Q2 2025 NACCO Industries Inc Earnings Call
Speaker #1: Thank you for standing by . My name is Tina and I will be your conference operator today . At this time , I would like to welcome everyone to the Global Indemnity Group Second quarter 2020 Earnings Call .
Speaker #1: I'm sorry . NACCO Industries second quarter 2025 Earnings Call . All lines have been placed on mute to prevent any background noise . After the speakers remarks , there will be a question and answer session .
Speaker #1: If you would like to ask a question during this time , simply press star followed by the number one on your telephone keypad .
Speaker #1: If you would like to withdraw your question , press star one again . It is now my pleasure to turn the call over to Christina Kmetko Investor Relations .
Speaker #1: Please go ahead .
Speaker #2: Good morning , everyone , and thank you for joining us on today's second quarter 2020 earnings call . I'm Christina Kmetko and I oversee investor relations here at NATO .
Speaker #2: I'm joined by our president and CEO , Jake Butler and our Senior Vice President and controller , Elisabeth Lubman . Yesterday evening we released our second quarter results and filed our 10-q with the SEC .
Speaker #2: Both are available on the website if you haven't had a chance to review them . Before we dive in , let me remind you that today's discussion will include forward looking statements , as always .
Speaker #2: Actual outcomes could differ materially due to various risks and uncertainties , which are outlined in our Earnings Release 10-q and other filings . We don't plan to update these statements until our next call .
Speaker #2: We'll also be referencing some non-GAAP metrics to give you a clearer picture of how we think about our businesses . Reconciliations to GAAP can be found in the materials we posted online .
Speaker #2: Lastly , we mentioned in our earnings release during the quarter , we changed our reportable segment names to make it easier for our stakeholders to associate the business activities with each segment .
Speaker #2: Coal mining was renamed utility coal mining . North American mining is now referred to as contract mining , and Minerals management was renamed Minerals and Royalties .
Speaker #2: The composition and historical reporting of each segment remained the same . With the housekeeping out of the way . I'll hand things over Jake for his opening comments .
Speaker #2: Jake .
Speaker #3: Thank you Christy , and good morning , everyone . I want to open today by giving you a sense of how we see our business developing , where our momentum is most visible , and how we're navigating what we believe are temporary challenges .
Speaker #3: The operational challenges we mentioned occurred primarily primarily at our utility coal mining and contract mining segments . These temporary disruptions affected our second quarter results , but my confidence in our business remains strong .
Speaker #3: We're also comparing these results against a particularly strong prior year quarter , where earnings a year ago were boosted by a sizable gain on the sale of legacy land .
Speaker #3: We experienced strong revenue growth , specifically in the utility coal mining segment , but it wasn't enough to overcome operational disruptions in the utility coal and contract mining segments , as well as higher unallocated costs within the utility coal mining segment .
Speaker #3: Challenges at Mississippi Lignite Mining Company primarily drove the lower segment . Results MLMs customer has and continues to experience in efficiencies at its power plant .
Speaker #3: This , in turn affects our ability to efficiently mine coal . Our team continues to respond to these unfavorable conditions with agility , but the operating inefficiencies tied to the power plant and lower pricing did weigh on our results .
Speaker #3: Disruptions at the contract mining segment due to temporary mechanical issues at certain quarries resulted in fewer trends delivered and higher operating costs . That said , parts sales helped offset some of this , and we expect stronger results in the back half of the year as benefits from additional part sales and several new and extended contracts kick in .
Speaker #3: The second new MTech dragline was commissioned early in the third quarter , and an existing customer quarry joining one commissioned at the end of the first quarter at a different quarry .
Speaker #3: These new MTech Draglines are great additions to the fleet . They're designed simplifies maintenance , which allows increased uptime and greater efficiency . Amid these temporary bumps , our underlying growth drivers are performing well within contract mining .
Speaker #3: Sawtooth mining is continuing to provide support for the Thacker Pass project in Nevada , which is now under construction . This operation generates stable income today and is expected to provide enhanced income and lasting cash flow as the project transitions to full scale lithium production in late 2027 .
