NACCO Industries, Inc. Annual Report 2015

FY2015 Annual Report · NACCO Industries, Inc.

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NACCO Industries, Inc.
2015 Annual Report
Strategic Update

NACCO Industries, Inc. at a Glance

Principal Businesses

2015
Financial Results

Market Positions

North American Coal (“NACoal”)
Headquarters: Dallas, Texas
North American Coal mines coal primarily
for use in power generation and provides
selected value-added mining services for
other natural resources companies.

MINING

Hamilton Beach Brands (“HBB”)
Headquarters: Richmond, Virginia
HBB is a leading designer, marketer and
distributor of small electric household and
specialty housewares appliances, as well as
commercial products for restaurants, bars
and hotels.

HBB has a broad portfolio of some of the
most recognized and respected brands in
the small electric appliance industry, including
Hamilton Beach®, Proctor Silex®, Hamilton
Beach® Commercial and Weston®. HBB also
sells products under licensed brands such
as Jamba® and Wolf Gourmet®.

Kitchen Collection
Headquarters: Chillicothe, Ohio
Kitchen Collection is a national specialty
retailer of kitchenware in outlet and traditional
malls throughout the United States.

NACoal:
North American Coal is
among the ten largest
coal producers in the
United States.

Coal is delivered from
developed mines in North
Dakota, Texas, Mississippi,
and Louisiana to adjacent
or nearby power plants or
coal processing facilities.

HBB:
HBB is a leading company
in retail and commercial
small appliances, with
strong share positions in
many of the categories
in which it competes.

HBB products are primarily
distributed through mass
merchants, national
department stores, whole-
sale distributors, other
retail sales outlets and
the Internet.

Kitchen Collection:
Kitchen Collection is
a leading specialty
retailer of kitchen and
related products in
outlet and traditional
malls with 229 stores
throughout the United
States at December 31,
2015.

NACoal:
Revenues:

$148.0 million
Operating profit:
$0.5 million

Net income:

$5.6 million
Adjusted income:(1)
$27.3 million

Equity:

$108.4 million
Return on Equity:(1)

5.2%

Return on Capital
Employed:(1)
3.6%

HBB:
Revenues:

$621.0 million
Operating profit:
$34.8 million

Net income:

$19.7 million

Equity:

$51.4 million
Return on Equity:(1)

38.3%

Return on Capital
Employed:(1)
19.1%

Kitchen Collection:
Revenues:

$151.0 million
Operating profit:
$0.2 million

Net loss:

$0.4 million

Equity:

$31.8 million
Return on Equity:(1)

(1.4%)

Return on Capital
Employed:(1)
(1.3%)

(1) This Annual Report contains references to non-GAAP financial measures. Presentations of, and quantitative reconciliations to, the most directly comparable financial

measures calculated and presented in accordance with U.S. generally accepted accounting principles (“GAAP”) appear on page 14.

* Jamba® is a registered trademark of the Jamba Juice Company.
** Wolf Gourmet® is a registered trademark of the Sub-Zero Group, Inc.

NACCO Industries, Inc. is an operating holding company with subsidiaries in the following principal
industries: mining, small appliances and specialty retail.

Competitive Advantages

Financial Objectives

Strategic Initiatives

NACoal:
Earn a minimum return
on capital employed of
13 percent, maintain or
increase the profitability
of all existing mining
operations and achieve
income growth from
development of new
mining and services
ventures

HBB:
Achieve $750 million in
sales and a minimum
operating profit margin
target of 10 percent

NACoal:
• Coal mines provide steady income and
cash flow before financing activities
• Coal sales contracts are structured
to eliminate exposure to market
fluctuations of coal prices

• 2.0 billion tons of lignite coal reserves,
of which approximately 1.1 billion tons
are committed to current customers
• Outstanding operational and techno-

logical mining skills

• Highly efficient heavy equipment

utilization

• Excellent record of environmental
responsibility and employee safety

HBB:
• Strong heritage brands with leading

market shares

• Strong relationships with leading

retailers

• Highly professional and experienced

management team

• Successful track record of product
line expansion and new product
innovation

• Industry-leading working capital

management

Kitchen Collection:
• Highly analytical merchandising skills

and disciplined operating controls
• Strong core Kitchen Collection® store

portfolio in outlet malls

Kitchen Collection:
Achieve a minimum
operating profit margin
target of 5 percent

NACoal:
• Using a disciplined approach and utilizing NACoal’s

core cost-plus business model, pursue:
– Additional opportunities to serve as a contract

miner in new or existing coal mining operations
– Opportunities in non-coal mining operations, such

as aggregates or other minerals

– Opportunities to expand value-added services

HBB:
• Enhance placements in the North American consumer

business

• Achieve a leadership position in internet sales by

providing best-in-class retailer support and increased
consumer content and engagement

• Enhance placements in the “only-the-best” market with

strong brands and broad product lines

• Expand internationally in emerging Asian and Latin

American markets

• Achieve further penetration of the global commercial

market through an enhanced global product line

Kitchen Collection:
• Focus on comparable store sales growth

– Enhance sales volume and profitability through

refinement of store formats and specific product
offerings to improve sales closure rates

– Maintain inventory efficiency and store inventory

controls

– Increase sales of higher-margin products

• Selectively open new Kitchen Collection® stores in

strong outlet malls in well-positioned locations

Selected Financial and Operating Data
NACCO Industries, Inc. and Subsidiaries

Year Ended December 31
2015 2014(1) 2013 2012(2) 2011(2)(3)
(In thousands, except per share data)

Operating Statement Data :
Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating profit (loss) . . . . . . . . . . . . . . . . . . . . . . . .

$915,860
$ 31,827

$ 896,782
$ (66,309)

$932,666
$ 61,336

$873,364
$ 67,642

$ 790,455
$ 64,074

Income (loss) from continuing operations . . . . . . .
Discontinued operations, net-of-tax(2). . . . . . . . . . .
Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 21,984
–
$ 21,984

$ (38,118)
–
$ (38,118)

$ 44,450
–
$ 44,450

$ 42,163
66,535
$108,698

$ 79,470
82,601
$ 162,071

Basic Earnings (Loss) per Share:
Income (loss) from continuing operations . . . . . . .
Discontinued operations, net-of-tax(2) . . . . . . . . . . .
Basic earnings (loss) per share . . . . . . . . . . . . . . . . .

