NACCO Industries CEO Speaks About His Company

| About: NACCO Industries (NC)

On June 11, The Wall Street Transcript interviewed Alfred M. Rankin Jr., Chairman, President and Chief Executive Officer of NACCO Industries, Inc. (NYSE:NC). Key excerpts follow:

TWST: What is NACCO Industries?

Mr. Rankin: NACCO Industries is an operating holding company with three main businesses - lift trucks, housewares and mining. Our largest business is NACCO Materials Handling Group, which designs, manufactures and sells a comprehensive line of lift trucks under the Hyster® and Yale® brand names. The NACCO Housewares Group consists of two quite different businesses. One is Hamilton Beach/Proctor-Silex, which is a leading designer, marketer and distributor of small electric household appliances and commercial products. The Kitchen Collection is a national specialty retailer of kitchenware and gourmet foods, operating under the Kitchen Collection® and Le Gourmet Chef® store names. There are about 275 stores mainly located in outlet malls, but some are in traditional malls. Finally, the original company, the North American Coal Corporation - from which the acronym NACCO was derived - mines and markets lignite coal, primarily as fuel for power generation, although we do provide some value-added mining services for other natural resource companies. Each of the four businesses has evolved a bit differently over the years. NACCO acquired WearEver-ProctorSilex in 1988. We subsequently sold the WearEver business to Newell in 1989 and acquired Hamilton Beach in 1990, which we merged with Proctor-Silex.

The most recent significant news regarding the structure of NACCO's business overall was the announcement on April 26 that the company plans to spin off the Hamilton Beach/Proctor-Silex business to NACCO shareholders. The Kitchen Collection retail business is the smallest of NACCO's businesses. It is the result of growth from a very small group of retail stores associated with the Proctor-Silex business. I think there were five stores originally, and it has really flourished over the years. In August of 2006, Kitchen Collection was able to acquire the Le Gourmet Chef format, which is a little higher-end store format that will provide a new growth platform and be a great complement to the existing Kitchen Collection store format. NACCO first acquired the Yale® forklift truck business in the mid-1980s, and then Hyster in 1989. It is now our largest business, by revenues.

We're one of the three largest companies in the forklift truck industry in the world. We operate in the Asia Pacific area, in Europe and in the Americas. We have a comprehensive line of forklift trucks in two main categories - electric forklift trucks and internal combustion engine forklift trucks. We range from smaller trucks to very large port container handling trucks. Our two main competitors in the business are Toyota and Linde. We have a very substantial market position on a global basis, with our strongest position in the mid- to high 20s in market share in the Americas. North American Coal has its roots in the underground mining business, but in the 1980s, we closed our underground mines and enhanced our position in the surface mining of lignite coal.

Today, we are the nation's largest miner of lignite coal and the seventh largest coal producer in the country. We have a very successful business model, mainly supplying power plants with coal, largely from reserves that we own. Our contracts are structured such that we provide mining services under established, long-term contracts for the delivery of coal to customers' power plants. That business is focused in North Dakota, Texas, Mississippi and Louisiana.

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Tagged: , Farm & Construction Machinery, Interviews
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