Speaker #3: We are now providing contract mining services for several of the top ten US producers of aggregates , and are expanding pipeline of potential new deals as strong .
Speaker #3: We believe that our continued engagement with current and potential customers positions North American mining and the contract mining segment as a key pillar for future growth .
Speaker #3: Turning to our Minerals and Royalties segment . In July , catapult completed a $4.2 million strategic acquisition that expanded our minerals interest within the Midland Basin .
Speaker #3: This deal included 10,500 gross acres and approximately 400 net royalty acres , and includes a mix of producing wells as well as additional upside opportunities through future development with existing operators in the area .
Speaker #3: Switching gears , we are also seeing growth at mitigation resources . We had expected mitigation resources to achieve full year profitability in 2025 .
Speaker #3: However , temporary delays in federal permitting have pushed out that expectation . Mitigation resources is now expected to achieve full year profitability in 2026 and move toward more consistent results over time .
Speaker #3: The pace of growth at mitigation resources is building as this team continues to secure new projects , new projects which build on results from projects that are currently underway .
Speaker #3: Despite the current quarter challenges , we're well positioned to achieve meaningful growth going forward . Our fundamental business model is built on a strong collection of long term contracts and investments that produce relatively strong and steady earnings and cash flows over time .
Speaker #3: Each year , we add to this business model by securing more long term projects and making investments that will contribute to future results , creating a compounding effect .
Speaker #3: Many of these opportunities are built on a fee for service model , where we have little or no capital , while others might require us to invest capital up front .
Speaker #3: Regardless of the model , very few of our businesses require significant amounts of maintenance CapEx . Our goal is to keep adding layers that will provide something approaching annuity like returns and cash generation over time .
Speaker #3: All of this is underpinned by a business model purposefully built for durability and compounding growth . We've been pursuing this approach for ten years and it's really gaining momentum .
Speaker #3: This is why I remain confident in our ability to deliver what we believe will be improving results in the second half of the year and continuing into future years .
Speaker #3: Before wrapping up my comments , I'd like to note that I believe our new segment names do a much better job of describing what we do in each of our businesses .
Speaker #3: We made this change as part of a larger effort to enhance our communications with shareholders and others who might be interested in our company .
Speaker #3: With that , I'll turn the call over to Liz for a closer look at the financials . Liz .
Speaker #4: Thank you . Let's get into the results for the quarter , and I'll try to keep it as straightforward as possible . Consolidated revenues were $68 million , up 30% year over year .
Speaker #4: That's really being driven by the utility coal mining segment . As Mississippi Lignite Mining Company's customer returned to more normal operations after running at reduced capacity for much of last year .
Speaker #4: Both an increase in other income and a favorable change in income taxes helped to partly counterbalance the impact from operational disruptions . This combination resulted in consolidated net income of $3.3 million , down from $6 million in the prior year .
Speaker #4: Diluted earnings per share decreased 40% 46% year on year , again reflecting those operational headwinds and last year's unusually strong comparison . EBITDA was $9.3 million versus $13.5 million in the same period last year .
Speaker #4: Here's a little more color at the segment level at the utility coal mining segment . The decline in operating profit and segment adjusted EBITDA was primarily driven by unfavorable results at Mississippi Lignite Mining Company , although the cost per ton of coal delivered improved , the lower contract pricing more than offset that improvement .
Speaker #4: Looking ahead , we expect improvement in the second half of 2025 compared with the first half of the year . Still , the current formula based contract pricing remains a headwind compared to the second half of last year , which also benefited from business interruption insurance income .
Speaker #4: Anticipated improvements in both sales price and cost per ton delivered are expected to result in a return to profitability at Mississippi Lignite Mining Company in 2026 , assuming the customers power plant operations and demand stabilize and formula based pricing improves as expected .
To wrap up. I am confident in our future. We are operating in a very favorable environment. There is strong growing demands for the products and services that we provide and rapidly growing demand for energy. Recent government support is also food further. Booster-ring all of our businesses
Short-term direct disruptions aside. I believe the building box for durable compounding growth at Naco or firmly in place. Our team remains focused on execution, operational, discipline, and driving long-term returns for shareholders. We're optimistic about what the rest of the year holds and even more. So about our prospects for 2026 and Beyond with that, we will now turn to any questions you may have
At this time, I would like to remind everyone that in order to ask a question, press star 1 on your telephone keypad. We will pause for just a moment to compile the Q&A roster.
