338) 443 Other non-cash items .............................. (1,687) 4,328 Working Capital Changes: Accounts receivable ............................... 15,111 (167) Inventories ....................................... (23,530) (92,597) Other current assets .............................. 73 3,014 Accounts payable .................................. 1,628 22,071 Accrued income taxes .............................. (4,197) (9,275) Other liabilities ................................. (7,488) (13,143) --------- --------- Net cash provided (used) by operating activities 45,259 (18,186) Investing Activities Expenditures for property, plant and equipment ........ (41,803) (33,801) Proceeds from the sale of assets ...................... 687 422 Additional investment in subsidiary ................... (1,805) -- --------- --------- Net cash used by investing activities .......... (42,921) (33,379) Financing Activities Additions to long-term obligations and revolving credit .................................... 55,459 236,915 Reductions of long-term obligations and revolving credit .................................... (51,500) (177,061) Additions to obligations of project mining subsidiaries ........................................ 38,939 26,855 Reductions of obligations of project mining subsidiaries ........................................ (43,152) (25,892) Cash dividends paid ................................... (3,301) (3,137) Capital grants ........................................ 1,461 1,863 Other - net ........................................... (508) 1,159 --------- --------- Net cash provided (used) by financing activities (2,602) 60,702 Effect of exchange rate changes on cash ............... (843) 1,681 --------- --------- Cash and Cash Equivalents Increase (decrease) for the period .................... (1,107) 10,818 Balance at the beginning of the period ................ 30,924 19,541 --------- --------- Balance at the end of the period ...................... $ 29,817 $ 30,359 ========= ========= </TABLE> See notes to unaudited consolidated financial statements.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS NACCO INDUSTRIES, INC. AND SUBSIDIARIES (Tabular Dollars in Millions, Except Per Share Data) Note A - Basis of Presentation NACCO Industries, Inc. ("NACCO") is a holding company with four operating subsidiaries: The North American Coal Corporation ("NACoal"), NACCO Materials Handling Group, Inc. ("NMHG"), Hamilton Beach/Proctor-Silex, Inc. ("HBPS"), and The Kitchen Collection, Inc. ("KCI"). The accompanying unaudited consolidated financial statements include the accounts of NACCO and its majority owned subsidiaries (NACCO Industries, Inc. and Subsidiaries - 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 with 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 for complete financial statements. 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, 1996 and the results of its operations for the three and six month periods and cash flows for the six month periods ended June 30, 1996 and 1995 have been included. Operating results for the six month period ended June 30, 1996, are not necessarily indicative of the results that may be expected for the year ended December 31, 1996. 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 year ended December 31, 1995.
Note B - Inventories <TABLE> <CAPTION> Inventories are summarized as follows: June 30 December 31 1996 1995 -------- -------- Manufacturing inventories: Finished goods and service parts <S> <C> <C> NACCO Materials Handling Group ............... $ 139.2 $ 117.4 Hamilton Beach/Proctor-Silex ................. 71.8 43.3 -------- -------- 211.0 160.7 -------- -------- Raw materials and work in process NACCO Materials Handling Group ............... 156.1 182.0 Hamilton Beach/Proctor-Silex ................. 15.5 15.7 -------- -------- 171.6 197.7 -------- -------- LIFO reserve NACCO Materials Handling Group ............... (16.6) (13.3) Hamilton Beach/Proctor-Silex ................. (.6) (.3) -------- -------- (17.2) (13.6) -------- -------- Total manufacturing inventories ................ 365.4 344.8 North American Coal: Coal ......................................... 11.2 10.6 Mining supplies .............................. 19.2 19.1 Retail inventories - Kitchen Collection ............ 16.2 14.3 ======== ======== $ 412.0 $ 388.8 ======== ======== </TABLE> The cost of manufacturing inventories has been determined by the last-in, first-out (LIFO) method for 66 percent of such inventories as of June 30, 1996 and December 31, 1995. Note C - Extraordinary Charge The 1995 extraordinary charge of $1.3 million, net of $0.9 million in tax benefits, relates to the write off of deferred financing fees associated with NMHG's former revolving credit facility and senior term loan which was replaced by a new long-term credit agreement.
