Ramaco Resources, Inc. (NASDAQ:METC) today reported a net loss
of $2.6 million, or $0.07 per share, for the fourth quarter of 2017
on revenues of $24.0 million. The Company’s adjusted earnings
before interest, taxes, depreciation and amortization and
equity-based compensation expense (“adjusted EBITDA”) for the
fourth quarter was a loss of approximately $328,000 for the same
period.
The Company reported a net loss of $15.4 million, or $0.41 per
share for the full year 2017. Revenues exceeded $61 million
and the Company’s adjusted EBITDA loss for the year was $9.3
million.
“We had aggressive development plans for 2017 and I am pleased
with our execution,” Michael Bauersachs, Ramaco Resources’
President and CEO stated. “Ramaco Resources has the nation’s
newest, fully operational preparation plant and loadout facility,
with three active deep mines and one surface/highwall mine at our
Elk Creek complex. All of this was completed within the past
fifteen months. Coupled with commercial mining of low volatile coal
at our Berwind mine, we expect to produce between 2.0 to 2.2
million tons of high quality, low cost coal in 2018. In the fourth
quarter of 2017, average cash mining costs at our Elk Creek mines
dropped below $60 per ton. These achievements are possible because
of our employees and we thank them for their commitment and hard
work,” Bauersachs concluded.
Operational Results
Over the past twelve months Ramaco Resources opened four new
mines and the Elk Creek preparation plant mentioned above.
Capital expenditures were $75.0 million for 2017.
The Company sold 608 thousand tons of metallurgical coal in
2017, including 236 thousand tons of purchased coal. The
average sales price (FOB mine) of the Company’s sales volumes
improved to just under $70 for the fourth quarter and was
approximately $66 for the entire year. “These selling prices were
indicative of the need to introduce our products as a new entrant
into the market. Strategically, this was important in
positioning Ramaco Resources to achieve our ramp-up in production,”
Bauersachs commented.
Ramaco Resources saw production costs fall to approximately $58
per ton in the fourth quarter from $84 per ton for the first three
quarters of 2017. Production costs for 2017 were adversely impacted
by higher trucking and third-party processing expenses incurred
before its preparation plant and loadout facilities became
operational.
Randall Atkins, Chairman of Ramaco Resources noted, “We have
transitioned from being a development stage company into a fully
operational company in 2018. Our mining costs continue to fall, in
line with expectations, and pricing realizations are also improving
in 2018. Metallurgical coal pricing continued to be strong in the
fourth quarter, driven by the favorable global economic conditions
and steel industry strength. We anticipate these same
positive macro-economic conditions will continue through 2018.”
“We are pleased with our sales and marketing execution.
Presently, we have committed approximately 73% of our anticipated
2018 Company mined sales volumes. We have roughly 600 thousand
uncommitted tons, which we expect to place into the export
markets.”
“We continue to see strong interest from foreign purchasers for
our coal qualities and expect to place our remaining uncommitted
volumes principally into export markets. Given our low mining
cost advantage, combined with the pricing strength in the markets,
we are optimistic for a strong performance in 2018,” Mr. Atkins
concluded.
The exhibit below summarizes some of the key metrics for the
respective periods:
|
|
|
|
|
Three Months Ended |
|
Year Ended |
|
December 31, 2017 |
|
December 31, 2017 |
Sales Volume(a) |
|
|
|
Company |
|
163 |
|
|
372 |
|
Purchased |
|
102 |
|
|
236 |
|
Total Sales
Volume |
|
265 |
|
|
608 |
|
|
|
|
|
Company
Production(a) |
|
|
|
Elk Creek mining
complex
|
|
273 |
|
|
546 |
|
Berwind mine |
|
2 |
|
|
2 |
|
Total
Production |
|
275 |
|
|
548 |
|
|
|
|
|
Company Financial
Metrics |
|
|
|
Average revenue per
ton(b) |
$ |
69.76 |
|
$ |
65.71 |
|
Average cash costs of
coal sold(b) |
|
58.04 |
|
|
72.68 |
|
Average cash margin per
ton |
$ |
11.72 |
|
$ |
(6.97 |
) |
|
|
|
|
Purchased Coal
Financial Metrics |
|
|
|
Average revenue per
ton(c) |
$ |
93.97 |
|
$ |
110.71 |
|
Average cash costs of
coal sold(c) |
|
86.82 |
|
|
97.65 |
|
Average cash margin per
ton |
$ |
7.15 |
|
$ |
13.06 |
|
|
|
|
|
Capital
Expenditures(a) |
$ |
21,758 |
|
$ |
75,039 |
|
|
|
|
|
Notes: |
|
|
|
(a) In
thousands. |
|
|
|
(b)
On Company sales volumes, excludes transportation. |
|
|
(c)
On purchased coal sales volumes, excludes transportation. |
|
|
2018 Guidance
The Company previously released sales guidance for 2018 in its
press release dated February 22, 2018 which is updated and recapped
in the following table:
Committed 2018 Sales
Volume (a) |
Volume |
|
Average Price |
Company: |
|
|
|
Domestic, fixed
priced |
1,151 |
|
$ |
77 |
Export, fixed
priced |
211 |
|
$ |
110 |
Export, priced
against index |
166 |
|
|
Total Committed Company
Tons
|
1,528 |
|
|
|
|
|
|
Purchased: |
|
|
|
Domestic, fixed
priced |
418 |
|
$ |
100 |
Export, fixed
priced |
21 |
|
$ |
132 |
Total Purchased
Tons |
439 |
|
|
|
|
|
|
Total Committed
Sales Volume |
1,967 |
|
|
% of Estimated
2018 Sales Volume (b) |
73% |
|
|
|
|
|
|
2018 Estimated Sales
Volume (a) |
|
|
|
Company |
2,000 -
2,200 |
|
|
Purchased |
400 - 750 |
|
|
Total 2018 Sales
Volume |
2,400 -
2,950 |
|
|
|
|
|
|
Notes:(a) Volumes
in thousands.(b) Based upon mid-point of estimated sales
volume |
|
|
|
|
|
|
|
About Ramaco Resources, Inc.
