August 16, 2018 - 8:00 AM EDT
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Contura Announces Second Quarter 2018 Results

BRISTOL, Tenn., Aug. 16, 2018 /PRNewswire/ -- Contura Energy, Inc., a leading U.S. coal supplier, today reported results for the second quarter and year-to-date through June 30, 2018.

(PRNewsfoto/Contura Energy, Inc.)

Highlights include:

  • Net Income from continuing operations of $75 million for the second quarter 2018 compared with $18 million in the same period last year(1)
  • Adjusted EBITDA of $86 million for the quarter compared with $73 million in the same period last year(1)
  • Merger with Alpha progressing with important milestones achieved; transaction expected to close before year-end, likely in early- to mid-fourth quarter
  • Strong Trading and Logistics performance, increasing 2018 guidance to 5.6 million to 6.2 million tons
  • Cumberland soft clay issue mitigated ahead of schedule; mine back to full operation

 


(millions, except per share)


Three months ended June 30,

Six months ended June 30,


2018(1)

2017(1)

2018(1)

2017(1)

Net income(2)

$74.6

$18.4

$132.9

$49.4

Net income(2) per diluted share

$7.24

$1.69

$12.91

$4.57

Adjusted EBITDA(3)

$86.1

$73.1

$185.1

$192.6

Operating cash flow(4)

$145.9

$44.0

$115.6

$186.2

Capital expenditures

$18.9

$18.6

$38.3

$30.5

Tons of coal sold

4.4

4.1

8.2

8.4

 

1.

Excludes discontinued operations.

2.

From continuing operations.

3.

These are non-GAAP financial measures. A reconciliation of Net Income to Adjusted EBITDA is included in tables accompanying the financial schedules.

4.

Includes discontinued operations.

 

"Between another robust result from our Trading and Logistics segment and the continued progress we are making toward consummating our transaction with Alpha, this past quarter was a very productive one for Contura Energy," said Kevin Crutchfield, chief executive officer. "I am proud of our teams across the organization for delivering an overall strong quarterly performance despite the headwinds we faced through the geologic challenges at Cumberland and a subpar rail performance that capped what could have been even greater returns from our export sales."

Financial Performance

Total revenues in the second quarter were $528.9 million. Coal revenues, excluding freight and handling fulfillment revenues, in the second quarter were $423.9 million, with Central Appalachia (CAPP) coal revenues accounting for $152.2 million, Trading and Logistics (T&L) accounting for $201.0 million, and Northern Appalachia (NAPP) coal revenues totaling $70.7 million. Comparatively, in the second quarter 2017, CAPP revenues were $111.2 million, T&L revenues were $179.3 million, and NAPP accounted for $77.3 million of the $367.9 million in total coal revenues.

CAPP coal shipments for the second quarter 2018 were 1.2 million tons at an average per-ton realization of $128.51, compared to 1.0 million tons at $112.37 per ton in the prior year second quarter. Contura shipped 1.6 million tons of NAPP coal during the quarter at an average per-ton realization of $44.98, down from 1.8 million tons at $42.08 per ton in the second quarter 2017. As previously announced, NAPP volumes in the quarter were impacted by geologic conditions including a reduced coal seam thickness and localized soft clay issues. In the T&L segment, coal volumes increased from 1.3 million tons in the prior year period to 1.6 million tons in the second quarter 2018, while the average T&L realization decreased from $138.97 per ton to $123.39 per ton during the same period. 

Freight and handling fulfillment revenues and other revenues in the second quarter 2018 were $101.3 million and $3.8 million, respectively, compared with $69.7 million and $2.1 million, respectively, in the prior year period.

  • Total costs and expenses during the second quarter 2018 were $444.2 million and cost of coal sales was $331.6 million, compared with $406.6 million and $286.9 million, respectively, in the same period a year ago. Total expenses were negatively impacted by approximately $5.8 million in net demurrage costs due to poor rail service throughout the quarter, affecting primarily export met shipments. The cost of coal sales in CAPP for the quarter averaged $75.93 per ton, up from $73.13 in the prior year period. The CAPP cost includes $1.12 per ton in idle costs. NAPP costs at $40.95 per ton were impacted by the aforementioned geologic conditions experienced during the quarter, which reduced production volume. NAPP costs included idle costs of $0.96 per ton. In the year ago period, NAPP cost of coal sales averaged $33.01 per ton. In the T&L segment, the cost of coal sales during the second quarter 2018 was $108.85 per ton versus $119.03 per ton in the second quarter 2017.
  • Selling, general and administrative (SG&A) expenses for the second quarter 2018 were $12.0 million, down from $26.3 million in the year ago period. The year ago period included approximately $12.0 million in expenses related to the special dividend, business development expenses, and costs related to the company's filing of a registration statement with the SEC. Included in the SG&A costs for the second quarter 2018 are approximately $1.8 million in non-cash stock compensation and accrued expenses of $2.5 million related to incentive bonus plans. Depreciation, depletion and amortization was $11.2 million during the second quarter and amortization of acquired intangibles was $1.1 million, compared with $8.9 million and $14.6 million respectively, in the same period last year, excluding discontinued operations. 
  • Contura reported net income from continuing operations of $74.6 million, or $7.24 per diluted share, for the second quarter 2018. In the second quarter 2017, the company had net income from continuing operations of $18.4 million or $1.69 per diluted share.
  • Total Adjusted EBITDA was $86.1 million for the second quarter, compared with $73.1 million in the prior year quarter, adjusted to remove the impact of discontinued operations.