Item 2 - Management's Discussion and Analysis of Results of Operations and Financial Condition (Tabular Dollars in Millions, Except Per Share Data) FINANCIAL SUMMARY NACCO's four operating subsidiaries function in distinct business environments, and the results of operations and financial condition are best discussed at the subsidiary level as presented below. The results for "North American Coal" have been adjusted to exclude the previously combined results of Bellaire Corporation, a non-operating subsidiary of NACCO. <TABLE> <CAPTION> THREE MONTHS ENDED SIX MONTHS ENDED JUNE 30 JUNE 30 ---------------------------- ------------------------------ 1996 1995 1996 1995 -------- ---------- ---------- ---------- REVENUES <S> <C> <C> <C> <C> NACCO Materials Handling Group ..................... $ 407.6 $ 370.2 $ 828.4 $ 733.3 Hamilton Beach/Proctor-Silex ....................... 82.7 79.7 150.6 146.7 North American Coal ................................ 56.7 55.3 115.8 115.8 Kitchen Collection ................................. 14.6 13.5 27.5 25.6 NACCO and Other .................................... .1 .3 .2 .3 Eliminations ....................................... (.8) (1.4) (2.1) (1.7) -------- ---------- ---------- ---------- $ 560.9 $ 517.6 $ 1,120.4 $ 1,020.0 ======== ========== ========== ========== AMORTIZATION OF GOODWILL NACCO Materials Handling Group ..................... $ 2.8 $ 2.7 $ 5.7 $ 5.4 Hamilton Beach/Proctor-Silex ....................... .9 .7 1.8 1.4 Kitchen Collection ................................. .1 -- .1 -- -------- ---------- ---------- ---------- $ 3.8 $ 3.4 $ 7.6 $ 6.8 ======== ========== ========== ========== OPERATING PROFIT (LOSS) NACCO Materials Handling Group ..................... $ 25.4 $ 21.9 $ 51.9 $ 45.5 Hamilton Beach/Proctor-Silex ....................... 4.7 3.6 3.7 5.0 North American Coal ................................ 7.8 9.2 17.6 21.0 Kitchen Collection ................................. (.6) (.3) (1.8) (.8) NACCO and Other .................................... (2.6) (2.3) (5.1) (4.3) -------- ---------- ---------- ---------- $ 34.7 $ 32.1 $ 66.3 $ 66.4 ======== ========== ========== ========== OPERATING PROFIT (LOSS) EXCLUDING GOODWILL AMORTIZATION NACCO Materials Handling Group ..................... $ 28.2 $ 24.6 $ 57.6 $ 50.9 Hamilton Beach/Proctor-Silex ....................... 5.6 4.3 5.5 6.4 North American Coal ................................ 7.8 9.2 17.6 21.0 Kitchen Collection ................................. (.5) (.3) (1.7) (.8) NACCO and Other .................................... (2.6) (2.3) (5.1) (4.3) -------- ---------- ---------- ---------- $ 38.5 $ 35.5 $ 73.9 $ 73.2 ======== ========== ========== ========== INTEREST EXPENSE NACCO Materials Handling Group ..................... $ (7.9) $ (8.0) $ (16.0) $ (15.5) Hamilton Beach/Proctor-Silex ....................... (1.5) (1.7) (2.8) (3.3) North American Coal ................................ -- (.4) (.1) (.8) Kitchen Collection ................................. (.1) (.1) (.3) (.2) NACCO and Other .................................... (.4) (.8) (.8) (1.6) Eliminations ....................................... .3 .9 .8 1.9 -------- ---------- ---------- ---------- (9.6) (10.1) (19.2) (19.5) Project mining subsidiaries ........................ (3.4) (2.3) (6.8) (6.9) -------- ---------- ---------- ---------- $ (13.0) $ (12.4) $ (26.0) $ (26.4) ======== ========== ========== ========== </TABLE>
FINANCIAL SUMMARY - continued <TABLE> <CAPTION> THREE MONTHS ENDED SIX MONTHS ENDED JUNE 30 JUNE 30 ------------------------- ------------------------- 1996 1995 1996 1995 ------- ------- ------- ------- OTHER-NET, INCOME (EXPENSE) <S> <C> <C> <C> <C> NACCO Materials Handling Group ........................... $ (.1) $ 1.0 $ .4 $ 1.1 Hamilton Beach/Proctor-Silex ............................. (.1) (.1) (.1) (.2) North American Coal ...................................... 3.2 -- 3.5 .2 NACCO and Other .......................................... .4 .1 .4 .2 ------- ------- ------- ------- $ 3.4 $ 1.0 $ 4.2 $ 1.3 ======= ======= ======= ======= NET INCOME (LOSS) Before Extraordinary Charge NACCO Materials Handling Group ........................... $ 9.6 $ 8.9 $ 21.8 $ 18.6 Hamilton Beach/Proctor-Silex ............................. 1.7 1.1 1.0 .9 North American Coal ...................................... 5.3 5.4 10.1 10.6 Kitchen Collection ....................................... (.5) (.3) (1.2) (.6) NACCO and Other .......................................... (1.6) .1 (4.1) (1.3) Minority interest ........................................ (.5) (.5) (.7) (.7) ------- ------- ------- ------- 14.0 14.7 26.9 27.5 Extraordinary charge, net-of-tax ......................... -- -- -- (1.3) ------- ------- ------- ------- $ 14.0 $ 14.7 $ 26.9 $ 26.2 ======= ======= ======= ======= DEPRECIATION, DEPLETION AND AMORTIZATION EXPENSE NACCO Materials Handling Group $ 16.6 $ 16.2 Hamilton Beach/Proctor-Silex 9.1 8.0 North American Coal 1.0 .8 Kitchen Collection .5 .5 NACCO and Other .1 .1 ------- ------- 27.3 25.6 Project mining subsidiaries 14.5 14.0 ------- ------- $ 41.8 $ 39.6 ======= ======= CAPITAL EXPENDITURES NACCO Materials Handling Group $ 26.0 $ 17.9 Hamilton Beach/Proctor-Silex 3.9 4.3 North American Coal .7 1.3 Kitchen Collection .7 .9 NACCO and Other .1 .1 ------- ------- 31.4 24.5 Project mining subsidiaries 10.4 9.3 ------- ------- $ 41.8 $ 33.8 ======= ======= </TABLE> <TABLE> <CAPTION> JUNE 30 DECEMBER 31 1996 1995 ---------- ---------- TOTAL ASSETS <S> <C> <C> NACCO Materials Handling Group ..... $ 1,086.9 $ 1,052.2 Hamilton Beach/Proctor-Silex ....... 295.6 288.0 North American Coal ................ 37.7 40.7 Kitchen Collection ................. 24.3 25.1 NACCO and Other .................... 53.0 62.7 ---------- -------- 1,497.5 1,468.7 Project mining subsidiaries ........ 433.1 433.3 ---------- -------- 1,930.6 1,902.0 Consolidating eliminations ......... (85.2) (68.2) ---------- -------- $ 1,845.4 $ 1,833.8 ========== ======== </TABLE>
