EX-99.1 2 l20234aexv99w1.htm EX-99.1 NACCO INDUSTRIES, INC.'S SUBSIDIARY EX-99.1
 

Exhibit 99.1
Subsidiary Business Highlights
NACCO Materials Handling Group Business Highlights
Leading Global Lift Truck Manufacturer
    Leading market share positions with large installed population base
 
    Comprehensive global product line undergoing significant redesign
 
    Globally integrated operations with significant economies of scale
Leading Brands and Market Shares
Hyster and Yale are among the most recognized brands in the lift truck industry
    Leading market share positions in the Americas and worldwide
 
    Both brands in business for more than 75 years
Strong heritage customer base in complementary market segments
    Hyster – large, heavy-duty applications
 
    Yale – lighter-duty and warehouse applications
2005 market share in Class I through V industrial lift trucks in the Americas of 25%
    2005 global market share of 12%
 
    Significant growth opportunities in Europe, Asia-Pacific and China
Comprehensive Product Line
    Class 1: Electric counterbalanced rider trucks: 1 ton — 5.5 ton capacity
 
    Class 2: Electric narrow aisle trucks: 1.5 ton — 6 ton capacity
 
    Class 3: Electric hand trucks: 1.5 ton — 8 ton capacity
 
    Class 4: Internal combustion engine counterbalanced trucks, cushion tire: 1 ton — 7 ton capacity
 
    Class 5: Internal combustion engine counterbalanced trucks, pneumatic tire: 1 ton — 52 ton capacity
Global Scope of Operations
    NMHG global locations
Global Economies of Scale
    NMHG economies of scale strategy
Large Global Installed Population
    Estimated 765,000 Hyster and Yale lift trucks in operation worldwide (as of December 31, 2005)
 
    Large installed base provides barrier to entry and assures ongoing parts revenue
 
    More than 66% of total parts for the Hyster and Yale installed base are captured by NMHG in the Americas market (as of December 31, 2005)

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    Comprehensive global proprietary and “all-makes” service parts program
 
    Service parts result in recurring, higher-margin revenues
Experienced Management Team
    Strong team of long-term NMHG managers and executives
 
    Supplemented by professionals with previous management experience at leading industrial companies, such as Case, Toyota, Ingersoll Rand and Cummins
Highly Professional Dealers
    Strong, stable network of independent dealers in key U.S. markets
 
    Global operations supplying both Hyster and Yale dealer networks
 
    Independently owned and operated dealers with exclusivity
 
    Defined sales territories
 
    Company-owned dealers
 
    Strong global distribution drives market share
Leading National Accounts Program
    Industry-leading, direct-sales national accounts program
 
    Over 200 national accounts in a wide range of industries (as of December 31, 2005)
 
    Key exclusive accounts, including Costco stores, Lowe’s stores, Saturn and GM (North America, China, Brazil)
 
    Industry-leading capabilities in fleet management and financial services in key markets
 
    Growing global account program
Diversified Customer Base
    NMHG markets industrial lift trucks into over 600 different end-user applications in 900 industries (as of December 31, 2005)
 
    Top 10 customers accounted for approximately 10% and 6% of 2005 Americas and Consolidated unit sales, respectively

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Hamilton Beach/Proctor-Silex Business Highlights
Leading Brands and Market Shares
    One of the leading companies in small kitchen and garment care appliances in North America
 
    Significant share position in 26 categories in small kitchen and garment care appliances
 
    One of the leading companies in the commercial small appliance category, with significant share positions in commercial blenders and spindle mixers
 
    Broad complement of key brand names targeted at distinct consumer segments
    Recent entry into high-end market with Hamilton Beach® Eclectrics brand
 
    New low-end Traditions by Proctor Silex brand protects heritage of other brands
Most Comprehensive Product Line
    Automatic Drip Coffee Makers
 
    Blenders
 
    Can Openers
 
    Carafes
 
    Coffee Mills
 
    Deep Fryers
 
    Drink Mixers
 
    Electric Knives
 
    Espresso/Cappuccino Makers
 
    Fifth Burners
 
    Food Choppers
 
    Food Processors
 
    Griddles
 
    Hand Blenders
 
    Hand Mixers
 
    Hot Pots
 
    Indoor Grills
 
    Ice Cream Makers
 
    Ice Shavers
 
    Ice Tea Makers
 
    Irons
 
    Juice Extractors
 
    Juicers
 
    Kettles
 
    Percolators
 
    Rice Cooker/Food Steamers
 
    Roaster Ovens
 
    Rotisseries
 
    Skillets
 
    Slow Cookers
 
    Stand Mixers
 
    Toasters
 
    Toaster Ovens
 
    Travel Irons/Steamers
 
    Coffee Urns
 
    Waffle Bakers
Strong Retailer Relationships
    Approximately 1,500 active accounts

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    Has been named Category Captain at Wal-Mart, Kmart and 21 other accounts and has throughout the years received Vendor-of-the-Year awards at Wal-Mart, Target, Kmart and others
Low Cost Producer
    Recent plant and production facility restructuring and increased outsourcing enhance low cost position
 
    Industry-leading working capital management
Strong Supplier Relationships
    Source finished products through more than 20 Chinese suppliers, typically with a lead supplier for each product category
 
    Working with multiple suppliers allows HB/PS to bring a wide variety of products to market quickly
Experienced Management Team
    Senior management team averages more than 10 years of experience at HB/PS and more than 20 years of relevant experience
 