Liquidity and Capital Resources

Cash provided by operating activities, including discontinued operations, for the second quarter 2018 was $145.9 million and capital expenditures for the second quarter was $18.9 million. As expected, working capital provided significant cash in the second quarter, including $60.0 million from accounts receivable and $22.2 million from reduced inventories, offset by $15.6 million used in accounts payable. In the prior year period, the cash provided by operating activities was $44.0 million and capital expenditures were $18.6 million. Capital expenditures of $4.0 million from discontinued operations are excluded from the prior year total.

At the end of June 2018, Contura had $199.3 million in unrestricted cash. Total long-term debt, including the current portion of long-term debt as of June 30, 2018, was approximately $367.1 million.  At the end of the quarter, the company had total liquidity of $314.4 million, including cash and cash equivalents of $199.3 million and $115.1 million of unused commitments available under the Asset-Based Revolving Credit Facility. As of June 30, 2018, the company had no borrowings and $9.9 million letters of credit outstanding under the Asset-Based Revolving Credit Facility.

Alpha Merger Update

On April 30, 2018, the company jointly announced a definitive merger agreement with ANR, Inc. and Alpha Natural Resources Holdings, Inc. (together, "Alpha"), which is expected to create the largest metallurgical coal supplier in the U.S. complemented by a cost-competitive thermal coal portfolio.

Since the merger announcement, several key milestones have been achieved. On July 2, 2018, Contura and Alpha received early termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Act).  The company also announced on July 16, 2018 that Contura had filed a confidential registration statement on form S-4 with the U.S. Securities and Exchange Commission (SEC).

The transaction is expected to close prior to year-end 2018, likely in early- to mid-fourth quarter. As previously indicated, the merger is expected to generate synergies in the range of $30 million to $50 million annually.

For additional information regarding the transaction, see the presentation titled "Contura + Alpha: Transformative Combination" at www.conturaenergy.com/financials.

Other Business Updates

On July 2, 2018, the company announced an updated 2018 production outlook for the Cumberland mine, its longwall thermal coal mine located in NAPP. Due to unforeseen geologic conditions including reduced coal seam thickness and localized soft clay influences within the coal seam, both production and processing were temporarily slowed. Full coal production resumed August 1, 2018 at the Cumberland mine as the previously announced challenges due to localized geologic conditions are no longer impacting production or processing.

On December 11, 2017, the company announced that its wholly-owned subsidiary, Contura Coal West, LLC, completed a transaction to sell the Eagle Butte and Belle Ayr mines in Wyoming, along with related coal reserves, equipment, infrastructure and other real properties, to Blackjewel L.L.C. The reclamation bonds required to effectuate the permit transfer for those properties have since been submitted to the state of Wyoming by Blackjewel L.L.C. and, along with the permit transfer applications, are under review by the Wyoming Attorney General and the Wyoming Department of Environmental Quality.

2018 Full-Year Guidance

None of the guidance ranges described herein include any potential effects of the transaction with Alpha, which is expected to close prior to year-end 2018.

The company expects total 2018 coal shipments to be in the range of 15.4 million to 16.8 million tons. CAPP metallurgical coal guidance remains at 3.7 million to 4.1 million tons and guidance for the T&L segment is increased to 5.6 million to 6.2 million tons from a range of 5.0 million to 5.6 million tons. As previously announced, NAPP shipments, sold primarily into thermal markets, are now anticipated to be between 6.1 million and 6.5 million tons in 2018.

As of July 31, 2018, 68% of the midpoint of anticipated 2018 CAPP coal shipments were committed and priced at an average expected per-ton realization of $131.48, with an additional 18% committed and either unpriced or priced based on various indices. Based on the midpoint of guidance, 100% of anticipated 2018 NAPP coal shipments were committed and priced at an average expected per-ton realization of $43.71.