NORTH AMERICAN COAL 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 2.1 billion tons with 1.3 billion tons committed to electric utility customers pursuant to long-term contracts. In November 1995, NACoal began providing dragline mining services ("Florida dragline operations") for a limerock quarry near Miami, Florida. The operating results for the Florida dragline operations are included in other mining operations. FINANCIAL REVIEW NACoal's three project mining subsidiaries (Coteau, Falkirk and Sabine) 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 impacted by increases and decreases in operating costs, as well as by sales tons. 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 income before taxes and net income. Tons sold by NACoal's four operating lignite mines were as follows for the three and six months ended June 30: <TABLE> <CAPTION> THREE MONTHS SIX MONTHS ------------------------ ------------------------ 1996 1995 1996 1995 ---- ---- ---- ---- <S> <C> <C> <C> <C> Coteau Properties ................................... 3.4 3.3 7.6 7.4 Falkirk Mining ...................................... 1.5 1.6 3.4 3.5 Sabine Mining ....................................... .9 .7 1.8 1.6 Red River Mining .................................... .2 .3 .3 .4 --- ---- ---- ---- 6.0 5.9 13.1 12.9 === ==== ==== ==== </TABLE> 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 -------------------------- ------------------------- 1996 1995 1996 1995 ------- ------ ------ ------ Revenues <S> <C> <C> <C> <C> Project mines ....................................... $ 52.1 $ 49.2 $ 106.7 $ 104.0 Other mining operations ............................. 4.0 3.9 7.6 7.2 ------- ------ ------ ------ 56.1 53.1 114.3 111.2 Royalties and other ................................. .6 2.2 1.5 4.6 ======= ====== ====== ====== $ 56.7 $ 55.3 $ 115.8 $ 115.8 ======= ====== ====== ====== Income before taxes Project mines ....................................... $ 5.2 $ 5.2 $ 11.5 $ 11.6 Other mining operations ............................. .5 .5 1.1 .7 ------- ------ ------ ------ Total from operating mines .............................. 5.7 5.7 12.6 12.3 Royalty and other income, net ........................... 4.1 3.1 5.6 5.8 Headquarters expense .................................... (1.8) (1.3) (3.2) (3.0) ------- ------ ------ ------ 8.0 7.5 15.0 15.1 Provision for taxes ..................................... 2.7 2.1 4.9 4.5 ------- ------ ------ ------ Net income .......................................... $ 5.3 $ 5.4 $ 10.1 $ 10.6 ======= ====== ====== ====== </TABLE>
NORTH AMERICAN COAL - continued FINANCIAL REVIEW - continued Second Quarter of 1996 Compared with Second Quarter of 1995 The following schedule details the components of the changes in revenues, income before taxes and net income for the three months ended June 30: <TABLE> <CAPTION> Income Before Net Revenues Taxes Income --------- --------- --------- <S> <C> <C> <C> 1995 $ 55.3 $ 7.5 $ 5.4 Increase (decrease) in 1996 from: Project mines Tonnage volume ................................................. 2.3 .1 -- Mix of tons sold ............................................... (.1) (.1) (.1) Pass-through costs ............................................. .8 -- -- Other mining operations Tonnage volume ................................................. (.1) .6 .4 Mix of tons sold ............................................... .1 .1 .1 Operating costs ................................................ -- (1.0) (.6) Other income ................................................... -- .4 .2 ----- ---- ---- Changes from operating mines ...................................... 3.0 .1 -- Escrow payments ................................................... -- 2.8 1.8 Management fees ................................................... (1.0) (1.0) (.7) Royalties ......................................................... (.6) (.7) (.5) Other ............................................................. -- (.2) -- Headquarters expense .............................................. -- (.5) (.3) Differences between effective and statutory tax rates ............................................ -- -- (.4) ----- ---- ---- 1996 $ 56.7 $ 8.0 $ 5.3 ===== ==== ==== </TABLE> The favorable volume variance at the other mining operations was due to the Florida dragline operations which began production in November of 1995, somewhat offset by reduced volume at Red River. The increase in operating costs at the other mining operations was due to the costs associated with operating the Florida dragline operations along with increased costs at Red River due to lower production volumes. The reduction in revenues from royalties and other income was due to the receipt of the final management fee relating to the Trinity project in 1995 along with the lower level of royalties received relating to former coal properties. Offsetting the impact on net income from the reduced management fees and royalties was the receipt during the second quarter of 1996 of a nonrecurring final escrow payment for the sale of a previously owned eastern underground mining property.
NORTH AMERICAN COAL - continued FINANCIAL REVIEW - continued First Six Months of 1996 Compared with First Six Months of 1995 The following schedule details the components of the changes in revenues, income before taxes and net income for the six months ended June 30: <TABLE> <CAPTION> Income Before Net Revenues Taxes Income ---------- --------- --------- <S> <C> <C> <C> 1995 $ 115.8 $ 15.1 $ 10.6 Increase (decrease) in 1996 from: Project mines Tonnage volume 3.1 .2 .1 Mix of tons sold (.1) (.1) (.1) Pass-through costs (.3) --- --- Other mining operations Tonnage volume --- 1.4 .9 Mix of tons sold .3 .3 .2 Average selling price .1 .1 --- Operating costs --- (1.9) (1.2) Other income --- .4 .3 ---------- --------- --------- Changes from operating mines 3.1 .4 .2 Escrow payments --- 2.9 1.9 Management fees (2.0) (2.0) (1.3) Royalties (1.1) (1.1) (.7) Other --- (.1) (.1) Headquarters expense --- (.2) (.1) Differences between effective and statutory tax rates --- --- (.4) ---------- --------- --------- 1996 $ 115.8 $ 15.0 $ 10.1 ========== ========= ========= </TABLE> The impact of the Florida dragline operations somewhat offset by reduced tonnage volume at Red River resulted in a favorable volume variance at the other mining operations. The increase in operating costs at the other mining operations was due to the operating costs of the Florida dragline operations and, to a lesser degree, increased costs at Red River. The receipt of the final management fee relating to the Trinity project in 1995 along with reduced royalties resulted in lower royalty revenues in 1996. Offsetting the unfavorable effect of the reduced management fees and royalty income was the receipt of the nonrecurring final escrow payment from the sale of a previously owned eastern underground mining property.
