NACCO Industries, Inc.

This call is being recorded on Thursday, May 1st, 2025. I would now like to turn the conference over to Christina Kometko, Investor Relations. Please go ahead.

Thank you. Good morning, everyone, and welcome to our 2025 First Quarter Earnings Call and Webcast. Thank you for joining us this morning. I'm Christina Kometko, and I'm responsible for Investor Relations at NANCO. Joining me today are J.C. Butler, President and Chief Executive Officer, and Elizabeth Lubman, Senior Vice President and Controller. Yesterday, we published our 2025 first quarter results and filed our 10-Q. This information is available on our website. Our remarks that follow, including answers to your questions, contain forward-looking statements. These statements are subject to several risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements made here today. These risks include, among others, matters that we've described in our earnings release, 10Q, and other SEC products. We may not update these forward-looking statements until our next quarterly earnings conference call. We'll also be discussing non-GAAP information that we believe is useful in evaluating the company's operating performance. Reconciliations for these non-GAAP measures can be found in our earnings release and on our website. Now I'll turn the call over to JC for some opening remarks. JC?

Thank you, Christy, and good morning, everyone. I'm pleased to report another quarter of strong financial results. Consolidated operating profit increased over 60%. While this improvement was partly offset by higher net interest expense and a reduction in other income, We still delivered a 7% increase in net income and a 14% increase in EBITDA. Christy will provide more detail about these financial results in a minute, but first, let me talk about our operations. The significant improvement in operating profit was driven by our coal mining segment, where segment-adjusted EBITDA more than tripled over the prior year. There were two primary reasons for this improvement. First, we had an increase in earnings at our unconsolidated operations, led by higher pricing at Falkirk and a moderate increase in customer demand at Coteau. Second, Mississippi Lignite Mining Company operated more efficiently on improved customer demand compared to 2024, when the Red Hills Power Plant was operating with only one of its two boilers. I'm thrilled to see these improvements in our coal mining segment. We are also encouraged by the current administration's actions, which are fostering a more favorable regulatory environment for the fossil fuel industry. Mitigation resources also contributed positively to the improvement in consolidated operating profit in EBITDA. This business reported its second consecutive quarter of profitability and anticipates generating profit for the full year. North American mining is operating well, but its results were affected by reduced customer demand, some of which is due to temporary one-off situations, while some customers are experiencing a softer market. Operating profit decreased on a significant reduction in year-over-year tons sold, as well as an increase in operating expenses. This decline was partly offset by an increase in part sales. While this quarter didn't provide a favorable year-over-year comparison at North American mining, results improved compared with the fourth quarter of 2024. We expect North American mining to generate increasing levels of operating profit and EBITDA over time as benefits from new and extended contracts add to the profitability of existing contracts. Let me shift to Sawtooth Mining. which is the exclusive contract miner for the Thacker Pass lithium project in Northern Nevada. Lithium Americas continues to make progress on the Thacker Pass project. Lithium Americas and General Motors recently announced their final investment decision for construction of phase one of the project. We view this as a positive step toward development of a U.S.-produced lithium supply chain that will reduce American dependence on foreign suppliers for critical minerals. We continue to support the project by assisting with certain construction services as they ramp up work to build the lithium processing plant. Phase one production continues to be estimated to begin in late 2027. At minerals management, segment adjusted EBITDA increased 10% over the prior year. As we mentioned in our year end earnings release, During the fourth quarter of 2024, Minerals Management increased their investment in a company that holds non-operated working interests in oil and natural gas assets in the Hugaton Basin. This investment drove the improvement in segment EBITDA and is expected to continue to be accretive to future earnings. We are very pleased with the work done by the Catapult Mineral Partners team, which manages this segment. While we continue to budget up to $20 million annually to expand our portfolio and provide long-term stable cash flow generation, our business model allows flexibility regarding the cadence and type of investments we make based on available opportunities that we believe will result in significant long-term value and increasing profitability. We believe that this expansion and diversification program has us well-positioned to generate increasing levels of operating profit and EBITDA well into the future. The current quarter's results support my belief that 2025 is a pivotal transition year for our company, which is described in more detail in our most recent annual report. Overall, I'm pleased with the way all of our businesses continue to advance their strategies, and I continue to be very optimistic about the future. With that, I'll turn the call back over to Christy to cover our quarterly details and outlook in more detail. Christy?