Contura is maintaining its previously announced guidance for 2018 CAPP cost of coal sales per ton of $70.00 to $75.00. As recently updated, NAPP cost estimates are projected to be between $35.00 to $38.00 per ton due to unexpected geologic conditions that temporarily impacted both production and processing. Additionally, costs related to the company's idle operations are expected to be between $10 million and $12 million for the full-year 2018.

The margin from Contura's T&L platform is expected to average $9 to $15 per ton for the full-year 2018.

As previously announced, Contura's SG&A guidance is estimated at $32 million to $36 million, excluding one-time and non-recurring items, annual incentive bonuses and stock compensation. Capital expenditure guidance is increased to a range of $72 million to $82 million, due primarily to additional capitalization of development work in NAPP while the longwall was idled and the company's strategic decision to convert a CAPP mine from a third-party contract operation to a company-operated mine. Depreciation, depletion and amortization for 2018 is expected to be between $40 million and $50 million. The company expects 2018 cash interest expense to be between $25 million and $27 million.

 

in millions of tons

Low

High

CAPP

3.7

4.1

NAPP

6.1

6.5

Total Production

9.8

10.6




Contura Trading & Logistics

5.6

6.2




Total Shipments

15.4

16.8




Committed/Priced1,2,3

Committed

Average Price

CAPP4

68%

$131.48

NAPP

100%

$43.71




Committed/Unpriced1,3

Committed


CAPP4

18%





Costs per ton

Low

High

CAPP

$70.00

$75.00

NAPP

$35.00

$38.00




Margin per ton

Low

High

Contura Trading & Logistics

$9

$15




In millions (except taxes)

Low

High

SG&A5

$32

$36

Idle Operations Expense

$10

$12

Cash Interest Expense

$25

$27

DD&A

$40

$50

Capital Expenditures

$72

$82

Tax Rate

0%

5%

 

Notes: 

1.

Based on committed and priced coal shipments as of July 31, 2018. Committed percentage based on the midpoint of shipment guidance range.

2.

Actual average per-ton realizations on committed and priced tons recognized in future periods may vary based on actual freight expense in future periods relative to assumed freight expense embedded in projected average per-ton realizations.

3.

Includes estimates of future coal shipments based upon contract terms and anticipated delivery schedules. Actual coal shipments may vary from these estimates.

4.

CAPP committed tons and price information represent captive Contura production and does not include Trading and Logistics.

5.

Excludes expenses related to non-cash stock compensation, accrual of incentive bonus and non-recurring business development expenses.

 

ABOUT CONTURA ENERGY

Contura Energy is a private, Tennessee-based coal supplier with affiliate mining operations across major coal basins in Pennsylvania, Virginia and West Virginia. With customers across the globe, high-quality reserves and significant port capacity, Contura Energy reliably supplies both metallurgical coal to produce steel and thermal coal to generate power. For more information, visit www.conturaenergy.com.

ADDITIONAL INFORMATION FOR INVESTORS

This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction. BEFORE MAKING ANY VOTING OR INVESTMENT DECISION, INVESTORS ARE URGED TO READ THE FORM S-4 AND THE JOINT PROXY STATEMENT AND PROSPECTUS REGARDING THE PROPOSED TRANSACTION AND ANY OTHER RELEVANT DOCUMENTS CAREFULLY IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. The joint proxy statement and prospectus, as well as other filings containing information about Contura and Alpha will be available without charge at the SEC's Internet site (www.sec.gov). Copies of the joint proxy statement and prospectus can also be obtained, when available, without charge, from Contura's website at www.conturaenergy.com. Copies of the joint proxy statement can be obtained, when available, without charge, from Alpha's website at www.alphanr.com.

For additional financial information about Contura, please visit www.conturaenergy.com/financials.

FORWARD-LOOKING STATEMENTS

This news release includes forward-looking statements. These forward-looking statements are based on Contura's expectations and beliefs concerning future events and involve risks and uncertainties that may cause actual results to differ materially from current expectations. These factors are difficult to predict accurately and may be beyond Contura's control. Forward-looking statements in this news release or elsewhere speak only as of the date made. New uncertainties and risks arise from time to time, and it is impossible for Contura to predict these events or how they may affect Contura. Except as required by law, Contura has no duty to, and does not intend to, update or revise the forward-looking statements in this news release or elsewhere after the date this release is issued. In light of these risks and uncertainties, investors should keep in mind that results, events or developments discussed in any forward-looking statement made in this news release may not occur. 

INVESTOR CONTACT
[email protected]

Alex Rotonen, CFA
423.573.0396

MEDIA CONTACTS
[email protected]

Rick Axthelm
423.573.0304

Emily O'Quinn
423.573.0369

 

FINANCIAL TABLES FOLLOW

Use of Non-GAAP Measures

In addition to the results prepared in accordance with generally accepted accounting principles in the United States (GAAP) provided throughout this press release, Contura has presented the following non-GAAP financial measure: Adjusted EBITDA. The company uses Adjusted EBITDA to measure the operating performance of its segments and allocate resources to the segments. This non-GAAP financial measure excludes various items detailed in the attached reconciliation tables.

