Achieves record quarterly Net Income of $297.0
million and all-time record Adjusted Net Income Accomplishes
all-time record Cash Flows and Adjusted EBITDA of $431.2
million
Warrior Met Coal, Inc. (NYSE: HCC) (“Warrior” or the “Company”)
today announced results for the second 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 second quarter of 2022 of
$297.0 million, or $5.74 per diluted share, the Company's third
consecutive quarter of record quarterly net income and earnings per
share, in over three years. This compares to a net loss of $4.7
million, or $0.09 per diluted share, in the second quarter of 2021.
Adjusted net income per share for the second quarter of 2022 was
$5.87 per diluted share, an all-time record high, compared to
adjusted net income per share of $0.25 per diluted share in the
second quarter of 2021. The Company reported Adjusted EBITDA of
$431.2 million in the second quarter of 2022, an all-time record
quarterly high, compared to Adjusted EBITDA of $65.2 million in the
second quarter of 2021.
“We continue to realize the benefits of our premium met coal
assets and efficient business model, setting new quarterly records
in a number of different financial metrics, including revenue,
adjusted net income and cash flow from operations,” commented Walt
Scheller, CEO of Warrior. “Our mining capabilities and assets,
combined with our strategically accumulated inventory, enabled us
to take advantage of the macro tailwinds this quarter, capturing
strong demand from customers in what has been a high, albeit
volatile, pricing environment. We are particularly proud of our
ability to manage through shipment delays relating to port
maintenance, the lack of available rail transportation and port
congestion as well as the impact of significant inflation on costs
to deliver these results.”
“With our business having shown the ability to take advantage of
strong pricing cycles and also withstand turbulent economic periods
with disciplined expense management, we are well-positioned,
despite global headwinds, heading into the second half of the
year.”
Operating Results
The Company produced 1.7 million short tons of met coal in the
second quarter of 2022 compared to 1.2 million short tons in the
second quarter of 2021. The tons of met coal produced in the second
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. Sales volume in the second
quarter of 2022 was 1.5 million short tons compared to 1.8 million
short tons in the second quarter of 2021. Inventory levels rose to
735 thousand short tons at the end of June 30, 2022 from the 601
thousand short tons at the end of March 31, 2022 primarily due to
shipment delays resulting from port maintenance, lack of railcar
availability and port congestion in the second quarter.
Additional Financial Results
Total revenues were $625.2 million for the second quarter of
2022, including $623.3 million in mining revenues, which consisted
of met coal sales of 1.5 million short tons at an average net
selling price of $403.95 per short ton, net of demurrage and other
charges. This compares to total revenues of $227.4 million in the
second quarter of 2021. The average net selling price of the
Company's met coal increased 227% from $123.36 per short ton in the
second quarter of 2021 to $403.95 per short ton in the second
quarter of 2022. The year-over-year increase in revenues is
primarily attributed to improved met coal pricing, partially offset
by lower sales volume and higher demurrage and other charges.
Cost of sales for the second quarter of 2022 were $191.1 million
compared to $152.8 million for the second quarter of 2021. Cash
cost of sales (including mining, transportation and royalty costs)
for the second quarter of 2022 were $189.8 million, or 30.5% of
mining revenues, compared to $151.8 million, or 67.5% of mining
revenues in the same period of 2021. Cash cost of sales
(free-on-board port) per short ton increased to $123.03 in the
second quarter of 2022 from $83.30 in the second quarter of 2021,
reflecting a 227% 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 increased 140% in the second
quarter of 2022 compared to the same period last year due to the
higher met coal average net selling prices. Inflation accounted for
an approximately $4 per short ton impact during the second quarter
of 2022 due to increases in the costs of diesel, fluids, 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 second
quarter of 2022 were $12.5 million, or 2.0% of total revenues and
were higher than the same period last year driven by the
acceleration of stock compensation expense for retirement eligible
employees and a 40% higher stock price than last year. Depreciation
and depletion expenses for the second quarter of 2022 were $30.4
million, or 4.9% of total revenues and were lower than the prior
year comparable quarter due to lower sales volume. Warrior incurred
net interest expense of $7.2 million during the second 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 $6.3 million and represent
non-recurring expenses that are directly attributable to the
ongoing labor strike for incremental safety and security, labor
negotiations and other expenses. Idle mine expenses were $1.7
million and represent expenses incurred with reduced operations at
Mine No. 4, such as electricity, insurance and maintenance
labor.
