Fourth quarter results consistent with
expectations; exceeds guidance targets for 2019
Achieved record annual sales volume of 8.0
million short tons
Recorded best-ever annual production volume of
8.5 million short tons
Returned $253.0 million to stockholders through
dividends and stock repurchases in 2019
Announces commencement of development of world
class Blue Creek project
Warrior Met Coal, Inc. (NYSE:HCC) (“Warrior” or the “Company”)
today announced results for the fourth quarter and full-year 2019
and the commencement of the development of its world class Blue
Creek project. Warrior is the leading dedicated U.S. based producer
and exporter of high quality metallurgical (“met”) coal for the
global steel industry.
Warrior reported fourth quarter 2019 net income of $20.8
million, or $0.41 per diluted share, compared to net income of
$374.2 million, or $7.11 per diluted share, in the fourth quarter
of 2018. Adjusted net income per share for the fourth quarter of
2019 was $0.23 per diluted share compared to $2.38 per diluted
share in the fourth quarter of 2018. The Company reported Adjusted
EBITDA of $39.0 million in the fourth quarter of 2019, compared to
Adjusted EBITDA of $161.6 million in the fourth quarter of
2018.
“We met or exceeded all guidance metrics and performed well
operationally in the fourth quarter, in line with our expectations
for a declining price environment,” commented Walt Scheller, CEO of
Warrior. “Moreover, we are taking advantage of this pullback in
pricing by focusing on investing in our operations through
strategic capital expenditures that improve our efficiency and
position us to outperform the market when prices improve. We know
our greatest assets are our large scale and low-cost operations,
our premium and highly desirable coals, our variable cost
structure, our balance sheet flexibility, and we will continue to
leverage these strengths.”
Warrior reported full year 2019 net income of $301.7 million and
adjusted net income of $284.0 million, or net income of $5.86 per
diluted share and adjusted net income of $5.52 per diluted share,
compared to net income of $696.8 million and adjusted net income of
$459.0 million, or net income of $13.17 per diluted share and
adjusted net income of $8.67 per diluted share, in 2018. The
Company reported Adjusted EBITDA of $478.7 million for the full
year 2019 compared to $601.0 million in 2018.
The Company also announced the commencement of the development
of its Blue Creek mine, a strategic growth project that it expects
will deliver significant future returns to shareholders. “We expect
Blue Creek to significantly enhance Warrior’s already existing
world class hard coking coal portfolio of assets and to continue to
demonstrate our highly focused business strategy as a premium
pure-play met coal producer,” Scheller said. Warrior has issued a
separate news release and presentation providing more detail on the
development of its world class Blue Creek growth project, both of
which can be found on its website at www.warriormetcoal.com.
Operating Results
The Company produced 1.8 million short tons of met coal in the
fourth quarter of 2019 compared to 1.9 million short tons in the
fourth quarter of 2018. For the full year of 2019, the Company
produced a record 8.5 million short tons, or a 9.5% increase over
2018, which exceeded its guidance and expectations. This record
achievement was even more notable because of a record low safety
incident rate at the mines in 2019. Sales volume in the fourth
quarter of 2019 was 1.7 million short tons compared to 2.0 million
short tons in the fourth quarter of 2018. Sales volumes for the
full year 2019 reached a new record high for the Company of 8.0
million short tons and was 4.5% higher than 2018. Inventory levels
rose to 749 thousand short tons at the end of December 31, 2019
from the end of the third quarter of 2019.
Additional Financial Results
Total revenues were $204.9 million for the fourth quarter of
2019, including $198.0 million in mining revenues, which consisted
of met coal sales of 1.7 million short tons at an average net
selling price of $119.67 per short ton, net of demurrage and other
charges. This compares to total revenues of $360.4 million in the
fourth quarter of 2018. During the quarter, global met coal markets
continued to weaken in response to slowing steel demand and other
macroeconomic issues in the global economy, which contributed to a
three-year low in met coal prices. The average net selling price of
the Company's met coal declined from $177.50 per short ton in the
fourth quarter of 2018 to $119.67 per short ton in the fourth
quarter of 2019. Despite a pullback in met coal prices, the Company
sold its met coal at 97% of the quarterly Australian premium
low-volatility hard coking coal (“HCC”) Platts Premium LV FOB
Australian Index (the "Platts Index”) price.