NORTH AMERICAN COAL - continued FINANCIAL REVIEW - continued Other Income and Expense and Income Taxes Items of other income (expense) for the three and six months ended June 30: <TABLE> <CAPTION> Three Months Six Months --------------------- ---------------------- 1996 1995 1996 1995 --------- --------- --------- --------- Interest income <S> <C> <C> <C> <C> Project mining subsidiaries .................. $ .3 $ .3 $ .5 $ .6 Other mining operations ...................... .1 .6 .3 1.0 --------- --------- --------- --------- $ .4 $ .9 $ .8 $ 1.6 ========= ========= ========= ========= Interest expense Project mining subsidiaries .................. $ (3.4) $ (2.3) $ (6.8) $ (6.9) Other mining operations ...................... -- ( .4) (.1) (.8) --------- --------- --------- --------- $ (3.4) $ (2.7) $ (6.9) $ (7.7) ========= ========= ========= ========= Other-net Project mining subsidiaries .................. $ -- $ -- $ -- $ .1 Other mining operations ...................... 3.2 -- 3.5 .1 --------- --------- --------- --------- $ 3.2 $ -- $ 3.5 $ .2 ========= ========= ========= ========= Effective tax rate 33.6% 28.4% 32.8% 29.5% </TABLE> The increase in other-net relates to the previously discussed nonrecurring final payment received in the second quarter of 1996. The increase in NACoal's effective tax rate in 1996 compared with 1995 is due primarily to the receipt in the second quarter of 1995 of a nonrecurring tax refund. LIQUIDITY AND CAPITAL RESOURCES NACoal has in place a $50.0 million revolving credit facility. The expiration date of this facility (which currently is September 2000) can be extended one additional year, on an annual basis, upon the mutual consent of NACoal and the bank group. NACoal had $50.0 million of its revolving credit facility available at June 30, 1996. The financing of the project mining subsidiaries, which is guaranteed by the utility customers, is comprised of long-term equipment leases, notes payable and non-interest-bearing advances from customers. The obligations of the project mining subsidiaries do not impact the short- or long-term liquidity of the company and are without recourse to NACCO or NACoal. These arrangements allow the project mining subsidiaries to pay dividends in amounts equal to their retained earnings.
NORTH AMERICAN COAL - continued LIQUIDITY AND CAPITAL RESOURCES (continued) NACoal's capital structure, excluding the project mining subsidiaries, is presented below: <TABLE> <CAPTION> June 30 December 31 1996 1995 ------- ------- <S> <C> <C> Investment in Project Mining Subsidiaries ............ $ 2.4 $ 3.3 Other Net Tangible Assets ............................ 9.6 (2.8) ------- ------- Total Tangible Assets ............................ 12.0 .5 Advances to Parent Company ........................... 3.3 14.9 Debt Related to Parent Advances ...................... -- -- Other Debt ........................................... (.2) (.3) ------- ------- Total Debt ....................................... (.2) (.3) ======= ======= Stockholder's Equity ................................. $ 15.1 $ 15.1 ======= ======= Debt to Total Capitalization 1% 2% </TABLE>
NACCO MATERIALS HANDLING GROUP 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 -------------------------- -------------------------- 1996 1995 1996 1995 -------- -------- -------- -------- Revenues <S> <C> <C> <C> <C> Americas ................................................ $ 269.5 $ 240.5 $ 541.7 $ 490.0 Europe, Africa and Middle East .......................... 113.4 107.3 234.7 203.0 Asia-Pacific ............................................ 24.7 22.4 52.0 40.3 -------- -------- -------- -------- $ 407.6 $ 370.2 $ 828.4 $ 733.3 ======== ======== ======== ======== Operating profit Americas ................................................ $ 15.6 $ 13.0 $ 31.7 $ 29.9 Europe, Africa and Middle East .......................... 10.8 8.3 21.7 14.0 Asia-Pacific ............................................ (1.0) .6 (1.5) 1.6 -------- -------- -------- -------- $ 25.4 $ 21.9 $ 51.9 $ 45.5 ======== ======== ======== ======== Operating profit excluding goodwill amortization Americas ................................................ $ 17.6 $ 15.1 $ 35.7 $ 33.9 Europe, Africa and Middle East .......................... 11.6 8.9 23.3 15.4 Asia-Pacific ............................................ (1.0) .6 (1.4) 1.6 -------- -------- -------- -------- $ 28.2 $ 24.6 $ 57.6 $ 50.9 ======== ======== ======== ======== Net income before extraordinary charge ...................... $ 9.6 $ 8.9 $ 21.8 $ 18.6 Extraordinary charge ........................................ -- -- -- (1.3) -------- -------- -------- -------- Net income .............................................. $ 9.6 $ 8.9 $ 21.8 $ 17.3 ======== ======== ======== ======== </TABLE>