The definition of this non-GAAP measure may be changed periodically by management to adjust for significant items important to an understanding of operating trends. This measure is not intended to replace financial performance measures determined in accordance with GAAP. Rather, it is presented as a supplemental measure of the company's performance that management finds useful in assessing the company's financial performance and believes is useful to securities analysts, investors and others in assessing the company's performance over time. Moreover, this measure is not calculated identically by all companies and therefore may not be comparable to similarly titled measures used by other companies.


 

 

CONTURA ENERGY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

(Amounts in thousands, except share and per share data)



Three Months Ended June 30,


Six Months Ended June 30,


2018


2017


2018


2017

Revenues:








Coal revenues

$

525,168



$

367,862



$

1,003,533



$

780,900


Freight and handling revenues



69,696





129,919


Other revenues

3,750



2,110



7,717



3,968


Total revenues

528,918



439,668



1,011,250



914,787


Costs and expenses:








Cost of coal sales (exclusive of items shown separately below)

331,590



286,915



629,128



571,320


Freight and handling costs

101,310



69,696



176,976



129,919


Depreciation, depletion and amortization

11,222



8,939



22,810



17,788


Amortization of acquired intangibles, net

1,104



14,585



11,310



34,243


Selling, general and administrative expenses (exclusive of depreciation, depletion and amortization shown separately above)

11,951



26,319



31,108



40,148


Merger related costs

3,423





3,883




Secondary offering costs



2,496





3,438


Total other operating (income) loss:








Gain on disposal of assets

(16,502)





(16,502)




Mark-to-market adjustment for acquisition-related obligations



6,739





2,382


Gain on settlement of acquisition-related obligations



(9,200)



(292)



(9,200)


Other expenses

95



81



288



81


Total costs and expenses

444,193



406,570



858,709



790,119


Income from operations

84,725



33,098



152,541



124,668


Other income (expense):








Interest expense

(8,779)



(8,338)



(17,984)



(19,614)


Interest income

191



42



322



73


Loss on early extinguishment of debt







(38,701)


Equity loss in affiliates

(1,170)



(496)



(1,233)



(1,709)


Bargain purchase gain



642





642


Miscellaneous income, net

(270)



(219)



(583)



(192)


Total other expense, net

(10,028)



(8,369)



(19,478)



(59,501)


Income from continuing operations before income taxes

74,697



24,729



133,063



65,167


Income tax expense

(55)



(6,329)



(121)



(15,811)


Net income from continuing operations

74,642



18,400



132,942



49,356


Discontinued operations:








Loss from discontinued operations before income taxes

(854)



(9,019)



(2,213)



(4,000)


Income tax benefit from discontinued operations



3,231





2,366


Loss from discontinued operations

(854)



(5,788)



(2,213)



(1,634)


Net income

$

73,788



$

12,612



$

130,729



$

47,722










Basic income (loss) per common share:








Income from continuing operations

$

7.75



$

1.78



$

13.87



$

4.79


Loss from discontinued operations

(0.08)



(0.56)



(0.23)



(0.16)


Net income

$

7.67



$

1.22



$

13.64



$

4.63










Diluted income (loss) per common share








Income from continuing operations

$

7.24



$

1.69



$

12.91



$

4.57


Loss from discontinued operations

(0.08)



(0.53)



(0.22)



(0.15)


Net income

$

7.16



$

1.16



$

12.69



$

4.42










Weighted average shares - basic

9,625,874



10,309,612



9,587,457



10,309,520


Weighted average shares - diluted

10,306,043



10,874,175



10,299,539



10,801,228


 

 

CONTURA ENERGY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

(Amounts in thousands, except share and per share data)



June 30, 2018


December 31, 2017

Assets




Current assets:




Cash and cash equivalents

$

199,252



$

141,924


Trade accounts receivable, net of allowance for doubtful accounts of $0 as of June 30, 2018 and December 31, 2017

168,310



127,326


Inventories, net

74,464



69,561


Assets held for sale



171


Short-term restricted cash

11,680



11,615


Short-term deposits

6,619



12,366


Prepaid expenses and other current assets

43,054



59,693


Current assets - discontinued operations

26,231



40,498


Total current assets

529,610



463,154


Property, plant, and equipment, net

207,805



196,579


Other acquired intangibles, net of accumulated amortization of $3,851 and $28,662 as of June 30, 2018 and December 31, 2017