Cash cost of sales (including mining, transportation and royalty
costs) for the fourth quarter of 2019 were $141.9 million, or 71.7%
of mining revenues, compared to $182.6 million, or 52.2% of mining
revenues in the same period of 2018. Cash cost of sales
(free-on-board port) per short ton decreased to $85.74 in the
fourth quarter of 2019 from $92.64 in the fourth quarter of 2018,
reflecting Warrior's low and variable cost structure and focus on
cost control during periods of depressed met coal prices. The full
year cash cost of sales per short ton was $89.95, a three-year
record low.
Selling, general and administrative expenses for the fourth
quarter of 2019 were $8.0 million, or 3.9% of total revenues.
Depreciation and depletion costs for the fourth quarter of 2019
were $23.7 million, or 11.6% of total revenues. Warrior incurred
interest expense, net of $6.5 million during the fourth quarter of
2019.
Income tax benefit was $3.2 million in the fourth quarter of
2019 and represents the recognition of $6.7 million additional
alternative minimum tax credits, general business credits and net
operating losses (“NOLs”) available to the Company in connection
with a settlement agreement between Walter Energy, Inc. and the
Internal Revenue Service. The Company did not have income tax
expense in the fourth quarter of 2018 and reversed the full
valuation allowance previously recorded against its deferred income
tax assets. The Company expects to continue to utilize its NOLs and
pay no cash taxes for the next several years, contingent upon met
coal pricing and overall company performance.
Cash Flow and Liquidity
The Company generated positive cash flows from operating
activities in the fourth quarter of 2019 of $24.5 million, despite
a low met coal pricing environment, compared to $130.8 million in
the fourth quarter of 2018. Capital expenditures and mine
development costs for the fourth quarter of 2019 were $33.9
million. Free cash flow was negatively impacted during the quarter
by the change in net working capital. Cash flows used in financing
activities for the fourth quarter of 2019 were $6.8 million,
primarily due to principal repayments of capital lease obligations
of $4.2 million, and the payment of dividends of $2.6 million. The
Company generated $532.8 million of cash flows from operating
activities for the full year 2019 compared to $559.4 million in
2018. Capital expenditures and mine development costs for the full
year 2019 were $130.7 million. Cash flows used in financing
activities for the full year 2019 were $411.6 million primarily due
to the payment of dividends of $240.4 million and the retirement of
debt of $140.3 million.
Net working capital, excluding cash, for the fourth quarter of
2019 increased by $26.6 million from the third quarter of 2019,
primarily reflecting an increase in inventory due to lower sales
volume and a decrease in accrued expenses and accounts payable
primarily due to lower interest payments on the Senior Secured
Notes. Net working capital, excluding cash, for the full year 2019
decreased by $30.2 million from the prior year, primarily
reflecting a decrease in trade accounts receivable and increase in
inventories due to lower sales volume in the fourth quarter of
2019.
The Company’s available liquidity as of December 31, 2019 was
$309.5 million, consisting of cash and cash equivalents of $193.4
million and available liquidity under its Amended and Restated
Asset-Based Revolving Credit Agreement (the "ABL Facility") of
$116.1 million, net of outstanding letters of credit of $8.9
million.
Capital Allocation
During 2019, the Company capitalized on the strength of global
HCC markets and customer demand by generating $402.1 million of
free cash flow. The Company further strengthened its already strong
balance sheet by reducing its debt by $140.3 million. It also
distributed capital returns of $253.0 million to stockholders
through dividends and stock repurchases. In addition, the Company
announced an additional stock repurchase program of $70.0 million
after it fully exhausted its previous stock repurchase program of
$40.0 million.
On February 14, 2020, the board of directors declared a regular
quarterly cash dividend of $0.05 per share, totaling approximately
$2.6 million, which will be paid on March 2, 2020 to stockholders
of record as of the close of business on February 25, 2020.
Any future special dividends or stock repurchases from excess
cash flows will be at the discretion of the board of directors 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
The Company's outlook for 2020 is subject to many risks that may
impact performance, such as market conditions in the steel and met
coal industries and overall global economic and competitive
conditions, all as more fully described under Forward-Looking
Statements. The Company's guidance for the full year 2020 is
outlined below.
