Good morning ladies and gentlemen and welcome to the NACCO Industries, Inc. Fourth Quarter and Year End 2008 Earnings Results Conference Call. My name is Noelia and I will be your coordinator for today. (Operator Instructions) I would now like to turn the presentation over to your host for today’s conference Miss Christina Kmetko, Manager of Finances. Please proceed.

Thank you. Good morning everyone and thank you for joining us today. This morning a press release was distributed outlining NACCO’s results for the fourth quarter and year-end December 31, 2008. If anyone has not received a copy of this earnings release or would like a copy of the 10-K please call me at 440-449-9669 and I will be happy to send you this information. You may also obtain copies of these items on our web site at nacco.com. Our conference call today will be hosted by Al Rankin, Chairman, President, and Chief Executive Officer of NACCO Industries. Also in attendance representing NACCO is Ken Schilling, Vice President and Controller. Al will provide an overview of the quarter and full year and then open up the call to your questions. Before we begin, I would like to remind participants that this conference call may contain certain forward-looking statements. These statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements made here today. Additional information regarding these risks and uncertainties was set forth in our earnings release and in our 10-K. In addition, certain amounts discussed during this call are considered non-GAAP numbers. The non-GAAP reconciliations of these amounts are included on our website and in our 2008 fourth quarter earnings release, which is also available on our website. I'll now turn the call over to Al Rankin.

Thanks Christy and good morning to all of you. The Company’s revenues for the fourth quarter of 2008 were $949 million which was 13% lower than the $1.1 billion in the prior year period. The sales decline was primarily attributable to lower volume and all of NACCO’s subsidiaries primarily as a result of the deteriorating economy. During the quarter the Company wrote off the goodwill on its books. Because the Company’s stock price at year-end was significantly below the Company’s book value of tangible assets and its book value of equity accounting rules effectively required that the company take a non-cash write off of goodwill and certain other intangible assets totaling $436 million or $431.6 million net of taxes of $4.1 million. The Company recorded those pre tax charges as follows: $351 million at NACCO Materials Handling Group; $80 million at Hamilton Beach and $4 million at Kitchen Collection. The goodwill and intangibles were incurred largely as a result of acquisitions in the late 1980s and early 1990s. Also in the fourth quarter, basically as a consequence of the goodwill write off, the Company recognized a non-cash charge of $15.3 million against accumulated deferred tax assets for the European operations of NMHG's Wholesale and Retail subsidiaries. The Company believes that current stock market valuations, which were the basis for the impairment testing under the existing accounting rules are generally reflective of broader global macro economic and stock market conditions and I must say also the trading characteristics of our own stock, rather than reflection of the operating fundamentals and the programs being implemented at each of our subsidiaries. We expect that as market conditions improve the Company will find that these fundamentals and the programs in place at each of our subsidiaries is well positioned, each subsidiary to move positively…

(Operator Instructions) Your first question comes from Frank Magdlen with The Robins Group.

On the Hamilton Beach side what is happening to your costs right now particularly in light of maybe declining deflationary trends for raw material and what are the new products? Can you give us new product examples?

Let me address the issue of product cost first, because it is a very important issue. We have challenged all of our suppliers to get their costs back to the levels that we saw toward the end of 2007 and we have seen increasingly positive responses from suppliers as their own supply chains are having lower costs. To the extent that the lower costs have not fully come through at this point we have been working with our customers to change product offerings, to increase prices and generally to put ourselves back in a margin position that’s much closer to our traditional margin position than it was after the big spike in costs occurred. I think the answer to your question is it’s a very aggressive program to get costs back down to levels that they previously were at. As far as new products are concerned, I think if you want some more detailed list that Christy can provide those in a separate call, but we have a very broad new product introduction program. It covers our commercial products where we have an increasingly broad set of products. It covers our US consumer product lines and includes really new products in essentially every product category. On average, and I would have to check a little bit, but my recollection is that we renew about 1/3 of our products every year, so it is a very broad program. To the extent your question was focused on break through products I think in the main these would be more classified as updating and enhancing the performance of products we have, ensuring that the quality is as high as it can possibly be. We give a lot of attention to quality. We have a very significant quality oversight organization in China that works closely with our suppliers and is actively involved in bringing forward a strong new set of products.

Okay Al. On the cost side could you quantity a little bit, ’08 costs were what percentage higher than ’07 and you’re halfway or ¾ of the way back to the ’07 levels?

I don’t think I’d put it in terms of costs, but margin aspirations and I think that we’re hopeful that our gross profit margins will return to levels that are closer to 2007. That is the way I would put it.

