Achieves quarterly Net Income of $98.4 million
and Adjusted EBITDA of $171.6 million
Achieves record total liquidity of $869.0
million
Warrior Met Coal, Inc. (NYSE: HCC) (“Warrior” or the “Company”)
today announced results for the third quarter of 2022. Warrior is
the leading dedicated U.S.-based producer and exporter of high
quality metallurgical (“met”) coal for the global steel
industry.
Warrior reported net income for the third quarter of 2022 of
$98.4 million, or $1.90 per diluted share. This compares to net
income of $38.4 million, or $0.74 per diluted share, in the third
quarter of 2021. Adjusted net income per share for the third
quarter of 2022 was $2.10 per diluted share, compared to adjusted
net income per share of $0.97 per diluted share in the third
quarter of 2021. The Company reported Adjusted EBITDA of $171.6
million in the third quarter of 2022, compared to Adjusted EBITDA
of $104.9 million in the third quarter of 2021.
“We were able to deliver an extremely strong quarter, both in
terms of financial results and better-than-expected production,
despite experiencing continued shipment delays as a result of rail
transportation and port maintenance and congestion issues,”
commented Walt Scheller, CEO of Warrior. “We also delivered this
performance in the face of additional macroeconomic headwinds,
including the impact of the sanctions relating to the war in
Ukraine and negative economic trends in the U.S. and China. The
benefits of our efficient operating model and our high quality
assets are notable, and we believe that they will continue to drive
value for shareholders.”
“Looking ahead, with significant coal inventories and record
total liquidity, we believe that Warrior is well-positioned to make
value-enhancing investments while delivering strong financial
results. We were pleased to see gradual improvements in the
shipping delays during the final few weeks of the quarter, a trend
which we expect to continue in the fourth quarter. We are also
continuing to see strong demand from customers while global met
coal supply also continues to be constrained,” Mr. Scheller
concluded.
Operating Results
Sales volume in the third quarter of 2022 was 1.5 million short
tons compared to 1.1 million short tons in the third quarter of
2021, despite the impact of shipment delays. The Company produced
1.6 million short tons of met coal in the third quarter of 2022
compared to 1.1 million short tons in the third quarter of 2021.
The tons of met coal produced in the third quarter of 2022 were the
result of running two longwalls and five continuous miner units at
Mine No. 7 and one longwall and three continuous miner units at
Mine No. 4. Inventory levels rose to 858 thousand short tons at the
end of September 30, 2022 from 735 thousand short tons at the end
of June 30, 2022. The increase was primarily due to the continued
shipment delays we have experienced this year attributed to the
lack of available rail transportation, port maintenance and port
congestion.
Additional Financial Results
Total revenues were $390.2 million for the third quarter of
2022, including $371.9 million in mining revenues, which consisted
of met coal sales of 1.5 million short tons at an average net
selling price of $248.13 per short ton, net of demurrage and other
charges. This compares to total revenues of $202.5 million in the
third quarter of 2021. The average net selling price of the
Company's met coal increased 32% from $188.62 per short ton in the
third quarter of 2021 to $248.13 per short ton in the third quarter
of 2022. The quarter-over-quarter increase in revenues was
primarily attributed to improved met coal pricing and higher sales
volume partially offset by higher demurrage and other charges due
to the shipment delays.
Cost of sales for the third quarter of 2022 were $203.4 million
compared to $92.0 million for the third quarter of 2021. Cash cost
of sales (including mining, transportation and royalty costs) for
the third quarter of 2022 were $202.0 million, or 54.3% of mining
revenues, compared to $91.0 million, or 45.6% of mining revenues in
the same period of 2021. Cash cost of sales (free-on-board port)
per short ton increased to $134.78 in the third quarter of 2022
from $85.92 in the third quarter of 2021, reflecting a 32% increase
in average net selling prices and its effect on Warrior's variable
cost structure, primarily for wages, transportation and royalties,
plus the impact of inflation. Transportation and royalty costs
accounted for approximately 47% of total cash cost of sales
(free-on-board port) in the third quarter of 2022 compared to 39%
in the same period last year due to the higher met coal average net
selling prices and its effect on our transportation and royalty
costs. Given our transportation rates are reset at the beginning of
each quarter based on met coal prices in the previous quarter, we
expect transportation costs to be lower in the fourth quarter of
2022 than the third quarter of 2022 due to lower met coal prices in
the third quarter of 2022. Inflation accounted for an approximately
$4 per short ton impact during the third quarter of 2022 due to
increases in the costs of diesel fuel, belt structure, roof bolts,
cable, magnetite, rock dust and other supplies, plus labor and
parts on repair and rebuilds.