Income tax expense was $68.4 million in the second quarter of
2022, which was higher than last year primarily as a result of the
higher income before income taxes this quarter, which totaled
$365.3 million. This expense primarily reflects the utilization of
net operating losses which resulted in no cash taxes paid during
the second quarter of 2022.
Cash Flow and Liquidity
The Company generated record cash flows of $329.6 million from
operating activities in the second quarter of 2022, compared to
$68.7 million in the second quarter of 2021. Capital expenditures
for the second quarter of 2022 were $79.4 million. Free cash flow
was $250.2 million in the second quarter of 2022, an all-time
record, and was $196.8 million better than the second quarter of
2021. The increase primarily reflects higher realized prices,
partially offset by lower sales volume.
Net working capital, excluding cash, for the second quarter of
2022 increased by $66.8 million from the first quarter of 2022,
primarily reflecting an increase in trade accounts receivables due
to higher prices and the timing of sales, combined with an increase
in inventories due to strong production and shipment delays.
Cash flows used in financing activities for the second quarter
of 2022 were $35.9 million, primarily due to the payment of regular
quarterly and special dividends of $29.0 million and principal
repayments of financing lease obligations of $6.9 million.
The Company’s total liquidity as of June 30, 2022 was $768.1
million, a record high, consisting of cash and cash equivalents of
$644.8 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 August 1, 2022, the board of directors declared a regular
quarterly cash dividend of $0.06 per share, totaling approximately
$3.1 million, which will be paid on August 18, 2022, to
stockholders of record as of the close of business on August 11,
2022.
In addition, on August 1, 2022, the Board declared a special
cash dividend (the "August 2022 Special Dividend") of $0.80 per
share of Warrior's common stock, par value $0.01 per share, to be
paid on August 29, 2022, to stockholders of record as of the close
of business on August 22, 2022. This represents the second special
dividend in 2022 as the Company continues to demonstrate its
previously stated commitment to returning cash to stockholders
while driving long-term growth with its investment in the
development of its Blue Creek reserves.
Any future special dividends or stock repurchases from excess
cash flows will be at the discretion of the Company's 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
Warrior updated its guidance for the full year 2022 as indicated
below.
Coal sales
5.5 - 6.5 million short tons
Coal production
5.5 - 6.5 million short tons
Cash cost of sales (free-on-board
port)
$115 - $125 per short ton
Capital expenditures
$185 - $200 million
Mine development costs
$30 - $40 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:
- two planned longwall moves (Q3, 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 second
quarter 2022 results today, August 3, 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 August 3, 2022 until 6:30 p.m. ET
on August 12, 2022. The replay will be available by calling:
1-877-344-7529 (domestic) or 1-412-317-0088 (international) and
entering passcode 6881242.
