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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
May 1, 2024
WARRIOR MET COAL, INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware 001-38061 81-0706839
(State or other jurisdiction of (Commission File Number) (I.R.S. Employer Identification No.)
incorporation or organization)
16243 Highway 216
Brookwood Alabama 35444
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (
205
)
554-6150
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of
the following provisions:
Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Exchange Act:
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Title of each class Trading Symbol(s) Name of each exchange on which registered
Common Stock, par value $.01 per share HCC New York Stock Exchange
Rights to Purchase Series A Junior Participating -- New York Stock Exchange
Preferred Stock, par value $0.01 per share
Indicate by check mark whether the registrant is an emerging growth company as
defined in Rule 405 of the Securities Act of 1933 ((s)230.405 of this chapter)
or Rule 12b-2 of the Securities Exchange Act of 1934 ((s)240.12b-2 of this
chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has
elected not to use the extended transition period for complying with any new
or revised financial accounting standards provided pursuant to Section 13(a)
of the Exchange Act.
o
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Item 2.02
Results of Operations and Financial Condition.
On May 1, 2024, Warrior Met Coal, Inc. (the "Company") issued a press release
announcing the Company's first quarter 2024 results. A copy of the press
release is attached hereto as Exhibit 99.1.
The information provided pursuant to this Item 2.02, including Exhibit 99.1 in
Item 9.01, is "furnished" and shall not be deemed to be "filed" with the
Securities and Exchange Commission or incorporated by reference in any filing
under the Securities Exchange Act of 1934, as amended, or the Securities Act
of 1933, as amended, except as shall be expressly set forth by specific
reference in any such filings.
Item 9.01
Financial Statements and Exhibits.
(d)
Exhibits.
Exhibit No. Exhibit Description
99.1 Press Release, dated May 1, 2024
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Warrior Met Coal, Inc.
Date: May 1, 2024 By: /s/ Dale W. Boyles
Dale W. Boyles
Chief Financial Officer
Exhibit 99.1
Warrior Reports First Quarter 2024 Results
Achieved net income of $137.0 million and adjusted EBITDA of $200.2 million
Returned $30.6 million to stockholders through quarterly dividend and special
cash dividend
Continued making excellent progress in the ongoing development of Blue Creek
BROOKWOOD, AL - May 1, 2024 -
Warrior Met Coal, Inc. (NYSE: HCC) ("Warrior" or the "Company") today
announced results for the first quarter of 2024. Warrior is the leading
dedicated U.S.-based producer and exporter of high-quality steelmaking coal
for the global steel industry.
Warrior reported net income for the first quarter of 2024 of $137.0 million,
or $2.62 per diluted share, a decrease from net income of $182.3 million, or
$3.51 per diluted share, in the first quarter of 2023. Adjusted net income per
share for the first quarter of 2024 was $2.63 per diluted share compared to
adjusted net income per share of $3.57 per diluted share in the first quarter
of 2023. The Company reported Adjusted EBITDA of $200.2 million in the first
quarter of 2024 compared to Adjusted EBITDA of $259.4 million in the first
quarter of 2023.
First Quarter Highlights
.
Recorded a 9% increase in sales volumes and a 17% increase in production
volumes, resulting in largest quarterly production in over three years
.
Invested $68.5 million in the continued development of the world-class Blue
Creek growth project and $33.2 million in sustaining capital expenditures,
funded through $104.1 million of cash flows from operations
.
Significantly advanced the Blue Creek project, especially in the seam access
components, which will allow continuous miner production beginning in the
third quarter of 2024
.
Returned excess cash to stockholders in the form of a quarterly dividend and
special cash dividend totaling $0.58 per share
.
Re-affirmed outlook for 2024
"We delivered very strong performance during the first quarter, producing more
than 2.1 million tons, levels not seen since 2020, driven primarily by strong
operational performance," commented Walt Scheller, CEO of Warrior. "We were
able to leverage the inventory levels we had built over the preceding quarters
to generate $104.1 million in cash from operations, which we used to fund,
among other things, the continued development of our Blue Creek growth
project."
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"While weaker demand from China and India, coupled with improved supply from
Australia has driven down steelmaking coal prices since early March, Warrior's
results in the first quarter continue to reflect the strong demand from our
contracted customers for our premium met coal. As a result, despite recent
pressure on spot steelmaking coal prices, we are maintaining our sales and
production guidance for the year," Mr. Scheller concluded.