7,149



18,458


Long-term restricted cash

35,240



40,421


Long-term deposits

9,238



3,607


Deferred income taxes

78,744



78,744


Other non-current assets

34,285



28,005


Non-current assets - discontinued operations



7,632


Total assets

$

902,071



$

836,600


Liabilities and Stockholders' Equity




Current liabilities:




Current portion of long-term debt

$

5,435



$

10,730


Trade accounts payable

74,000



76,319


Acquisition-related obligations - current

13,788



15,080


Liabilities held for sale

1,305



27,161


Accrued expenses and other current liabilities

56,615



58,771


Current liabilities - discontinued operations

26,138



54,114


Total current liabilities

177,281



242,175


Long-term debt

361,649



361,973


Acquisition-related obligations - long-term

20,852



20,332


Asset retirement obligations

55,313



52,434


Other non-current liabilities

61,748



59,276


Non-current liabilities - discontinued operations

82



7,762


Total liabilities

676,925



743,952


Commitments and Contingencies




Stockholders' Equity




Preferred stock - par value $0.01, 2.0 million shares authorized, none issued




Common stock - par value $0.01, 20.0 million shares authorized, 10.8 million issued and 9.9 million outstanding at June 30, 2018 and 10.7 million issued and 9.9 million outstanding at December 31, 2017

108



108


Additional paid-in capital

47,273



40,616


Accumulated other comprehensive loss

(1,998)



(1,948)


Treasury stock, at cost: 0.9 million shares at June 30, 2018 and 0.8 million shares
at December 31, 2017

(54,930)



(50,092)


Retained earnings

234,693



103,964


Total stockholders' equity

225,146



92,648


Total liabilities and stockholders' equity

$

902,071



$

836,600


 

 

CONTURA ENERGY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(Amounts in thousands)



Six Months Ended June 30,


2018


2017

Operating activities:




Net income

$

130,729



$

47,722


Adjustments to reconcile net income to net cash (used in) provided by operating activities:




Depreciation, depletion and amortization

22,810



34,277


Amortization of acquired intangibles, net

11,310



34,243


Accretion of acquisition-related obligations discount

3,020



4,441


Amortization of debt issuance costs and accretion of debt discount

1,499



1,206


Mark-to-market adjustment for acquisition-related obligations



2,382


Gain on settlement of acquisition-related obligations

(292)



(9,200)


Gain on disposal of assets

(16,502)



(708)


Bargain purchase gain



(642)


Accretion of asset retirement obligations

4,056



11,049


Employee benefit plans, net

5,324



5,539


Loss on early extinguishment of debt



38,701


Stock-based compensation

7,125



6,598


Equity in loss of affiliates

1,233



1,701


Changes in operating assets and liabilities

(54,706)



8,905


Net cash provided by operating activities

115,606



186,214


Investing activities:




Capital expenditures

(38,349)



(35,508)


Payments on disposal of assets

(10,250)




Proceeds on disposal of assets

464



2,272


Capital contributions to equity affiliates

(525)



(3,090)


Purchase of additional ownership interest in equity affiliate



(13,293)


Other, net

(1,446)



(408)


Net cash used in investing activities

(50,106)



(50,027)


Financing activities:




Proceeds from borrowings on debt



396,000


Principal repayments of debt

(5,323)



(357,500)


Principal repayments of capital lease obligations

(139)



(504)


Debt issuance costs



(14,385)


Debt extinguishment costs



(25,036)


Debt amendment costs



(4,520)


Common stock repurchases and related expenses

(4,838)




Principal repayments of notes payable

(2,939)



(726)


Other, net

(49)



11


Net cash used in financing activities

(13,288)



(6,660)


Net increase in cash and cash equivalents and restricted cash

52,212



129,527


Cash and cash equivalents and restricted cash at beginning of period

193,960



171,289


Cash and cash equivalents and restricted cash at end of period

$

246,172



$

300,816






Supplemental cash flow information:




Cash paid for interest

13,431



$

27,738


Cash paid for taxes

$

2



$

13,110


Cash received for income tax refunds

$

13,457



$


Supplemental disclosure of non-cash investing and financing activities:




Capital leases and capital financing - equipment

$

344



$

283


Accrued capital expenditures

$

4,289



$

13,132


Dividend Declaration

$



$

92,786


 

The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the Condensed Consolidated Balance Sheets that sum to the total of the same such amounts shown in the Condensed Consolidated Statements of Cash Flows.

