Achieved full year strong net income of $641.3
million and all-time record Adjusted EBITDA of $994.2 million
Achieved all-time record annual cash flows from
operations of $841.9 million
Ended 2022 with total liquidity of $952.8
million
Sets out guidance for 2023
Warrior Met Coal, Inc. (NYSE:HCC) (“Warrior” or the “Company”)
today announced results for the fourth quarter and full-year 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 fourth quarter 2022 net income of $99.7
million, or $1.93 per diluted share, compared to net income of
$138.5 million, or $2.68 per diluted share, in the fourth quarter
of 2021. Adjusted net income for the fourth quarter of 2022 was
$1.90 per diluted share compared to an adjusted net income of $3.17
per diluted share in the fourth quarter of 2021. The Company
reported Adjusted EBITDA of $147.5 million in the fourth quarter of
2022, compared to Adjusted EBITDA of $240.2 million in the fourth
quarter of 2021. While sales volumes were flat quarter over
quarter, average net selling prices were 17% lower in the fourth
quarter of 2022 compared to 2021, primarily due to stronger met
coal market pricing in late 2021.
“In the fourth quarter, we delivered strong results despite
shipment delays due to mechanical failures at the McDuffie Terminal
and bad weather at the Port of Mobile, which continued to drive
higher than normal inventories and lower shipment volumes,”
commented Walt Scheller, CEO of Warrior. “We were pleased to see
customer demand and coal prices hold firm despite lower steel
production globally. As we jointly address the mechanical
challenges with our partner at the McDuffie Terminal and as rail
transportation performance continues to improve, we expect to ship
higher volumes, returning our inventories to normal levels. We have
already seen significant improvement from these joint efforts in
the first six weeks of the year. Our fourth quarter results marked
the conclusion of an exceedingly strong financial year for Warrior,
which posted strong net income, record operating cash flows and set
Company records for Adjusted EBITDA, more than double our 2021
Adjusted EBITDA at nearly $1 billion, as well as free cash flow and
total liquidity. As a result, we are able to move ahead more
rapidly with our transformational Blue Creek mine development
project, which we believe will drive meaningful future growth,
profitability and cash generation.”
“Overall, Warrior enters 2023 with excellent financial and
operational momentum. Our current liquidity, which is at a record
high, will enable us to continue to return excess cash to
stockholders while investing in the future growth of the business
through the rapid development of the Blue Creek mine,” Scheller
concluded.
Warrior reported strong full year 2022 net income of $641.3
million and adjusted net income of $666.1 million, or net income of
$12.40 per diluted share and adjusted net income of $12.88 per
diluted share, compared to net income of $150.9 million and
adjusted net income of $227.7 million, or net income of $2.93 per
diluted share and adjusted net income of $4.43 per diluted share,
in 2021. The Company reported an all-time record high Adjusted
EBITDA of $994.2 million for the full year 2022 compared to $457.0
million for the full year 2021.
Operating Results
The Company produced 1.5 million short tons of met coal in the
fourth quarter of 2022 compared to 1.1 million short tons in the
fourth quarter of 2021. Fourth quarter production was the result of
running both longwalls and five continuous miner units at Mine No.
7 and one longwall and three continuous miner units at Mine No. 4.
For the full year of 2022, the Company produced 6.3 million short
tons, or an increase of 12.7% compared to 2021. Sales volume in the
fourth quarter of 2022 was 1.5 million short tons compared to 1.4
million short tons in the fourth quarter of 2021. Sales volumes for
the full year 2022 were 5.6 million short tons, or a decrease of
10.5% compared to 2021 primarily due to the shipment delays caused
by the Port of Mobile and low rail transportation performance
throughout the year. Inventory levels increased to 855 thousand
short tons at the end of December 31, 2022 from the 243 thousand
short tons at the end of 2021 primarily due to the shipment
delays.
Additional Financial Results
Total revenues were $344.8 million for the fourth quarter of
2022, including $329.9 million in mining revenues, which consisted
of met coal sales of 1.5 million short tons at an average net
selling price of $227.21 per short ton, net of demurrage and other
charges. This compares to total revenues of $415.5 million in the
fourth quarter of 2021. The average net selling price of the
Company's met coal decreased 17% from $273.84 per short ton in the
fourth quarter of 2021 to $227.21 per short ton in the fourth
quarter of 2022 due to stronger met coal market pricing last
year.