Our first question comes from the line of Douglas Weiss with DSW Investment. Please go ahead.
Hey, good morning.
Morning.
Um,
starting with, um,
the call segment. Um, so on, on your unconscious businesses, um,
Uh volumes were a little bit later than they've been over the last couple years. Could you say why that happened?
There's nothing there that I would specifically call out and there's nothing that I really think is a problem going forward. It's true. It really just kind of, you know, single quarter noise going on. But uh,
Has been the main main problem.
Okay, so do you you would see that? I mean it it dropped from. Um yeah yeah. There's no there's nothing in there. That's, you know, reason for concern.
Okay. You see it kind of returning to trend line there.
Um,
Yep, and then when you say um nmlc will return or you expect it to return to profit next year. Um, are you talking about gross profit?
Yes.
Okay, yeah, um combination. If we think the formula pricing is going to improve.
Um, you know, based on, you know, what we know about the formula and how we can look at where we think uh, inflation will go in the future. Uh, as well as, you know, we're expecting that the plants going to operate more consistently, which allows us to operate more consistently and drive down our costs.
Right. And that formula is is, is it returned based on year, end pricing
No, it's uh, it's reset is monthly or quarterly.
Monthly. I think that includes the part that we look back. Yeah. A monthly and the 5 year list. And so it's, it's a, it's a contractually agreed formula that that came up with back in the mid 1990s. Uh, that takes a 1 year, look back, as well as a 5 year. Look back at published, you know, nationally published, indices that reflect General inputs in, uh, mining in power production.
I see, but is it is it resetting every quarter? Did I understand you?
Okay, so you could actually see better pricing.
Over the next couple quarters if depending on. Yep. Well, you know, based on the way we're forecasting uh, the coming quarters. Yeah. Um you know it's really in 2026 that we see the substantial Improvement in the sales price.
Okay. Okay. Um this is gonna be some noise going through the pricing formula which isn't surprising. I mentioned earlier that it's you know a 1 year look back. So what what is
What is um, you know, a stated index.
For some I'm sorry, something today versus a year ago, but also today versus 5 years ago, um, when you think about 5 years ago, uh, you know, the, the economy was going through the roller coaster of coid when, you know, things prices and lots of things dropped a lot early on and then spiked up.
So as you're doing a 1 year, look back, I mean, that's not, there's not a lot of noise there, but as you're doing a 5 year, look back, uh, there's some noise 5 years ago and that's um, that's messing with the formula right now. But we, we expect that's going to stabilize as we move into 2026.
Okay. And, and you know, and then Elsie had the boiler problem and it sounds like they're having some some more operational problems. Um,
Is, is that coincidental or is it just a really old?
Facility that that you think may have ongoing issues.
Well, I mean it's not a terribly old facility. This thing started up in uh 2020, um, which in the scheme of us power plants is pretty or coal fired verify. It's pretty new. Uh, obviously the boiler issue a year ago, uh, more than a year ago. Was a very substantial 1-time issue that took out half the plant for half the year. Um, that's that's clearly a very, um,
you know, you would, you would only expect that to happen at most once in the life of a player plant over many decades, the things that are going on now are more sort of minor uh things that
Period of time. That's affected the second quarter results.
Okay. Okay. Um
For North American mining. Um,
uh, volume was
I haven't, I haven't, uh,
Uh, I haven't memorized your new, uh, headings, by the way, but I will for next quarter. But, um, uh,
the volume, um, was light, uh,
Why was that?
Did you say, 'Why was that?' Yep. Yeah. Why did volume drop off?