Operating Results
Sales volume in the first quarter of 2024 was 2.1 million short tons compared
to 1.9 million short tons in the first quarter of 2023, representing a 9%
increase. The 9% increase in sales volume was driven by higher production from
both Mine No. 4 and Mine No. 7 operating at higher capacity levels in 2024
compared to 2023, driven by the employees returning from the labor strike
beginning in the second quarter of 2023. We transported more volume by rail to
the port during the first quarter of 2024 without any delays due to the
failure of a lock and dam system on the Black Warrior River in January, which
slightly increased our transportation costs.
The Company produced 2.1 million short tons of steelmaking coal in the first
quarter of 2024 compared to 1.8 million short tons in the first quarter of
2023, representing a 17% increase. Inventory levels decreased to 892 thousand
short tons as of March 31, 2024 from 968 thousand short tons as of December
31, 2023.
Additional Financial Results
Total revenues were $503.5 million for the first quarter of 2024, which
compares to total revenues of $509.7 million in the first quarter of 2023. The
average net selling price of the Company's steelmaking coal decreased 9% from
$256.93 per short ton in the first quarter of 2023 to $233.91 per short ton in
the first quarter of 2024. Our average net selling price realization, which is
net of demurrage and other charges, was approximately 84% of the Platts
Premium Low Vol FOB Australian index price for the first quarter of 2024.
Cost of sales for the first quarter of 2024 were $285.6 million compared to
$232.6 million for the first quarter of 2023. Cash cost of sales (free-on-board
port) for the first quarter of 2024 were $284.2 million, or 57% of mining
revenues, compared to $231.6 million, or 46% of mining revenues in the same
period of 2023. Cash cost of sales (free-on-board port) per short ton
increased to $133.48 in the first quarter of 2024 from $118.87 in the first
quarter of 2023, due to higher royalty costs on higher royalty rates in the
areas currently being mined and higher labor and supply related costs on
higher production volumes since the end of the labor strike. The higher labor
related costs were primarily due to the employees returning from the labor
strike beginning in the second quarter of 2023 and wage increases. Our
headcount was 33% higher in the first quarter of this year compared to the
first quarter of 2023. In addition, costs were higher in the first quarter of
2024 due to higher spending on a higher mix of rail transportation, repairs
and maintenance, both of which should be temporary, and less mine development
credits now that Mine 4 is producing from the north portal area of the mine.
Selling, general and administrative expenses for the first quarter of 2024
were $18.7 million, or 3.7% of total revenues and were slightly higher than
the same period last year of 2.8%
due to higher employee-related stock compensation costs.
Depreciation and depletion expenses for the first quarter of 2024 were $40.0
million, or 7.9% of total revenues and were slightly higher than the same
period last year of 7.3%. Warrior achieved net interest income of $7.0 million
during the first quarter of 2024, which compares to net interest income in the
same period of last year of $1.5 million. Interest income earned on our cash
investments continues to exceed interest expense on our outstanding notes and
equipment leases.
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Income tax expense was $19.1 million in the first quarter of 2024 on income of
$156.1 million primarily driven by an income tax benefit for foreign-derived
intangible income and depletion expense. This compares to an income tax
expense of $29.1 million on income of $211.3 million in the first quarter of
2023.
Cash Flow and Liquidity
The Company generated cash flows of $104.1 million from operating activities
in the first quarter of 2024, compared to $192.9 million in the first quarter
of 2023. Capital expenditures and mine development for the first quarter of
2024 were $101.7 million compared to $82.6 million in the first quarter of
2023, primarily reflecting the continued development of the Blue Creek growth
project. Free cash flows in the first quarter of 2024 were $2.4 million
compared to $110.3 million in the first quarter of 2023 and were significantly
impacted by the timing of higher accounts receivable on higher sales volumes
that should reverse in the short term.
Net working capital, excluding cash, for the first quarter of 2024 increased
by $85.8 million from the fourth quarter of 2023, primarily reflecting higher
trade accounts receivable due to higher sales volumes and the timing of sales
partially offset by the draw down of inventories.
Cash flows used in financing activities for the first quarter of 2024 were
$46.7 million, primarily due to the payment of a regular quarterly dividend
and special dividend totaling $30.6 million, payments for taxes related to net
share settlement of vested equity awards of $11.8 million and principal
repayments of financing lease obligations of $4.3 million.