Diluted Earnings (Loss) per Share:
Income (loss) from continuing operations . . . . . . .
Discontinued operations, net-of-tax(2) . . . . . . . . . . .
Diluted earnings (loss) per share . . . . . . . . . . . . . . .

$ 3.14
–
$ 3.14

$ (5.02)
–
$ (5.02)

$ 5.48
–
$ 5.48

$ 5.04
7.93
$ 12.97

$ 9.49
9.85
$ 19.34

$ 3.13
–
$ 3.13

$ (5.02)
–
$ (5.02)

$ 5.47
–
$ 5.47

$ 5.02
7.90
$ 12.92

$ 9.46
9.82
$ 19.28

Per Share and Share Data:
Cash dividends(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Market value at December 31. . . . . . . . . . . . . . . . . .
Stockholders’ equity at December 31 . . . . . . . . . . .

$ 1.0450
$ 42.20
$ 29.42

Actual shares outstanding at December 31 . . . . . .
Basic weighted average shares outstanding . . . . .
Diluted weighted average shares outstanding . . .

6.837
7.001
7.022

Balance Sheet Data at December 31:
Cash(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total assets(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term debt(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 52,499
$655,408
$160,113
$201,138

$ 1.0225
$ 59.36
$ 29.23

7.236
7.590
7.590

$ 1.0000
$ 62.19
$ 37.83

7.872
8.105
8.124

$ 5.3775
$ 60.69
$ 33.68

8.353
8.384
8.414

$ 2.1200
$ 89.22
$ 68.81

8.374
8.383
8.408

$ 61,135
$ 770,520
$ 191,431
$ 211,474

$ 95,390
$809,956
$152,431
$297,780

$139,855
$776,306
$135,448
$281,331

$ 153,784
$1,808,834
$ 74,471
$ 576,210

(1) During the fourth quarter of 2014, NACoal determined that indicators of impairment existed at its Centennial mining operations and as a result reviewed the
Centennial long-lived assets for impairment. NACoal recorded a non-cash, asset impairment charge of $105.1 million pre-tax for Centennial’s long-lived asset
group.

(2) During 2012, NACCO spun off Hyster-Yale, a former subsidiary. The results of operations of Hyster-Yale for all periods shown have been reclassified to reflect

Hyster-Yale’s operating results as discontinued operations.

(3) In 2006, NACCO initiated litigation in the Delaware Chancery Court against Applica Incorporated (“Applica”) and individuals and entities affiliated with Applica’s

shareholder, Harbinger Capital Partners Master Fund, Ltd. The litigation alleged a number of contract and tort claims against the defendants related to the failed
transaction with Applica, which had been previously announced. On February 14, 2011, the parties to this litigation entered into a settlement agreement. The
settlement agreement provided for, among other things, the payment of $60 million to NACCO and dismissal of the lawsuit with prejudice. The payment was
received in February 2011. Litigation cost related to this matter was $2.8 million in 2011.

(4) Cash dividends in 2012 include a one-time special cash dividend of $3.50 per share. The $0.25 dividend paid in the fourth quarter of 2012 was the first regular

quarterly dividend following the spin-off of Hyster-Yale.

This Annual Report contains references to non-GAAP financial measures. Presentations of, and quantitative reconciliations to, the most directly comparable
financial measures calculated and presented in accordance with U.S. generally accepted accounting principles (“GAAP”) appear on page 3 and page 14. For
certain pre-tax disclosures included in the “Discussion of 2015 Results” on page 4, the resulting after-tax amount and the related income tax amount have
been included and reconciled on page 14. Certain after-tax amounts are considered non-GAAP measures in accordance with Regulation G. Management
believes that after-tax information is useful in analyzing the Company’s net income.

Year Ended December 31
2015 2014(1) 2013 2012(2) 2011(2)(3)
(In thousands, except employee data)
Cash Flow Data:
Operating Activities
North American Coal Corporation . . . . . . . . . . . .
Hamilton Beach Brands . . . . . . . . . . . . . . . . . . . . .
Kitchen Collection . . . . . . . . . . . . . . . . . . . . . . . . . .
NACCO and Other . . . . . . . . . . . . . . . . . . . . . . . . . .
Provided by operating activities
from continuing operations . . . . . . . . . . . . . . . . . .

$ (6,082)
18,581
7,097
203

$ 95,925
13,941
12,548
(14,412)

$ 29,525
40,754
(10,071)
(7,143)

$ 50,158
27,390
3,754
(6,96 7)

$ 31,645
24,229
5,026
39,697

$ 100,597

$ 74,335

$ 19,799

$ 53,065

$ 108,002

Investing Activities
North American Coal Corporation . . . . . . . . . . . .
Hamilton Beach Brands . . . . . . . . . . . . . . . . . . . . .
Kitchen Collection . . . . . . . . . . . . . . . . . . . . . . . . . .
NACCO and Other . . . . . . . . . . . . . . . . . . . . . . . . . .
Used for investing activities
from continuing operations . . . . . . . . . . . . . . . . . .

Cash Flow before Financing Activities(5)
North American Coal Corporation . . . . . . . . . . . .
Hamilton Beach Brands . . . . . . . . . . . . . . . . . . . . .
Kitchen Collection . . . . . . . . . . . . . . . . . . . . . . . . . .
NACCO and Other . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Cash Flow before Financing Activities
from continuing operations(5) . . . . . . . . . . . . . . . . . .

Provided by (used for) financing activities
from continuing operations . . . . . . . . . . . . . . . . . .

Other Data:
Adjusted EBITDA(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ (1,512)
(4,775)
(1,768)
(236)

$ (44,143)
(29,516)
(792)
(483)

$ (56,185)
(2,278)
(2,113)
(158)

$ (56,320)
(3,215)
(3,852)
(381)

$ (10,755)
(3,705)
(2,292)
(33)

$ (8,291)

$ (74,934)

$ (60,734)

$ (63,768)

$ (16,785)

$ 94,413
9,166
10,780
(14,648)

$ (50,225)
(10,935)
6,305
(280)

$ (26,660)
38,476
(12,184)
(7,301)

$ (6,162)
24,175
(98)
(7,348)

$ 20,890
20,524
2,734
39,664

$ 99,711

$ (55,135)

$ (7,669)

$ 10,567

$ 83,812

$(108,301)

$ 20,979

$ (36,776)

$ (24,520)

$ (22,446)

$ 54,929

$ 63,351

$ 88,815

$ 81,946

$ 79,875

Total employees at December 31(7) . . . . . . . . . . . . . .

