Daniel Bore's questions to NACCO INDUSTRIES (NC) leadership • Q2 2025
Question
Daniel Bore from AWCL asked about NACCO's strategic direction, questioning the company's leverage philosophy following its shift from a net cash to a net debt position. He also sought more detail on the parts business within the Contract Mining segment, asking if it represents a new business model. Additionally, he inquired about the sourcing of draglines for new quarry projects, whether it's a growth constraint, and requested information on the investment strategy and earnings potential of the company's stake in Eiger.
Answer
President & CEO J.C. Butler responded to the inquiries. He reiterated NACCO's core philosophy of maintaining a 'bulletproof balance sheet' with very low debt to ensure long-term stability for partners and mitigate business risks, stating the goal is to deleverage over time. He described the parts business as an 'evolution' of the model, designed to better serve customers by stocking hard-to-find components for a growing equipment fleet. Mr. Butler clarified that dragline sourcing is not a limiting factor; they use a mix of existing fleet equipment, market sourcing, and a new exclusive partnership with MTech for modern electric draglines. Regarding Eiger, he characterized it as a non-operational investment with a complementary business model, expressing optimism for its future but declining to provide a specific earnings outlook.