Cost of sales for the fourth quarter of 2022 was $180.7 million
compared to $155.2 million for the fourth quarter of 2021. Cash
cost of sales (including mining, transportation and royalty costs)
for the fourth quarter of 2022 were $179.2 million, or 54.3% of
mining revenues, compared to $153.3 million, or 38.6% of mining
revenues in the same period of 2021. Cash cost of sales
(free-on-board port) per short ton increased to $123.40 in the
fourth quarter of 2022 from $105.80 in the fourth quarter of 2021,
primarily reflecting the delayed impact of transportation and
royalty costs and rising inflation in 2022. The full year 2022 cash
cost of sales per short ton was $125.50 compared to $87.48 in for
the full year 2021. Inflation accounted for approximately $5 per
short impact during the fourth quarter and $4 per short ton for the
full year 2022 primarily due to increases in the costs of diesel
fuel, belt structure, roof bolts, cable, chemicals and other
supplies, plus labor and parts on equipment repair and
rebuilds.
Selling, general and administrative expenses for the fourth
quarter of 2022 were $11.8 million, or 3.4% of total revenues.
Depreciation and depletion costs for the fourth quarter of 2022
were $28.3 million, or 8.2% of total revenues. Warrior incurred net
interest income of $1.7 million during the fourth quarter of 2022,
compared to net interest expense of $9.4 million in the fourth
quarter of 2021. Interest income earned on our cash investments
exceeded interest expense on our outstanding notes and equipment
leases.
Business interruption expenses were $3.4 million in the fourth
quarter of 2022 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 $2.0 million in the fourth quarter of 2022 and
represent expenses incurred with the reduced operations at the
mines, such as electricity, insurance and maintenance labor.
Income tax expense was $19.7 million in the fourth quarter of
2022 due to income before income taxes of $119.3 million and
primarily reflects the utilization of our net operating losses
offset partially by an income tax benefit for depletion. This
compares to an income tax expense of $26.7 million in the fourth
quarter of 2021.
Cash Flow and Liquidity
The Company generated cash flows from operating activities in
the fourth quarter of 2022 of $195.0 million, compared to $174.7
million in the fourth quarter of 2021. Capital expenditures for the
fourth quarter of 2022 were $98.5 million, resulting in free cash
flow of $96.5 million. Free cash flow was $54.4 million less than
the fourth quarter of 2021 and reflected lower realized prices and
higher capital expenditures and mine development costs.
Net working capital, excluding cash, for the fourth quarter of
2022 decreased by $46.7 million from the third quarter of 2022,
primarily reflecting a decrease in accounts receivable due to lower
average net selling prices, partially offset by higher inventories
and lower accounts payable.
Cash flows used in financing activities for the fourth quarter
of 2022 were $12.7 million, primarily due to payments of capital
lease obligations of $7.9 million, the payment of the regular
quarterly dividend of $3.1 million, and retirements of debt of $1.6
million.
The Company generated an all-time record $841.9 million of cash
flows from operating activities for the full year 2022 compared to
$351.5 million in 2021. Capital expenditures and mine development
costs for the full year 2022 were $254.2 million, including $47.1
million for the development of Blue Creek. Cash flows used in
financing activities for the full year 2022 were $153.1 million,
primarily due to the payment of regular and special cash dividends
of $79.7 million, retirements of debt of $39.4 million, and
payments on capital lease obligations of $30.3 million.
The Company’s total liquidity as of December 31, 2022 was a
record high $952.8 million, consisting of cash and cash equivalents
of $829.5 million and available liquidity under its ABL Facility of
$123.3 million, net of outstanding letters of credit of $8.7
million.
Capital Allocation
On February 9, 2023, the Board of Directors (the "Board")
declared a regular quarterly cash dividend of $0.07 per share,
which was an increase of 17% over the regular cash dividend
declared by the Board on October 24, 2022, totaling approximately
$3.7 million, which will be paid on February 27, 2023 to
stockholders of record as of the close of business on February 20,
2023.
