Royal Gold, Inc. (NASDAQ: RGLD) (together with its
subsidiaries, “Royal Gold” or the “Company,” “we” or “our”) reports
net income attributable to stockholders (“net income”) of $20.4
million, or $0.32 per share, on revenue of $94.1 million in its
fiscal fourth quarter ended June 30, 2016 (“fourth quarter”).
Earnings increased 38% compared to the prior year quarter net
income of $14.8 million, or $0.23 per share, on revenue of $73.6
million. The average gold price was $1,259 per ounce, up 6% from
the prior year quarter.
Fourth Fiscal Quarter 2016 Highlights Compared to the Prior
Year Quarter:
- Volume of 74,700 Gold Equivalent Ounces
(“GEOs1”), an increase of 21%
- Revenue of $94.1 million, an increase
of 28%
- Reported earnings per share of $0.32,
an increase of 38%
- Operating cash flow of $49.2 million,
an increase of 12%
- Dividends paid of $15 million, an
increase of 5%
Fiscal 2016 Highlights Compared to Fiscal 2015:
- Record volume of 308,000 GEOs2, an
increase of 36%
- Record revenue of $359.8 million, an
increase of 29%
- Record dividends paid of $58.7 million,
an increase of 5%
For the fiscal year ended June 30, 2016 (“fiscal 2016”), Royal
Gold reports record revenue of $359.8 million, a 29% increase over
$278.0 million in fiscal 2015. Fiscal 2016 earnings were impacted
by impairments reported in the March 2016 quarter and discrete tax
expenses reported in the September 2015 quarter resulting in a net
loss attributable to stockholders of $77.1 million, or ($1.18) per
share, compared to fiscal 2015 net income of $52.0 million, or
$0.80 per share. Absent the adjustments for impairments and the
discrete tax expenses, fiscal 2016 adjusted net income3 would have
been $65.0 million, or $1.00 per share. The average gold price was
$1,168 in fiscal 2016, down 5% from fiscal 2015.
“We made great progress in fiscal 2016 by enhancing our
portfolio with four large transactions resulting in immediate
contributions to our operating results from four new mines,
including Pueblo Viejo, Andacollo, Wassa and Prestea,” commented
Tony Jensen, President and CEO. “And fiscal 2017 is starting off
strong with Centerra Gold’s agreement to acquire Thompson Creek
Metals. In this new fiscal year, we look forward to a financially
stronger Mount Milligan, construction progress at Rainy River and
the Wassa and Prestea underground mines, and ongoing development at
Cortez Crossroads to further grow and diversify our portfolio.”
Recent Developments
Mount Milligan Commitment Letter
On July 5, 2016, we signed a binding commitment letter with
Centerra Gold Inc. (“Centerra”) describing key terms of a
future amendment to the Company’s streaming interest at
the Mount Milligan mine owned by Terrane Metals Corp.
(“Terrane”), a subsidiary of Thompson Creek Metals Company
Inc. (“Thompson Creek”). Centerra entered into a definitive
arrangement agreement to acquire Thompson Creek and, in connection
with closing that acquisition, will redeem all of Thompson Creek’s
secured and unsecured notes.
Under the commitment letter, our 52.25% gold streaming interest
at Mount Milligan will be amended to a 35% gold stream and we will
obtain an 18.75% copper stream. We will continue to pay $435 per
ounce of gold delivered and will pay 15% of the spot price per
metric tonne of copper delivered. The amendment is conditioned upon
closing of Centerra’s acquisition of Thompson Creek. Royal Gold
estimates this amendment to be value neutral on a discounted cash
flow basis, and expects about two-thirds of its future net revenue
from Mount Milligan will be gold related and one-third copper
related over the next ten years. After transition to the amended
stream, Royal Gold expects that approximately 85% of our total net
revenue will come from precious metals and 15% from base
metals.4
Centerra’s proposed acquisition of Thompson Creek is subject to
court and applicable regulatory approvals as well as approval of
Thompson Creek shareholders, and is expected to close in the fall
of calendar 2016._________________________________
1 GEOs are calculated as revenue divided by the average gold
price for the same period. GEOs net of stream payments were 59,600
in the fourth quarter compared to 53,300 in the year-ago quarter. 2
GEOs net of stream payments were 247,300 for fiscal 2016, compared
to 199,800 net GEOs in fiscal 2015. 3 Non-GAAP measure. See
Schedule A for reconciliation. 4 Based on current projections for
the next five years from operators where the Company has interests.
