NACCO Industries Inc. Reports Operating Results (10-Q)
Nacco Industries Inc. has a market cap of $758.8 million; its shares were traded at around $91.09 with a P/E ratio of 25.2 and P/S ratio of 0.3. The dividend yield of Nacco Industries Inc. stocks is 2.4%.NC is in the portfolios of Kenneth Fisher of Fisher Asset Management, LLC, Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations:NMHG recognized net income attributable to stockholders of $15.3 million in the first six months of 2010 compared with a net loss attributable to stockholders of $21.6 million in the first six months of 2009. The increase was primarily a result of the improvement in operating profit (loss). In addition, NMHG recognized an income tax benefit on pre-tax income as a result of an income tax benefit related to the sale of certain Australian operations in the first six months of 2010, a change in a foreign tax law that reduced the statute of limitations for certain items, and a favorable shift in the mix of jurisdictions where taxable earnings and losses are projected for 2010 compared with
During 2009, NMHGs management approved a plan to close its facility in Modena, Italy and consolidate its activities into NMHGs facility in Masate, Italy. These actions were taken to further reduce NMHGs manufacturing capacity to more appropriate levels. As a result, NMHG recognized a charge of approximately $5.6 million during 2009. Of this amount, $5.3 million related to severance and $0.3 million related to lease impairment. During the first six months of 2010, $1.9 million of the accrual was reversed as a result of a reduction in the expected amount to be paid to former employees due to the finalization of an agreement with the Italian government. Severance payments of $0.6 million were made during the first six months of 2010. Payments related to this restructuring program are expected to continue through 2012. No further charges related to this plan are expected.
Benefits from this restructuring program are expected to be approximately $1.3 million for the remainder of 2010, $3.0 million in 2011 and $2.6 million in 2012 and thereafter.
At June 30, 2010, the excess availability under the NMHG Facility was $58.3 million, which reflects underlying collateral availability of $108.0 million reduced by a $10.0 million excess availability requirement, $20.8 million for a foreign credit facility commitment in Australia, $10.7 million in Europe for a reserve for preferential claims and $8.2 million for letters of credit. If commitments or availability under these facilities are increased, availability under the NMHG Facility will be reduced.
During 2006, NACCO Materials Handling Group, Inc. (NMHG Inc.), a wholly owned subsidiary of NMHG, entered into the NMHG Term Loan that provided for term loans up to an aggregate principal amount of $225.0 million, which mature in 2013. The term loans require quarterly payments in an amount equal to 1% of the original principal per year for the first six years, with the remaining balance to be paid in four equal installments in the seventh year. At June 30, 2010, there was $216.0 million outstanding under the NMHG Term Loan.
Expenditures by NMHG for property, plant and equipment were $3.2 million during the first six months of 2010. Capital expenditures are estimated to be an additional $16.1 million for the remainder of 2010. Planned expenditures for the remainder of 2010 are primarily for product development and improvements to NMHGs facilities and information technology infrastructure. The principal sources of financing for these capital expenditures will be internally generated funds and bank borrowings.
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