 


Six Months Ended June 30,


2018


2017

Cash and cash equivalents

$

199,252



$

244,019


Short-term restricted cash

11,680




Long-term restricted cash

35,240



56,797


Total cash and cash equivalents and restricted cash shown in the Condensed Consolidated Statements of Cash Flows

$

246,172



$

300,816


 

 

CONTURA ENERGY, INC. AND SUBSIDIARIES

ADJUSTED EBITDA RECONCILIATION

(Amounts in thousands)


Reconciliation of Non-GAAP measures:



Three Months Ended June 30, 2018


CAPP


NAPP


Trading and
Logistics


All Other


Consolidated

Net income (loss) from continuing operations

$

73,140



$

3,090



$

22,342



$

(23,930)



$

74,642


Interest expense

3



(417)





9,193



8,779


Interest income

(6)



(10)



(18)



(157)



(191)


Income tax expense







55



55


Depreciation, depletion and amortization

5,742



5,295





185



11,222


Merger related costs







3,423



3,423


Non-cash stock compensation expense







1,876



1,876


Gain on sale of disposal group (1)

(16,386)









(16,386)


Accretion expense

655



941







1,596


Amortization of acquired intangibles, net





1,104





1,104


Adjusted EBITDA (2)

$

63,148



$

8,899



$

23,428



$

(9,355)



$

86,120


 

(1) During the fourth quarter of 2017, the Company entered into an asset purchase agreement to sell a disposal group (comprised of property, plant and equipment and associated asset retirement obligations) within our CAPP segment. From the date the Company entered into the asset purchase agreement through the transaction close date, the property, plant and equipment and associated asset retirement obligations were classified as held for sale in amounts representing the fair value of the disposal group. Upon permit transfer, the transaction closed on April 2, 2018. The Company paid $10,000 in connection with the transaction, which was paid into escrow on March 27, 2018 and transferred to the buyer at the transaction close date, and expects to pay a series of additional cash payments in the aggregate amount of $1,500, per the terms stated in the agreement, and recorded a gain on sale of $16,386 within gain on disposal of assets within the Condensed Consolidated Statements of Operations.


(2) Pursuant to the PRB divestiture and classification as a discontinued operation, the Company is no longer presenting a PRB reporting segment. The former PRB reporting segment had Adjusted EBITDA of ($1,102) for the three months ended June 30, 2018.

 

 

Segment Information:



Three Months Ended June 30, 2018


CAPP


NAPP


Trading and
Logistics


All Other


Consolidated

Total revenues

$

152,707



$

72,092



$

303,226



$

893



$

528,918


Depreciation, depletion, and amortization

$

5,742



$

5,295



$



$

185



$

11,222


Amortization of acquired intangibles, net

$



$



$

1,104



$



$

1,104


Adjusted EBITDA

$

63,148



$

8,899



$

23,428



$

(9,355)



$

86,120


Capital expenditures

$

8,173



$

10,572



$



$

163



$

18,908


 

 

Reconciliation of Non-GAAP measures:



Six Months Ended June 30, 2018


CAPP


NAPP


Trading and
Logistics


All Other


Consolidated

Net income (loss) from continuing operations

$

123,000



$

6,205



$

54,894



$

(51,157)



$

132,942


Interest expense

312



(349)





18,021



17,984


Interest income

(10)



(12)



(18)



(282)



(322)


Income tax expense







121



121


Depreciation, depletion and amortization

11,978



10,463





369



22,810


Merger related costs







3,883



3,883


Management restructuring costs (1)







2,659



2,659


Non-cash stock compensation expense







6,355



6,355


Gain on settlement of acquisition-related obligations







(292)



(292)


Gain on sale of disposal group (2)

(16,386)









(16,386)


Accretion expense

2,174



1,882







4,056


Amortization of acquired intangibles, net





11,310





11,310


Adjusted EBITDA (3)

$

121,068



$

18,189



$

66,186



$

(20,323)



$

185,120


 

(1) Management restructuring costs are related to severance expense associated with senior management changes in the six months ended June 30, 2018.


(2) During the fourth quarter of 2017, the Company entered into an asset purchase agreement to sell a disposal group (comprised of property, plant and equipment and associated asset retirement obligations) within our CAPP segment. From the date the Company entered into the asset purchase agreement through the transaction close date, the property, plant and equipment and associated asset retirement obligations were classified as held for sale in amounts representing the fair value of the disposal group. Upon permit transfer, the transaction closed on April 2, 2018. The Company paid $10,000 in connection with the transaction, which was paid into escrow on March 27, 2018 and transferred to the buyer at the transaction close date, and expects to pay a series of additional cash payments in the aggregate amount of $1,500, per the terms stated in the agreement, and recorded a gain on sale of $16,386 within gain on disposal of assets within the Condensed Consolidated Statements of Operations.


(3) Pursuant to the PRB divestiture and classification as a discontinued operation, the Company is no longer presenting a PRB reporting segment. The former PRB reporting segment had Adjusted EBITDA of ($2,368) for the six months ended June 30, 2018.