Ramaco Resources is an operator and developer of high-quality,
low cost metallurgical coal in southern West Virginia, southwestern
Virginia and southwestern Pennsylvania. The Company has five active
mines within two mining complexes at this time.
News and additional information about Ramaco Resources,
including filings with the Securities and Exchange Commission, are
available at http://www.ramacoresources.com. For more information,
contact investor relations at (859) 244-7455.
Conference Call
Ramaco Resources will hold its quarterly conference call and
webcast at 9:00 AM Eastern Time (ET) on Thursday, March 22, 2018 to
present its results for the fourth quarter and full year 2017 and
discuss its business and market outlook for the balance of the
year.
The conference call can be accessed by calling (844)
852-8392 domestically or (703) 639-1226 internationally. The
webcast for this release will be accessible by visiting
https://edge.media-server.com/m6/p/78ib9n3f.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING
STATEMENTS
Certain statements contained in this news release constitute
“forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995. These forward-looking
statements represent Ramaco Resources’ expectations or beliefs
concerning future events, and it is possible that the results
described in this news release will not be achieved. These
forward-looking statements are subject to risks, uncertainties and
other factors, many of which are outside of Ramaco Resources’
control, which could cause actual results to differ materially from
the results discussed in the forward-looking statements. These
factors include, without limitation, unexpected delays in our
current mine development activities, failure of our sales
commitment counterparties to perform, increased government
regulation of coal in the United States or internationally, or
unexpected decline of demand for coal in export markets and
underperformance of the railroads. Any forward-looking statement
speaks only as of the date on which it is made, and, except as
required by law, Ramaco Resources 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 Ramaco
Resources to predict all such factors. When considering these
forward-looking statements, you should keep in mind the risk
factors and other cautionary statements found in Ramaco Resources’
filings with the Securities and Exchange Commission (“SEC”),
including its Annual Report on Form 10-K. The risk
factors and other factors noted in Ramaco Resources’ SEC filings
could cause its actual results to differ materially from those
contained in any forward-looking statement.
|
Ramaco Resources, Inc. |
Condensed Consolidated Statements of
Operations |
|
|
|
|
|
|
|
Three Months Ended |
|
Year Ended December 31, |
|
December 31, 2017 |
|
|
2017 |
|
|
|
2016 |
|
|
|
|
|
|
|
Revenue |
$ |
24,019,051 |
|
|
$ |
61,035,804 |
|
|
$ |
5,215,659 |
|
Cost and expenses |
|
|
|
|
|
Cost of
coal sales |
|
21,374,437 |
|
|
|
58,308,259 |
|
|
|
1,795,845 |
|
Cost of
coal processing |
|
— |
|
|
|
2,212,403 |
|
|
|
2,600,874 |
|
Other
operating costs and expenses |
|
32,063 |
|
|
|
257,721 |
|
|
|
416,292 |
|
Asset
retirement obligation accretion |
|
101,277 |
|
|
|
405,106 |
|
|
|
229,304 |
|
Depreciation and amortization |
|
1,819,089 |
|
|
|
3,154,072 |
|
|
|
251,684 |
|
Professional fees |
|
325,153 |
|
|
|
1,377,053 |
|
|
|
4,325,503 |
|
Selling,
general and administrative |
|
3,024,076 |
|
|
|
11,214,056 |
|
|
|
3,125,941 |
|
Total cost and
expenses |
|
26,676,095 |
|
|
|
76,928,670 |
|
|
|
12,745,443 |
|
Operating loss |
|
(2,657,044 |
) |
|