The Company's total liquidity as of March 31, 2024 was $801.3 million,
consisting of cash and cash equivalents of $693.9 million and available
liquidity under its ABL Facility of $107.4 million, net of outstanding letters
of credit of $8.7 million.
Capital Allocation
On April 25, 2024, our Board declared a regular quarterly cash dividend of
$0.08 per share, totaling approximately $4.2 million, which will be paid on
May 13, 2024, to stockholders of record as of the close of business on May 6,
2024.
Progress at Blue Creek
During the first quarter, Warrior invested $68.5 million on the continued
development of the Blue Creek mine, which brings the total project spend to
approximately $434.5 million. The Company expects to spend $325 to $375
million in 2024 on the continued development of the Blue Creek mine. As
previously disclosed in 2023, the Company initiated important and highly
beneficial project scope changes that will require incremental capital
expenditures of $120 to $130 million over the life of the project while
lowering operating costs, increasing flexibility to manage risks, and making
better use of multi-channel transportation methods. At the same time, the
Company effectively reset the original total baseline cost of the project of
$700 million to include these scope changes and the impact of inflationary
cost increases ranging from 25 to 35 percent in both operating and capital
expenditures in relation to labor, construction materials and certain
equipment. The new baseline project cost ranges from $995 million to $1.075
billion.
"We continued to make excellent progress on the development of our world-class
Blue Creek growth project," Scheller said. "We accomplished key milestones on
the major components for seam access, surface infrastructure and coal
transportation. The seam access components, including the production slope,
service shaft and ventilation shaft remain on schedule for completion late in
the second quarter of
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2024, which will allow us to begin development of the initial longwall panel
with the first continuous miner unit in the third quarter of 2024. We remain
focused on tight capital discipline ensuring the project will be completed
within budget and on time, including the longwall startup in the second
quarter of 2026."
With the addition of Blue Creek, Warrior expects to increase its annual High
Vol A production by 4.8 million short tons; enhance its already advantageous
position on the global cost curve; drive its cash costs further into the first
quartile globally; improve its profitability and cash flow generation; and
cement its position as a leading pure play steelmaking coal producer.
Company Outlook
The Company re-affirmed its outlook for 2024, which is subject to many risks
that may impact performance, such as market conditions in the steel and
steelmaking coal industries and overall global economic and competitive
conditions, all as more fully described under Forward-Looking Statements. The
Company is re-affirming its guidance for the full year 2024 as outlined below.
Coal sales 7.4 - 8.2 million short tons
Coal production 7.4 - 8.0 million short tons
Cash cost of sales (free-on-board port) $125 - $135 per short ton
Capital expenditures for existing mines $100 - $110 million
Blue Creek project and other discretionary capital expenditures $335 - $390 million
Mine development costs $28 - $38 million
Selling, general and administrative expenses $55 - $65 million
Interest expense $13 - $18 million
Interest income $20 - $25 million
Income tax expense 14% - 18%
Key factors that may affect outlook include:
.
Three planned longwall moves remaining (two in Q3 and one in Q4),
.
HCC index pricing, geography of sales and freight rates,
.
Exclusion of other non-recurring costs,
.
Terms of any new labor contract, and
.
Inflationary pressures.
The Company's guidance for its capital expenditures consists of sustaining
capital spending of approximately $100 - $110 million, including regulatory
and gas requirements, and capital spending of $325 - $375 million for the
development of the Blue Creek reserves and $10 - $15 million for the final 4
North bunker construction.
The Company's production guidance contains approximately 200,000 short tons of
High Vol A steelmaking coal in the second half of 2024 from the continuous
miner units from the Blue Creek reserves, which are expected to be sold in the
second half of 2025 after the preparation plant comes online.
The Company does not provide reconciliations of its outlook for cash cost of
sales (free-on-board port) to cost of sales in reliance on the unreasonable
efforts exception provided for under Item 10(e)(1)(i)(B) of Regulation S-K.
The Company is unable, without unreasonable efforts, to forecast certain items
required to develop the meaningful comparable Generally Accepted Accounting
Principles ("GAAP") cost of sales. These items typically include non-cash
asset retirement obligation accretion expenses, mine idling
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expenses and other non-recurring indirect mining expenses that are difficult
to predict in advance in order to include in a GAAP estimate. The unavailable
information could have a significant impact on the Company's reported
financial results.