Coal sales
7.3 - 7.8 million short tons
Coal production
7.0 - 7.5 million short tons
Cash cost of sales (free-on-board
port)
$88 - $93 per short ton
Capital expenditures
$125 - $145 million
Mine development costs
$10 - $14 million
Selling, general and administrative
expenses
$32 - $36 million
Interest expense, net
$25 - $27 million
Noncash deferred income tax expense
18% - 20%
Cash tax rate
0%
Key factors that may affect outlook
include:
- Four planned longwall moves (1 per quarter)
- HCC index pricing
- Exclusion of other non-recurring costs
The Company’s guidance for its capital expenditures consists of
sustaining capital spending of approximately $75 - $85 million,
including regulatory and gas requirements, and discretionary
capital spending of $50 - $60 million for various operational
improvements, 4 North portal construction and the development of
the Blue Creek project for which the Company has budgeted $25.0
million for 2020.
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 a GAAP
estimate.
Environmental, Social and Governance Sustainability
The Company recently announced the release of its inaugural
corporate environmental, social and governance sustainability
report, which is located at www.warriormetcoal.com. The report was prepared in
accordance with the Global Reporting Initiative (GRI) standards
core option. The Company is committed to transparency and open
conversations surrounding environmental, social and governance
topics. Although Warrior's underground metallurgical (met) coal
operations have a minimal environment impact compared to
surface-mined thermal coal, the Company strives to be an
environmental steward by focusing on preservation of the
environment, monitoring energy use, reducing greenhouse gas (GHG)
emissions and effective land reclamation.
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 fourth
quarter 2019 results today, February 19, 2020, 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 February 19, 2020 until 6:30 p.m. ET
on February 28, 2020. The replay will be available by calling:
1-877-344-7529 (domestic) or 1-412-317-0088 (international) and
entering passcode 10137511.
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,
Alabama, 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 2020
guidance, sales and production growth, ability to maintain cost
structure, demand, the future direction of prices, expected capital
expenditures, future effective income tax rates and payment of cash
taxes, if any or the Company's purchases of shares of its common
stock pursuant to the stock repurchase program or otherwise. The
words “believe,” “expect,” “anticipate,” “plan,” “intend,”
“estimate,” “project,” “target,” “foresee,” “should,” “would,”
“could,” “potential,” or “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; 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; 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 NOLs 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 or the timing and amount of any stock
repurchases the Company makes under its stock repurchase program;
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, 2019 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)
(Unaudited)
For the three months ended
December 31,
For the year ended December
31,
2019
2018
2019
2018
Revenues:
Sales
$
198,048
$
349,851
$
1,235,998
$
1,342,683
Other revenues
6,853
10,509
32,311
35,324
Total revenues
204,901
360,360
1,268,309
1,378,007
Costs and expenses:
Cost of sales (exclusive of items shown
separately below)
142,707
180,238
720,745
716,645
Cost of other revenues (exclusive of items
shown separately below)
6,481
(11,654
)
29,828
10,172
Depreciation and depletion
23,678
25,459
97,330
97,209
Selling, general and administrative
7,964
7,570
37,014
36,626
Transaction and other expenses
—
1,529
—
9,068
Total costs and expenses
180,830
203,142
884,917
869,720
Operating income
24,071
157,218
383,392
508,287
Interest expense, net
(6,542
)
(8,842
)
(29,335
)
(37,314
)
Loss on early extinguishment of debt
—
—
(9,756
)
—
Other income
—
—
22,815
—
Income before income tax expense
(benefit)
17,529
148,376
367,116
470,973
Income tax expense (benefit)
(3,222
)
(225,814
)
65,417
(225,814
)
Net income
$
20,751
$
374,190
$
301,699
$
696,787
Basic and diluted net income per
share:
Net income per share—basic
$
0.41
$
7.13
$
5.87
$
13.19
Net income per share—diluted
$
0.41
$
7.11
$
5.86
$
13.17
Weighted average number of shares
outstanding—basic
51,051
52,504
51,363
52,812
Weighted average number of shares
outstanding—diluted
51,201
52,643
51,493
52,918
Dividends per share:
$
0.05
$
0.05
$
4.61
$
6.73
WARRIOR MET COAL, INC.