Selling, general and administrative expenses for the third
quarter of 2022 were $10.6 million, or 2.7% of total revenues and
were higher than the same period last year due to higher employee
related costs, primarily related to stock compensation expense, and
higher professional fees.
Depreciation and depletion expenses for the third quarter of
2022 were $30.8 million, or 7.9% of total revenues and were higher
than the prior year comparable quarter due to higher sales volume.
Warrior incurred net interest expense of $5.7 million during the
third quarter of 2022, which was lower than the same quarter last
year primarily due to a decrease in interest on our outstanding
notes combined with an increase in interest income.
Business interruption expenses were $7.1 million and represent
non-recurring expenses for incremental safety and security, labor
negotiations and other expenses that are directly attributable to
the ongoing labor strike. Idle mine expenses were $5.4 million and
represent expenses incurred with reduced operations at Mine No. 7
and Mine 4, such as electricity, insurance and maintenance
labor.
Income tax expense was $20.3 million in the third quarter of
2022, which was higher than last year primarily as a result of the
higher income before income taxes this quarter, which totaled
$118.7 million. This expense reflects the utilization of net
operating losses which resulted in no cash taxes paid during the
third quarter of 2022.
Cash Flow and Liquidity
The Company generated cash flows of $247.2 million from
operating activities in the third quarter of 2022, compared to
$62.9 million in the third quarter of 2021. Capital expenditures
and mine development for the third quarter of 2022 were $55.9
million. Free cash flow was $191.3 million in the third quarter of
2022, compared to $52.4 million in the third quarter of 2021. The
increase primarily reflects higher realized prices combined with
higher sales volume.
Net working capital, excluding cash, for the third quarter of
2022 decreased by $95.1 million from the second quarter of 2022,
primarily reflecting a decrease in trade accounts receivables due
to lower prices and the timing of sales, combined with an increase
in inventories due to strong production and continued shipment
delays.
Cash flows used in financing activities for the third quarter of
2022 were $90.5 million, primarily due to the payment of the
regular quarterly dividend and special dividend totaling $44.4
million, retirements of debt of $37.8 million and principal
repayments of financing lease obligations of $8.3 million.
The Company’s total liquidity as of September 30, 2022 was
$869.0 million, a record high, consisting of cash and cash
equivalents of $745.7 million and available liquidity under its
existing Second Amended and Restated Asset-Based Revolving Credit
Agreement (as amended, the “ABL Facility”) of $123.3 million, which
is net of outstanding letters of credit of $8.7 million.
Capital Allocation
On October 24, 2022, our Board of Directors (the "Board")
declared a regular quarterly cash dividend of $0.06 per share,
totaling approximately $3.1 million, which will be paid on November
11, 2022, to stockholders of record as of the close of business on
November 4, 2022.
Any future special dividends or stock repurchases from excess
cash flows will be at the discretion of the Board and subject to
consideration of several factors including business and market
conditions, future financial performance and other strategic
investment opportunities. The Company will also seek to optimize
its capital structure to improve returns to stockholders while
allowing flexibility for the Company to pursue very selective
strategic growth opportunities that can provide compelling
stockholder returns.
Company Outlook
Warrior updated its guidance for the full year 2022 as indicated
below, which we expect to be further impacted in the fourth quarter
by the continued shipment delays and other factors noted below.
