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NACCO Industries, Inc.
2012 Annual Report
Founder, Frank E. Taplin, Sr.

Table of contents

  • Page 1
    NACCO Industries, Inc. 2012 Annual Report Founder, Frank E. Taplin, Sr.

  • Page 2
    ... in the West and Southwest. North American Coal moved its corporate headquarters to Dallas, Texas, in 1988. Today North American Coal mines and markets lignite coal primarily as fuel for electrical power generation. In 2012, North American Coal returned to its historic roots with the acquisition...

  • Page 3
    ...railroads and Great Lakes dockyards, into The North American Coal Corporation. The new corporation ranks as one of the country's largest underground... North American Coal begins to pursue long-term supply contracts with electric utility companies 1956 North American Coal stock is publicly traded for ...

  • Page 4
    ... in 1983, NACCO Industries, Inc., a new publicly-traded holding company, is formed in 1986. North American Coal becomes a wholly owned subsidiary of NACCO and the Company acquires Yale Materials Handling Corporation in 1985 and Wear-Ever/Proctor-Silex, Inc. and The Kitchen Collection, Inc. in...

  • Page 5
    ... and Western Division office are moved to Dallas, Texas. 1989 The Hyster Company is acquired and combined with Yale Materials Handling Corporation to form NACCO Materials Handling Group. 1990 Hamilton Beach is acquired and combined with Proctor Silex to form Hamilton Beach/Proctor-Silex. 2000...

  • Page 6
    ...primarily to adjacent or nearby power plants. MINING Hamilton Beach Brands ("HBB") Headquarters: Richmond, Virginia HBB is a leading designer, marketer and distributor of small electric household appliances, as well as commercial products for restaurants, bars and hotels. HBB has a broad portfolio...

  • Page 7
    ... of product line expansion and new product innovation • Industry-leading working capital management Achieve a minimum operating profit margin target of 10 percent • Enhance placements in the North American consumer business • Enhance internet sales by providing best-in-class retailer support...

  • Page 8
    ...results as discontinued operations. (4) During 2008, NACCO's stock price significantly declined compared with previous periods and the Company's market value of equity was below its book value of tangible assets and book value of equity. The Company performed an impairment test, which indicated that...

  • Page 9
    Year Ended December 31 2012(1) 2011(1)(2) 2010(1)(2) 2009(1)(2)(3) 2008(1)(2)(3)(4) Cash Flow Data: Operating Activities North American Coal Corporation ...$ Hamilton Beach Brands ...Kitchen Collection ...NACCO and Other ...Provided by operating activities from continuing operations ...$ ...

  • Page 10
    ..., small appliances and specialty retail industries, and is well positioned to support its individual businesses in the years ahead. The spin-off was not the only substantial change to the Company's business model during 2012. Late in Subsidiary Financial Objectives • NACoal: Earn a minimum return...

  • Page 11
    ...-market consumer, which is Hamilton Beach Brands' ("HBB") and Kitchen Collection's primary customer, remained under pressure in 2012. Additionally, customer visits to stores in both indoor and outlet malls dropped in 2012, especially during the fourthquarter holiday-selling season. In this highly...

  • Page 12
    ...as the Company executes its strategies for growth and to reach its subsidiaries' financial targets. In addition, in November 2012, NACCO's Board of Directors approved an extension of the Company's stock repurchase program through December 31, 2013. The stock repurchase program permits the repurchase...

  • Page 13
    ... to the customer's power plant which ran more consistently in 2012 than in 2011, by increased deliveries at the limerock dragline mining operations due to customer demand for supply to a large construction project in southern Florida, and by higher royalty income. Higher employee-related expenses...

  • Page 14
    ... will be completed in early 2013 and the overall Florida construction market remains weak. Demery Resources Company's Five Forks Mine commenced delivering coal to its customer in 2012 and is expected to increase production in 2013, with full production levels expected to be reached in late 2015 or...

  • Page 15
    ... approximately 2.7 million tons of coal annually when full production is achieved. In addition, in October 2012, North American Coal's subsidiary, Coyote Creek Mining Company, entered into a new agreement with the coowners of the Coyote Station generation plant to develop a lignite mine in Mercer...

  • Page 16

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    ...to expand through mining activities that serve the international mining arena, such as new opportunities to provide value-added mining services outside the United States, similar to its current relationship in India. In addition, the company is investigating a number of non-coal mining opportunities...

  • Page 18

  • Page 19
    ... cooker, Hamilton Beach® Smoothie Smart™ Blender and Hamilton Beach® Digital Simplicity™ Rice Cooker and Steamer. Above: New display layouts and signage at Kitchen Collection's Le Gourmet Chef® store in Aurora, Ohio. Le Gourmet Chef® stores feature brand-name kitchenware and gourmet foods...

  • Page 20
    ...and branding programs, together with appropriate levels of advertising for the company's highly successful and innovative product lines. Particular focus is being placed on single-serve coffee products such as The Scoop and FlexBrew . HBB expects The Scoop®, the Two-Way Brewer and the Durathon iron...

  • Page 21
    ... to create additional lines that ® Hamilton Beach Brands' newest Proctor Silex® products include, clockwise from top: Proctor Silex® programmable 12-cup coffeemaker, Proctor Silex® 10-speed blender and Proctor Silex® 4-quart slow cooker. can be distributed in high-end specialty stores and on...

  • Page 22
    ...opening new stores. The Kitchen Collection stores, which sell a wide variety of basic kitchen items, generated an increased average sales transaction value. However, the number of customer visits declined. Additionally, lower gross margins and higher employee-related costs reduced Kitchen Collection...

  • Page 23

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    ... by the Le Gourmet Chef® format, the company's expansion focus will shift to increasing the number of these stores Kitchen Collection® provides a wide variety of specialty kitchen-related products, as shown in this new bakeware display at the Kitchen Collection® store in Jeffersonville, Ohio...

  • Page 25
    ... management teams leading each of our subsidiaries and the parent company. Our many experienced and highly motivated professionals worked successfully to transform NACCO through the spin-off of Hyster-Yale, secure two new mining projects for North American Coal, overcome challenges in the Housewares...

  • Page 26
    ... of the Company. Calculation of Return on Capital Employed: (In millions, except percentage data) HBB Kitchen Collection 2012 NACoal 2012 Average Equity (12/31/2011 and each of 2012's quarter ends) ...$ 96.4 2012 Average Debt (12/31/2011 and at each of 2012's quarter ends) ...109.0 2012 Average...

  • Page 27
    ... Information Technology Kathleen L. Diller Vice President, General Counsel and Secretary James H. Taylor Vice President and Chief Financial Officer Richard E. Moss Senior Director, Finance & Treasurer Directors: John P. Jumper Chief Executive Officer, SAIC Retired Chief of Staff, United States Air...

  • Page 28
    ... Hamilton Beach Brands-Mexico: www.hamiltonbeach.com.mx Kitchen Collection: www.kitchencollection.com www.legourmetchef.com North American Coal: www.nacoal.com Stock Exchange Listing The New York Stock Exchange Symbol: NC Investor Relations Contact Investor questions may be addressed to: Investor...

  • Page 29
    5875 Landerbrook Drive, Suite 220 • Cleveland, Ohio 44124 An Equal Opportunity Employer