3,600

4,000

4,100

4,300

4,000

(5) Cash Flow before Financing Activities is equal to net cash provided by operating activities less net cash used for investing activities.
(6) Adjusted EBITDA is provided solely as a supplemental disclosure with respect to operating results. Adjusted EBITDA does not represent net income, as
defined by U.S. GAAP and should not be considered as a substitute for net income or net loss, or as an indicator of our operating performance. NACCO
defines Adjusted EBITDA as income before discontinued operations, Applica settlement and litigation charges, long-lived asset and goodwill impairment
charges and income taxes plus net interest expense and depreciation, depletion and amortization expense. Adjusted EBITDA is not a measurement
under U.S. GAAP and is not necessarily comparable with similarly titled measures of other companies.

(7) Includes employees of Weston Brands starting in 2014, Centennial from 2012 to 2014 and the unconsolidated mines for all years presented. Excludes

employees of Hyster-Yale for all years presented.

Year Ended December 31
2015 2014(1) 2013 2012(2) 2011(2)(3)
(In thousands)
Calculation of Adjusted EBITDA(6)
Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Discontinued operations, net of tax . . . . . . . . . . . . .
Applica settlement and litigation costs . . . . . . . . . .
Centennial long-lived asset
impairment charge . . . . . . . . . . . . . . . . . . . . . . . . . .
Centennial goodwill impairment charge . . . . . . . . .
Income tax provision (benefit) . . . . . . . . . . . . . . . . . .
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Depreciation, depletion and amortization
expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjusted EBITDA(6). . . . . . . . . . . . . . . . . . . . . . . . . . . . .

105,119
–
(38,455)
7,566
(831)

–
3,973
11,270
4,775
(225)

–
–
15,865
6,088
(162)

–
–
2,815
6,924
(474)

–
–
32,751
8,789
(290)

$ (38,118)
–
–

$ 108,698
(66,535)
–

$ 44,450
–
–

$ 21,984
–
–

28,070
$ 63,351

17,992
$ 81,946

16,301
$ 79,875

24,572
$ 88,815

23,680
$ 54,929

$ 162,071
(82,601)
(57,146)

Discussion of 2015 Results

NACCO Industries, Inc. and its subsidiaries operate in the mining, small appliances and specialty

retail industries.

North American Coal (“NACoal”) performed as expected in 2015 with the exception of its Centennial

Natural Resources mining operation in Alabama. Revenues at NACoal were lower in 2015 because the

Centennial Natural Resources mining operation continued to be affected by decreased demand and

depressed coal prices, and the Company’s decision in mid-2015 to cease mining operations at Centennial.

NACoal’s consolidated mining operations, excluding Centennial, realized an increase in revenues mainly

as a result of an increase in tons sold at its Mississippi Lignite Mining Company (“MLMC”) operation.

NACoal reported net income of $5.6 million compared with a net loss of $51.0 million in 2014. The

decision to cease mining operations at Centennial came after incurring significant losses resulting from

worsening conditions in Alabama and global coal markets and the adverse effects of regulatory changes.

NACoal ceased coal production at Centennial in the fourth quarter of 2015.

Excluding Centennial, NACoal reported adjusted income of $27.3 million in 2015 compared with

adjusted income of $28.0 million in 2014. “Adjusted income” refers to net income or net loss adjusted

for the exclusion of Centennial, including the 2014 asset impairment charge. (For reconciliations from

GAAP results to the adjusted non-GAAP results, see page 14.) Improved results at MLMC from an increase

in tons sold were more than offset by a reduction in gains on sales of assets, a reduction in royalty and

other income and higher selling, general and administrative expenses in 2015 compared with 2014.

Hamilton Beach Brands (“HBB”) recorded increased revenues in 2015 primarily due to higher

volumes and the December 2014 acquisition of Weston Brands. While HBB’s revenues and gross profit

improved during 2015 primarily due to an increase in sales volumes and a full year of Weston results,

net income declined to $19.7 million in 2015 from $23.1 million in 2014 as unfavorable foreign currency

movements negatively affected results.

Kitchen Collection made significant improvements in 2015 as a result of realigning its business
around a smaller number of core Kitchen Collection® outlet stores. The realignment included closing

more than 100 unprofitable stores during 2014 and 2015 in light of changing consumer trends and

ongoing market weakness. Although Kitchen Collection revenues decreased substantially in 2015 from

the closure of these stores, Kitchen Collection achieved a substantially lower net loss of $0.4 million in

2015 compared to a net loss of $4.6 million in 2014 as a result of a $2.8 million pre-tax charge related

to the realignment and store closures recognized in 2014 as well as fewer promotional markdowns, a

shift in sales mix to higher-margin products and a reduction in store expenses in 2015.

Consolidated NACCO revenues increased from $896.8 million in 2014 to $915.9 million in 2015.

Consolidated net income was $22.0 million, or $3.13 per diluted share, in 2015, compared with a net

loss of $38.1 million, or $5.02 per diluted share, in 2014. Consolidated adjusted income for the year

ended December 31, 2015 was $43.7 million, or $6.22 per diluted share, compared with adjusted

income in 2014 of $40.8 million, or $5.37 per diluted share.

Camino Real Fuels’ Eagle Pass mine in Texas began delivering coal to its customer in 2015.
A Wirtgen© surface miner is used to extract coal, ensuring specific quality parameters are met.