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, the impact of COVID-19 on its business and that of its
customers, 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, 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 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 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; 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
June 30,
For the six months ended June
30,
2022
2021
2022
2021
Revenues:
Sales
$
623,288
$
224,759
$
1,005,721
$
431,748
Other revenues
1,868
2,681
(1,913
)
9,456
Total revenues
625,156
227,440
1,003,808
441,204
Costs and expenses:
Cost of sales (exclusive of items shown
separately below)
191,087
152,765
326,428
307,115
Cost of other revenues (exclusive of items
shown separately below)
10,663
8,343
17,703
16,138
Depreciation and depletion
30,371
40,151
56,168
73,054
Selling, general and administrative
12,499
11,115
26,428
18,752
Business interruption
6,290
7,020
12,978
7,020
Idle mine
1,715
10,876
4,723
10,876
Total costs and expenses
252,625
230,270
444,428
432,955
Operating income (loss)
372,531
(2,830
)
559,380
8,249
Interest expense, net
(7,183
)
(8,477
)
(15,005
)
(17,170
)
Other income (expense)
—
—
675
(109
)
Income (loss) before income tax expense
(benefit)
365,348
(11,307
)
545,050
(9,030
)
Income tax expense (benefit)
68,356
(6,626
)
101,809
17,006
Net income (loss)
$
296,992
$
(4,681
)
$
443,241
$
(26,036
)
Basic and diluted net income (loss) per
share:
Net income (loss) per share—basic
$
5.75
$
(0.09
)
$
8.59
$
(0.51
)
Net income (loss) per share—diluted
$
5.74
$
(0.09
)
$
8.58
$
(0.51
)
Weighted average number of shares
outstanding—basic
51,646
51,449
51,591
51,362
Weighted average number of shares
outstanding—diluted
51,740
51,449
51,678
51,362
Dividends per share:
$
0.56
$
0.05
$
0.62
$
0.10
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
June 30,
For the six months ended June
30,
2022
2021
2022
2021
Tons sold
1,543
1,822
2,670
3,774
Tons produced
1,667
1,195
3,204
3,367
Average net selling price
$
403.95
$
123.36
$
376.67
$
114.40
Cash cost of sales (free-on-board port)
per short ton(2)
$
123.03
$
83.30
$
121.43
$
80.89
(1)
1 short ton is equivalent to 0.907185
metric tons.
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
June 30,
For the six months ended June
30,
2022
2021
2022
2021
Cost of sales
$
191,087
$
152,765
$
326,428
$
307,115
Asset retirement obligation accretion
(494
)
(432
)
(987
)
(865
)
Stock compensation expense
(752
)
(560
)
(1,227
)
(982
)
Cash cost of sales (free-on-board
port)(2)
$
189,841
$
151,773
$
324,214
$
305,268
(2)
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.
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
June 30,
For the six months ended June
30,
2022
2021
2022
2021
Net income (loss)
$
296,992
$
(4,681
)
$
443,241
$
(26,036
)
Interest expense, net
7,183
8,477
15,005
17,170
Income tax expense (benefit)
68,356
(6,626
)
101,809
17,006
Depreciation and depletion
30,371
40,151
56,168
73,054
Asset retirement obligation accretion
899
805
1,766
1,610
Stock compensation expense
4,433
5,544
11,651
7,240
Other non-cash accretion
463
360
694
721
Mark-to-market loss on gas hedges
14,543
3,288
27,708
2,818
Business interruption
6,290
7,020
12,978
7,020
Idle mine
1,715
10,876
4,723
10,876
Other (income) expense
—
—
(675
)
402
Adjusted EBITDA(3)
$
431,245
$
65,214
$
675,068
$
111,881
Adjusted EBITDA margin(4)
69.0
%
28.7
%
67.3
%
25.4
%
(3)
Adjusted EBITDA is defined as net income
(loss) 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) expense. 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
(loss), income (loss) 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.