Use of Non-GAAP Financial Measures
This release contains the use of certain non-GAAP financial measures. These
non-GAAP financial measures are provided as supplemental information for
financial measures prepared in accordance with GAAP. Management believes that
these non-GAAP financial measures provide additional insights into the
performance of the Company, and they reflect how management analyzes Company
performance and compares that performance against other companies. These
non-GAAP financial measures may not be comparable to other similarly titled
measures used by other entities. The definition of these non-GAAP financial
measures and a reconciliation of non-GAAP to GAAP financial measures is
provided in the financial tables section of this release.
Conference Call
The Company will hold a conference call to discuss its first quarter 2024
results today, May 1, 2024, at 4:30 p.m. ET. To listen to the event, live or
access an archived recording, please visit
http://investors.warriormetcoal.com
. Analysts and investors who would like to participate in the conference call
should dial 1-844-340-9047 (domestic) or 1-412-858-5206 (international) 10
minutes prior to the start time and reference the Warrior Met Coal conference
call. Telephone playback will also be available from 6:30 p.m. ET on May 1,
2024 until 6:30 p.m. ET on May 8, 2024. The replay will be available by
calling: 1-877-344-7529 (domestic) or 1-412-317-0088 (international) and
entering passcode 1740379.
About Warrior
Warrior is a U.S.-based, environmentally and socially minded supplier to the
global steel industry. It is dedicated entirely to mining non-thermal
metallurgical (met) steelmaking coal used as a critical component of steel
production by metal manufacturers in Europe, South America and Asia. Warrior
is a large-scale, low-cost producer and exporter of premium quality met coal,
also known as hard-coking coal (HCC), operating highly efficient longwall
operations in its underground mines based in Alabama. The HCC that Warrior
produces from the Blue Creek coal seam contains very low sulfur and has strong
coking properties. The premium nature of Warrior's HCC makes it ideally suited
as a base feed coal for steel makers. For more information, please visit
www.warriormetcoal.com
.
Forward-Looking Statements
This press release contains, and the Company's officers and representatives
may from time to time make, forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended and Section 21E of the
Securities Exchange Act of 1934, as amended. All statements, other than
statements of historical facts, included in this press release that address
activities, events or developments that the Company expects, believes or
anticipates will or may occur in the future are forward-looking statements,
including statements regarding 2024 guidance, sales and production growth,
ability to maintain cost structure, demand, management of liquidity, cash
flows, expenses and expected capital expenditures and working capital, the
Company's pursuit of strategic growth opportunities, the Company's future
ability to return excess cash to stockholders, as well as statements regarding
production, inflationary pressures, the development of the Blue Creek project,
and the outcome of the ongoing negotiations with the labor union representing
certain of our hourly employees, including any potential changes to our
production and sales volumes as a result of such outcome. The words "believe,"
"expect," "anticipate," "plan," "intend," "estimate," "project," "target,"
"foresee," "should," "would," "could," "potential," "outlook," "guidance" or
other similar expressions are intended to identify forward-looking statements.
However, the absence of these words does not mean that the statements are
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not forward-looking. These forward-looking statements represent management's
good faith expectations, projections, guidance, or beliefs concerning future
events, and it is possible that the results described in this press release
will not be achieved. These forward-looking statements are subject to risks,
uncertainties and other factors, many of which are outside of the Company's
control, that could cause actual results to differ materially from the results
discussed in the forward-looking statements, including, without limitation,
fluctuations or changes in the pricing or demand for the Company's coal (or
met coal generally) by the global steel industry; the impact of global
pandemics, such as the novel coronavirus ("COVID-19") pandemic, on its
business and that of its customers, including the risk of a decline in demand
for the Company's met coal due to the impact of any such pandemic on steel
manufacturers; the impact of inflation on the Company, the impact of
geopolitical events, including the effects of the Russia-Ukraine war; the
inability of the Company to effectively operate its mines and the resulting
decrease in production; the inability of the Company to transport its products