Yeah, so it was a combination of some customer, uh, reduction in customer is demand which might be some general softness uh, in their customer demand. Uh, but I don't think any of its really significant. Uh, there were some minor, you know issues, uh, with we, I think, with some of their facilities, although nothing major. And, uh, we had some mechanical issues with some of our equipment primarily drag lines that, uh, you know, made it unable for us to deliver. So, 1 of the reasons that, you know, customers keeps, uh, inventory stock piles on site, uh, it creates a buffer for them. And for us, with respect to deliveries,
Uh the the repairs uh, that we have made, you know, have been successful and and we don't see a problem with any of that going forward.
Okay.
Um,
in terms of the, um, capex its back in weighted is most of that. How, how is that allocated at? This point, is a lot of that, for the, the contract mining, or, um, so a vast majority of it, um, is related to growth initiatives. Uh, it's money that we're spending in order to secure new, um, you know, new contracts, new projects. And, you know, you remember that our, our business model is and where we can, uh, we'd like to have a service model where we don't have any Capital up front and we just collect a fee going forward, but in some instances, particularly at North American mining. Uh, but also at catapults will invest Capital up front. Um, uh, that will been catapults Case by mineral and royalty interest to make other Investments that will then have very long-term,
Returns with no further investment on our part or at. Uh, when you look at at Contract mining at North American mining, it might be a drag line that will buy upfront. Um, and the maintenance capex on those things is a fraction of the depreciation over time. So a majority of that capex uh which is later in the year is tied to growth. Uh tied to new contracts and new Investments.
Mhm. And which, you know, it's to me, sorry, sorry to interrupt, but to me the really attractive thing about that in our business model is we don't really have a lot of ongoing capex, unless we see opportunities for growth,
Uh, but, you know, meets a very, uh, well-developed. And I think robust. And proven instead of investment, I need criteria that we have for new projects. Um, so you know, we got low capex unless we see opportunities to grow in these long-term multi-year contracts. And in that case, you know, we're going to increase our capex then because it's an opportunity to grow the business.
Right? And and I it sounds like you're you continue to sign new um projects in the uh the contract mining segment.
Uh, yeah, certainly the contract mining segment, but I would say that's true across, uh, the entire company. Um, we over the last, you know, number of years, have built an incredibly effective, um, Business Development machine,
Uh, that is continuing to add new long-term multi-year, projects and contracts and Investments, on top of those that are already in place.
Um, as well as the income that we generate out of our natural gas reserves and Appalachian that we've known for decades.
Uh those long-term platforms have really fueled the success over the last 10 years that we've added more and more long-term contracts. And you know, as we continue to exercise that business development muscle, we're getting better and better at it. Um, I'd say in the beginning, we were hitting a lot of singles, which I was very happy with. Uh We've more recently started, hipping hitting more doubles and triples and even some of the home runs uh with respect to these long-term uh projects contracts and Investments and uh you know, as we add those
More fortunate that we got a balance sheet uh and stable cash flows that allow us to keep adding those to the portfolio that we already have. So really has a very much a compounding effect as we as we think about, you know, the growth trajectory that we're on.
Um, when you say, you know, triples and home runs are. Are you thinking can can you give some specific examples? Are you thinking?
Within the contract mining segment or catapult.
Um, it's really kind of across the board. Uh, We've we've found some opportunities, uh, in each of our businesses, uh, to find, uh, projects that are increasingly attractive to us. Uh, both in terms of their size, in terms of the profit opportunities that they offer Us in terms of the length of the contract. Um, you know, and and I would also say we're finding ways to Branch out really just kind of on the edges of what we do.
Uh, a great example of that I would point out is our lithium uh project. You know, we signed that in 2019. Uh we've been working with the customer to develop that um that project ever since and we're we're making you know, a modest amount of money right now while we're supporting them in development. But as we get to 2027 and Beyond when we start delivering lithium to them that that thing's a very substantial meaningful uh project for us.
So you know, it's 1 example of something that we've already signed. Um we have others in other parts of our business that I have similar feelings about those and we've got a number in the pipeline that I think are equally as exciting.
Um, okay great. Um
the um, you know, on the in terms of the cash flow statement, it looks like um, you still haven't realized the um,
Um, you still haven't received the cash from your investments in working capital over the last couple years. Um,
Is, do you expect that later in the year?