To Our Stockholders

Introduction

NACCO Industries, Inc., headquartered

provides selected value-added mining services

in Cleveland, Ohio, is an operating holding

for other natural resources companies.

company with an established objective of

Hamilton Beach Brands, Inc., headquartered

increasing long-term shareholder wealth, with

in Richmond, Virginia, is a leading designer,

a particular focus on taxable investors. The

marketer and distributor of small electric house-

business of NACCO Industries is conducted

hold and specialty housewares appliances, as

through three separate and independently

well as commercial products for restaurants,

managed subsidiaries, with a small core of

bars and hotels.

people performing public company activities

The Kitchen Collection, LLC, headquartered

at the corporate headquarters.

in Chillicothe, Ohio, is a national specialty retailer

The North American Coal Corporation,

headquartered in Dallas, Texas, mines coal

primarily for use in power generation and

of kitchenware operating under the Kitchen
Collection® store name in outlet and traditional
malls throughout the United States.

North American Coal

NACoal entered into a new 15-year agree-

North American Coal’s mines operate

ment in 2015 to operate a mine for the Navajo

under contracts to supply coal to an individual

Transitional Energy Company (NTEC). Under this

customer’s power plant or coal processing

facility for a long period of time, often for

agreement NACoal, through a new wholly owned

subsidiary named Bisti Fuels, will act as NTEC’s

decades. The mines and the customer facilities

contract miner at NTEC’s Navajo Mine, a surface

are in close proximity, often adjacent to one

another. NACoal also provides value-added

services, such as operating and maintaining

coal mine located within the Navajo Nation near

Fruitland, New Mexico. Similar to most of NACoal’s

other mining agreements, the agreement with

draglines for limerock producers, and operating

NTEC is a cost-plus arrangement, under which

and maintaining a coal processing system for

NTEC will reimburse Bisti for all operating costs

a customer’s power plant.

Unconsolidated Mines

NACoal employs a business model that

of the mine, provide the capital required to

operate the mine and pay NACoal an agreed fee

per btu of heating value delivered. Production

is expected to be 5 million to 6 million tons of

differs from most other coal industry participants.

coal per year. NTEC will deliver that coal to the

All but one of NACoal’s contracts include “cost-

third-party owners of the nearby Four Corners

plus” pricing terms under which NACoal’s compen-

Generating Station.

sation includes reimbursement of all operating

costs, plus a comparatively small but consistent

Consolidated Mines

amount of agreed profit on coal tons or heating

NACoal has a coal mine located in Mississippi

units (btu) delivered. Each contract specifies the

that operates pursuant to a more traditional

indices and mechanics by which agreed profits

business model in which NACoal pays all operating

change over time, generally in line with broad

costs and provides the capital for the mine.

measures of inflation. Financing for these mines

This mine is referred to as a “consolidated mine”

is supported by, or in some instances actually

because its results are consolidated in the

provided by, their respective customers in order

Company’s financial statements. Mississippi

to minimize costs and are without recourse to

Lignite Mining Company (MLMC) delivers coal

NACoal or NACCO.

to a single power plant adjacent to the mine.

These mines are referred to as “unconsoli-

MLMC’s sales prices are not subject to spot coal

dated mines” because they are not consolidated

market fluctuations since MLMC sells coal to

in the Company’s financial statements. The pre-

its customer at a contractually agreed-upon

tax profits generated from these mines are shown

price which adjusts monthly, primarily based on

separately in the Company’s income statement as

changes in the level of established indices over

“Earnings of unconsolidated mines.” NACoal and

time. The indices include cost components such

its customers believe strongly that the structure

as labor and diesel fuel. The price of diesel fuel is

of these long-term contracts fully aligns long-term

heavily weighted among these indices. The recent

interests of the mine and the customer in a way

substantial decline in diesel fuel prices is expected

that assures low costs for the customer over the

to reduce 2016 earnings as a moderate increase

long term. NACoal’s analysis of historical data

in tons sold and the beneficial effect of lower

supports that conclusion.

diesel prices on production costs will only partially

reclamation is complete or ownership of the mines

is transferred. NACoal is also evaluating a range

of strategies for its Alabama mineral reserves,

including holding reserves with substantial

unmined coal tons for sale or contract mining

when conditions in Alabama and global coal

markets improve.

Value-added Services

NACoal’s “cost-plus” business model also

applies to its value-added services operations.

NACoal personnel operate and maintain drag-

lines for extraction of limerock at independent

customer-owned limerock quarries in Florida.

This business is operated as a division of NACoal

and its financial results are included in the results

of consolidated operations.

NACoal also operates a coal processing

system for a power plant customer pursuant

to a cost-plus arrangement.

Safety and Environmental Excellence

NACoal consistently ranks among the safest

and most environmentally responsible coal mining

companies in the country. In 2015, the National

Mining Association ranked NACoal among the

North American Coal signed a new agreement to
operate a surface mine located within the
Navajo Nation, near Fruitland, New Mexico.
Pictured left to right are Rick Ziegler, President of
NACoal’s subsidiary, Bisti Fuels Company, which
will operate the mine, Navajo Nation President
Russell Begaye, and J.C. Butler, President and
Chief Executive Officer of North American Coal.

offset the reduction in sales prices. MLMC’s

safest coal mining companies in the United

contract with its customer expires in 2032.

States based on the Mine Safety and Health

During the third quarter of 2015, NACoal’s

Administration (MSHA) 2015 incident rate. Safety

management recommended and its Board of

is at the very core of NACoal’s culture, embedded

Directors approved cessation of coal production

deeply in employee training programs, operating

at the Centennial Natural Resources business

procedures and best practices shared among

in Alabama by the end of 2015. The cessation of

all of NACoal’s operations.

coal production at Centennial occurred during

NACoal’s permitting, mining and reclamation

the fourth quarter of 2015, eliminating NACoal’s

activities utilize state-of-the-art technology and a

only direct exposure to coal market price volatility.

commitment to excellence to ensure that activities

Centennial will continue to evaluate strategies to

comply with, or exceed, legal requirements. Work

maximize cash flow, including through the sale of

on mine sites is performed with the greatest

mineral reserves, equipment and parts inventory.

degree of care to ensure that land is returned

However, cash expenditures related to mine

to a productive natural state. Frequently, NACoal

reclamation at Centennial will continue until

employees and their families are farmers,

ranchers and outdoorsmen who live near mining

low U.S. inflation rates, as reflected in typical

areas. They care deeply about the land, water and

market indices such as the Consumer Price Index

wildlife where they live, and are excellent stewards.

and the Producer Price Index, will determine the

As evidence of this corporate and individual

extent to which contractual compensation at the

commitment to the environment, NACoal’s Coteau

unconsolidated mines will change year by year.