Fiscal 2016 Overview
Fiscal year 2016 revenue of $359.8 million included stream
revenue of $238.0 million and royalty revenue of $121.8 million.
Stream segment gold purchases totaled approximately 216,600 ounces
of gold and sales were approximately 202,000 ounces of gold. Stream
segment silver purchases were 532,600 ounces and sales were 208,900
ounces of silver. The Company had approximately 19,800 ounces of
gold and 323,700 ounces of silver in inventory at June 30, 2016, as
previously announced, compared to 5,300 ounces of gold at June 30,
2015.
The increase in fiscal 2016 revenue, compared to the fiscal year
ended June 30, 2015, resulted primarily from higher production at
Mount Milligan and new production from our recently acquired
streams at the Wassa, Prestea, Pueblo Viejo and Andacollo
mines.
Fiscal 2016 cost of sales was $71.0 million, compared to $33.5
million in fiscal 2015. The increase is primarily attributable to
higher volume from our streaming segment. Cost of sales is specific
to our stream agreements and results from the Company’s purchase of
gold and silver for cash payments at a set contractual price, or a
percentage of the prevailing market price of gold or silver when
purchased.
General and administrative expenses increased to $31.7 million
in fiscal 2016 compared to $24.9 million in fiscal 2015. The
increase was primarily due to non-cash, stock-based compensation of
approximately $4.9 million, resulting from management’s change in
estimate for the number of performance shares that are expected to
vest.
Depreciation, depletion and amortization expense increased to
$141.1 million in fiscal 2016, compared to $93.5 million in fiscal
2015. The increase was primarily attributable to the ramp-up in
production at Mount Milligan ($11.4 million) and new production
from the recently acquired streams at Pueblo Viejo ($21.9 million),
Wassa and Prestea ($7.8 million), and Andacollo ($9.0 million).
Exploration costs, which are specific to our Peak Gold joint
venture in Alaska, increased to $8.6 million in fiscal 2016,
compared to $2.2 million in fiscal 2015.
We recognized a fiscal 2016 income tax expense of $60.7 million
compared to $9.6 million in fiscal 2015. The increase is primarily
related to the gain attributable to the Company’s Andacollo
transactions, the liquidation of our Chilean subsidiary, and
impairment charges.
At June 30, 2016, we had current assets of $164.8 million
compared to current liabilities of $22.7 million. This compares to
current assets of $797.0 million and current liabilities of $25.0
million at June 30, 2015. The decrease in our current
assets was primarily attributable to a decrease in our cash and
equivalents resulting from the stream acquisitions completed early
in the fiscal year.
The Company repaid $25 million on its revolving credit facility
during the fourth quarter and as of June 30, 2016, had $375 million
available and $275 million outstanding under the facility. Working
capital, combined with the Company’s undrawn revolving credit
facility, totaled $517.1 million in liquidity at June 30, 2016.
PROPERTY HIGHLIGHTS
A summary of fiscal 2016 fourth quarter and historical
production can be found on Tables 1 and 2. Calendar year production
estimates versus actual production at certain producing properties
can be found on Table 3. Results of our streaming business for the
three months and fiscal year ended June 30, 2016 compared to the
three months and fiscal year ended June 30, 2015, can be found on
Table 4. Highlights at certain of the Company’s principal producing
and development properties during fiscal 2016, compared to fiscal
2015, are detailed in our Form 10-K.
CORPORATE PROFILE
Royal Gold is a precious metals stream and royalty company
engaged in the acquisition and management of precious metal
streams, royalties and similar production based interests. The
Company owns interests on 193 properties on six continents,
including interests on 38 producing mines and 24 development stage
projects. Royal Gold is publicly traded on the NASDAQ Global Select
Market under the symbol “RGLD.” The Company’s website is located at
www.royalgold.com.
Note: Management’s conference call reviewing the fourth
fiscal quarter results will be held Thursday, August 11, 2016 at
10:00 a.m. Mountain Daylight Time (noon Eastern Daylight Time) and
will be available by calling (855) 209-8260 (U.S.), (855) 669-9657
(Canada) or (412) 542-4106 (international), conference title “Royal
Gold.” The call will be simultaneously broadcast on the Company’s
website at www.royalgold.com under the “Presentations”
section. A replay of this webcast will be available on the
Company’s website approximately two hours after the call ends.