So we did say, we expect, you know, more favorable cash flows this year than last year. Um, if you look at our balance sheet, you can see we have deposits with vendors of 16.3 million as current. So we anticipate the collection of that, um, you know, last year we in 2324, you know, we were building up inventory in the, um,
In the uh contract mining business that you know, we don't anticipate significant increases in that going forward. So um,
That's, I guess a little bit of color around that.
Okay.
Um, yeah, you said you expected to generate cash this year. Um
I I think on a net basis. Is that right?
You said net of net of, uh, capex. That's that's just what. I recall, the guidance being, uh, earlier in the year.
Um, could be awful.
Let's see.
This quarter. We said it would be an improvement in uh cash flow but it was still a use of cash. But yes, you're correct a previous we had previously. Initially said we thought it was going to be an increase in cash flow. Yep.
But the change is partly related to these additional capex. Uh opportunities. I'd really I'd very much think of them as capex opportunities uh to secure some new projects.
Expectation for operating cash, flow, change? Or, or are you just, or is it just your spending more?
Well, I'd say that, they, they have changed to the extent that the second quarter didn't play out. Like, we thought it would, right? Yeah, if you, if you neutralize for the second quarter, we still feel pretty good uh about where we're having.
Right. Second quarter is really the the driver in the slight change in setting that it's not an ongoing. Uh, change of view. It's really a second quarter impact. Yeah.
And then going into 2026 is when we really anticipate a more steady increase in annual cash flow generation. But remember,
I remember if we find some great opportunities,
To enter into some great new projects that do require some capex up front. We're probably going to pursue those, but I would think, as an investor,
that's a good thing.
Yeah no no absolutely. Um and the the pension settlement um it sounds like that's non-cash uh and correct me if I'm wrong on that but in terms of the overfunding what what happens to the overfunding there?
Um, similar to what happened with. Um, if you see, we have a prepaid profit sharing um, amount on our balance sheet, at the end of the quarter, we can use that to fund other uh, qualified planned, funding requirements.
I see, so it's it's it's money that's sitting on the balance sheet that we look, we can't use it for capex, uh, but we can certainly use that money that's sitting in that account to fund qualified, uh, plan contributions, um, you know, 401K kind of stuff,
So if you think of money as fundable that's sitting in an account that can be used, uh, for a specific purpose, we otherwise would have been using general funds for that. Correct? And you're correct that the the pension charge is a non-cash charge. It's going to look, it's going to hit the income statement, it's going to make it look bad, but it's I I view it. As a good thing, we're going to get out of the pinch of business.
We, we've been out of Pensions for a long, long time. This is finally, uh, terminating it and, uh, you know, getting it out of out of our financial statements.
Yeah. Yes, our plan is up front.
Lens from Frozen front, 25 years.
Yeah. Right. Okay. Last question for me is, um, uh, you know, there's been a fair amount of press coverage about um activity in the Appalachia region with um, data centers and um,
You know, Off the Grid, uh, natural gas contracts.
Um,
Uh, reserves in that region.
I would say indirectly. Yes, uh, directly
Um, you know, we're we just own the minerals.
Uh, we
really can't enter into a contract for our minerals to go into a power plant, but serving a data Farm.
But I would say, you know, when you think about um, basis, uh, if you're familiar with basis, it's really the T Transportation costs to get from where something is produced to, you know, the Central Markets, uh I'd say it's it's helpful for for natural gas pricing in the Appalachian region. Uh, the closer you bring demand to the product. Uh, that's always a good thing.
Mhm. Okay, all right, great. Well well as always appreciate the answers and uh look forward to talking to you next quarter.
I just want everything out here on your last question.
Tried to put every uh you know, bit of production through the existing Pipelines.
The last thing I got is, sorry.
Yeah that's 1. All right the point of clarification. Um, real quick, the pension plan was frozen in 2020. Your ride is 25 years ago and, um, mlmc actually started deliveries in 2020 or 2002. Not 2000 just clarifying.
It's a long time ago. Yes, both of them are a long time ago.
Got it. Okay, all right. Well, thanks again.
Yeah. Thanks and our final question. Our final question comes from the line of Daniel. Boring with awcl. Please go ahead.
