Ramaco Resources, Inc. (NASDAQ:METC) today reported net income of
$5.3 million, or $0.13 per diluted share for the first quarter of
2018, compared with a net loss of $2.6 million, or $(0.07) per
share for the fourth quarter of 2017. The Company’s adjusted
earnings before interest, taxes, depreciation, amortization and
non-operating expenses (“adjusted EBITDA”) was $9.2 million
for the first quarter of 2018 as compared with an adjusted EBITDA
loss of $328 thousand for the fourth quarter of 2017.
Randall Atkins, Ramaco Resources’ Executive Chairman remarked,
“We are very pleased to report our first positive financial results
since inception. These results reflect more than a doubling of our
revenues since the prior quarter to $56 million. Today, we have
forward sales commitments for more than 1.7 million tons of our
planned 2018 production. As we reported previously, 1.1 million
tons of domestic sales were committed and priced last year. We have
sold 249 thousand tons into export markets at fixed prices
averaging $109 per ton (FOB mine) and have export commitments for
an additional 400 thousand tons at index prices. At current market
prices, these index sales would exceed the fixed prices contracted
to date. For the balance of the year, we expect to demonstrate even
stronger earnings and cash flows than in the first quarter.”
The Company ended the quarter with $7.3 million of cash on hand
and $23.5 million of accounts receivable.
Operational Results
Revenues totaled $55.9 million for the three months ended
March 31, 2018, up 133% from the fourth quarter of 2017. Total
production for the first quarter was 380 thousand tons as compared
with 275 thousand tons for 2017’s fourth quarter.
The Company’s total cash cost per ton sold (FOB mine) for the
first quarter of 2018 was approximately $65 for produced coal, up
from about $58 in the fourth quarter of 2017. This was due to
the impact of weather-related issues at the Company’s mines and
lower than anticipated surface mining production volumes caused by
unexpected geological challenges.
Michael Bauersachs, Ramaco Resources’ President and CEO
commented, “Although strong, our export sales in the first quarter
were somewhat curtailed by the rail transportation challenges
reported by many others in our industry. Our deep mines at Elk
Creek continue to achieve their projected production and cost
expectations in the upper $50 per ton range. At our surface mine,
however, we encountered a number of areas that were previously
mined. These were old auger works which pre-dated present reporting
laws. This unmapped mining was not evident in our advanced
planning. The positive news is that these headwinds on surface
production and rail issues were partially offset by both increased
export price realizations and demand.”
In the first quarter of 2018, the Company recorded income tax
expense of $743 thousand based on an expected effective tax
rate of approximately 12% for 2018. Cash taxes payable for 2018 are
expected to be less than $400 thousand.
Capital expenditures totaled approximately $12.8 million during
the first quarter of 2018. The Company expects to spend $29
million to $34 million of capital expenditures in 2018, including
newly planned capital projects designed to reduce the impact of
adverse weather on transportation within its Elk Creek Mining
Complex.
The exhibit below summarizes some of the key metrics for the
sequential periods:
|
|
Three months ended |
|
|
|
March 31,2018 |
|
|
December 31,2017 |
|
Sales Volume(a) |
|
|
|
|
|
|
|
|
Company |
|
|
403 |
|
|
|
163 |
|
Purchased |
|
|
119 |
|
|
|
102 |
|
Total |
|
|
522 |
|
|
|
265 |
|
|
|
|
|
|
|
|
|
|
Company
Production(a) |
|
|
|
|
|
|
|
|
Elk Creek Mining
Complex |
|
|
360 |
|
|
|