QUARTERLY SUPPLEMENTAL
FINANCIAL DATA AND RECONCILIATION OF NON-GAAP FINANCIAL
MEASURES
(Unaudited)
QUARTERLY SUPPLEMENTAL FINANCIAL DATA:
For the three months ended
December 31,
For the year ended December
31,
(short tons in thousands)(1)
2019
2018
2019
2018
Tons sold
1,655
1,971
7,980
7,640
Tons produced
1,813
1,889
8,470
7,735
Gross price realization (2)
97
%
93
%
98
%
97
%
Average net selling price
$
119.67
$
177.50
$
154.89
$
175.74
Cash cost of sales (free on board port)
per short ton (3)
$
85.74
$
92.64
$
89.95
$
93.76
(1)
1 short ton is equivalent to 0.907185
metric tons.
(2)
For the three and twelve months ended
December 31, 2019 and 2018, our gross price realization represents
a volume weighted-average calculation of our daily realized price
per ton based on gross sales, which excludes demurrage and other
charges, as a percentage of the Platts Index.
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
December 31,
For the year ended December
31,
2019
2018
2019
2018
Cost of sales
$
142,707
$
180,238
$
720,745
$
716,645
Asset retirement obligation
(399
)
2,555
(1,519
)
875
Stock compensation expense
(405
)
(202
)
(1,405
)
(1,214
)
Cash cost of sales (free-on-board
port)(3)
$
141,903
$
182,591
$
717,821
$
716,306
(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. Our cash cost of sales
per short ton is calculated as cash cost of sales divided by the
short tons sold. Cash cost of sales 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 per 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 per ton may not be comparable to similarly titled measures
used by other companies.
RECONCILIATION OF ADJUSTED EBITDA TO
AMOUNTS REPORTED UNDER U.S. GAAP:
For the three months ended
December 31,
For the year ended December
31,
(in thousands)
2019
2018
2019
2018
Net income
$
20,751
$
374,190
$
301,699
$
696,787
Interest expense, net
6,542
8,842
29,335
37,314
Income tax expense (benefit)
(3,222
)
(225,814
)
65,417
(225,814
)
Depreciation and depletion
23,678
25,459
97,330
97,209
Asset retirement obligation accretion and
valuation adjustment
(10,327
)
(23,407
)
(7,891
)
(19,942
)
Stock compensation expense
1,602
807
5,820
6,405
Transaction and other expenses
—
1,529
—
9,068
Loss on early extinguishment of debt
—
—
9,756
—
Other income
—
—
(22,815
)
—
Adjusted EBITDA (4)
$
39,024
$
161,606
$
478,651
$
601,027
Adjusted EBITDA margin (5)
19.0
%
44.8
%
37.7
%
43.6
%
(4) Adjusted EBITDA is defined as net
income before net interest expense (benefit), income tax expense,
depreciation and depletion, non-cash asset retirement obligation
accretion and valuation adjustment, non-cash stock compensation
expense, transaction and other expenses, loss on early
extinguishment of debt 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
December 31,
For the year ended December
31,
2019
2018
2019
2018
Net income
$
20,751
$
374,190
$
301,699
$
696,787
Incremental stock compensation expense
—
—
—
3,570
Transaction and other expenses, net of
tax
—
1,529
—
9,068
Income tax valuation allowance release
—
(225,814
)
—
(225,814
)
Asset retirement obligation valuation
adjustment, net of tax
(9,089
)
(24,562
)
(9,089
)
(24,562
)
Loss on early extinguishment of debt, net
of tax
—
—
9,756
—
Other income, net of tax
—
—
(18,331
)
—
Adjusted net income(6)
$
11,662
$
125,343
$
284,035
$
459,049
Weighted average number of basic shares
outstanding
51,051
52,504
51,363
52,812
Weighted average number of diluted shares
outstanding
51,201
52,643
51,493
52,918
Adjusted basic net income per share:
$
0.23
$
2.39
$
5.53
$
8.69
Adjusted diluted net income per share:
$
0.23
$
2.38
$
5.52
$
8.67
(6) Adjusted net income is defined as net
income net of incremental stock compensation expense, transaction
and other expenses, asset retirement obligation valuation
adjustment, loss on early extinguishment of debt, other income, net
of tax (based on each respective period's effective tax rate) and
income tax valuation release. 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