Cautionary “Safe Harbor” Statement Under the Private
Securities Litigation Reform Act of 1995: With the exception of
historical matters, the matters discussed in this press release are
forward-looking statements that involve risks and uncertainties
that could cause actual results to differ materially from
projections or estimates contained herein. Such forward-looking
statements include statements about operators’ expectations about
development; anticipated production and returns from our stream and
royalty properties, including without limitation Centerra’s
proposed acquisition of Thompson Creek Metals Company, Centerra’s
financial strength as proposed owner of Mount Milligan, estimated
percentages of precious and base metals expected from Mount
Milligan and from the Company’s stream and royalty portfolio in the
aggregate after the proposed Mount Milligan stream agreement
becomes effective; construction progress at Rainy River and at
Wassa and Prestea and development at Cortez Crossroads; operators’
production estimates for calendar year 2016 and statements about
the opportunities for portfolio and investment growth and
diversification and the Company’s ability to pursue such
opportunities. Factors that could cause actual results to differ
materially from the projections include, among others, precious
metals, copper and nickel prices; performance of and production at
the Company's stream and royalty properties, including gold and
copper production at Mount Milligan; the ability of operators of
development properties to finance project construction to
completion and bring projects into production as expected;
operators’ delays in securing or inability to secure necessary
governmental permits; decisions and activities of the operators of
the Company's stream and royalty properties; unanticipated grade,
environmental, geological, seismic, metallurgical, processing,
liquidity or other problems the operators of the mining properties
may encounter; changes in operators’ project parameters as plans
continue to be refined; changes in estimates of reserves and
mineralization by the operators of the Company’s stream and royalty
properties; the failure of Centerra’s acquisition of Thompson Creek
to occur; contests to the Company’s stream and royalty interests
and title and other defects to the Company’s stream and royalty
properties; errors or disputes in calculating stream and royalty
payments, or payments not made in accordance with stream and
royalty agreements; economic and market conditions; risks
associated with conducting business in foreign countries; changes
in laws governing the Company and its stream and royalty properties
or the operators of such properties, and other subsequent events;
as well as other factors described in the Company's Annual Report
on Form 10-K, Quarterly Reports on Form 10-Q, and other filings
with the Securities and Exchange Commission. Most of these factors
are beyond the Company’s ability to predict or control. The Company
disclaims any obligation to update any forward-looking statement
made herein. Readers are cautioned not to put undue reliance on
forward-looking statements.
Statement Regarding Third Party Information: Royal Gold
does not own, develop or mine the properties on which it holds
stream or royalty interests. Certain information provided in this
press release, including production estimates for calendar 2016,
has been provided to us by the operators of those properties or is
publicly available information filed by these operators with
applicable securities regulatory bodies, including the Securities
and Exchange Commission. Royal Gold has not verified, and is not in
a position to verify, and expressly disclaims any responsibility
for, the accuracy, completeness or fairness of such third-party
information and refers the reader to the public reports filed by
the operators for information regarding those properties.
TABLE 1Fourth Quarter Fiscal
2016Revenue and Reported Production for Principal Royalty
and Stream Interests(In thousands, except reported
production in oz. and lbs.)
Three Months Ended Three Months Ended June 30,
2016 June 30, 2015
Reported Reported
Stream/Royalty
Metal(s)
Revenue
Production1
Revenue Production1
Stream:
Mount
Milligan Gold $ 29,874 23,800 oz. $ 27,411 23,000 oz.
Andacollo Gold $ 17,080 13,500 oz. N/A N/A Pueblo Viejo Gold $
16,676 10,600 oz. N/A N/A Silver 208,900 oz. N/A N/A Wassa and
Prestea Gold $ 5,791 4,600 oz. N/A N/A Other Gold $ - 300 oz.
N/A N/A
Total stream revenue $ 69,421
$ 27,411
Royalty:
Peñasquito $ 2,552 $ 10,369 Gold 41,900 oz. 296,900 oz. Silver 2.6
Moz. 7.0 Moz. Lead 13.3 Mlbs. 48.2 Mlbs. Zinc 43.2 Mlbs. 88.9 Mlbs.