Good morning.
Morning.
We have moved from I don't know 80 or 100 million in net cash to 46 in net debt. Uh can you talk about kind of philosophically where you want to be after this large capex cycle cash flow cycle changes? Is there a period of deleveraging? You see what? Where are we going?
Yep. We we are headed towards, uh, less leverage rather than more, um, you know, I'm not saying that's going to be, you know, happen in the next quarter. But, uh, our objective, uh, is to have less leverage than they, than we do. Um, although we
Operate in an incredibly attractive political environment right now. Um, you know, I do recognize we recognize that there's political risk, uh, particularly on our coal business, uh, and we have some
Uh, entrepreneurial startup risk. Although today I think our businesses are much more mature than they were a few years ago.
So, my philosophy and our philosophy is, if we've got political risk on a core part of our business and we have um, entrepreneurial startup risk in other parts of our business. We should have no risk on our balance sheet.
Um, and that's why, um, you know, internally, we talk about maintaining a bulletproof balance sheet, uh, and uh, that's what we strive to have. Uh, you know, and you what we mean by bulletproof balance sheet is very low levels of debt uh and a substantial amount of cash.
And look, you know, I described to you the philos the philosophies from, you know, assessing risk.
The other reason I think, um, very, very conservative balance sheet is important. Uh, because as we meet with customers potential customers and represent to them that we're going to, we're going to
we're going to start a a, um,
A set of services for them that are completely integrated into their business. Whether that's running the coal mine, that supplies a power plant on a percent of the fuel for a power plant. Or if we're doing all of the mining with respect to an aggregate query or a cement plan,
uh, if we're going to sit down with them and sign a 20-year contract,
we need to be able to look them in the eye and assure them that we're going to be here. Uh, if we are, um,
if we're taking Financial Risk, the 1 thing that can get in the way of that long-term approach is, uh, a balance sheet that starts making decisions for the ballot for the business.
Uh, as long as the ballot sheet is bulletproof, uh, we will never get that situation and we can assure our partners that we're going to be integrated, uh, important part of their business. You know, for decades to come our, our largest our, our longest. Um, customer relationship is 46. I think going on 47 years, um, in North Dakota at 1, of our coal mines. Uh, that's the kind of relationship we want to have with many of
Our customers. So, in order to do that, we need to make sure that we can tell them that we're going to be here. Um, we've been here at 111 years right now and uh, 112 years and um, you know, we're shooting for the next hundred
It's a remarkable run.
This, this Parts business at Contract mining.
Is that um, it is it a new business model? Are you trying to run down inventory?
The the changes from the past, uh, it seems over the last couple of quarters. We've started talking much more about the parts business.
Yeah, I mean I I would say it's an evolution in the business model.
Um, we have stocked, uh, Parts in inventory for a very long time. Um, servicing our, our, you know, drag lines that we operate the equipment that we add operate.
Uh, in these, you know, integrated operations with our customers.
Um, as that business, the the fundamental contract mining business really led by North American mining has grown over time. We have you know, expanded the range of equipment that we operate which has caused us to expand the inventory that we carry. And as we have looked at that business, um, you know, what we see is that, you know, 1 we've been incurring costs to carry those and manage those, and we had a minimum, uh, should get reimbursed for those. Uh, but we also find their instances where, you know, many of these pieces of equipment. Some of these drag lines haven't been manufactured, uh, for decades, and the parts are getting parts, and components are getting harder and harder to find.
So we've concluded that really the right decision for us. And for our customers is for us to stock, uh, those, um, particularly those more difficult to find components and parts on site, uh, and it, essentially rather than searching the country for those when we might need them. Uh, we're, we're going to stock them ourselves and then, um, you know, really operate as a parts distributor, both internally and externally. So it's really kind of an evolution of the business. As we think about how we can best serve our customers in this space.
That helps a lot. Thank you. And
on on North American mining or or the contract business
when we start up a new,
Add a new query.
Are are we moving drag lines from?
Closed.
North American coal mines over is, is that a major portion of this business. And and if so is that a is it a kind of limiting factor on the the growth of
Contract mining or are those completely separate?