Properties Company received the inaugural 2015

Achievement of the goal to increase earnings

Distinction in Reclamation Award. This award

of the unconsolidated mines by 50 percent is

was given by the American Society of Mining

currently expected to occur in 2017 or 2018, but

and Reclamation for construction of a lake and

timing will depend on future inflation rates and

reclamation of surrounding grasslands on mined

customer demand.

land, which were donated by Coteau to the North

At MLMC, NACoal’s only operating consoli-

Dakota Game and Fish Department for public use.

dated mine, profits are determined by customer

Strategic Initiatives and Long-term View
NACoal’s unconsolidated operations, which

constitute a large majority of its earnings and

cash flow capabilities, provide a strong core that

is central to NACoal’s business model. NACoal

has been very fortunate to enter into eight new

agreements over the last several years to develop

or operate new mines, or provide value-added

services to customers. With the exception of

demand for coal, index-based coal prices, and

actual operating costs incurred. As previously

mentioned, as long as low diesel prices persist

MLMC’s earnings will be affected. NACoal will

focus efforts on increasing sales, reducing costs

and evaluating capital requirements at MLMC.

Generally, the power plants served by NACoal

are lower-cost producers of electricity on their

respective grids. NACoal expects to continue to

be a low-cost miner of coal at existing mines and

Centennial, these arrangements have all been

its mines in development.

structured as cost-plus contracts. Camino Real

began delivering coal to its customer during the

fourth quarter of 2015, Coyote Creek will begin

delivering coal to its customer mid-2016, and

Liberty Fuels’ and Bisti Fuels’ customers have

Given the current unsupportive regulatory

environment for developing new traditional coal-

fired power plants, and based on lessons learned

at Centennial, NACoal is taking an extremely

disciplined approach with respect to growth. This

indicated they expect to begin accepting deliveries

includes thoughtful consideration of NACoal’s core

during the second half of 2016.

skills, strengths and relationships. Opportunities

Over the longer term, NACoal’s goal continues

may exist to serve as a cost-plus contract miner

to be to increase earnings of its unconsolidated

for those who continue to need coal for power

mines by approximately 50 percent from the 2012

generation or other processes using coal. NACoal

level of $45.2 million through the development and

is well suited to serve as a cost-plus contract miner

maturation of its newer mines and normal escala-

in non-coal mining operations, such as aggregates

tion of contractual compensation at its existing

mines. Income related to a full year of deliveries

at the Camino Real mine, the commencement of

deliveries at the Liberty Fuels and Coyote Creek

mines and income at Bisti Fuels will contribute to

this goal in 2016 and beyond. However, generally

or other minerals. Also, strategic growth could

come from projects based on new technologies

that utilize coal, such as integrated gasification

combined cycle power generation, and production

of alternative fuels made from coal, as well as

other clean coal technologies and non-traditional

products derived from coal. NACoal is working with

integral part of the nation’s total energy mix for

a range of technical experts and potential partners

the United States to continue to be competitive in

who could help develop projects based on these

a global economy. NACoal will continue to monitor

technologies. However, any significant growth

pending regulations and legislation and will take

in domestic coal mining opportunities is largely

a leadership role to help encourage reasonable

dependent on the United States adopting a more

regulation by the government. Importantly, NACoal

balanced energy policy in which coal continues

expects to continue to address changes to

to play a key role, including through new coal

domestic environmental regulatory requirements

technologies. Developing new opportunities and

by working collaboratively with its customers,

securing new contracts is a long-term initiative

trade associations, representatives of regulatory

that will take time. This is a significant strategic

bodies, and government officials.

priority at NACoal.

Overall, NACoal’s attractive but unusual

NACoal believes that a large majority of

business model, based largely on long-term cost-

consumers in the United States will benefit

reimbursable contracts, provides a solid foundation

from a domestic energy policy which balances

for all of the company’s coal and limerock mining

affordability, energy needs and environmental

operations. This business model offers generally

responsibility. The company believes that, for

stable cash flow before financing activities with

the foreseeable future, coal must remain an

minimal capital investment, other than at MLMC,

which will continue to require ongoing replacement

capital. NACoal will continue to pursue growth

over the next few years mainly as the company’s

newer mines reach full production. NACoal

expects to continue its record of operational

excellence in safety, environmental stewardship

and production at each of its mining operations

and, over time, to deliver profitability that exceeds

its financial objectives.

Hamilton Beach Brands
Overview

Hamilton Beach Brands’ (HBB) vision is to

be a leading designer, marketer and distributor

of small electric household and specialty house-

wares appliances, as well as commercial products

sold worldwide under preferred brand names

and to achieve profitable growth from innovative

solutions that improve everyday living.

HBB develops and invests in several core

competencies that are critical to achieving that

vision. Most importantly HBB has a culture based

on a foundation of Good Thinking™. Whether

Hamilton Beach’s focus on consumer-driven
innovation led to the development of the
following products (clockwise from bottom
right): Digital Simplicity™ Rice Cooker,
Breakfast Burrito Maker, 8-Cup Food Processor,
FlexBrew® Programmable Single Serve
Coffee maker with Hot Water Dispenser,
Set & Forget® Programmable Slow Cooker, and
Easy Reach™ Convection Oven.

developing innovation to address consumers’

unmet needs, solving a challenge in the supply

chain or partnering with a retail customer, HBB’s

Good Thinking™ culture provides a meaningful

competitive advantage. The only way to maintain

that culture is by hiring and retaining talented

and dedicated employees globally. In addition,

HBB believes it is best in class at sourcing and

logistics as well as support systems to meet the

needs of retail and commercial customers. HBB

pursues market and product development

expertise to help ensure that its products delight

consumers across the most desirable market

opportunities. Finally, HBB maintains and invests

in a strong brand portfolio to increase customer

and consumer confidence that HBB’s family of

products is right for them.