273 |
|
Berwind Mine |
|
|
20 |
|
|
|
2 |
|
Total |
|
|
380 |
|
|
|
275 |
|
|
|
|
|
|
|
|
|
|
Company Financial
Metrics(b) |
|
|
|
|
|
|
|
|
Average revenue per
ton |
|
$ |
91.37 |
|
|
$ |
69.76 |
|
Average cash costs of
coal sold |
|
|
65.02 |
|
|
|
58.04 |
|
Average cash margin per
ton |
|
$ |
26.35 |
|
|
$ |
11.72 |
|
|
|
|
|
|
|
|
|
|
Purchased Coal
Financial Metrics(b) |
|
|
|
|
|
|
|
|
Average revenue per
ton |
|
$ |
99.62 |
|
|
$ |
93.97 |
|
Average cash costs of
coal sold |
|
|
88.57 |
|
|
|
86.82 |
|
Average cash margin per
ton |
|
$ |
11.05 |
|
|
$ |
7.15 |
|
|
|
|
|
|
|
|
|
|
Capital
Expenditures(a) |
|
$ |
12,769 |
|
|
$ |
21,758 |
|
|
|
|
Notes: |
|
|
(a) In
thousands. |
|
|
(b) Excludes
transportation. |
|
|
2018 Guidance
Updated sales guidance for 2018 is presented in the
following table:
Committed 2018 Sales
Volume(a) |
|
Volume |
|
|
Avg Price |
|
Company: |
|
|
|
|
|
|
|
|
Domestic,
fixed priced |
|
|
1,077 |
|
|
$ |
78 |
|
Export,
fixed priced |
|
|
249 |
|
|
$ |
109 |
|
Export,
indexed |
|
|
392 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Committed Company
Tons |
|
|
1,718 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchased: |
|
|
|
|
|
|
|
|
Domestic,
fixed priced |
|
|
418 |
|
|
$ |
100 |
|
Export,
fixed priced |
|
|
21 |
|
|
$ |
132 |
|
Total Purchased
Tons |
|
|
439 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Committed Sales
Volume |
|
|
2,157 |
|
|
|
|
|
|
|
|
|
Notes: |
|
|
|
(a) Volumes in
thousands. |
|
|
|
As result of the newly discovered geological conditions at its
Elk Creek surface mine, the Company is lowering its annual guidance
for Company produced tons to 1.8 to 2 million tons from a previous
production guidance of 2 to 2.2 million tons. This reduction solely
reflects anticipated lower surface mine production, which the
Company anticipates may be partially offset by better production
results from its deep mines.
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 Wednesday, May 16,
2018 to present its results for the first quarter 2018.
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/w2jnkjiz.
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. |
Consolidated Statements of Operations |
|
|
Three months ended |
|
|
|
March 31, 2018 |
|
|
December 31, 2017 |
|
|
March 31, 2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
$ |
55,943,148 |
|
|
$ |
24,019,051 |
|
|
$ |
11,538,272 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost and expenses |
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
sales (exclusive of items shown separately below) |
|
|
44,330,847 |
|
|
|
21,374,437 |
|
|
|
10,845,912 |
|
Other
operating costs and expenses |
|
|
— |
|
|
|
32,063 |
|
|
|
17,300 |
|
Asset
retirement obligation accretion |
|
|
123,468 |
|
|
|
101,277 |
|
|
|
101,277 |
|
Depreciation and amortization |
|
|
2,437,500 |
|
|
|
1,819,089 |
|
|
|
156,127 |
|
Selling,
general and administrative |
|
|
3,431,144 |
|
|
|
3,349,229 |
|
|
|
3,601,363 |
|
Total
cost and expenses |
|
|
50,322,959 |
|
|
|
26,676,095 |
|
|
|
14,721,979 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss) |
|
|
5,620,189 |
|
|
|
(2,657,044 |
) |
|
|
(3,183,707 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and dividend
income |
|
|
1,237 |
|
|
|
3,284 |
|
|
|
116,429 |
|
Other income
(expense) |
|
|
489,317 |
|
|
|
53,869 |
|
|
|
(3,257 |
) |
Interest expense |
|
|
(101,159 |
) |
|
|
- |
|
|
|
(22,608 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before
taxes |
|
|
6,009,584 |
|
|
|
(2,599,891 |
) |
|
|
(3,093,143 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense |
|
|
743,307 |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
5,266,277 |
|
|
$ |
(2,599,891 |
) |
|
$ |
(3,093,143 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