It's a great question. Uh they're completely separate a majority of the drag lines that we operate in our uh, coal. Mining business are absolutely huge machines uh much larger than you would ever operate at any kind of a Corey. Um,
When we start up a new so you don't have to worry about that being a limiting factor uh the process for starting up a new quarry. Uh
For an Aggregates customer. Uh, I guess I would start with saying, in some instances will go in and take over operation of the equipment that they already have on site.
Um, so there's really, you know, not a transition and there's not a concern about where the equipment's coming from.
In other instances, if it's an operating query, uh, you know, we may move in a drag line that is more efficient or that we think is better suited for the operating query. Uh, that would all have been part of the negotiations with that customer. Uh, with respect to the equipment, we're going to use and how we're going to serve them.
If it's a green field Quarry then we and the customer are going to work together to, uh, determine what equipment. What drag lines would be needed.
Planning operation. Hopefully that's uh, that's helpful.
That's, that's very helpful. Okay, I guess I would just add 1 other piece to that. I talked a lot about old drag lines, um, in the last few years, uh, we have developed a relationship with a company in, um, in the Netherlands called mtech cranes and their primary, their vast majority of their business is manufacturing cranes which are
Similar.
technology, but not identical to a drag line, uh, and we have worked with them, so that they are now manufacturing, an electric, uh, drag line, the older drag lines tend to be, um,
Uh, driven by diesel, uh, their mechanical machines, whereas the the mtech machines are much more modern technology. Uh, we've been, uh, deploying those drag lines. In fact, we're the only operator of mtech drag lines in the United States and we are the exclusive dealer for a mtech drag lines in 48 of 50 states where the exclusive dealer for mtech drag Line Parts.
Uh, in the United States. So, this kind of fits with your earlier question about parts and also fits with a question that you add about, where do we get our drag lines from these new electric drag lines for the write operations? Right? Sized operations are incredibly effective machines in terms of their operating efficiencies uh their maintenance their uptime. Uh we're really excited about the opportunities that we think lie ahead because of this relationship we have with mtech.
Yeah, thanks for that.
the the last 1, I think, um,
Hiker is a business. We've invested somewhere around $20 million in.
Are they themselves fully invested or is this kind of dollars to sort of run rate earnings from them?
Um, and then could could you talk about?
What their Capital allocation plan is, is that a is that a growth business? Is it kind of a yield thing? What what are we doing there?
so, Eiger is a, um,
I mean, to begin with iger's, got its own website, it's very modest website, but sort of describes, what they do, it's private business. Um, we made an investment in them because we think that they have a very interesting business model. Uh,
With respect to, uh, you know, the the, both the, the Basin where they're invested. And, uh, the way they're Investing For Us, you know, we look at it as a non-op investment. Um, we are not operating any of the minds, any of the minds, sorry, any of the wells, uh, and quite honestly right now, they are either. Um, but you know, their business model is very focused on, um, expanding the productivity of Wells that they have in in um, in their control. And we think that it is a business model that is very similar to ours and very complimentary 2 hours, uh, which is why we made the investment, but to us, it's essentially a non-op working interest. Meaning we
We're not operating. Um, we're not responsible for operating, uh, somebody else is taking care of all that. Um, so for us, it's another investment in the portfolio as to, you know, what's the run rate for income? I think, you know, we are optimistic about their business model. It's our investments are relatively recent, um, and I would say they're um, I think they're building momentum in what they are doing. Uh, but I'm not going to make any specific Outlook comments about where we think they're they're headed. But we do think overall, this is going to be an attractive investment for us.
All right, I appreciate you taking my questions.
No, we we we really appreciate your interest and we appreciate your call.
And with no further questions, thank you. I will hand the call back to Christina for closing remarks.
Just a relations website. When it becomes available, if you have any follow-up questions, please reach out to me, you can reach me at the phone number on the release. I hope you enjoy the rest of your day and I'll turn it back to Tina to conclude the call.
To access the replay of today's call dial toll-free 800-770-2030 playback. ID is 679 0172 followed by the pound key. This does conclude today's conference call you may now disconnect