All right and in the lift truck market do you have a feel for where dealer inventories are today versus what they were maybe six months ago?

You know it’s a very geographically dependent answer that I have to give. We think that in certain areas of the world Eastern Europe, Latin America, South America, that dealer inventories were fairly substantial. The pipelines are much longer in those areas and so the factory booking levels have fallen off very rapidly in those areas. All factory bookings have fallen off very rapidly, but even more rapidly in those areas. Generally speaking, the last two months, December and January, I don’t have the numbers yet for February, showed global declines slightly over 50% in terms of market volumes compared to the previous year. I would guess that by the end of February the largest portion of that will have worked its way through and we’ll be dealing much more with underlying retail bookings, order levels, but again, that will be somewhat dependent on the inventory situation in some countries. But, that is the general flavor that I would give you, which is that the biggest stress of that run off will, for us, occur in the first quarter or in first quarter bookings and then we should return to levels that are closer to retail consumption levels.

All right and in your backlog number will most of that be shipped in the first quarter?

I would have to think about it carefully, but in the main our 12 weeks of backlog would mean that most would be shipped in the first quarter, but some will go into the second quarter. I can’t really give you the numbers on that, but certainly some of those are planned to be produced in the second quarter.

All right and do you have your market share numbers for ’08?

Well we have never commented publicly on our market share. Not in recent times in any event. But, we feel that it depends on the product category. We’ve had some customers that have been good customers of ours that have been more stressed than some of our competitors, for example in the automotive area. We’ve been gaining share in certain products over the last couple of years, particularly in Class 2, that is the narrow isle types of warehousing products. Overall we’re a little bit lower, but it’s more related to the industry segments, in my view, and how we’re positioned in certain markets. But, it is a relatively stable situation and we expect to have about our normal level of share as we look forward in the course of 2009.

All right. Company wide can you give a feel for what your headcount is down to, or what percentage it’s down?

I really couldn’t give you company wide figures. We don’t tend to look at it from that point of view. Just go through the businesses and say that the coal company is stable. They operate efficiently and their demand characteristics haven’t changed much. The bulk of employees in Kitchen Collection are out in our retail stores and we have restricted hourly hiring to try to tie it better to the sales levels in the stores. Some constraints on head count at the headquarters at that business, freezes in salaries and elimination of certain benefits and incentive compensation. Then Hamilton Beach there have been reductions in force in the United States that are not insignificant. The biggest ones, however, really have occurred, as you would expect, in the forklift truck business where we’ve had very significant reductions in the numbers of people. I’m not sure I have the numbers. Christy can check on them, but my recollection is they’re in the order of 20% reduction in headcount in the business. That is really not the full story either, because we have taken weeks out of the schedule and the employees have in effect taken weeks off at our manufacturing operations and that’s been complimented on the salary side by headcount reductions, but also by salary reductions in that particular business and here at NACCO headquarters. That is so that everyone is sharing in the difficulties of what is the sharpest downturn the industry has seen and certainly in my memory, and going back into the 70’s and before, from a percentage point of view. That includes the US market which is our strongest market.

All right, thank you very much.

Your next question comes from Charlene Mills with The Boston Company.

With regards to Hamilton Beach what was the impact of the shift from LIFO to FIFO?

In our footnote too we describe the impact to the prior years, but the impact after tax to 2008 was $2.1 million.

I think just to complete that, that it’s important to recognize that the environmental charge and the inventory write down to get our inventories at an absolutely clean level more than exceeded the change from LIFO to FIFO. So, if you’re trying to think about it in terms of the future you probably have to take all of those things into account, not just the one.

Okay thank you. Regarding some of the other comments in your 10-K about the covenants, if things don’t get better in the second half as you expect them to at NMHG are you at all concerned about this 3.25c leverage covenant or the 1.5x fixed charge covenant and could you confirm that those are correct for me?

I believe that those are correct and I guess what I would say is I am always concerned about covenants. We have operating plans and have no expectation that we’ll have difficulty meeting those covenants. It takes a lot of hard work and cost reduction of the type that we’ve been implementing and a variety of other actions, but we’re watching all of that very, very carefully. Now I can certainly describe for you a scenario where the market volumes go down so much more than we’re currently anticipating that you would have a problem, but at this point we are not forecasting one.

Thank you, I’m all set.

Your next question comes from Mark Sigal with Canaccord Adams.

With regard to the NACCO Materials business in light of some of your prior comments, can you talk a bit about how the domestic business is faring versus International and perhaps what geographies you might expect to lead recovery when it happens?