NACCO MATERIALS HANDLING GROUP - continued FINANCIAL REVIEW - continued Second Quarter of 1996 Compared With Second Quarter of 1995 The following schedule details the components of the changes in revenues, operating profit and net income for the second quarter of 1996 compared with the second quarter of 1995: <TABLE> <CAPTION> Operating Net Revenues Profit Income ---------- ----------- --------- <S> <C> <C> <C> 1995 $ 370.2 $ 21.9 $ 8.9 Increase (Decrease) in 1996 from: Unit volume ................................................... 21.2 4.5 2.9 Sales mix ..................................................... 10.6 (10.3) (6.7) Average sales price ........................................... 4.2 4.2 2.7 Service parts ................................................. 5.3 2.4 1.6 Foreign currency .............................................. (3.9) 5.9 3.8 Manufacturing cost ............................................ -- .7 .4 Other operating expense ....................................... -- (3.9) (2.5) Other income and expense ...................................... -- -- (.7) Differences between effective and statutory tax rates ..................................... -- -- (.8) ----- ----- ---- 1996 $ 407.6 $ 25.4 $ 9.6 ===== ======== ======= </TABLE> Unit volumes in the second quarter of 1996 increased 6 percent in the Americas, 18 percent in Europe and 4 percent in Asia-Pacific compared with the same period in 1995. While industry demand, as measured by retail bookings, is down almost 13 percent in the Americas, unit shipments increased due to a reduction in backlog and increased market share. In Europe, the growth in shipments resulted from an overall increase in market share and increased market size in most markets. NMHG's backlog of orders at June 30, 1996 was approximately 14,400 forklift truck units compared to 17,300 and 21,200 forklift truck units at March 31, 1996 and December 31, 1995, respectively. Product sales mix favorably impacted revenues due to increased sales of higher value product classes. Margins were negatively affected by a shift in sales to lower margin countries in Europe. The favorable impact from pricing was due to the price increases which became effective in Europe in late 1995 and early 1996, offset somewhat by unfavorable pricing in Asia-Pacific due to competitive pressures. The improvement in service parts was concentrated mainly in the Americas. Operating profit was positively affected by currency because of the strength of the dollar and pound sterling relative to the yen. Other operating expenses increased in 1996 primarily due to marketing expenditures related to increased volumes and new product launches, increased parts distribution cost and inflation.
NACCO MATERIALS HANDLING GROUP - continued FINANCIAL REVIEW - continued First Six Months of 1996 Compared With First Six Months of 1995 The following schedule details the components of the changes in revenues, operating profit and net income for the first six months of 1996 compared with the first six months of 1995: <TABLE> <CAPTION> Operating Net Revenues Profit Income ---------- ----------- --------- <S> <C> <C> <C> 1995 $ 733.3 $ 45.5 $ 17.3 Increase (Decrease) in 1996 from: Unit volume .................................................... 62.4 11.8 7.7 Sales mix ...................................................... 17.3 (14.4) (9.4) Average sales price ............................................ 8.8 8.8 5.7 Service parts .................................................. 10.0 4.1 2.7 Foreign currency ............................................... (3.4) 8.7 5.7 Manufacturing cost ............................................. -- (2.6) (1.9) Other operating expense ........................................ -- (10.0) (6.3) Other income and expense ....................................... -- -- (1.1) Differences between effective and statutory tax rates ...................................... -- -- .1 Extraordinary charge ........................................... -- -- 1.3 ---- ---- --- 1996 $ 828.4 $ 51.9 $ 21.8 ======== ========= ======== </TABLE> Unit volumes for the first six months of 1996 increased 7 percent in the Americas, 24 percent in Europe and 25 percent in Asia-Pacific compared with the same period in 1995. The increased volumes in the Americas was due to a reduction in backlog and improved market share. Improvement in overall European market size and market share resulted in increased unit shipments. Product sales mix favorably impacted revenues due to increased sales of higher value product classes. Margins were negatively affected by a shift in sales to lower margin countries in Europe. The improvement in service parts sales was primarily from sales in the Americas of service parts for both Hyster and Yale lift trucks and competitors' lift trucks. The strength of the dollar and pound sterling relative to the yen favorably impacted operating profit. Increased product costs partially offset by lower purchased materials costs and higher factory throughput in the Americas resulted in increased manufacturing costs. Other operating expenses increased in 1996 due to higher marketing expenditures related to increased volumes and new product launches along with general inflation.