earnings (loss) per share |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.13 |
|
|
$ |
(0.07 |
) |
|
$ |
(0.10 |
) |
Diluted |
|
$ |
0.13 |
|
|
$ |
(0.07 |
) |
|
$ |
(0.10 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common
shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
39,905,327 |
|
|
|
39,554,469 |
|
|
|
32,068,708 |
|
Diluted |
|
|
40,141,652 |
|
|
|
39,554,469 |
|
|
|
32,068,708 |
|
Ramaco Resources, Inc. |
Consolidated Balance Sheets |
|
|
March 31, 2018 |
|
|
December 31, 2017 |
|
Assets |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash and
cash equivalents |
|
$ |
7,323,571 |
|
|
$ |
5,934,043 |
|
Short-term investments |
|
|
— |
|
|
|
5,199,861 |
|
Accounts
receivable |
|
|
23,496,089 |
|
|
|
7,165,487 |
|
Inventories |
|
|
10,131,419 |
|
|
|
10,057,787 |
|
Prepaid
expenses |
|
|
3,356,956 |
|
|
|
1,104,437 |
|
Total
current assets |
|
|
44,308,035 |
|
|
|
29,461,615 |
|
|
|
|
|
|
|
|
|
|
Property, plant and
equipment, net |
|
|
125,825,988 |
|
|
|
115,450,841 |
|
|
|
|
|
|
|
|
|
|
Advanced coal
royalties |
|
|
2,719,315 |
|
|
|
2,867,369 |
|
Other assets |
|
|
422,137 |
|
|
|
318,206 |
|
Total
Assets |
|
$ |
173,275,475 |
|
|
$ |
148,098,031 |
|
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity |
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
Current
liabilities |
|
|
|
|
|
|
|
|
Accounts
payable |
|
$ |
28,327,276 |
|
|
$ |
19,532,531 |
|
Accrued
expenses |
|
|
6,107,123 |
|
|
|
2,821,422 |
|
Asset
retirement obligations |
|
|
291,806 |
|
|
|
70,616 |
|
Note
payable, net |
|
|
5,790,935 |
|
|
|
— |
|
Other |
|
|
568,631 |
|
|
|
— |
|
Total
current liabilities |
|
|
41,085,771 |
|
|
|
22,424,569 |
|
Deferred tax
liability |
|
|
708,465 |
|
|
|
|
|
Asset retirement
obligations |
|
|
12,266,871 |
|
|
|
12,276,176 |
|
Total
liabilities |
|
|
54,061,107 |
|
|
|
34,700,745 |
|
|
|
|
|
|
|
|
|
|
Commitments and
contingencies |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
Stockholders'
Equity |
|
|
|
|
|
|
|
|
Preferred stock, $0.01
par value, 50,000,000 shares authorized, none issued and
outstanding |
|
|
— |
|
|
|
— |
|
Common stock, $0.01 par
value, 260,000,000 shares authorized, 40,082,467 and 39,559,366
shares issued and outstanding, respectively |
|
|
400,825 |
|
|
|
395,594 |
|
Additional paid-in
capital |
|
|
148,838,837 |
|
|
|
148,293,263 |
|
Accumulated
deficit |
|
|
(30,025,294 |
) |
|
|
(35,291,571 |
) |
Total
stockholders' equity |
|
|
119,214,368 |
|
|
|
113,397,286 |
|
Total
Liabilities and Stockholders' Equity |
|
$ |
173,275,475 |
|
|
$ |
148,098,031 |
|
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, amortization
and non-operating expenses. 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 |
|
|
|
March 31, 2018 |
|
|
December 31, 2017 |
|
|
March 31, 2017 |
|
Reconciliation
of Net Income (Loss) to Adjusted EBITDA: |
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
5,266,277 |
|
|
$ |
(2,599,891 |
) |
|
$ |
(3,093,143 |
) |
Add (Subtract): |
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
2,437,500 |
|
|
|
1,819,089 |
|
|
|
156,127 |
|
Interest
and dividend income, net |
|
|
99,922 |
|
|
|
(3,284 |
) |
|
|
(93,821 |
) |
Income
taxes |
|
|
743,307 |
|
|
|
— |
|
|
|
— |
|
EBITDA |
|
|
8,547,006 |
|
|
|
(784,086 |
) |
|
|
(3,030,837 |
) |
Add: |
|
|
|
|
|
|
|
|
|
|
|
|
Equity-based compensation |
|
|
550,805 |
|
|
|
354,873 |
|
|
|
2,145,333 |
|
Accretion
of asset retirement obligation |
|
|
123,468 |
|
|
|
101,277 |
|
|
|
101,277 |
|
Adjusted EBITDA |
|
$ |
9,221,279 |
|
|
$ |
(327,936 |
) |
|
$ |
(784,227 |
) |
POINT OF CONTACT:Michael P. Windisch, Chief
Accounting Officermpw@ramacocoal.com859-244-7455
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