Coal sales
5.8 - 6.3 million short tons
Coal production
5.8 - 6.3 million short tons
Cash cost of sales (free-on-board
port)
$118 - $125 per short ton
Capital expenditures for existing
mines
$75 - $80 million
Blue Creek project and other
discretionary capital expenditures
$110 - $120 million
Mine development costs
$42 - $47 million
Selling, general and
administrative expenses
$48 - $52 million
Interest expense, net
$22 - $25 million
Noncash deferred income tax
expense
18% - 20%
Cash tax rate
0%
Key factors that may affect outlook include:
- one planned longwall move (Q4),
- HCC index pricing,
- exclusion of other non-recurring costs,
- new labor contract, and
- inflationary pressures.
The Company's guidance for its capital expenditures consists of
sustaining capital spending of approximately $75 - $80 million,
including regulatory and gas requirements, and discretionary
capital spending of $110 - $120 million for the 4 North portal
construction, deposits on two new sets of longwall shields and the
development of the Blue Creek project for which the Company has
budgeted $45 million for 2022.
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 expenses and other non-recurring indirect mining expenses
that are difficult to predict in advance in order to include in a
GAAP estimate.
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 third
quarter 2022 results today, November 2, 2022, 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 November 2, 2022 until 6:30 p.m. ET on November 11,
2022. The replay will be available by calling: 1-877-344-7529
(domestic) or 1-412-317-0088 (international) and entering passcode
1739313.
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 met 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 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, has strong coking properties and is
of a similar quality to coal referred to as the premium HCC
produced in Australia. The premium nature of Warrior’s HCC makes it
ideally suited as a base feed coal for steel makers and results in
price realizations near the Platts Index price. 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 2022
guidance, sales and production growth, ability to maintain cost
structure, demand, the future direction of prices, management of
liquidity, cash flows, expenses and expected capital expenditures
and working capital, the Company's pursuit of strategic growth
opportunities, future effective income tax rates and payment of
cash taxes, if any, as well as statements regarding production, the
Company's ability to withstand economic instability, the
development of the Blue Creek project, future reduction in shipping
delays, and the outcome of negotiations with our labor union,
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 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 COVID-19 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 COVID-19 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
ship its products to customers in the case of a partial or complete
shut-down of 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, 2021 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.
WARRIOR MET COAL, INC.
CONDENSED STATEMENTS OF
OPERATIONS
(in thousands, except
per-share amounts)
(Unaudited)
For the three months ended
September 30,
For the nine months ended
September 30,
2022
2021
2022
2021
Revenues:
Sales
$
371,944
$
199,745
$
1,377,665
$
631,493
Other revenues
18,236
2,722
16,323
12,178
Total revenues
390,180
202,467
1,393,988
643,671
Costs and expenses:
Cost of sales (exclusive of items shown
separately below)
203,441
91,973
529,869
399,088
Cost of other revenues (exclusive of items
shown separately below)
8,417
6,654
26,120
22,792
Depreciation and depletion
30,805
28,967
86,973
102,021
Selling, general and administrative
10,557
7,430
36,985
26,182
Business interruption
7,106
6,872
20,084
13,892
Idle mine
5,418
9,327
10,141
20,203
Total costs and expenses
265,744
151,223
710,172
584,178
Operating income
124,436
51,244
683,816
59,493
Interest expense, net
(5,701
)
(8,784
)
(20,706
)
(25,954
)
Other income
—
1,400
675
1,291
Income before income tax expense
118,735
43,860
663,785
34,830
Income tax expense
20,332
5,433
122,141
22,439
Net income
$
98,403
$
38,427
$
541,644
$
12,391
Basic and diluted net income per
share:
Net income per share—basic
$
1.91
$
0.75
$
10.49
$
0.24
Net income per share—diluted
$
1.90
$
0.74
$
10.48
$
0.24
Weighted average number of shares
outstanding—basic
51,654
51,416
51,612
51,315
Weighted average number of shares
outstanding—diluted
51,744
51,585
51,699
51,424
Dividends per share:
$
0.86
$
0.05
$
1.48
$
0.15
WARRIOR MET COAL, INC.