NACCO MATERIALS HANDLING GROUP- continued FINANCIAL REVIEW - continued Other Income and Expense and Income Taxes Below is a detail of other income (expense) for the three and six months ended June 30: <TABLE> <CAPTION> Three Months Six Months ------------------------- -------------------------- 1996 1995 1996 1995 ---- ----- ----- ----- <S> <C> <C> <C> <C> Interest income ................................. $ .2 $ .4 $ .2 $ .7 Interest expense ................................ (7.9) (8.0) (16.0) (15.5) Other-net ....................................... (.1) 1.0 .4 1.1 ---- ----- ----- ----- $ (7.8) $ (6.6) $ (15.4) $ (13.7) ==== ===== ===== ===== Effective tax rate 45.2% 41.7% 40.3% 41.6% </TABLE> In the second quarter of 1995, NMHG recognized a nonrecurring tax refund which reduced the effective tax rate compared with the same period in 1996. During the first quarter of 1996, NMHG recorded a favorable income tax adjustment from the resolution of tax issues from prior years which reduced the effective tax rate for the first six months of 1996 compared with 1995. Extraordinary Charge The 1995 extraordinary charge of $1.3 million, net of $0.9 million in tax benefits, relates to the write off of deferred financing fees associated with NMHG's former revolving credit facility and senior term loan which was replaced by a new long-term credit agreement. LIQUIDITY AND CAPITAL RESOURCES Expenditures for property, plant and equipment were $26.0 million during the first six months of 1996. It is estimated that NMHG's capital expenditures for the remainder of 1996 will be approximately $25.9 million. The principal sources of financing for these capital expenditures are internally generated funds, bank borrowings and government assistance grants. The company believes it can meet all of its current and long-term commitments and operating needs from operating cash flows and funds available under revolving credit agreements. At June 30, 1996 NMHG had available $60.0 million of its $350.0 million revolving credit facility. In addition, NMHG has separate facilities totalling $31.4 million, of which $17.7 million was available at June 30, 1996. NMHG's capital structure is presented below: <TABLE> <CAPTION> JUNE 30 DECEMBER 31 1996 1995 -------- -------- <S> <C> <C> Total Tangible Assets .............................................................. $ 316.4 $ 305.2 Goodwill at Cost ................................................................... 439.6 438.9 -------- -------- Total Assets Before Goodwill Amortization ..................................... 756.0 744.1 Accumulated Goodwill Amortization ............................................. (77.0) (71.2) Total Debt .................................................................. (319.9) (331.9) -------- ------- Stockholders' Equity ............................................................... $ 359.1 $ 341.0 ======== ======== Debt to Total Capitalization 47% 49% </TABLE>
HAMILTON BEACH/PROCTOR-SILEX HBPS, 80 percent-owned by NACCO, is a leading manufacturer of small electric appliances. 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 increase significantly for the fall holiday selling season. FINANCIAL REVIEW The results of operations for HBPS were as follows for the three and six months ended June 30: <TABLE> <CAPTION> Three Months Six Months -------------------------- ---------------------------- 1996 1995 1996 1995 ------- ------- -------- -------- <S> <C> <C> <C> <C> Revenues ............................................. $ 82.7 $ 79.7 $ 150.6 $ 146.7 Operating profit ..................................... $ 4.7 $ 3.6 $ 3.7 $ 5.0 Operating profit excluding goodwill amortization ............................ $ 5.6 $ 4.3 $ 5.5 $ 6.4 Net income ........................................... $ 1.7 $ 1.1 $ 1.0 $ .9 </TABLE> Second Quarter of 1996 Compared With Second Quarter of 1995 The following schedule details the components of the changes in revenues, operating profit and net income for the second quarter of 1996 compared with the second quarter of 1995: <TABLE> <CAPTION> Operating Net Revenues Profit Income ------------ ------------ --------- <S> <C> <C> <C> 1995 $ 79.7 $ 3.6 $ 1.1 Increase (Decrease) in 1996 from: Unit volume and sales mix ...................................... 4.5 1.6 1.1 Average sales price ............................................ (1.5) (1.5) (1.1) Manufacturing cost ............................................. -- 2.0 1.3 Other operating expense ........................................ -- (1.0) (.6) Other income and expense ....................................... -- -- .2 Differences between effective and statutory tax rates ..................................... -- -- (.3) ---- ---- ---- 1996 $ 82.7 $ 4.7 $ 1.7 ========= ========= ======== </TABLE>
HAMILTON BEACH/PROCTOR-SILEX - continued FINANCIAL REVIEW - continued The favorable unit volume and sales mix variance is due mainly to higher unit sales of blenders, coffeemakers, can openers and indoor grills somewhat offset by reduced sales of toasters, mixers, irons, and toaster ovens. In addition, increased sales of products in the "better" product category somewhat offset by reduced sales in the "good" and "best" product categories generated a favorable sales mix. A competitive pricing environment, due primarily to low-cost Chinese imports, caused the unfavorable effect on operating results due to price. Reductions in raw materials costs, somewhat offset by higher overhead costs, resulted in favorable manufacturing costs in 1996. The reductions in raw materials costs included the favorable impact from the acquisition in 1995 of SOTEC S.A. de C.V. which supplies plastic parts to HBPS's Mexican operations. The unfavorable variance from other operating expenses was primarily caused by higher marketing expenses and increased amortization related to the 1995 acquisition of SOTEC. First Six Months of 1996 Compared With First Six Months of 1995 The following schedule details the components of the changes in revenues, operating profit and net income for the first six months of 1996 compared with the first six months of 1995: <TABLE> <CAPTION> Operating Net Revenues Profit Income ------------ ------------ --------- <S> <C> <C> <C> 1995 $ 146.7 $ 5.0 $ .9 Increase (Decrease) in 1996 from: Unit volume and sales mix 6.5 1.7 1.2 Average sales price (2.6) (2.6) (1.7) Manufacturing cost --- 1.8 1.2 Other operating expense --- (2.2) (1.5) Other income and expense --- --- .4 Differences between effective and statutory tax rates --- --- .5 ------------ ------------ --------- 1996 $ 150.6 $ 3.7 $ 1.0 ============ ============ ========= </TABLE> Increased sales of blenders, coffeemakers, can openers and indoor grills offset by lower toaster, iron, toaster oven and mixer sales resulted in a favorable impact on unit volume and sales mix. During the first quarter the impact from volume increases resulted in a minimal improvement on operating profit due to a sales mix shift from products in the "best" and "good" product categories to the "better" category. The average sales price, manufacturing cost and other operating expense variances were caused by the same factors as explained for the second quarter.
