Good morning. My name is Julie and I will be your conference operator today. At this time, I'd like to welcome everyone to the Q3 2016 NACCO Industries Earnings Conference Call. [Operator Instructions] Thank you. Christina Kmetko, you may begin your conference.

Thank you. Good morning, everyone, and welcome to our 2016 third quarter earnings call. I am Christina Kmetko, and I am responsible for Investor Relations at NACCO Industries. I will be providing a brief overview of our quarterly results and business outlook, and then I will open up the call for your questions. Joining me on today's call are Al Rankin, Chairman, President, and Chief Executive Officer; and J.C. Butler, our Senior Vice President Finance, Treasurer, and Chief Administrative Officer, as well as the President and Chief Executive Officer of our North American Coal subsidiary. Also joining us is Elizabeth Loveman, NACCO's Vice President and Controller. Yesterday, we published our third quarter 2016 results and filed our third quarter 10-Q. Copies of our earnings release and 10-Q are available on our Web site at NACCO.com. For anyone who is not able to listen to today's entire call, an archived version of this webcast will be on our Web site later this afternoon and available for approximately 12 months. As 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, in either our prepared remarks or during the following question-and-answer session. We disclaim any obligation to update these forward-looking statements, which may not be updated until our next quarterly conference call, if at all. Additional information regarding these risks and uncertainties was set forth in our earnings release and in our 10-Q. Also, certain amounts discussed during today's call are considered non-GAAP. The non-GAAP reconciliations of these amounts are included in your 2016 third quarter earnings release available on our Web site. Now, let me…

[Operator instructions] Your first question comes from the line of Jacob Wagner from Oaktree Capital. Your line is open.

Hi, good morning. Congrats on a good quarter. So NACCO is generating a lot of cash flow but without reinvestment opportunities, you are forced to pay down cheap debt or buy back even more of your limited growth. The company doesn’t need the capital markets for financing as you haven't raised public equity or bonds in decades. And at this point, Mr. Rankin even your family control over 80% of the voting rights and nearly 50% of the company's economics. These facts have created a massive valuation overhang where we think NACCO trades at a discount to Hamilton Beach's competitors without any value ascribes North American Coal's contracted cash flow. So, Mr. Rankin, in your and the Board's opinion why is keeping NACCO as an independent public company the best path forward for all shareholders?

Well, obviously any question of that nature would be handled by our Board of Directors and would be thought about periodically and we look at all of our options over time. I think that at the moment one of our key concerns is that we have some substantial debt at our coal company and it isn't crystal clear by any means how banks will view coal companies and the amount of debt that we might think as appropriate in the coal company itself as we move forward. So we are pretty cautious about thinking about cash flow at this point. Our views may change in the future but at this point those are really our focuses. We think about returning cash to shareholders through dividends, we think about returning cash to shareholders through our share buyback program. As you know we have been returning cash in the share buyback program to some degree. Those are the main focuses for us at this point in time. You know we are also from time to time looking for opportunities to invest in businesses that have a high degree of synergy value with the businesses that we are already in and I think Western is a good example of that. We felt that it worked well for us, it was highly complementary, it got us in Hamilton Beach and to a new channel, and new products which we could then use to sell additional traditional Hamilton Beach products through Western's channels and traditional Western products through Hamilton Beach channels. We look at opportunities to take advantage of some of the significant skills we have in our coal business and various like reclamation and things of that nature. So we continue at this point to look for opportunities to invest in related businesses but I must say too that in no way are we willing to over pay for those. And we take a very long term view about when we might invest in any of those and this upturn in stock market won’t last forever and there may be opportunities as we look forward in the future. So we have a very long term view of building value for all shareholders, that's our primary concern, we treat them equally as we look forward. J.C, you want to add anything to that?

No, I mean you know my primary focus is North American Coal and we do have a number of initiatives underway looking at opportunities to grow that business. We mentioned in the earnings released that we signed an additional contract in Florida, it’s a very small part of our business but we think it’s a place where we might have growth opportunities.

That's in the limerock mining business

Right. And that particular project didn't take much capital but you don’t know what might be the future.

All right. Thank you.

Your next question comes from the line of Michael Fisherman with Zuckerman. Your line is open.

Thank you. Good morning, Al. My question is very similar to Jacob's, during the quarter Goldman Sachs took company [indiscernible] for 1.4 times revenue or 17 times EBIT. If we apply those multiples to Hamilton Beach trailing 12 month revenue and earnings or EBIT. You get a value about $630 million to $820 million which is greater than the whole company of NACCO. My question is why don't you explore strategic alternatives for this division?

So you suggest we don't explore strategic alternatives - I try to say in the answer to the earlier question, we do look at the strategic alternatives and with - but primarily we take a long view about building the value of our individual businesses, trying to build the profits over time to use the capital and its generated in a wise way and we think that in the long term that's in the best interest of all of our shareholders and I just wouldn’t comment any further than that.

Well 10 years ago, even 13 years ago 2003, Hamilton Beach did $36 million of EBIT, right, you are going to 36 million, 40 million today so why do you think Hamilton Beach is best in your hands versus selling to someone from more value than the total company today and let someone else grow the business that you guys haven't been able to do over 10, 15 year period.

I've really said all I want to say at this point.

Okay.

There are no other questions at this time. I will turn the call back over to the presenters.

Al, do you have any further comments.

No, I don’t have any further comments. At this point I would just echo the comments that I made earlier and J.C. made about looking for opportunities to use the skills and spend on the capabilities that we have in the businesses that we have. And that remains a primary focus but also with real attention to ensuring that we have the appropriate levels of debt in each of our businesses given the financing conditions as we look forward and I would close there.