 

Segment Information:



Six Months Ended June 30, 2018


CAPP


NAPP


Trading and
Logistics


All Other


Consolidated

Total revenues

$

287,543



$

135,229



$

586,245



$

2,233



$

1,011,250


Depreciation, depletion, and amortization

$

11,978



$

10,463



$



$

369



$

22,810


Amortization of acquired intangibles, net

$



$



$

11,310



$



$

11,310


Adjusted EBITDA

$

121,068



$

18,189



$

66,186



$

(20,323)



$

185,120


Capital expenditures

$

15,845



$

22,341



$



$

163



$

38,349


 

 

Reconciliation of Non-GAAP measures:



Three Months Ended June 30, 2017


CAPP


NAPP


Trading and
Logistics


All Other


Consolidated

Net income (loss) from continuing operations

$

33,979



$

14,871



$

10,921



$

(41,371)



$

18,400


Interest expense

(153)



(420)





8,911



8,338


Interest income

(2)







(40)



(42)


Income tax expense







6,329



6,329


Depreciation, depletion and amortization

5,206



3,506





227



8,939


Non-cash stock compensation expense





166



5,001



5,167


Mark-to-market adjustment - acquisition-related obligations







6,739



6,739


Gain on settlement of acquisition-related obligations







(9,200)



(9,200)


Secondary offering costs







2,496



2,496


Bargain purchase gain







(642)



(642)


Accretion expense

1,461



1,041







2,502


Amortization of acquired intangibles, net





14,585





14,585


Expenses related to Special Dividend

377



57





9,102



9,536


Adjusted EBITDA (1) (2)

$

40,868



$

19,055



$

25,672



$

(12,448)



$

73,147


 

(1) The Company's Adjusted EBITDA calculation has been modified to add back non-cash stock compensation expense to align with industry peer group methodology.


(2) Pursuant to the PRB divestiture and classification as a discontinued operation, the Company is no longer presenting a PRB reporting segment. The former PRB reporting segment had Adjusted EBITDA of $2,446 for the three months ended June 30, 2017.

 

 

Segment Information:



Three Months Ended June 30, 2017


CAPP


NAPP


Trading and
Logistics


All Other


Consolidated

Total revenues

$

111,525



$

78,668



$

249,244



$

231



$

439,668


Depreciation, depletion, and amortization

$

5,206



$

3,506



$



$

227



$

8,939


Amortization of acquired intangibles, net

$



$



$

14,585



$



$

14,585


Adjusted EBITDA

$

40,868



$

19,055



$

25,672



$

(12,448)



$

73,147


Capital expenditures

$

5,140



$

12,610



$



$

858



$

18,608


 

 

Reconciliation of Non-GAAP measures:



Six Months Ended June 30, 2017


CAPP


NAPP


Trading and
Logistics


All Other


Consolidated

Net income (loss) from continuing operations

$

98,346



$

45,155



$

16,590



$

(110,735)



$

49,356


Interest expense

(93)



(369)





20,076



19,614


Interest income

(5)







(68)



(73)


Income tax expense







15,811



15,811


Depreciation, depletion and amortization

10,711



6,662





415



17,788


Non-cash stock compensation expense





209



6,389



6,598


Mark-to-market adjustment - acquisition-related obligations







2,382



2,382


Gain on settlement of acquisition-related obligations







(9,200)



(9,200)


Secondary offering costs







3,438



3,438


Loss on early extinguishment of debt







38,701



38,701


Bargain purchase gain







(642)



(642)


Accretion expense

2,923



2,082







5,005


Amortization of acquired intangibles, net





34,243





34,243


Expenses related to Special Dividend

377



57





9,102



9,536


Adjusted EBITDA (1) (2)

$

112,259



$

53,587



$

51,042



$

(24,331)



$

192,557


 

(1) The Company's Adjusted EBITDA calculation has been modified to add back non-cash stock compensation expense to align with industry peer group methodology.


(2) Pursuant to the PRB divestiture and classification as a discontinued operation, the Company is no longer presenting a PRB reporting segment. The former PRB reporting segment had Adjusted EBITDA of $18,761 for the six months ended June 30, 2017.