Voisey's Bay $ - $ 3,021 Nickel N/A 9.0 Mlbs. Copper N/A 20.8 Mlbs.
Holt Gold $ 2,775 13,500 oz. $ 2,911 15,800 oz. Cortez Gold $ 1,267
16,100 oz. $ 3,283 43,900 oz. Andacollo2 Gold - N/A oz. $ 9,433
10,500 oz. Other Various
18,114
N/A $ 17,151 N/A
Total royalty revenue
24,708
$ 46,168 Total Revenue
94,129
$ 73,579
TABLE 1Fiscal Year
2016Revenue and Reported Production for Principal Royalty
and Stream Interests(In thousands, except reported
production in oz. and lbs.)
Fiscal Year Ended Fiscal Year Ended June 30,
2016 June 30, 2015
Reported Reported
Stream/Royalty
Metal(s)
Revenue
Production1 Revenue
Production1 Stream:
Mount Milligan Gold $ 125,438 108,800
oz. $ 94,104 76,900 oz. Andacollo Gold $ 49,243 41,600 oz.
N/A N/A Pueblo Viejo Gold $ 39,683 31,200 oz. N/A N/A Silver
208,900 oz. N/A N/A Wassa and Prestea Gold $ 23,346 20,100 oz. N/A
N/A Other Gold $ 318 300 oz. N/A N/A
Total stream
revenue $ 238,028 $ 94,104
Royalty:
Peñasquito $ 22,760 $ 30,306
Gold 584,000 oz. 742,100 oz. Silver 21.4 Moz. 24.6 Moz. Lead 134.2
Mlbs. 158.4 Mlbs. Zinc 333.0 Mlbs. 340.8 Mlbs. Voisey's Bay $
11,044 $ 16,665 Nickel 78.6 Mlbs. 62.8 Mlbs. Copper 56.2 Mlbs. 64.8
Mlbs. Holt Gold $ 10,295 58,300 oz. $ 11,954 61,500 oz. Cortez Gold
$ 6,107 74,000 oz. $ 18,044 229,000 oz. Andacollo2 Gold $ - - oz. $
38,033 41,500 oz. Other Various $ 71,556 N/A $ 68,913 N/A
Total
royalty revenue $ 121,762 $ 183,915
Total Revenue $ 359,790 $
278,019
TABLE 2Historical
Production
Reported Production For The Quarter Ended1
Property
Stream/Royalty
Operator
Metal(s) Jun. 30, 2016 Mar.
31, 2016 Dec. 31, 2015 Sep. 30,
2015 Jun. 30, 2015 Stream:
Mount Milligan
52.25% of payable gold Thompson Creek Gold
23,800 oz. 25,400 oz. 38,700 oz.
21,000 oz. 23,000 oz. Andacollo
100% of gold produced Teck Gold 13,500
oz. 13,500 oz. 5,200 oz. 9,500
oz. N/A Pueblo Viejo
7.5% of gold produced up to 990,000ounces;
3.75% thereafter
Barrick (60%) Gold 10,600 oz. 11,800
oz. 8,800 oz. N/A N/A
75% of payable silver up to 50
millionounces; 37.5% thereafter
Silver 208,900 oz. N/A
N/A N/A
N/A Wassa and Prestea
9.25% of gold produced up to 12/31/17;
10.5% of gold produced up to 240,000 ounces; 5.5% thereafter
Golden Star Gold 4,600 oz. 3,500
oz. 8,800 oz. 3,200 oz.
N/A
Royalty:
Peñasquito 2.0% NSR Goldcorp
Gold 41,900 oz. 120,300
oz. 195,400 oz. 226,500 oz.
296,900 oz. Silver 2.6 Moz. 4.8
Moz. 6.8 Moz. 7.3 Moz. 7.0
Moz. Lead 13.3 Mlbs. 30.2 Mlbs.
41.7 Mlbs. 49.1 Mlbs. 48.2
Mlbs. Zinc
43.2 Mlbs. 73.1 Mlbs. 98.0 Mlbs.
118.7 Mlbs. 88.9 Mlbs. Cortez
GSR1 and GSR2, GSR3, NVR1 Barrick Gold 16,100
oz. 18,400 oz. 17,000 oz.
22,600 oz. 43,900 oz. Holt 0.00013 x
quarterly average gold price Kirkland Lake Gold Gold
13,500 oz. 13,500 oz. 15,000
oz. 16,300 oz. 15,800 oz.