The pain is very broad based and I suppose the worst hit are some of those developing country environments or the less developed countries. The forklift truck business, which was quite large in Russia, virtually came to a halt in December and January. That is probably the worst. Markets are down in China, not as much. Markets are down in Japan, but the Europe market turned down a little bit later than the US market and now the decline is very pronounced. I think these declines have affected all areas of the world. Our most significant markets by quite a significant margin are Europe and North America. I think that if the stimulus is effective and if the actions that are designed to shore up the banking system work effectively, we could see the US market turn up perhaps earlier than some of the others and that would be good for us. I suppose if I were speculating that is probably the way I would speculate. I think I said in my remarks at one point, these are uncharted waters and we really don’t have the kind of insight that we would normally have on how our end markets and demand for our products should work; so it is very difficult to give you a good answer on that, particularly with regard to timing. Perhaps the most important thing in our forklift truck business is the overall perspective that we are very fortunate that we took aggressive actions over two years ago to begin the process of changing our manufacturing footprint in Europe and America so that we didn’t have as much exposure to currency fluctuations. That has reduced our capacity and the project, as I indicated, that whole program basically is complete at the end of this quarter. It…

Okay, that’s very helpful. Then can you just give us a sense of the mix of business between internal combustion engine and electric units? Does the mix shift significantly in light of the expected new product introductions in the next couple of quarters?

If you look at total units we have a lot of electric trucks because we have motorized hand trucks, narrow isle trucks, and the counter balance trucks; all of them are electric powered. I think the more important aspect to your question is traditionally the internal combustion engine trucks have been more cyclical than the electric trucks. We expect that to be the case, especially in certain countries in this downturn as well. However, this is a broader downturn and we think that that shift will be less pronounced in the United States because the warehousing infrastructure that was associated with the tremendous increase in imports, particularly from China, really has been put in place over the last 10 or 15 years, and now with the decline in imports that comes from the downturn in the economy, the supportiveness of the electric truck line in a downturn is just not there. So, that business is cyclical as well. Christy can probably get you some more specific figures on the mix, but I think we will see a mix away from internal combustion engine towards electric, but not as much as would have been the case in past years.

All right, great, thanks so much.

Your next question comes from Vanessa Miranda with Stanfield Capital Partners.

I don’t know if you said this in the call, but I was just wondering if you could tell us the amount of equity that was contributed to Hamilton Beach in the fourth quarter and for the year? In addition, what is your outlook for 2009?

I did mention it. It is in the press release and over the course of the year we contributed $68 million to NACCO Materials Handling Group and we would expect to make additional contributions during the course of this year. It will depend on the circumstances. We want to make sure that our business is adequately capitalized and in the best position to move forward. I would add that we expect NACCO Materials Handling Group to be a very large cash generator over the course of 2009 as well. That is simply a consequence of the reduced volumes that it expects to sell due to market levels which are so much lower than normal. So, the working capital component will come down very significantly.

Okay and also you put out a press release regarding the consulting agreement for Kitchen Collections. Do you have any plans or any thoughts about combining the two businesses?

No, but I think it goes without saying that one of the reasons that we want to associate them more closely is we think that there are elements that can work together in those businesses. I will just give you a couple of examples: Both businesses bring in very substantial amounts of product from China. Both have negotiated freight rates. We have certain areas where we can provide administrative support that can be helpful. The Kitchen Collection business, very importantly, has a licensing agreement with Hamilton Beach and uses the Hamilton Beach and Proctor Silex names on certain of its products and that has to be overseen from the point of view of product quality and consistency with the requirements of the license. I think the fundamental answer to your question is that it’s more of an oversight issue and not combining, because one business is really a retail business and the other business is sales products to retailers and so there is not an overlap of any significance at that level.

Okay, thanks, that is it for me.

I am showing that at this moment you don’t have any further questions.

Okay, I thank all of you for joining us. I think what we most need and what everybody most needs is stabilization and an upturn in the economy. But, I would leave you with the overview thought that our approach to this is not to assume an upturn. When we see it, we will respond. In the meantime, we are taking every action that we can to strengthen our businesses and manage them in a highly disciplined way in light of the extraordinary economic and financial market conditions that we’re dealing with. I thank you all for participating and that’s it for today.

Thank you. If you do have any additional questions you can reach me at 440-449-9669. Have a good day.

Thank you for your participation in today’s conference. To access the replay for this call you may dial 1-617-614-4949 or 1-888-233-1854 internationally with a replay pass code of 52105229. The replay will be available in approximately one-hour’s time. This concludes the presentation. (operator instructions) Have a great day.