December 31,
For the year ended December
31,
2019
2018
2019
2018
OPERATING ACTIVITIES:
Net income
$
20,751
$
374,190
$
301,699
$
696,787
Non-cash adjustments to reconcile net
income to net cash provided by operating activities
15,220
(219,750
)
174,859
(136,880
)
Changes in operating assets and
liabilities:
Trade accounts receivable
9,774
(24,649
)
38,928
(20,653
)
Income tax receivable
375
5,514
21,795
5,514
Inventories
(10,203
)
9,255
(30,491
)
(1,812
)
Prepaid expenses and other receivables
(3,216
)
832
3,864
5,316
Accounts payable
(5,340
)
(6,566
)
13,409
5,060
Accrued expenses and other current
liabilities
(17,962
)
(5,350
)
(17,317
)
13,835
Other
15,150
(2,679
)
26,068
(7,771
)
Net cash provided by operating
activities
24,549
130,797
532,814
559,396
INVESTING ACTIVITIES:
Purchases of property, plant, and
equipment, and other
(28,912
)
(23,050
)
(107,278
)
(98,692
)
Mine development costs
(4,994
)
(5,355
)
(23,392
)
(8,937
)
Proceeds from sale of property, plant and
equipment
3
—
3,127
—
Other
—
—
(6,670
)
—
Net cash used in investing activities
(33,903
)
(28,405
)
(134,213
)
(107,629
)
FINANCING ACTIVITIES:
Net cash used in financing activities
(6,766
)
(26,969
)
(411,623
)
(281,626
)
Net increase (decrease) in cash and cash
equivalents and restricted cash
(16,120
)
75,423
(13,022
)
170,141
Cash and cash equivalents and restricted
cash at beginning of period
209,503
130,982
206,405
36,264
Cash and cash equivalents and restricted
cash at end of period
$
193,383
$
206,405
$
193,383
$
206,405
RECONCILIATION OF FREE CASH FLOW TO
AMOUNTS REPORTED UNDER U.S. GAAP:
(in thousands)
For the three months ended
December 31,
For the year ended December
31,
2019
2018
2019
2018
Net cash provided by operating
activities
$
24,549
$
130,797
$
532,814
$
559,396
Purchases of property, plant and equipment
and mine development costs
(33,906
)
(25,623
)
(130,670
)
(101,620
)
Free cash flow (7)
$
(9,357
)
$
105,174
$
402,144
$
457,776
Free cash flow conversion (8)
(24.0
)%
65.1
%
84.0
%
76.2
%
(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)
December 31, 2019
(Unaudited)
December 31, 2018
ASSETS
Current assets:
Cash and cash equivalents
$
193,383
$
205,577
Short-term investments
14,675
17,501
Trade accounts receivable
99,471
138,399
Income tax receivable
12,925
21,607
Inventories, net
97,901
56,719
Prepaid expenses and other receivables
25,691
29,366
Total current assets
444,046
469,169
Mineral interests, net
110,130
120,427
Property, plant and equipment, net
606,200
540,315
Deferred income taxes
154,297
222,780
Non-current income tax receivable
11,349
21,310
Other long-term assets
18,242
21,039
Total assets
$
1,344,264
$
1,395,040
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Accounts payable
$
46,436
$
33,588
Accrued expenses
65,755
82,342
Short term financing lease liabilities
10,146
—
Other current liabilities
6,615
7,742
Current portion of long-term debt
—
760
Total current liabilities
128,952
124,432
Long-term debt
339,189
468,231
Asset retirement obligations
53,583
59,049
Long term financing lease liabilities
25,528
—
Other long-term liabilities
31,430
30,716
Total liabilities
578,682
682,428
Stockholders’ Equity:
Common stock, $0.01 par value per share
(Authorized -140,000,000 shares, 53,293,449 issued and 51,071,608
outstanding as of December 31, 2019 and 53,256,098 issued and
51,622,898 outstanding as of December 31, 2018)
533
533
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 and
1,633,200 shares as of December 31, 2019 and December 31, 2018)
(50,576
)
(38,030
)
Additional paid in capital
243,932
239,827
Retained earnings
571,693
510,282
Total stockholders’ equity
765,582
712,612
Total liabilities and stockholders’
equity
$
1,344,264
$
1,395,040
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200219005934/en/
For Investors: Dale W. Boyles, 205-554-6129
dale.boyles@warriormetcoal.com
For Media: Jason Houston, 205-554-6228
jason.houston@warriormetcoal.com
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