QUARTERLY SUPPLEMENTAL
FINANCIAL DATA AND RECONCILIATION OF NON-GAAP FINANCIAL
MEASURES
(Unaudited)
QUARTERLY SUPPLEMENTAL FINANCIAL
DATA:
(short tons in thousands)(1)
For the three months ended
September 30,
For the nine months ended
September 30,
2022
2021
2022
2021
Tons sold
1,499
1,059
4,169
4,834
Tons produced
1,643
1,129
4,847
4,496
Average net selling price
$
248.13
$
188.62
$
330.45
$
130.64
Cash cost of sales (free-on-board port)
per short ton(2)
$
134.78
$
85.92
$
126.23
$
81.97
(1) 1 short ton is equivalent to 0.907185
metric tons.
(2) Cash cost of sales (free-on-board
port) per short ton is calculated as cash cost of sales divided by
the short tons sold. Cash cost of sales (free-on-board port) per
short ton 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) per short ton 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) per short ton may not be comparable to similarly titled
measures used by other companies.
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
September 30,
For the nine months ended
September 30,
2022
2021
2022
2021
Cost of sales
$
203,441
$
91,973
$
529,869
$
399,088
Asset retirement obligation accretion
(493
)
(432
)
(1,480
)
(1,297
)
Stock compensation expense
(909
)
(555
)
(2,136
)
(1,536
)
Cash cost of sales (free-on-board
port)(3)
$
202,039
$
90,986
$
526,253
$
396,255
(3) 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. 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.
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
September 30,
For the nine months ended
September 30,
2022
2021
2022
2021
Net income
$
98,403
$
38,427
$
541,644
$
12,391
Interest expense, net
5,701
8,784
20,706
25,954
Income tax expense
20,332
5,433
122,141
22,439
Depreciation and depletion
30,805
28,967
86,973
102,021
Asset retirement obligation accretion
900
805
2,666
2,416
Stock compensation expense
2,599
1,524
14,250
8,763
Other non-cash accretion
348
360
1,042
1,081
Mark-to-market loss on gas hedges
—
5,843
27,708
8,661
Business interruption
7,106
6,872
20,084
13,892
Idle mine expense
5,418
9,327
10,141
20,203
Other income
—
(1,400
)
(675
)
(998
)
Adjusted EBITDA(4)
$
171,612
$
104,942
$
846,680
$
216,823
Adjusted EBITDA margin(5)
44.0
%
51.8
%
60.7
%
33.7
%
(4) Adjusted EBITDA is defined as net
income before net interest expense, income tax expense,
depreciation and depletion, non-cash asset retirement obligation
accretion, non-cash stock compensation expense, other non-cash
accretion, mark-to-market loss on gas hedges, business interruption
expenses, idle mine 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.
(5) 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
September 30,
For the nine months ended
September 30,
2022
2021
2022
2021
Net income
$
98,403
$
38,427
$
541,644
$
12,391
Alabama state income tax valuation
allowance
—
—
—
24,965
Business interruption, net of tax
5,798
5,419
16,388
10,954
Idle mine, net of tax
4,421
7,354
8,275
15,930
Incremental stock compensation expense,
net of tax
—
—
—
3,238
Other income, net of tax
—
(1,104
)
(551
)
(820
)
Adjusted net income(6)
$
108,622
$
50,096
$
565,756
$
66,658
Weighted average number of shares
outstanding—basic
51,654
51,416
51,612
51,315
Weighted average number of shares
outstanding—diluted
51,744
51,585
51,699
51,424
Adjusted net income per share—basic
$
2.10
$
0.97
$
10.96
$
1.30
Adjusted net income per share—diluted
$
2.10
$
0.97
$
10.94
$
1.30
(6) Adjusted net income is defined as net
income net of Alabama state income tax valuation allowance,
business interruption expenses, idle mine expenses, incremental
stock compensation expense 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.
WARRIOR MET COAL, INC.