Voisey's Bay 2.7% NSR Vale
Nickel N/A
17.2 Mlbs. 23.6 Mlbs.
37.8 Mlbs. 9.0 Mlbs.
Copper N/A
39.2 Mlbs. 15.2 Mlbs. 1.7 Mlbs.
20.8 Mlbs. Andacollo2 75% Teck
Gold N/A N/A N/A
N/A 10,500 oz.
FOOTNOTES
Tables 1 and 2
1 Reported production relates to the amount of metal sales
that are subject to our royalty and stream interests for the stated
period, as reported to us by operators of the mines. 2 This royalty
was terminated effective July 1, 2015.
TABLE 3Calendar 2016 Operators’
Production Estimate vs Actual Production
Calendar 2016 Operator’s Production Estimate1
Calendar 2016 Operator's Production
Actual2,3
Gold Silver Base Metals
Gold Silver Base Metals
Stream/Royalty (oz.) (oz.)
(lbs.) (oz.) (oz.)
(lbs.) Stream:
Andacollo4 57,600 -
- 25,300 - -
Mount Milligan5 240,000-270,000 -
- 99,700 - -
Pueblo Viejo6 600,000-650,000 Not
provided 321,900 Not provided
- Wassa and Prestea7 180,000-205,000
95,700
Royalty:
Cortez GSR1
119,200 - - 31,800 -
- Cortez GSR2 1,300 -
- 2,700 - -
Cortez GSR3 120,500 - -
34,400 - - Cortez NVR1
68,900 - - 23,700 -
- Penasquito8
520,000-580,000 22-24 million - 161,000
7.8 million - Lead
145-155 million
46.1 million Zinc
375-400 million
109.4 million 1
Production estimates received from our operators are for calendar
2016. There can be no assurance that production estimates received
from our operators will be achieved. Please refer to our cautionary
language regarding forward-looking statements preceding Table 1
above, as well as the Risk Factors identified in Part I, Item 1A,
of our Fiscal 2015 10-K for information regarding factors that
could affect actual results. 2 Actual production figures shown are
for the period January 1, 2016 through June 30, 2016, unless
otherwise noted. 3 Actual production figures for Andacollo and
Cortez are based on information provided to us by the operators,
and actual production figures for Andacollo, Mount Milligan,
Peñasquito (gold), and Wassa and Prestea are the operators’
publicly reported figures. 4 The estimated and actual production
figures shown for Andacollo are contained gold in concentrate. 5
The estimated and actual production figures shown for Mount
Milligan are payable gold in concentrate. 6 The estimated and
actual production figures shown are payable gold in doré and
represent Barrick’s 60% interest in Pueblo Viejo. 7 The estimated
production figure shown is payable gold in doré. 8 The estimated
gold and silver production figures reflect payable gold and silver
in concentrate and doré, while the estimated lead and zinc
production figures reflect payable metal in concentrate.
TABLE 4Stream Summary
Three Months Ended June 30, 2016 Three
Months Ended June 30, 2015 As of June 30, 2016
As of June 30, 2015 Gold Stream Purchases
(oz.) Sales (oz.) Purchases (oz.)
Sales (oz.) Ounces in inventory Ounces in
inventory Mount Milligan 31,200 23,700 21,400
23,000 7,500 5,300 Pueblo Viejo 11,000 11,000 N/A N/A 11,000 N/A
Andacollo 13,500 13,500 N/A N/A - N/A Wassa and Prestea 4,400 4,600
N/A N/A 1,300 N/A Phoenix Gold - - N/A N/A - N/A
Total 60,100 52,800 21,400
23,000 19,800 5,300 Three Months
Ended June 30, 2016 Three Months Ended June 30, 2015
As of June 30, 2016 As of June 30, 2015 Silver
Stream Purchases (oz.) Sales (oz.)
Purchases (oz.) Sales (oz.) Ounces in
inventory Ounces in inventory Pueblo Viejo 322,800
208,900 N/A N/A 323,700 N/A
Fiscal Year Ended June 30, 2016
Fiscal Year Ended June 30, 2015 As of June 30, 2016
As of June 30, 2015 Gold Stream Purchases
(oz.) Sales (oz.) Purchases (oz.)