Strategic Initiatives and Long-term View
HBB’s vision includes delivering sales of

Hamilton Beach Brands’ Wolf Gourmet®
Countertop Oven is the flagship product in a line
of luxury countertop appliances created through
a licensing agreement with Sub-Zero Group, Inc.

strong brand portfolio which includes Proctor
Silex®, Hamilton Beach®, Weston®, Wolf Gourmet®
and Jamba®.

A second area of growth opportunity is

approximately $750 million over the next three

through the enhancement of online sales and

to five years by focusing on its five key strategic

communications. In the past few years, online

initiatives. As the company moves toward this

sales of small kitchen appliances have grown

target sales level, HBB expects to take advantage

significantly. During 2015, over 20 percent of

of increasing economies of scale to improve

small kitchen appliance category dollars were

return on sales.

purchased online. Retailers are looking for

First, HBB is focused on enhancing placements

partners that can provide not only products, but

in the North American consumer business through

also the capabilities and support for promotion,

consumer-driven innovative products and strong

marketing and distribution programs appropriate

sales and marketing support. The company’s

for the online channel. As consumers’ shopping

product and placement track record is strong due

habits evolve to rely more on the Internet, HBB

to innovation processes centered on understanding

is focused on providing best-in-class retailer

and meeting end-user needs and focusing on

support, increasing engagement with end users,

quality and best-in-class customer service. In the

including maintaining a website that is appropriate

North American consumer market, HBB believes

for mobile devices, and enhancing its programs

it has a stronger and deeper portfolio of new

designed to make HBB the preferred partner for

products than its competitors. HBB will continue

small appliances.

to introduce new products across a wide range of

Third, HBB has increased focus and invest-

brands, price points and categories in both the

ment around our strategy to become a leader

retail and commercial marketplace, leveraging its

in the “only-the-best” high-end small appliance

market segment. This segment accounts for

HBB’s objective is to increase international sales to

approximately one-third of the U.S. small kitchen

35 to 45 percent of total sales by concentrating on

appliance market, and the target consumer is

key markets. HBB’s efforts will focus on continuing

financially strong. This “only-the-best” segment

to expand its established positions in Mexico,

offers a strong growth opportunity in an area

Canada, Central America and South America as

in which HBB has not previously participated. In

well as further expanding HBB’s position in the

2014, HBB announced its entry into the “only-the-

emerging markets of China and Brazil. HBB expects

best” high-end small kitchen appliance market

to pursue other markets by selectively leveraging

segment through multi-year licensing agreements

primarily the Hamilton Beach and Wolf Gourmet

with the Sub-Zero Group, Inc. and the Jamba Juice

brands. To achieve this growth, HBB is working

Company. HBB and Sub–Zero Group launched a
full line of Wolf Gourmet® branded small kitchen
appliances and cooking tools in 2015 for sale in

to enhance its understanding of local consumers’

needs, developing products to meet those needs

and increasing sales and marketing resources

high-end retail channels, in Sub-Zero and Wolf

allocated to these markets, especially in the mid-

showrooms, and on the Internet. Hamilton Beach

to high-end segments. HBB began selling retail

secured its lead distribution partners for the
Wolf Gourmet® branded products in 2015 and
expects to add additional distribution channels in

products in China in 2013, and in Brazil in 2014.

HBB expects to increase sales in these areas

in 2016.

2016 both domestically and in its Canadian and

Fifth, while HBB has a leading position in

Mexican markets. The company is also working

the commercial market, it continues to focus

with the Jamba Juice Company and launched a

on achieving further penetration of the global

product line focused on blending and juicing
under the Jamba® brand in 2015. HBB is pursuing
other opportunities to create additional product

commercial market through a commitment to

an enhanced global product line for chains and

distributors serving the global food service and

lines that can be distributed in high-end or

hospitality markets. HBB is enhancing its global

specialty stores and on the Internet, including the
introduction of the Hamilton Beach® Professional
premium line of counter-top kitchen appliances.

commercial product line, particularly with new

innovative juicing, blending and mixing platforms,

and strengthening its food service and hospitality

Fourth, HBB is focused on expanding its retail

offerings in order to achieve further market

presence internationally in the emerging growth

penetration in this segment. Over the near term,

markets of Asia and Latin America by increasing

HBB anticipates continuing to build distribution

product offerings designed specifically for those

capabilities and resources in the international

market needs and by expanding distribution

food service market, where products and services

channels and sales and marketing capabilities.

will be directed at global food service chains.

While HBB has a long-standing presence in the

HBB made significant progress in most

global commercial products market, HBB’s

segments of the business in 2015. Momentum

historical strength in the retail segment has

is building in its core business and from efforts

been in the U.S. consumer goods market, with

resulting from its Strategic Initiatives. HBB is

approximately 20 percent of its total sales

optimistic that it will be able to build on that

occurring outside the United States in 2015.

momentum in the years ahead. HBB believes

it is well-positioned to continue its leadership

merchandise mix, store displays and appearance

position in the small appliance industry. Achieving

and enhancing customers’ store experience

its $750 million sales objective will help move

through improved customer interactions. A

the company toward achieving its near-term

particular focus will be on increasing sales of

financial objective of 8 percent operating profit

higher-margin products. Nonetheless, at current

margin and its long-term financial objective of

mall and store traffic levels, reaching the company’s

a minimum 10 percent operating profit margin

long-term 5 percent operating profit margin

in the years ahead. It also expects to continue to

target will be challenging.

be a substantial generator of cash flow before

Overall, Kitchen Collection is dealing with a

financing activities, with a continued low level

difficult environment and evolving aggressively

of capital expenditures required.

in a constructive manner. To achieve its vision,

Kitchen Collection

Kitchen Collection’s vision is to be a leading

specialty retailer of kitchenware in outlet malls

and to a lesser degree traditional malls through-

out the United States. Constrained discretionary

income, lower rates of household formation and

increased online shopping have resulted in fewer

visits to many of the malls and outlets where

Kitchen Collection has store locations. In this

environment, not all malls where Kitchen Collection

maintains stores have been adequately profitable.

Kitchen Collection must increase the number

of customers coming into its stores and its sale

closure rate with these customers. Kitchen

Collection believes its remaining stores are well-

positioned to allow the company to perform at

close to break-even in the current challenging

environment and to take advantage of any future

market rebound. The company will continue to

evaluate and, as lease contracts permit, terminate

or restructure leases for underperforming stores.