    Highly professional team with significant tenure at HB/PS, as well as experience from industry-leading consumer companies, including General Electric Co. (UK), Fuji Film, Young & Rubicam and Cooper Tire
Increasing Number of Innovative Products
Hamilton Beach® BrewStation Coffee maker
    Breakthrough new product
 
    The #1 selling coffee maker product family in America (as of December 31, 2005)
 
    Driven significant high-margin growth
Hamilton Beach® Wave~Action™ Blenders
    Wave-Action™ system forces mixture down into the blades for smoother results
Hamilton Beach® Stay-or-Go™ Slow Cooker
    Clip tight lid locks on to prevent messy spills
 
    Large, full grip handles make carrying easier
Hamilton Beach® Revolution™ Ice Shaver
    Key restaurant and bar business
 
    For smoothies, milkshakes, daiquiris, margaritas and more

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Kitchen Collection Business Highlights
Successful, Proven Format
    Well-tested Kitchen Collection format has helped KCI become the leading retailer of kitchenware in outlet malls, with 195 stores (as of December 31, 2005)
Enclosed Mall Format
    New stores located in enclosed malls focused on high-margin gadgets
 
    Gadgets deliver high margins and are small items that take up little shelf space
 
    18 permanent, enclosed mall stores continue to operate in test mode in order to optimize profitability (as of December 31, 2005)
 
    Potential market of over 500 traditional enclosed malls nationwide
Continuous Improvement
    Kitchen Collection has developed specific approaches over time to improve the three main retail performance drivers
    Number of customer visits
 
    Percentage of visitors who purchase
 
    Average dollar amount of sales
    KCI continually tests and implements new approaches to further improve these key drivers
Disciplined Overhead Management
    Small home office staff provides merchandising expertise, accounting, information systems and oversight
 
    Minimum number of full-time employees at store level
SKU Profitability Optimization
    Economic Value Income (EVI) business tool helps achieve the greatest possible return per cubic foot of retail space by optimizing product mix and space allocation
Leading Brand Names
    KCI sells Hamilton Beach® and Proctor Silex® kitchen electrics, including close-out and excess inventory items from HB/PS
 
    Other top brands sold by KCI include Kitchen Aid, WearEver and OXO
 
    KCI also exclusively sells Hamilton Beach®- and Proctor Silex®-branded non-electric gadgets, bakeware and cookware
Efficient Supply Chain
    Recent warehouse upgrade allows higher throughput in same space
 
    Many high-volume products ship directly to store locations from U.S.-based vendors

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North American Coal Corporation Business Highlights
Coal Production Overview
Coal fuels about 50% of the country’s electrical generation
    Nuclear 20%
 
    Hydroelectric 7%
 
    Fuel Oil 2%
 
    Biomass 2%
 
    Other 1%
The country’s abundant recoverable coal reserves of over 269 billion tons help to provide a lower-cost energy source and U.S. energy independence
    Coal production in the U.S. in 2005 was approximately 1.1 billion tons
 
    Coal is one of the lowest cost fuels for base-load electric power generation, considerably less expensive than natural gas or oil
 
    Natural gas prices are likely to continue to stay high due to domestic supply limitations
Energy sector shows moderate growth, but growth could be higher in coal industry if natural gas prices stay high and coal gasification technology continues to develop
    New technologies, including coal gasification, show promise in cost-effectively reducing emissions
NAC Focuses on Lignite Coal
NAC is the nation’s largest miner of lignite coal, and the 7th largest coal producer nationwide as of December 31, 2005, delivering 34.7 million tons of lignite coal in 2005
NAC has 2.3 billion tons of lignite coal reserves, including unconsolidated project mining operations, of which 1.2 billion tons are committed to current customers (as of December 31, 2005)
Click on the diagram at right to see a comparison of lignite coal to other types of coal
Diverse Mining Locations
Click on the map at right to see NAC’s mine locations
Dependable Financial Performance
    Steady operating income and cash flow before financing activities
 
    High returns on equity
Minimal Exposure to Coal Prices
    Contracts structured to minimize exposure to fluctuations in coal prices
 
    Long-term agreements establish mining services NAC will perform and mechanisms for compensation
Stable Operating Income Streams
Three Unconsolidated Project Mining Operations (North Dakota and Texas)

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    Cost plus profit per ton with incentive agreements
 
    Modest up front equity investment by NAC
 
    Debt financing guaranteed by utility customer; non-recourse to NAC; no coal market price risk
 
    Long-term contracts (2020-2037)
 
    2005 deliveries, 27.4 million tons
Three Consolidated Mining Operations (Louisiana, Texas and Mississippi)
    Fixed price with cost escalator negotiated up front
 
    NAC assumes operating risks; greater initial capital investment and greater profit opportunity
 
    Financing shifted to NAC
 
    Long-term contracts (2007-2032)
 
    2005 deliveries, 7.5 million tons
Three Limerock Dragline Mining Operations (Florida)
    Fixed fee per cubic yard of limerock removed from quarry, including annual price escalator
 
    2005 deliveries, 25.2 million cubic yards
Outstanding Mining Skills
    Use of technology to increase efficiency
 
    Award-winning environmental protection and safety record
Future Mining Project Potential
    Potential for further lignite mining projects
 
    Potential for additional limerock dragline mining projects
 
    Potential for mining other natural resources
Coal Gasification Project Potential
    Pursue various projects related to new coal-based energy technologies

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