to customers due to rail performance issues or the impact of weather and
mechanical failures at the McDuffie Terminal at the Port of Mobile; federal
and state tax legislation; changes in interpretation or assumptions and/or
updated regulatory guidance regarding the Tax Cuts and Jobs Act of 2017;
legislation and regulations relating to the Clean Air Act and other
environmental initiatives; regulatory requirements associated with federal,
state and local regulatory agencies, and such agencies' authority to order
temporary or permanent closure of the Company's mines; operational,
logistical, geological, permit, license, labor and weather-related factors,
including equipment, permitting, site access, operational risks and new
technologies related to mining and labor strikes or slowdowns; the timing and
impact of planned longwall moves; the Company's obligations surrounding
reclamation and mine closure; inaccuracies in the Company's estimates of its
met coal reserves; any projections or estimates regarding Blue Creek,
including the expected returns from this project, if any, and the ability of
Blue Creek to enhance the Company's portfolio of assets, the Company's
expectations regarding its future tax rate as well as its ability to
effectively utilize its net operating losses to reduce or eliminate its cash
taxes; the Company's ability to develop Blue Creek; the Company's ability to
develop or acquire met coal reserves in an economically feasible manner;
significant cost increases and fluctuations, and delay in the delivery of raw
materials, mining equipment and purchased components; competition and foreign
currency fluctuations; fluctuations in the amount of cash the Company
generates from operations, including cash necessary to pay any special or
quarterly dividend; the Company's ability to comply with covenants in its ABL
Facility or indenture relating to its senior secured notes; integration of
businesses that the Company may acquire in the future; adequate liquidity and
the cost, availability and access to capital and financial markets; failure to
obtain or renew surety bonds on acceptable terms, which could affect the
Company's ability to secure reclamation and coal lease obligations; costs
associated with litigation, including claims not yet asserted; and other
factors described in the Company's Form 10-K for the year ended December 31,
2023 and other reports filed from time to time with the Securities and
Exchange Commission (the "SEC"), which could cause the Company's actual
results to differ materially from those contained in any forward-looking
statement. The Company's filings with the SEC are available on its website at
www.warriormetcoal.com and on the SEC's website at www.sec.gov.
Any forward-looking statement speaks only as of the date on which it is made,
and, except as required by law, the Company does not undertake any obligation
to update or revise any forward-looking statement, whether as a result of new
information, future events or otherwise. New factors emerge from time to time,
and it is not possible for the Company to predict all such factors.
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Contacts
For Investors:
Dale W. Boyles, 205-554-6129
dale.boyles@warriormetcoal.com
For Media:
D'Andre Wright, 205-554-6131
dandre.wright@warriormetcoal.com
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WARRIOR MET COAL, INC.
CONDENSED STATEMENTS OF OPERATIONS
(in thousands, except per-share amounts)
(Unaudited)
For the three months ended March 31,
2024 2023
Revenues:
Sales $ 497,998 $ 500,491
Other revenues 5,514 9,183
Total revenues 503,512 509,674
Costs and expenses:
Cost of sales (exclusive of items shown separately below) 285,587 232,630
Cost of other revenues (exclusive of items shown separately below) 9,965 11,438
Depreciation and depletion 40,023 37,213
Selling, general and administrative 18,658 14,516
Business interruption 201 4,217
Total costs and expenses 354,434 300,014
Operating income 149,078 209,660
Interest expense (1,121) (7,443)
Interest income 8,154 8,903
Other income - 221
Income before income tax expense 156,111 211,341
Income tax expense 19,122 29,064
Net income $ 136,989 $ 182,277
Basic and diluted net income per share:
Net income per share-basic $ 2.63 $ 3.52
Net income per share-diluted $ 2.62 $ 3.51
Weighted average number of shares outstanding-basic 52,163 51,842
Weighted average number of shares outstanding-diluted 52,217 51,956
Dividends per share: $ 0.58 $ 0.95
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WARRIOR MET COAL, INC.
QUARTERLY SUPPLEMENTAL FINANCIAL DATA AND RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(Unaudited)
QUARTERLY SUPPLEMENTAL FINANCIAL DATA:
(short tons in thousands) For the three months ended March 31,
(1)
2024 2023
Tons sold 2,129 1,948
Tons produced 2,051 1,759
Average net selling price $ 233.91 $ 256.93
Cash cost of sales (free-on-board port) per short ton $ 133.48 $ 118.87
(2)
Cost of production % 61 % 58 %
Transportation and royalties % 39 % 42 %
(1)
1 short ton is equivalent to 0.907185 metric tons.