Sales (oz.) Ounces in inventory Ounces in
inventory Mount Milligan 111,000 108,800 74,400 76,900 7,500
5,300 Pueblo Viejo 42,200 31,200 N/A N/A 11,000 N/A Andacollo
41,700 41,600 N/A N/A - N/A Wassa and Prestea 21,400 20,100 N/A N/A
1,300 N/A Phoenix Gold 300 300 N/A N/A - N/A
Total 216,600 202,000 74,400
76,900 19,800 5,300 Fiscal Year
Ended June 30, 2016 Fiscal Year Ended June 30, 2015
As of June 30, 2016 As of June 30, 2015 Silver
Stream Purchases (oz.) Sales (oz.)
Purchases (oz.) Sales (oz.) Ounces in
inventory Ounces in inventory Pueblo Viejo 532,600
208,900 N/A N/A 323,700 N/A
ROYAL GOLD, INC.Consolidated
Balance SheetsAs of June 30,(In thousands except share data)
2016 2015
ASSETS Cash and
equivalents $ 116,633 $ 742,849 Royalty receivables 17,990 37,681
Income tax receivable 20,043 6,422 Stream inventory 9,489 2,287
Available-for-sale securities - 6,273 Prepaid expenses and other
614 1,511 Total current assets 164,769 797,023
Stream and royalty interests, net 2,848,087 2,083,608 Other
assets 53,696 36,560 Total assets $ 3,066,552
$ 2,917,191
LIABILITIES Accounts payable $
4,114 $ 4,911 Dividends payable 15,012 14,341 Other current
liabilities 3,554 5,721 Total current
liabilities 22,680 24,973 Debt 600,685 313,869 Deferred tax
liabilities 133,867 146,603 Uncertain tax positions 16,996 15,130
Other long-term liabilities 6,439 689 Total
liabilities 780,667 501,264 Commitments
and contingencies
EQUITY
Preferred stock, $.01 par value,
authorized 10,000,000 sharesauthorized; and 0 shares issued
- -
Common stock, $.01 par value, 100,000,000
shares authorized; and65,093,950 and 65,033,547 shares outstanding,
respectively
651 650 Additional paid-in capital 2,179,781 2,170,643 Accumulated
other comprehensive loss - (3,292 ) Accumulated earnings
48,584 185,121 Total Royal Gold stockholders’ equity
2,229,016 2,353,122 Non-controlling interests 56,869
62,805 Total equity 2,285,885 2,415,927
Total liabilities and equity $ 3,066,552 $ 2,917,191
ROYAL GOLD, INC.Consolidated
Statements of Operations and Comprehensive (Loss) Income(In
thousands except for per share data)
For The Three Months Ended For The Years Ended June 30,
June 30, June 30, June 30, 2016
2015 2016 2015 Revenue $ 94,129
$ 73,579 $ 359,790 $ 278,019 Costs and expenses Cost of
sales 19,019 9,998 70,979 33,450 General and administrative 8,305
6,671 31,720 24,873 Production taxes 432 1,091 3,978 5,446
Exploration Costs 2,466 2,038 8,601 2,194 Depreciation, depletion
and amortization 35,391 26,213 141,108 93,486 Impairment of stream
and royalty interests and royalty receivables -
- 98,588 31,335 Total
costs and expenses 65,613 46,011
354,974 190,784 Operating income 28,516
27,568 4,816 87,235 Gain (loss) on available-for-sale
securities 1,665 (183 ) 2,340 (183 ) Interest and other income
1,582 178 3,711 883 Interest and other expense (8,656 )
(6,196 ) (32,625 ) (25,691 ) Income (loss)
before income taxes 23,107 21,367 (21,758 ) 62,244 Income
tax expense (5,025 ) (6,394 ) (60,680 )
(9,566 ) Net income (loss) 18,082 14,973 (82,438 ) 52,678 Net loss
(income) attributable to non-controlling interests 2,357
(154 ) 5,289 (713 ) Net income
(loss) attributable to Royal Gold common stockholders $ 20,439
$ 14,819 $ (77,149 ) $ 51,965 Net
income (loss) $ 18,082 $ 14,973 $ (82,438 ) $ 52,678 Adjustments to
comprehensive income (loss), net of tax Unrealized change in market
value of available-for-sale securities 1,112 689 5,632 (3,292 )
Reclassification adjustment for (gains) losses included in net
income (loss) (1,665 ) 167 (2,340 )
160 Comprehensive income (loss) 17,529 15,829 (79,146