Capital expenditures are expected to be modest,

with generation of positive cash flow before

Kitchen Collection closed nearly 100 stores during

financing activities expected.

2014 and 2015 due to a rigorous and strategic

review of the short-term and long-term prospects

Conclusion and NACCO Outlook

of each location. As part of that process, Kitchen

NACCO is a strong, multi-industry company

Collection determined it was important to focus on

with leading businesses in the mining and small

the Kitchen Collection brand, which resulted in the
closure of all remaining Le Gourmet Chef® stores.
As the business moves into 2016, Kitchen

appliances industries. The Company continues to

believe HBB’s growth opportunities are significant.

NACCO is confident that HBB has the right strategic

Collection has a strong core in its Kitchen
Collection® store format in outlet malls. While
the company continues to optimize its store

initiatives in place to move it closer to achieving

its long-term growth and financial objectives.

While growth opportunities also are significant

portfolio with stores in high-traffic locations in

at NACoal, they are largely based on growth at

strong outlet malls, the focus is now shifting to

existing and newer mines. Both HBB and NACoal

comparable store sales growth. Kitchen Collection

will be prudent in pursuing any new opportunities.

expects to accomplish this by increasing closure

Kitchen Collection’s long-term prospects at this

rates through continued refinement of its format,

time are uncertain, but its near-term prospects

ongoing review of specific product offerings,

are positive and should improve. NACCO is

well-positioned to support its individual businesses

Bob began his career with NACoal in 1976 as

in the years ahead. Each subsidiary is benefitting

Senior Mining Engineer responsible for supervising

from programs previously put in place which,

facility construction and overseeing contract

when combined with the initiatives now being

administration at the Falkirk Mine, which was in

implemented, should improve income and return

development. He was promoted to Production

on total capital employed at each business over

Manager of the Falkirk Mine in 1979, and named

the next few years. In addition, the Company

Manager of the Indian Head Mine in 1983. Bob

expects each business to generate significant cash

was President of Coteau’s Freedom Mine from

flow before financing over time, which it expects

1990 to 1997, when he was asked to lead the

to use mainly to pay dividends, repurchase stock,

construction and startup of MLMC’s Red Hills Mine

when that is an attractive investment for its

as its first General Manager. Bob assumed the

shareholders, and reduce debt. Of course, NACoal

additional role of VP, Eastern and Southern

and HBB will continue to look for internal and

Operations in 2001, and became Executive Vice

external opportunities to expand their range of

President and Chief Operating Officer of NACoal

activities in the long term.

in 2005. Bob served as President and Chief

In the fourth quarter of 2015, NACCO

Executive Officer of NACoal from 2006 to 2015.

completed its $60 million Class A stock repur-

Under Bob’s leadership NACoal grew significantly,

chase program, which had been announced

with the addition of eight new mining and

in November 2013. In total, NACCO purchased

services contracts. We appreciate Bob’s many

approximately 1,123,000 shares of its Class A

contributions, and wish him well in retirement.

common stock for an aggregate purchase price

In closing, we would like to thank all of our

of $60.0 million, including $24.0 million of

subsidiaries’ customers, retailers and suppliers,

stock purchased during 2015. Under a previous

and all of NACCO’s stockholders, for their

stock repurchase program, which ran from

continued support. Most importantly, we would

November 2011 to November 2013, the Company

also like to thank all employees of NACCO and its

repurchased approximately 624,000 shares

subsidiary companies for their continued hard

of Class A common stock for an aggregate

work. We continue to have great confidence in

purchase price of $35.6 million.

the management teams leading each of our

n n n

subsidiaries and the parent company, and we

are confident these teams can successfully

We would like to recognize Bob Benson, who

implement their respective strategic initiatives

retired from NACoal during 2015 after serving the

to enhance the Company’s sales and profits

Company in an exemplary way for over 39 years.

over the next few years.

Alfred M. Rankin, Jr.
Chairman, President and Chief Executive Officer
NACCO Industries, Inc.

J.C. Butler, Jr.
President and Chief Executive Officer
The North American Coal Corporation

Gregory H. Trepp
President and Chief Executive Officer
Hamilton Beach Brands, Inc.
Chief Executive Officer
The Kitchen Collection, LLC

Supplemental Data

Reconciliation of 2015 and 2014 Net Income (Loss) "As reported" to Adjusted Income:

(In thousands, except per share data)

NACoal

Consolidated

Year Ended
2015

Diluted
earnings per
share

2015 Net Income, as reported . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustments to eliminate Centennial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2015 Adjusted Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5,619
21,684
27,303

21,984
21,684
43,668

3.13
3.09
6.22

2014 Net Loss, as reported . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustments to eliminate Centennial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2014 Adjusted Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Year Ended
2014

$ (50,977)
78,941
27,964

Year Ended
2014

$ (38,118)

78,941
40,823

Diluted
earnings per
share

(5.02)
10.39
5.37

Adjusted Income is a measure of income that diﬀers from Net Income (Loss) measured in accordance with U.S. GAAP. The Company has reported Adjusted
Income and Diluted earnings per share for the years ended December 31, 2015 and 2014 excluding the net eﬀect of adjustments to eliminate Centennial.
Management believes a discussion excluding these adjustments to eliminate Centennial is more reﬂective of NACCO’s underlying business operations and
enables investors to better understand the results of operations of the Company.