HAMILTON BEACH/PROCTOR-SILEX - continued FINANCIAL REVIEW - continued Other Income and Expense and Income Taxes Below is a detail of other income (expense) for the three and six months ended June 30: <TABLE> <CAPTION> Three Months Six Months ---------------------------- --------------------------- 1996 1995 1996 1995 -------- ------- ------- ------- <S> <C> <C> <C> <C> Interest expense ............................... $ (1.5) $ (1.7) $ (2.8) $ (3.3) Other-net ...................................... (.1) (.1) (.1) (.2) ------- ------- ------- ------- $ (1.6) $ (1.8) $ (2.9) $ (3.5) ======= ======= ======= ======= Effective tax rate ............................. 44.1% 35.4% (30.3%) 33.5% </TABLE> The reduction in interest expense in 1996 was due primarily to lower average borrowings in 1996 compared with 1995. In the second quarter of 1995, HBPS's effective tax rate was reduced due to the utilization of foreign tax credits that were not repeated in 1996. These credits were received as a result of the repatriation in 1995 of foreign earnings previously taxed at a rate in excess of the U.S. statutory rate. HBPS's effective tax rate for the first six months of 1996 was substantially affected by the favorable impact from the recognition in the first quarter of 1996 of federal income tax adjustments relating to the resolution of tax issues from prior years. LIQUIDITY AND CAPITAL RESOURCES Expenditures for property, plant and equipment were $3.9 million during the first six months of 1996 and are estimated to be $19.0 million for the remainder of 1996. The primary purpose of these expenditures is to increase manufacturing capacity and efficiency and to acquire tooling for new and existing products. In April 1996, HBPS announced plans to build a new facility in Mexico to increase manufacturing capacity for new and existing products. Construction of the new plant, located in Saltillo, Coahuila, has begun with production targeted to begin in the first quarter of 1997. These expenditures are funded primarily from internally generated funds and short-term borrowings. HBPS's credit agreement provides for a revolving credit facility ("Facility") that permits advances up to $135.0 million. At June 30, 1996, HBPS had $44.9 million available under this Facility. The May 1999 expiration date of this Facility may be extended annually for one additional year upon the mutual consent of HBPS and the bank group. At June 30, 1996, HBPS also had $18.9 million available under separate facilities.
HAMILTON BEACH/PROCTOR-SILEX - continued LIQUIDITY AND CAPITAL RESOURCES - continued HBPS's capital structure is presented below: <TABLE> <CAPTION> JUNE 30 DECEMBER 31 1996 1995 -------- -------- <S> <C> <C> Total Net Tangible Assets .......................................................... $ 138.4 $ 131.7 Goodwill at Cost ................................................................... 112.3 112.0 -------- -------- Total Assets Before Goodwill Amortization ...................................... 250.7 243.7 Accumulated Goodwill Amortization .................................................. (20.5) (18.6) Total Debt ......................................................................... (96.9) (82.8) -------- -------- Stockholders' Equity ............................................................... $ 133.3 $ 142.3 ======== ========= Debt to Total Capitalization 42% 37% </TABLE> Because of the seasonal nature of the housewares business, HBPS's inventory and debt levels reach seasonal peaks in the second and third quarters.
KITCHEN COLLECTION KCI is a national specialty retailer of kitchenware, tableware, small electric appliances and related accessories. The specialty retail business is seasonal with the majority of its revenues and operating profit generated in the fourth quarter during the fall holiday selling season. FINANCIAL REVIEW Second Quarter of 1996 Compared With Second Quarter of 1995 The following schedule details the components of the changes in revenues, operating loss and net loss for the second quarter of 1996 compared with the second quarter of 1995: <TABLE> <CAPTION> Operating Net Revenues Loss Loss ------------- ------------ -------- <S> <C> <C> <C> 1995 $ 13.5 $ (.3) $ (.3) Increase (decrease) in 1996 from: Stores opened in 1996 ......................................... .2 (.1) (.1) Stores opened in 1995 ......................................... 1.1 .1 .1 Comparable stores ............................................. (.2) (.2) (.1) Other ......................................................... -- (.1) (.1) -------- ------- ------ 1996 $ 14.6 $ (.6 ) $ (.5) ========= =========== ======== </TABLE> First Six Months of 1996 Compared with First Six Months of 1995 The following schedule details the components of the changes in revenues, operating loss and net loss for the first six months of 1996 compared with the first six months of 1995: <TABLE> <CAPTION> Operating Net Revenues Loss Loss -------- -------- -------- <S> <C> <C> <C> 1995 $ 25.6 $ (.8) $ (.6) Increase (decrease) in 1996 from: Stores opened in 1996 ......................................... .2 (.1) (.1) Stores opened in 1995 ......................................... 2.6 -- -- Comparable stores ............................................. (.9) (.5) (.3) Other ......................................................... -- (.4) (.2) ----- ---- ---- 1996 $ 27.5 $ (1.8) $ (1.2) ========= ======== ====== </TABLE> KCI operated 140 stores at June 30, 1996 compared with 124 stores at June 30, 1995. A full quarter of operation of stores opened in 1995 contributed favorably to revenues in 1996. The results at comparable stores and profitability at new stores were adversely affected by the continuing difficult factory outlet retail environment evidenced by lower levels of customer traffic in factory outlet malls. The unfavorable Other variance is primarily due to higher payroll and store rent costs.