RECONCILIATION OF CASH COST OF SALES (FREE-ON-BOARD PORT) TO COST OF SALES
REPORTED UNDER U.S. GAAP:
(in thousands) For the three months ended March 31,
2024 2023
Cost of sales $ 285,587 $ 232,630
Asset retirement obligation accretion (702) (540)
Stock compensation expense (713) (534)
Cash cost of sales (free-on-board port) $ 284,172 $ 231,556
(2)
(2)
Cash cost of sales (free-on-board port) is based on reported cost of sales and
includes items such as freight, royalties, labor, fuel and other similar
production and sales cost items, and may be adjusted for other items that,
pursuant to GAAP, are classified in the Condensed Statements of Operations as
costs other than cost of sales, but relate directly to the costs incurred to
produce met coal. Our cash cost of sales per short ton is calculated as cash
cost of sales divided by the short tons sold. Cash cost of sales (free-on-board
port) is a non-GAAP financial measure which is not calculated in conformity
with U.S. GAAP and should be considered supplemental to, and not as a
substitute or superior to financial measures calculated in conformity with
GAAP. We believe cash cost of sales (free-on-board port) is a useful measure
of performance and we believe it aids some investors and analysts in comparing
us against other companies to help analyze our current and future potential
performance. Cash cost of sales (free-on-board port) may not be comparable to
similarly titled measures used by other companies.
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WARRIOR MET COAL, INC.
QUARTERLY SUPPLEMENTAL FINANCIAL DATA AND RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (CONTINUED)
(Unaudited)
RECONCILIATION OF ADJUSTED EBITDA TO AMOUNTS REPORTED UNDER U.S. GAAP:
($ in thousands) For the three months ended March 31,
2024 2023
Net income $ 136,989 $ 182,277
Interest income, net (7,033) (1,460)
Income tax expense 19,122 29,064
Depreciation and depletion 40,023 37,213
Asset retirement obligation accretion 1,297 906
Stock compensation expense 9,147 7,702
Other non-cash accretion 451 414
Mark-to-market gain on gas hedges - (705)
Business interruption 201 4,217
Other income - (221)
Adjusted EBITDA $ 200,197 $ 259,407
(3)
Adjusted EBITDA margin 39.8 % 50.9 %
(4)
(3)
Adjusted EBITDA is defined as net income before net interest income, net,
income tax expense, depreciation and depletion, non-cash asset retirement
obligation accretion, non-cash stock compensation expense, other non-cash
accretion, mark-to-market gain on gas hedges, business interruption expenses
and other income. Adjusted EBITDA is not a measure of financial performance
in accordance with GAAP, and we believe items excluded from Adjusted EBITDA
are significant to a reader in understanding and assessing our financial
condition. Therefore, Adjusted EBITDA should not be considered in isolation,
nor as an alternative to net income, income from operations, cash flows from
operations or as a measure of our profitability, liquidity or performance
under GAAP. We believe that Adjusted EBITDA presents a useful measure of our
ability to incur and service debt based on ongoing operations. Furthermore,
analogous measures are used by industry analysts to evaluate our operating
performance. Investors should be aware that our presentation of Adjusted
EBITDA may not be comparable to similarly titled measures used by other
companies.
(4)
Adjusted EBITDA margin is defined as Adjusted EBITDA divided by total revenues.
RECONCILIATION OF ADJUSTED NET INCOME TO AMOUNTS REPORTED UNDER U.S. GAAP:
(in thousands, except per share amounts) For the three months ended March 31,
2024 2023
Net income $ 136,989 $ 182,277
Business interruption, net of tax 176 3,637
Other income, net of tax - (191)
Adjusted net income $ 137,165 $ 185,723
(5)
Weighted average number of shares outstanding-basic 52,163 51,842
Weighted average number of shares outstanding-diluted 52,217 51,956
Adjusted net income per share-basic $ 2.63 $ 3.58
Adjusted net income per share-diluted $ 2.63 $ 3.57
(5)
Adjusted net income is defined as net income net of business interruption
expenses and other income, net of tax (based on each respective period's
effective tax rate). Adjusted net income is not a measure of financial
performance in accordance with GAAP, and we believe items excluded from
adjusted net income are significant to the reader in understanding and
assessing our results of operations. Therefore, adjusted net income should not
be considered in isolation, nor as an alternative to net income under GAAP. We
believe adjusted net income is a useful measure of performance and we believe
it aids some investors and analysts in comparing us against other companies to
help analyze our current and future potential performance. Adjusted net income
may not be comparable to similarly titled measures used by other companies.