Calculation of Return on Capital Employed and Return on Equity:

(In thousands, except percentage data)

2015
2015 Average Equity (12/31/2014 and each of 2015’s quarter ends) . . . . . . .
2015 Average Debt (12/31/2014 and at each of 2015’s quarter ends) . . . . . .
2015 Average Cash (12/31/2014 and at each of 2015’s quarter ends) . . . . . .
Total 2015 average capital employed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

NACoal
$ 107,240
132,308

(2,886)

$ 236,662

HBB
51,541
58,870
(1,373)
$ 109,038

2015 Net income (loss), as reported . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Plus: 2015 Interest expense, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less: Income taxes on 2015 interest expense at 38%*. . . . . . . . . . . . . . . . . . . . . .
Actual return on capital employed = actual net income (loss)

before interest expense, net, after tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Actual return on capital employed percentage(1) . . . . . . . . . . . . . . . . . . . . . . . . . .
Actual return on equity percentage(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5,619
4,545
(1,727)

8,437
3.6%
5.2%

Calculation of Return on Capital Employed and Return on Equity:

2014
2014 Average Equity (12/31/2013 and each of 2014’s quarter ends) . . . . . . . .
2014 Average Debt (12/31/2013 and at each of 2014’s quarter ends) . . . . . . .
2014 Average Cash (12/31/2013 and at each of 2014’s quarter ends) . . . . . . .
Total 2014 average capital employed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

NACoal
$ 139,791
179,841

(136)
$ 319,496

2014 Net income (loss), as reported . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Plus: 2014 Interest expense, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less: Income taxes on 2014 interest expense at 38%**. . . . . . . . . . . . . . . . . . . .
Actual return on capital employed = actual net income (loss)

$ (50,977)
5,211
(1,980)

$ (47,746)
(14.9%)
(36.5%)

19,749
1,775
(675)

20,849
19.1%
38.3%

HBB
53,453
32,284
(2,783)
82,954

23,144
1,133
(431)

23,846
28.7%
43.3%

Kitchen
Collection

30,101
795
(4,681)
26,215

(420)
131
(50)

(339)
(1.3%)
(1.4%)

Kitchen
Collection

32,176
8,126
(1,684)
38,618

(4,603)
367
(139)

(4,375)
(11.3%)
(14.3%)

(1) Return on capital employed is provided solely as a supplemental disclosure with respect to income generation because management believes it provides

useful information with respect to earnings in a form that is comparable to the Company’s cost of capital employed, which includes both equity and debt
securities, net of cash.

(2) Return on equity is deﬁned as net income divided by average equity.

* Tax rate of 38% represents the Company’s target marginal tax rate compared with 2015’s eﬀective income tax rate of 11.4%.
** Tax rate of 38% represents the Company’s target marginal tax rate compared with 2014’s eﬀective income tax rate of 50.2%.

Corporate Information

Annual Meeting

The Annual Meeting of Stockholders of NACCO
Industries, Inc. will be held on May 9, 2016, at
2:30 p.m. at the corporate office located at:
5875 Landerbrook Drive, Cleveland, Ohio 44124

Form 10-K

Additional copies of the Company’s Form 10-K filed
with the Securities and Exchange Commission are
available free of charge through NACCO Industries’
website (www.nacco.com) or by request to:

Investor Relations
NACCO Industries, Inc.
5875 Landerbrook Drive, Suite 220
Cleveland, Ohio 44124
(440) 229-5130

Stock Transfer Agent and Registrar

Stockholder Correspondence:
Computershare
P.O. Box 30170
College Station, TX 77842-3170

Overnight Correspondence:
Computershare
211 Quality Circle, Suite 210
College Station, TX 77845

(800) 622-6757 (U.S., Canada and Puerto Rico)
(781) 575-4735 (International)

Legal Counsel

McDermott Will & Emery LLP
227 West Monroe Street
Chicago, Illinois 60606

Independent Registered Public
Accounting Firm

Ernst & Young LLP
950 Main Ave., Suite 1800
Cleveland, Ohio 44113

Stock Exchange Listing

The New York Stock Exchange
Symbol: NC

Investor Relations Contact

Investor questions may be addressed to:

Investor Relations
NACCO Industries, Inc.
5875 Landerbrook Drive, Suite 220
Cleveland, Ohio 44124
(440) 229-5130
E-mail: ir@naccoind.com

NACCO Industries Website

Additional information on NACCO Industries
may be found at the corporate website,
www.nacco.com. The Company considers this
website to be one of the primary sources of
information for investors and other interested
parties.

Subsidiary Company Websites

The websites for NACCO’s subsidiaries are
as follows:

Hamilton Beach Brands–U.S.:
www.hamiltonbeach.com
www.proctorsilex.com
www.proctorsilex.com
www.commercial.hamiltonbeach.com
www.commercial.hamiltonbeach.com
H
Hamilton Beach Brands–Mexico:
www.hamiltonbeach.com.mx
Weston Brands:
www.westonproducts.com
Kitchen Collection:
www.kitchencollection.com
North American Coal:
www.nacoal.com

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Environmental Benefits

This Annual Report on Form 10K is printed using postconsumer waste recycled paper and vegetablebased inks.
By using this environmental paper, HysterYale Materials Handling, Inc. saved the following resources:

29 trees pre
served for the
future

84 lbs. water
borne waste
not created

12,092 gal.
wastewater
flow saved

1,338 lbs.
solid waste
not generated

2,634 lbs. net
greenhouse
gases prevented

20,162,000
BTUs energy
not consumed

(cid:30)(cid:29)(cid:28)(cid:31)(cid:21)(cid:15)(cid:31)(cid:20)(cid:13)(cid:8)(cid:31)(cid:26)(cid:32)(cid:15)(cid:4)(cid:13)(cid:20)(cid:15)(cid:21)(cid:12)(cid:5)(cid:32)(cid:31)(cid:9)(cid:13)(cid:26)(cid:31)(cid:8)(cid:33)(cid:32)(cid:15)(cid:32)(cid:31)(cid:11)(cid:25)(cid:5)(cid:11)(cid:6)(cid:5)(cid:25)(cid:19)(cid:13)(cid:20)(cid:15)(cid:3)(cid:31)(cid:28)(cid:25)(cid:5)(cid:11)(cid:6)(cid:5)(cid:25)(cid:19)(cid:13)(cid:20)(cid:15)(cid:31)(cid:4)(cid:32)(cid:26)(cid:31)(cid:2)(cid:13)(cid:33)(cid:25)(cid:14)(cid:22)(cid:31)(cid:1)(cid:20)(cid:7)(cid:21)(cid:26)(cid:13)(cid:20)(cid:23)(cid:32)(cid:20)(cid:8)(cid:25)(cid:5)(cid:31)(cid:28)(cid:25)(cid:5)(cid:11)(cid:6)(cid:5)(cid:25)(cid:8)(cid:13)(cid:26)(cid:3)

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