|
(15,892,866 |
) |
|
|
(7,529,784 |
) |
Interest and dividend
income |
|
3,284 |
|
|
|
295,185 |
|
|
|
138,752 |
|
Other income |
|
53,869 |
|
|
|
203,973 |
|
|
|
— |
|
Interest expense |
|
— |
|
|
|
(22,841 |
) |
|
|
(124,117 |
) |
Net loss |
$ |
(2,599,891 |
) |
|
$ |
(15,416,549 |
) |
|
$ |
(7,515,149 |
) |
|
|
|
|
|
|
Basic and fully diluted
loss per share |
$ |
(0.07 |
) |
|
$ |
(0.41 |
) |
|
|
|
|
|
|
|
|
Adjusted EBITDA |
$ |
(327,936 |
) |
|
$ |
(9,309,502 |
) |
|
$ |
(6,749,953 |
) |
|
|
|
|
|
|
|
Ramaco Resources, Inc. |
Condensed Consolidated Balance
Sheets |
|
|
|
|
|
December 31, |
|
|
2017 |
|
|
2016 |
|
|
|
|
|
Current assets |
|
|
|
Cash and
cash equivalents |
$ |
5,934,043 |
|
$ |
5,196,914 |
|
Short-term investments |
|
5,199,861 |
|
|
55,237,747 |
|
Accounts
receivable |
|
7,165,487 |
|
|
914,741 |
|
Inventories |
|
10,057,787 |
|
|
1,518,638 |
|
Prepaid
expenses |
|
1,104,437 |
|
|
388,921 |
|
Total current
assets |
|
29,461,615 |
|
|
63,256,961 |
|
Property, plant and
equipment – net |
|
115,450,841 |
|
|
46,433,726 |
|
Long-term
investments |
|
— |
|
|
5,199,077 |
|
Advanced coal
royalties |
|
2,867,369 |
|
|
2,050,000 |
|
Deferred offering
costs |
|
— |
|
|
2,247,974 |
|
Other |
|
318,206 |
|
|
21,354 |
|
Total Assets |
$ |
148,098,031 |
|
$ |
119,209,092 |
|
|
|
|
|
Current
liabilities |
$ |
22,424,569 |
|
$ |
15,356,856 |
|
Asset retirement
obligations, long-term |
|
12,276,176 |
|
|
9,434,838 |
|
Note payable-Ramaco
Carbon, LLC |
|
— |
|
|
10,629,275 |
|
Total liabilities |
|
34,700,745 |
|
|
35,420,969 |
|
Series A preferred
units |
|
— |
|
|
88,773,933 |
|
Shareholders' or
Members’ equity (deficit) |
|
113,397,286 |
|
|
(4,985,810 |
) |
Total Liabilities and
Equity |
$ |
148,098,031 |
|
$ |
119,209,092 |
|
|
|
|
|
Reconciliation of Non-GAAP Measure
Adjusted EBITDA is used as a supplemental non-GAAP financial
measure by management and external users of our financial
statements, such as industry analysts, investors, lenders and
rating agencies. The Company believes Adjusted EBITDA is useful
because it allows us to more effectively evaluate our operating
performance.
We define Adjusted EBITDA as net income (loss) plus net interest
expense, equity-based compensation, depreciation, depletion and
amortization expenses and any transaction related costs. A
reconciliation of income (loss) from continuing operations, net of
income taxes to Adjusted EBITDA is included below. Adjusted EBITDA
is not intended to serve as an alternative to U.S. GAAP measures of
performance and may not be comparable to similarly-titled measures
presented by other companies.
|
|
|
|
|
Three Months Ended |
|
Year Ended December 31, |
|
December 31, 2017 |
|
|
2017 |
|
|
|
2016 |
|
|
|
|
|
|
|
Reconciliation
of Net Loss to Adjusted EBITDA: |
|
|
|
|
|
Net loss |
$ |
(2,599,891 |
) |
|
$ |
(15,416,549 |
) |
|
$ |
(7,515,149 |
) |
Add (Subtract): |
|
|
|
|
|
Depreciation and amortization |
|
1,819,089 |
|
|
|
3,154,072 |
|
|
|
251,684 |
|
Interest
and dividend income, net |
|
(3,284 |
) |
|
|
(272,344 |
) |
|
|
(14,635 |
) |
Income
taxes |
|
— |
|
|
|
— |
|
|
|
— |
|
EBITDA |
|
(784,086 |
) |
|
|
(12,534,821 |
) |
|
|
(7,278,100 |
) |
Add: |
|
|
|
|
|
Equity-based compensation |
|
354,873 |
|
|
|
2,820,213 |
|
|
|
298,843 |
|
Accretion
of asset retirement obligation |
|
101,277 |
|
|
|
405,106 |
|
|
|
229,304 |
|
Adjusted EBITDA |
$ |
(327,936 |
) |
|
$ |
(9,309,502 |
) |
|
$ |
(6,749,953 |
) |
|
|
|
|
|
|
POINT OF CONTACT:Michael P.
Windisch, Chief Accounting
Officermpw@ramacocoal.com859-244-7455
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