) 49,546 Comprehensive income attributable to non-controlling
interests 2,357 154 5,289
(713 ) Comprehensive income (loss) attributable to
Royal Gold stockholders $ 19,886 $ 15,675 $ (73,857 )
$ 48,833 Net income (loss) per share available to
Royal Gold common stockholders: Basic earnings (loss) per share $
0.32 $ 0.23 $ (1.18 ) $ 0.80 Basic weighted
average shares outstanding 65,090,772
65,033,547 65,074,455 65,007,861
Diluted earnings (loss) per share $ 0.32 $ 0.23 $
(1.18 ) $ 0.80 Diluted weighted average shares outstanding
65,090,772 65,129,362 65,074,455
65,125,173 Cash dividends declared per common
share $ 0.23 $ 0.22 $ 0.91 $ 0.87
ROYAL GOLD, INC.Consolidated
Statements of Cash Flows(In Thousands)
For The Three Months Ended For The Years Ended June 30, June
30, June 30, June 30, 2016
2015
2016 2015 Cash flows from
operating activities: Net income (loss) $ 18,082 $ 14,973 $ (82,438
) $ 52,678
Adjustments to reconcile net income (loss)
to net cash providedby operating activities:
Depreciation, depletion and amortization 35,391 26,213 141,108
93,486 Impairment of stream and royalty interests - - 98,588 31,335
Amortization of debt discount and issuance costs 4,843 3,088 12,985
12,100 Non-cash employee stock compensation expense 2,250 1,481
10,039 5,141 Tax benefit of stock-based compensation exercises 301
(290 ) 548 (364 ) (Gain) loss on available-for-sale securities
(1,665 ) 183 (2,340 ) 183 Deferred tax benefit 12,263 6,548 (4,983
) (27,651 ) Other - (46 ) (390 ) (46 ) Changes in assets and
liabilities: Royalty receivables 2,245 1,805 17,221 5,977 Stream
inventory (4,088 ) 675 (7,203 ) 1,110 Income taxes receivable
(11,181 ) (9,666 ) (14,177 ) 15,525 Prepaid expenses and other
assets (1,783 ) (121 ) (153 ) 2,527 Accounts payable 684 1,892 (849
) 150 Foreign withholding taxes payable - 1 (199 ) (2,000 )
Uncertain tax positions (83 ) (331 ) 1,867 1,405 Other liabilities
(8,047 ) (2,500 ) 235 543
Net cash provided by operating activities $ 49,212 $ 43,905 $
169,859 $ 192,099 Cash flows from investing activities:
Acquisition of royalty and stream interests (19,853 ) (88 )
(1,346,109 ) (60,429 ) Andacollo royalty termination - - 345,000 -
Golden Star term loan - - (20,000 ) - Proceeds from sale of
available-for-sale securities 4,972 - 11,905 - Tulsequah stream
termination - - - 10,000 Other (7 ) (702 )
(309 ) (773 ) Net cash used in investing activities $
(14,888 ) $ (790 ) $ (1,009,513 ) $ (51,202 ) Cash flows
from financing activities: Borrowings from revolving credit
facility - - 350,000 - Repayment of revolving credit facility
(25,000 ) - (75,000 ) - Net (payments) proceeds from issuance of
common stock (179 ) - (353 ) 775 Common stock dividends (15,011 )
(14,342 ) (58,720 ) (56,054 ) Debt issuance costs (62 ) (864 )
(1,111 ) (864 ) Distribution to non-controlling interests (1 ) (578
) (830 ) (1,805 ) Tax (benefit) expense of stock-based compensation
exercises (301 ) 290 (548 ) 364
Net cash (used in) provided by financing activities $
(40,554 ) $ (15,494 ) $ 213,438 $ (57,584 ) Net (decrease)
increase in cash and equivalents (6,230 ) 27,621 (626,216 ) 83,313
Cash and equivalents at beginning of period 122,863
715,228 742,849 659,536
Cash and equivalents at end of period $ 116,633 $ 742,849
$ 116,633 $ 742,849
SCHEDULE A
Non-GAAP Financial Measures
Non-GAAP financial measures are intended to provide additional
information only and do not have any standard meaning prescribed by
generally accepted accounting principles (GAAP). These measures
should not be considered in isolation or as a substitute for
measures of performance prepared in accordance with GAAP.