Provision for Income Taxes KCI's effective tax rate for the three months ended June 30, 1996 and 1995 was 43.1 percent and 41.1 percent, respectively. KCI's effective tax rate for the six months ended June 30, 1996 and 1995 was 42.1 percent and 40.9 percent, respectively. LIQUIDITY AND CAPITAL RESOURCES Expenditures for property, plant and equipment were $0.7 million during the first six months of 1996. Estimated capital expenditures for the remainder of 1996 are $0.6 million. These expenditures relate primarily to new store openings and improvements to existing facilities. The principal source of funds for these capital expenditures is short term borrowings. At June 30, 1996, KCI had available $2.2 million of its $5.0 million line of credit. KCI's capital structure is presented below: <TABLE> <CAPTION> JUNE 30 DECEMBER 31 1996 1995 ------- ------- <S> <C> <C> Total Net Tangible Assets .......................................................... $ 14.7 $ 13.1 Goodwill at Cost ................................................................... 4.6 4.6 ----- ----- Total Assets Before Goodwill Amortization ...................................... 19.3 17.7 Accumulated Goodwill Amortization .................................................. (.9) (.9) Total Debt ......................................................................... (7.8) (5.0) ----- ----- Stockholder's Equity ............................................................... $ 10.6 $ 11.8 ===== ===== Debt to Total Capitalization 42% 30% </TABLE>
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 minor, it has significant long-term liabilities related to closed mine activities, 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 are anticipated to be $2.7 million for the remainder of 1996. 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 ------------------------- ------------------------- 1996 1995 1996 1995 ------ ------ ------ ------ <S> <C> <C> <C> <C> Revenues ............................................... $ .1 $ .3 $ .2 $ .3 Operating loss ......................................... $ (2.6) $ (2.3) $ (5.1) $ (4.3) Other income (expense), net ............................ $ .4 $ .1 $ .4 $ .2 Net income (loss) ...................................... $ (1.6) $ .1 $ (4.1) $ (1.3) </TABLE> In the second quarter of 1995, a nonrecurring tax benefit with related interest income was recorded resulting from the settlement of several prior year tax examinations. This tax item is the primary reason for the variance in net loss in 1996 compared with 1995. LIQUIDITY AND CAPITAL RESOURCES Although the subsidiaries have entered into substantial debt agreements, NACCO has not guaranteed the long-term debt or any borrowings of its subsidiaries. The debt agreements at HBPS and KCI allow for the payment of dividends under certain circumstances. The credit agreement at NMHG allows up to $25.0 million of dividends to be paid to NACCO; there have not yet been any such transfers. There are no restrictions on transfers from NACoal. Dividends and advances from subsidiaries are the primary source of cash for NACCO. 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.
Part II Item 1 Legal Proceedings None Item 2 Change in Securities 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 8, 1996, with the results indicated: Outstanding Shares Entitled to Vote Number of Votes -------------------------------------- --------------------- 7,274,163 Class A Common 7,274,163 1,708,786 Class B Common 17,087,860 -------------------- 24,362,023 ==================== Item 1.Election of ten directors for the ensuing year. Votes Director Nominee For Withheld Total ---------------------- --------------- ------------ --------- Owsley Brown II 22,171,939 46,025 22,217,964 John J. Dwyer 22,162,861 55,103 22,217,964 Robert M. Gates 22,167,119 50,845 22,217,964 Leon J. Hendrix, Jr. 22,171,939 46,025 22,217,964 Dennis W. LaBarre 22,161,357 56,607 22,217,964 Alfred M. Rankin, Jr. 22,175,139 42,825 22,217,964 Ian M. Ross 21,967,818 250,146 22,217,964 John C. Sawhill 22,174,089 43,875 22,217,964 Britton T. Taplin 22,140,134 77,830 22,217,964 Frank E. Taplin, Jr. 22,008,693 209,271 22,217,964 Item 2.Approval of the supplemental annual incentive compensation plan. For Against Abstain Total --------------- -------------- ---------------- -------------- 22,008,910 163,362 45,692 22,217,964 Item 3.Approval of the executive long-term incentive compensation plan. For Against Abstain Total ------------- ---------------- ---------------- --------------- 21,979,394 198,885 39,685 22,217,964
Item 4.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 ------------- ----------- ------------- --------------- 22,187,520 15,145 15,299 22,217,964 Item 5.Authority to vote on other matters that may properly come before the meeting. Votes For Withheld Total -------------- -------------- ---------------- 22,215,264 2,700 22,217,964 Item 5 Other Information None Item 6 Exhibits and Reports on Form 8-K - ------ -------------------------------- (a) Exhibits. See Exhibit Index on page 30 of this quarterly report on Form 10-Q.
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 13, 1996 Frank B. O'Brien Frank B. O'Brien Senior Vice President - Corporate Development and Chief Financial Officer Date August 13, 1996 Kenneth C. Schilling Kenneth C. Schilling Controller (Principal Accounting Officer)
Exhibit Index Exhibit Number* Description of Exhibit (10) (lxxv) Amended and Restated Credit Agreement dated as of June 4, 1996 among NACCO Materials Handling Group, Inc., the Banks party thereto, the Co-Arrangers and Co-Agents listed on the signature page thereto and Morgan Guaranty Trust Company of New York, as Agent. (cxvii) Amendment No. 1 dated as of March 29, 1996 to the Second Amended and Restated Credit Agreement dated as of October 11, 1990, amended and restated as of April 18, 1995, among Hamilton Beach/Proctor-Silex, Inc., Proctor-Silex Canada Inc., Proctor-Silex S.A. de C.V., as Borrowers, the Banks signatory thereto and the Chase Manhattan Bank, N.A., as U.S. Agent, and The Chase Manhattan Bank of Canada, as Canadian agent. (11) Computation of Earnings Per Common Share (27) Financial Data Schedule *Numbered in accordance with Item 601 of Regulation S-K.