In addition, on February 13, 2023, the Board declared a special
cash dividend (the "March 2023 Special Dividend") of $0.88 per
share, totaling approximately $46.3 million, which will be paid on
March 7, 2023, to stockholders of record as of the close of
business on February 28, 2023. The Company continues to demonstrate
its previous commitment to returning excess 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 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
The Company's outlook for 2023 is subject to many risks that may
impact performance, such as the labor strike, ongoing mechanical
issues at the McDuffie Terminal at the Port of Mobile, ongoing rail
transportation issues, 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 2023 is outlined below.
Coal sales
6.6 - 7.2 million short tons
Coal production
6.3 - 6.9 million short tons
Cash cost of sales (free-on-board
port)
$109 - $125 per short ton
Capital expenditures for sustaining
existing mines
$95 - $105 million
Blue Creek project and other discretionary
capital expenditures
$325 - $345 million
Mine development costs
$10 - $14 million
Selling, general and administrative
expenses
$42 - $48 million
Interest expense, net of interest
income
$5 - $10 million
Income tax expense
18% - 20%
Key factors that may affect outlook include:
- Four planned longwall moves (Q1, Q2, and Q3 has two
moves),
- 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 $95-$105 million,
including regulatory and gas requirements, and discretionary
capital spending of $325-$345 million for the development of the
Blue Creek reserves, final payments on two new sets of longwall
shields originally purchased in 2022, and the final 4 North portal
construction.
Environmental, Social and Governance Sustainability
The Company recently published its annual corporate
environmental, social and governance sustainability report for
2022, which is located at http://www.warriormetcoal.com/corporate-sustainability/.
The report was prepared in accordance with the codified standards
of the Sustainability Accounting Standards Board. 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 2022 results today, February 15, 2023, at 4:30 p.m. ET. To
listen to the event live or access an archived recording, please
visit http://investors.warriormetcoal.com/. 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 15,
2023, until 6:30 p.m. ET on February 22, 2023. The replay will be
available by calling: 1-877-344-7529 (domestic) or 1-412-317-0088
(international) and entering passcode 7984367.
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 quality 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 S&P Global 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 2023
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, the Company's future ability to return excess cash
to stockholders, 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
transport its products to customers due to rail performance issues
or the impact of weather and mechanical failures at the McDufffie
Terminal at 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, 2022 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)
For the three months ended
December 31,
For the twelve months ended
December 31,
2022
2021
2022
2021
Revenues:
Sales
$
329,914
$
396,790
$
1,707,579
$
1,028,283
Other revenues
14,836
18,755
31,159
30,933
Total revenues
344,750
415,545
1,738,738
1,059,216
Costs and expenses:
Cost of sales (exclusive of items shown
separately below)
180,736
155,194
710,605
554,282
Cost of other revenues (exclusive of items
shown separately below)
927
6,107
27,047
28,899
Depreciation and depletion
28,306
39,397
115,279
141,418
Selling, general and administrative
11,806
9,411
48,791
35,593
Business interruption
3,371
7,480
23,455
21,372
Idle mine
1,996
13,696
12,137
33,899
Total costs and expenses
227,142
231,285
937,314
815,463
Operating income
117,608
184,260
801,424
243,753
Interest income (expense), net
1,711
(9,435
)
(18,995
)
(35,389
)
Loss on early extinguishment of debt
—
(9,678
)
—
(9,678
)
Other income
—
—
675
1,291
Income before income tax expense
119,319
165,147
783,104
199,977
Income tax expense
19,665
26,657
141,806
49,096
Net income
$
99,654
$
138,490
$
641,298
$
150,881
Basic and diluted net income per
share:
Net income per share—basic
$
1.93
$
2.69
$
12.42
$
2.94
Net income per share—diluted
$
1.93
$
2.68
$
12.40
$
2.93
Weighted average number of shares
outstanding—basic
51,654
51,430
51,622
51,382
Weighted average number of shares
outstanding—diluted
51,760
51,580
51,715
51,445
Dividends per share:
$
0.06
$
0.05
$
1.54
$
0.20
WARRIOR MET COAL, INC.