Our management uses Adjusted EBITDA and Adjusted Net Income as
measures of operating performance to assist in comparing
performance from period to period on a consistent basis; as a
measure for planning and forecasting overall expectations and for
evaluating actual results against such expectations; in
communications with the board of directors, stockholders, analysts
and investors concerning our financial performance; as useful
comparisons to the performance of our competitors; and as metrics
of certain management incentive compensation calculations. We
believe that these measures are used by and are useful to investors
and other users of our financial statements in evaluating our
operating performance because they provide an additional tool to
evaluate our performance without regard to special and noncore
items, which can vary substantially from company to company
depending upon accounting methods and book value of assets and
capital structure. We have provided reconciliations of all non-GAAP
measures to their nearest U.S. GAAP measures and have consistently
applied the adjustments within our reconciliations in arriving at
each non-GAAP measure. We consider these items to be necessary
adjustments for purposes of evaluating our ongoing business
performance and are often considered non-recurring. Such
adjustments are subjective and involve significant management
judgment.
Adjusted EBITDA Reconciliation
Adjusted EBITDA is defined by the Company as net income (loss)
plus depreciation, depletion and amortization, non-cash charges,
income tax expense, interest and other expense, and any impairment
of mining assets, less non-controlling interests in operating loss
(income) of consolidated subsidiaries, interest and other income,
and any royalty portfolio restructuring gains or losses. Other
companies may define and calculate this measure differently.
Adjusted EBITDA identifies the cash generated in a given period
that will be available to fund the Company's future operations,
growth opportunities, shareholder dividends and to service the
Company's debt obligations. This information differs from measures
of performance determined in accordance with U.S. generally
accepted accounting principles (“GAAP”) and should not be
considered in isolation or as a substitute for measures of
performance determined in accordance with U.S. GAAP. See the table
below for a reconciliation of net income to Adjusted EBITDA.
For The Three Months Ended For The Years
Ended June 30, June 30, 2016
2015 2016
2015 Net income (loss) $ 18,082 $
14,973 $ (82,438 ) $ 52,678 Depreciation, depletion and
amortization 35,391 26,213 141,108 93,486 Non-cash employee stock
compensation 2,250 1,481 10,039 5,141 Impairment of stream and
royalty interests and royalty receivables - - 98,588 31,335
Interest and other, net 5,409 6,201 26,574 24,992 Income tax
expense 5,025 6,394 60,680 9,566 Non-controlling interests in
operating loss (income) of consolidated subsidiaries 2,357
(108 ) 5,289 (666 )
Adjusted
EBITDA $ 68,514 $ 55,154 $ 259,840 $ 216,532
Adjusted Net Income (Loss)
Reconciliation
Management of the Company uses adjusted net income (loss) to
evaluate the Company’s operating performance, and for planning and
forecasting future business operations. The Company believes the
use of adjusted net income (loss) allows investors and analysts to
understand the results relating to receipt of revenue from its
royalty interests and purchase and sale of gold from its streaming
interests by excluding certain items that have a disproportionate
impact on our results for a particular period. The net income
(loss) adjustments are presented net of tax generally at the
Company’s statutory effective tax rate. Management’s determination
of the components of adjusted net income (loss) are evaluated
periodically and based, in part, on a review of non-GAAP financial
measures used by mining industry analysts. Net income (loss)
attributable to Royal Gold stockholders is reconciled to adjusted
net income (loss) as follows:
For The Three Months Ended For The Years
Ended June 30, June 30, 2016
2015 2016
2015 Net income (loss) attributable to Royal Gold
common stockholders $ 20,439 $ 14,819 $ (77,149 ) $ 51,965
Impairment of stream and royalty interests and royalty
receivables, net of tax - - 86,130 24,185 Tax expense on Andacollo
royalty sale and Chilean subsidiary liquidation - - 56,000 -
Adjusted net income attributable to Royal
Gold common stockholders $ 20,439 $ 14,819 $ 64,981 $ 76,150
Adjusted earnings per share $
0.32 $ 0.23 $ 1.00 $ 1.17
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160810006156/en/
Royal Gold, Inc.Karli Anderson, 303-575-6517Vice
President Investor Relations
Royal Gold (NASDAQ:RGLD)
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