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WARRIOR MET COAL, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
For the three months
ended March 31,
2024 2023
OPERATING
ACTIVITIES:
Net income $ 136,989 $ 182,277
Non-cash adjustments to reconcile net income 53,774 75,098
to net cash provided by operating activities
Changes in operating
assets and liabilities:
Trade accounts (115,175) (56,804)
receivable
Income tax 7,833 -
receivable
Inventories 16,162 17,406
Prepaid expenses and (5,267) (3,140)
other receivables
Accounts 5,631 (8,463)
payable
Accrued expenses and other 5,046 (18,032)
current liabilities
Other (935) 4,592
Net cash provided by 104,058 192,934
operating activities
INVESTING
ACTIVITIES:
Purchases of property, (99,703) (68,179)
plant and equipment
Mine development (1,987) (14,458)
costs
Acquisitions, net - (2,381)
of cash acquired
Net cash used in (101,690) (85,018)
investing activities
FINANCING
ACTIVITIES:
Net cash used in (46,707) (74,848)
financing activities
Net (decrease) increase in (44,339) 33,068
cash and cash equivalents
Cash and cash equivalents 738,197 829,480
at beginning of period
Cash and cash equivalents $ 693,858 $ 862,548
at end of period
RECONCILIATION OF FREE CASH FLOW TO AMOUNTS REPORTED UNDER U.S. GAAP:
(in thousands) For the three months ended March 31,
2024 2023
Net cash provided by operating activities $ 104,058 $ 192,934
Purchases of property, plant and equipment and mine development costs (101,690) (82,637)
Free cash flow $ 2,368 $ 110,297
(6)
Free cash flow conversion 1.2 % 42.5 %
(7)
(6)
Free cash flow is defined as net cash provided by operating activities less
purchases of property, plant and equipment and mine development costs. Free
cash flow is not a measure of financial performance in accordance with GAAP,
and we believe items excluded from net cash provided by operating activities
are significant to the reader in understanding and assessing our results of
operations. Therefore, free cash flow should not be considered in isolation,
nor as an alternative to net cash provided by operating activities under GAAP.
We believe free cash flow is a useful measure of performance and we believe it
aids some investors and analysts in comparing us against other companies to
help analyze our current and future potential performance. Free cash flow may
not be comparable to similarly titled measures used by other companies.
(7)
Free cash flow conversion is defined as free cash flow divided by Adjusted
EBITDA.
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WARRIOR MET COAL, INC.
CONDENSED BALANCE SHEETS
(in thousands, except share and per-share data)
March 31, 2024 December 31,
2023
(Unaudited)
ASSETS
Current assets:
Cash and cash $ 693,858 $ 738,197
equivalents
Short-term investments 9,149 9,030
Trade accounts 213,400 98,225
receivable
Income tax receivable - 7,833
Inventories, net 165,650 183,949
Prepaid expenses and 37,200 31,932
other receivables
Total current assets 1,119,257 1,069,166
Mineral interests, net 78,428 80,442
Property, plant and 1,253,395 1,179,609
equipment, net
Deferred income taxes 5,752 5,854
Other long-term assets 21,759 21,987
Total assets $ 2,478,591 $ 2,357,058
LIABILITIES AND
STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 43,184 $ 36,245
Accrued expenses 80,944 81,612
Short-term financing 11,357 11,463
lease liabilities
Other current 27,557 18,350
liabilities
Total current 163,042 147,670
liabilities
Long-term debt 153,166 153,023
Asset retirement 71,916 71,666
obligations
Long-term financing 7,708 8,756
lease liabilities
Deferred income taxes 77,434 74,531
Other long-term 27,125 26,966
liabilities
Total liabilities 500,391 482,612
Stockholders' Equity:
Common stock, $0.01 par value, (140,000,000 shares authorized 545 542
as of March 31, 2024 and December 31, 2023; 54,519,114 issued
and 52,297,273 outstanding as of March 31, 2024; 54,240,764
issued and 52,018,923 outstanding as of December 31, 2023)
Preferred stock, $0.01 par - -
value per share (10,000,000
shares authorized; no shares
issued and outstanding)
Treasury stock, at (50,576) (50,576)
cost (2,221,841 shares
as of March 31, 2024
and December 31, 2023)
Additional paid 276,731 279,332
in capital
Retained earnings 1,751,500 1,645,148
Total stockholders' 1,978,200 1,874,446
equity
Total $ 2,478,591 $ 2,357,058
liabilities and
stockholders'
equity
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