QUARTERLY SUPPLEMENTAL
FINANCIAL DATA AND RECONCILIATION OF NON-GAAP FINANCIAL
MEASURES
QUARTERLY SUPPLEMENTAL FINANCIAL
DATA:
For the three months ended
December 31,
For the twelve months ended
December 31,
(short tons in thousands)(1)
2022
2021
2022
2021
Tons sold
1,452
1,449
5,621
6,282
Tons produced
1,468
1,108
6,315
5,604
Average net selling price
$
227.21
$
273.84
$
303.79
$
163.69
Cash cost of sales (free on board port)
per short ton(2)
$
123.40
$
105.80
$
125.50
$
87.48
(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
December 31,
For the twelve months ended
December 31,
2022
2021
2022
2021
Cost of sales
$
180,736
$
155,194
$
710,605
$
554,282
Asset retirement obligation accretion and
valuation adjustments
(321
)
(1,506
)
(1,801
)
(2,802
)
Stock compensation expense
(1,243
)
(380
)
(3,379
)
(1,917
)
Cash cost of sales (free-on-board
port)(2)
$
179,172
$
153,308
$
705,425
$
549,563
(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)
RECONCILIATION OF ADJUSTED EBITDA TO
AMOUNTS REPORTED UNDER U.S. GAAP:
For the three months ended
December 31,
For the twelve months ended
December 31,
(In thousands)
2022
2021
2022
2021
Net income
$
99,654
$
138,490
$
641,298
$
150,881
Interest (income) expense, net
(1,711
)
9,435
18,995
35,389
Income tax expense
19,665
26,657
141,806
49,096
Depreciation and depletion
28,306
39,397
115,279
141,418
Asset retirement obligation accretion and
valuation adjustments
(725
)
1,011
1,941
3,427
Stock compensation expense
3,371
607
17,621
9,370
Other non-cash accretion and valuation
adjustments
(6,386
)
800
(5,344
)
1,881
Non-cash mark-to-market (gain) loss on gas
hedges
—
(7,066
)
27,708
1,595
Loss on early extinguishment of debt
—
9,678
—
9,678
Business interruption
3,371
7,480
23,455
21,372
Idle mine
1,996
13,696
12,137
33,899
Other income
—
—
(675
)
(998
)
Adjusted EBITDA (3)
$
147,541
$
240,185
$
994,221
$
457,008
Adjusted EBITDA margin (4)
42.8
%
57.8
%
57.2
%
43.1
%
(3) Adjusted EBITDA is defined as net
income before net interest (income) expense, income tax expense,
depreciation and depletion, non-cash asset retirement obligation
accretion and valuation adjustments, non-cash stock compensation
expense, other non-cash accretion and valuation adjustments,
non-cash mark-to-market (gain) loss on gas hedges, loss on early
extinguishment of debt, 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.