CONDENSED STATEMENTS OF CASH
FLOWS
(in thousands)
(Unaudited)
For the three months ended
September 30,
For the nine months ended
September 30,
2022
2021
2022
2021
OPERATING ACTIVITIES:
Net income
$
98,403
$
38,427
$
541,644
$
12,391
Non-cash adjustments to reconcile net
income (loss) to net cash provided by operating activities
56,455
43,006
233,009
145,589
Changes in operating assets and
liabilities:
Trade accounts receivable
79,831
(8,112
)
(93,022
)
10,028
Inventories
(4,313
)
(14,344
)
(73,258
)
18,703
Prepaid expenses and other receivables
(1,362
)
(476
)
8,879
10,548
Accounts payable
7,606
(4,433
)
6,609
(16,746
)
Accrued expenses and other current
liabilities
13,283
9,422
20,044
(10,100
)
Other
(2,719
)
(560
)
3,005
6,417
Net cash provided by operating
activities
247,184
62,930
646,910
176,830
INVESTING ACTIVITIES:
Purchases of property, plant and
equipment
(41,320
)
(10,498
)
(120,022
)
(34,149
)
Mine development costs
(14,561
)
—
(35,690
)
(13,462
)
Acquisition of leased mineral rights
—
—
(3,500
)
—
Acquisition of Black Warrior Methane and
Black Warrior Transmission, net of $2.8 million cash acquired
—
—
2,533
—
Proceeds from sale of property, plant and
equipment
—
—
—
192
Net cash used in investing activities
(55,881
)
(10,498
)
(156,679
)
(47,419
)
FINANCING ACTIVITIES:
Net cash used in financing activities
(90,486
)
(50,913
)
(140,404
)
(72,932
)
Net increase in cash and cash
equivalents
100,817
1,519
349,827
56,479
Cash and cash equivalents at beginning of
period
644,849
266,876
395,839
211,916
Cash and cash equivalents at end of
period
$
745,666
$
268,395
$
745,666
$
268,395
RECONCILIATION OF FREE CASH FLOW TO
AMOUNTS REPORTED UNDER U.S. GAAP:
(in thousands)
For the three months ended
September 30,
For the nine months ended
September 30,
2022
2021
2022
2021
Net cash provided by operating
activities
$
247,184
$
62,930
$
646,910
$
176,830
Purchases of property, plant and equipment
and mine development costs
(55,881
)
(10,498
)
(155,712
)
(47,611
)
Free cash flow(7)
$
191,303
$
52,432
$
491,198
$
129,219
Free cash flow conversion(8)
111.5
%
50.0
%
58.0
%
59.6
%
(7) 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.
(8) Free cash flow conversion is defined
as free cash flow divided by Adjusted EBITDA.
WARRIOR MET COAL, INC.
CONDENSED BALANCE
SHEETS
(in thousands, except share
and per-share data)
September 30, 2022
December 31,
2021
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents
$
745,666
$
395,839
Short-term investments
8,546
8,505
Trade accounts receivable
215,172
122,150
Inventories, net
143,789
59,619
Prepaid expenses and other receivables
28,390
41,088
Total current assets
1,141,563
627,201
Mineral interests, net
90,502
93,180
Property, plant and equipment, net
677,718
603,412
Deferred income taxes
5,181
125,276
Other long-term assets
20,319
15,142
Total assets
$
1,935,283
$
1,464,211
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Accounts payable
$
51,885
$
33,829
Accrued expenses
78,797
54,847
Short-term financing lease liabilities
23,083
23,622
Other current liabilities
9,184
9,830
Total current liabilities
162,949
122,128
Long-term debt
303,916
339,806
Asset retirement obligations
69,583
65,536
Long-term financing lease liabilities
15,033
28,434
Other long-term liabilities
36,169
36,324
Total liabilities
587,650
592,228
Stockholders’ Equity:
Common stock, $0.01 par value,
(140,000,000 shares authorized as of September 30, 2022 and
December 31, 2021; 53,875,409 issued and 51,653,568 outstanding as
of September 30, 2022; 53,659,643 issued and 51,437,802 outstanding
as of December 31, 2021)
539
537
Preferred stock, $0.01 par value per share
(10,000,000 shares authorized; no shares issued and
outstanding)
—
—
Treasury stock, at cost (2,221,841 shares
as of September 30, 2022 and December 31, 2021)
(50,576
)
(50,576
)
Additional paid in capital
266,585
256,059
Retained earnings
1,131,085
665,963
Total stockholders’ equity
1,347,633
871,983
Total liabilities and stockholders’
equity
$
1,935,283
$
1,464,211
View source
version on businesswire.com: https://www.businesswire.com/news/home/20221102005197/en/
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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