(4)
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
June 30,
For the six months ended June
30,
2022
2021
2022
2021
Net income (loss)
$
296,992
$
(4,681
)
$
443,241
$
(26,036
)
Alabama state income tax valuation
allowance
—
—
—
24,965
Business interruption, net of tax
5,115
5,535
10,554
5,535
Idle mine, net of tax
1,395
8,576
3,841
8,576
Incremental stock compensation expense,
net of tax
—
3,238
—
3,238
Other (income) expense, net of tax
—
—
(550
)
284
Adjusted net income(5)
$
303,502
$
12,668
$
457,086
$
16,562
Weighted average number of shares
outstanding—basic
51,646
51,449
51,591
51,362
Weighted average number of shares
outstanding—diluted
51,740
51,577
51,678
51,487
Adjusted net income per share—basic
$
5.88
$
0.25
$
8.86
$
0.32
Adjusted net income per share—diluted
$
5.87
$
0.25
$
8.84
$
0.32
(5)
Adjusted net income is defined as net
income (loss) net of Alabama state income tax valuation allowance,
business interruption expenses, idle mine expenses, incremental
stock compensation expense and other (income) expense, 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 (loss)
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
June 30,
For the six months ended June
30,
2022
2021
2022
2021
OPERATING ACTIVITIES:
Net income (loss)
$
296,992
$
(4,681
)
$
443,241
$
(26,036
)
Non-cash adjustments to reconcile net
income (loss) to net cash provided by operating activities
97,087
40,304
176,554
99,765
Changes in operating assets and
liabilities:
Trade accounts receivable
(34,525
)
10,962
(172,853
)
18,139
Inventories
(29,499
)
49,155
(68,945
)
33,048
Prepaid expenses and other receivables
3,093
303
10,241
10,495
Accounts payable
(14,087
)
(17,278
)
(997
)
(12,313
)
Accrued expenses and other current
liabilities
8,261
(10,712
)
6,761
(16,175
)
Other
2,264
625
5,724
6,977
Net cash provided by operating
activities
329,586
68,678
399,726
113,900
INVESTING ACTIVITIES:
Purchases of property, plant and
equipment
(68,174
)
(14,172
)
(78,702
)
(23,651
)
Mine development costs
(11,236
)
(1,129
)
(21,129
)
(13,462
)
Acquisition of leased mineral rights
(3,500
)
—
(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
—
172
—
192
Net cash used in investing activities
(82,910
)
(15,129
)
(100,798
)
(36,921
)
FINANCING ACTIVITIES:
Net cash used in financing activities
(35,874
)
(8,620
)
(49,918
)
(22,019
)
Net increase in cash and cash
equivalents
210,802
44,929
249,010
54,960
Cash and cash equivalents at beginning of
period
434,047
221,947
395,839
211,916
Cash and cash equivalents at end of
period
$
644,849
$
266,876
$
644,849
$
266,876
RECONCILIATION OF FREE CASH FLOW TO
AMOUNTS REPORTED UNDER U.S. GAAP:
(in thousands)
For the three months ended
June 30,
For the six months ended June
30,
2022
2021
2022
2021
Net cash provided by operating
activities
$
329,586
$
68,678
$
399,726
$
113,900
Purchases of property, plant and equipment
and mine development costs
(79,410
)
(15,301
)
(99,831
)
(37,113
)
Free cash flow(6)
$
250,176
$
53,377
$
299,895
$
76,787
Free cash flow conversion(7)
58.0
%
81.8
%
44.4
%
68.6
%
(6)
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.
(7)
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)
June 30, 2022
December 31,
2021
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents
$
644,849
$
395,839
Short-term investments
8,512
8,505
Trade accounts receivable
295,003
122,150
Inventories, net
140,418
59,619
Prepaid expenses and other receivables
24,833
41,088
Total current assets
1,113,615
627,201
Mineral interests, net
92,490
93,180
Property, plant and equipment, net
654,645
603,412
Deferred income taxes
24,191
125,276
Other long-term assets
13,978
15,142
Total assets
$
1,898,919
$
1,464,211
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Accounts payable
$
46,876
$
33,829
Accrued expenses
65,033
54,847
Short term financing lease liabilities
22,770
23,622
Other current liabilities
9,792
9,830
Total current liabilities
144,471
122,128
Long-term debt
340,356
339,806
Asset retirement obligations
69,769
65,536
Long term financing lease liabilities
18,251
28,434
Other long-term liabilities
35,015
36,324
Total liabilities
607,862
592,228
Stockholders’ Equity:
Common stock, $0.01 par value,
(140,000,000 shares authorized as of June 30, 2022 and December 31,
2021; 53,875,375 issued and 51,653,534 outstanding as of June 30,
2022; 53,659,643 issued and 51,437,802 outstanding as of December
31, 2021)
537
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 June 30, 2022 and December 31, 2021)
(50,576
)
(50,576
)
Additional paid in capital
263,991
256,059
Retained earnings
1,077,105
665,963
Total stockholders’ equity
1,291,057
871,983
Total liabilities and stockholders’
equity
$
1,898,919
$
1,464,211
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220803005142/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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