(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
December 31,
For the twelve months ended
December 31,
2022
2021
2022
2021
Net income
$
99,654
$
138,490
$
641,298
$
150,881
Alabama state income tax valuation
allowance
—
—
—
24,965
Asset retirement obligation valuation
adjustments, net of tax
(572
)
150
1,530
150
Other non-cash valuation adjustments, net
of tax
(5,035
)
347
(4,214
)
347
Business interruption, net of tax
2,658
5,898
18,494
16,852
Idle mine, net of tax
1,574
10,799
9,570
26,729
Loss on early extinguishment of debt, net
of tax
—
7,631
—
7,631
Incremental stock compensation expense,
net of tax
—
—
—
960
Other income, net of tax
—
—
(532
)
(820
)
Adjusted net income (5)
$
98,279
$
163,315
$
666,146
$
227,695
Weighted average number of basic shares
outstanding
51,654
51,430
51,622
51,382
Weighted average number of diluted shares
outstanding
51,760
51,580
51,715
51,445
Adjusted basic net income per share:
$
1.90
$
3.18
$
12.90
$
4.43
Adjusted diluted net income per share:
$
1.90
$
3.17
$
12.88
$
4.43
(5) Adjusted net income is defined as net
income net of asset retirement obligation valuation adjustment,
other non-cash valuation adjustments, business interruption
expenses, idle mine expenses, loss on early extinguishment of debt,
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)
For the three months ended
December 31,
For the twelve months ended
December 31,
2022
2021
2022
2021
OPERATING ACTIVITIES:
Net income
$
99,654
$
138,490
$
641,298
$
150,881
Non-cash adjustments to reconcile net
income to net cash provided by operating activities
50,846
70,736
283,855
216,325
Changes in operating assets and
liabilities:
Trade accounts receivable
63,346
(48,880
)
(29,676
)
(38,852
)
Inventories
(6,587
)
26,990
(79,845
)
45,693
Prepaid expenses and other receivables
(766
)
(2,010
)
8,113
8,538
Accounts payable
(12,051
)
(3,576
)
(5,442
)
(20,322
)
Accrued expenses and other current
liabilities
2,759
(6,344
)
22,803
(16,444
)
Other
(2,207
)
(693
)
798
5,724
Net cash provided by operating
activities
194,994
174,713
841,904
351,543
INVESTING ACTIVITIES:
Purchases of property, plant and
equipment, and other
(85,220
)
(23,744
)
(205,242
)
(57,893
)
Mine development costs
(13,245
)
—
(48,935
)
(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 and other
—
17
—
209
Net cash used in investing activities
(98,465
)
(23,727
)
(255,144
)
(71,146
)
FINANCING ACTIVITIES:
Net cash used in financing activities
(12,715
)
(23,542
)
(153,119
)
(96,474
)
Net increase in cash and cash
equivalents
83,814
127,444
433,641
183,923
Cash and cash equivalents at beginning of
period
745,666
268,395
395,839
211,916
Cash and cash equivalents at end of
period
$
829,480
$
395,839
$
829,480
$
395,839
RECONCILIATION OF FREE CASH FLOW TO
AMOUNTS REPORTED UNDER U.S. GAAP:
(In thousands)
For the three months ended
December 31,
For the twelve months ended
December 31,
2022
2021
2022
2021
Net cash provided by operating
activities
$
194,994
$
174,713
$
841,904
$
351,543
Purchases of property, plant and equipment
and mine development costs
(98,465
)
(23,744
)
(254,177
)
(71,355
)
Free cash flow (6)
$
96,529
$
150,969
$
587,727
$
280,188
Free cash flow conversion (7)
65.4
%
62.9
%
59.1
%
61.3
%
(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)
December 31,
2022
December 31, 2021
ASSETS
Current assets:
Cash and cash equivalents
$
829,480
$
395,839
Short-term investments
8,608
8,505
Trade accounts receivable
151,826
122,150
Inventories, net
154,039
59,619
Prepaid expenses and other receivables
29,156
41,088
Total current assets
1,173,109
627,201
Mineral interests, net
88,636
93,180
Property, plant and equipment, net
738,947
603,412
Deferred income taxes
7,572
125,276
Other long-term assets
19,831
15,142
Total assets
$
2,028,095
$
1,464,211
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Accounts payable
$
39,026
$
33,829
Accrued expenses
77,435
54,847
Short term financing lease liabilities
24,089
23,622
Other current liabilities
12,574
9,830
Total current liabilities
153,124
122,128
Long-term debt
302,588
339,806
Asset retirement obligations
64,581
65,536
Long-term financing lease liabilities
9,002
28,434
Deferred income taxes
23,378
—
Other long-term liabilities
27,907
36,324
Total liabilities
580,580
592,228
Stockholders’ Equity:
Common stock, $0.01 par value per share
(140,000,000 shares authorized, 53,875,409 issued and 51,653,568
outstanding as of December 31, 2022, and 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 December 31, 2022, and December 31, 2021)
(50,576
)
(50,576
)
Additional paid in capital
269,956
256,059
Retained earnings
1,227,596
665,963
Total stockholders’ equity
1,447,515
871,983
Total liabilities and stockholders’
equity
$
2,028,095
$
1,464,211
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230215005131/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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