 

 

Segment Information:



Six Months Ended June 30, 2017


CAPP


NAPP


Trading and
Logistics


All Other


Consolidated

Total revenues

$

260,604



$

176,980



$

476,809



$

394



$

914,787


Depreciation, depletion, and amortization

$

10,711



$

6,662



$



$

415



$

17,788


Amortization of acquired intangibles, net

$



$



$

34,243



$



$

34,243


Adjusted EBITDA

$

112,259



$

53,587



$

51,042



$

(24,331)



$

192,557


Capital expenditures

$

7,189



$

22,209



$



$

1,058



$

30,456


 

 

CONTURA ENERGY, INC. AND SUBSIDIARIES

RESULTS OF OPERATIONS

(Amounts in thousands, except per ton data)



Three Months Ended June 30,


Increase (Decrease)

(In thousands, except for per ton data)

2018


2017


$ or Tons


%

Revenues:








Coal revenues:








Steam

$

55,935



$

74,459



$

(18,524)



(24.9)

%

Met

367,923



293,403



74,520



25.4

%

Freight and handling fulfillment revenues

101,310



69,696



31,614



45.4

%

Other revenues

3,750



2,110



1,640



77.7

%

Total revenues

$

528,918



$

439,668



$

89,250



20.3

%









Tons sold:








Steam

1,343



1,802



(459)



(25.5)

%

Met

3,042



2,316



726



31.3

%

Total

4,385



4,118



267



6.5

%









Coal sales realization per ton (1):








Steam

$

41.65



$

41.32



$

0.33



0.8

%

Met

$

120.95



$

126.69



$

(5.74)



(4.5)

%

Average

$

96.66



$

89.33



$

7.33



8.2

%




Three Months Ended June 30,


Increase (Decrease)

(In thousands, except for per ton data)

2018


2017


$ or Tons


%

Coal revenues (1):








CAPP Operations

$

152,154



$

111,244



$

40,910



36.8

%

NAPP Operations

70,708



77,347



(6,639)



(8.6)

%

Trading and Logistics Operations

200,996



179,271



21,725



12.1

%

Total coal revenues

$

423,858



$

367,862



$

55,996



15.2

%









Tons sold:








CAPP Operations

1,184



990



194



19.6

%

NAPP Operations

1,572



1,838



(266)



(14.5)

%

Trading and Logistics Operations

1,629



1,290



339



26.3

%









Coal sales realization per ton (1):








CAPP Operations

$

128.51



$

112.37



$

16.14



14.4

%

NAPP Operations

$

44.98



$

42.08



$

2.90



6.9

%

Trading and Logistics Operations

$

123.39



$

138.97



$

(15.58)



(11.2)

%

Average

$

96.66



$

89.33



$

7.33



8.2

%


(1) Does not include $101.3 million of freight and handling fulfillment revenues for the three months ended June 30, 2018.



Three Months Ended June 30,


Increase (Decrease)

(In thousands, except for per ton data)

2018


2017


$ or Tons


%

Cost of coal sales (exclusive of items shown separately below)

$

331,590



$

286,915



$

44,675



15.6

%

Freight and handling costs

101,310



69,696



31,614



45.4

%

Depreciation, depletion and amortization

11,222



8,939



2,283



25.5

%

Amortization of acquired intangibles, net

1,104



14,585



(13,481)



(92.4)

%

Selling, general and administrative expenses (exclusive of depreciation, depletion and amortization shown separately above)

11,951



26,319



(14,368)



(54.6)

%

Merger related costs

3,423





3,423



100.0

%

Secondary offering costs



2,496



(2,496)



(100.0)

%

Total other operating (income) loss:








Gain on disposal of assets

(16,502)





(16,502)



(100.0)

%

Mark-to-market adjustment for acquisition-related obligations



6,739



(6,739)



(100.0)

%

Gain on settlement of acquisition-related obligations



(9,200)



9,200



100.0

%

Other expenses

95



81



14



17.3

%

Total costs and expenses

444,193



406,570



37,623



9.3

%

Other (expense) income:








   Interest expense

(8,779)



(8,338)



(441)



(5.3)

%

   Interest income

191



42



149



354.8

%

Equity loss in affiliates

(1,170)



(496)



(674)



(135.9)

%

Bargain purchase gain



642



(642)



(100.0)

%

   Miscellaneous income, net

(270)



(219)



(51)



(23.3)

%

Total other expense, net

(10,028)



(8,369)



(1,659)



(19.8)

%

Income tax expense

(55)



(6,329)



6,274



99.1

%

Net income from continuing operations

$

74,642



$

18,400



$

56,242



305.7

%









Cost of coal sales:








CAPP Operations

$

89,903



$

72,397



$

17,506



24.2

%

NAPP Operations

$

64,369



$

60,668



$

3,701



6.1

%

Trading and Logistics Operations

$

177,318



$

153,554



$

23,764



15.5

%









Tons sold:








CAPP Operations

1,184



990



194



19.6

%

NAPP Operations

1,572



1,838



(266)



(14.5)

%

Trading and Logistics Operations

1,629



1,290



339



26.3

%









Cost of coal sales per ton:








CAPP Operations

$

75.93



$

73.13



$

2.80



3.8

%

NAPP Operations

$

40.95



$

33.01



$

7.94



24.1

%

Trading and Logistics Operations

$

108.85



$

119.03



$

(10.18)



(8.6)

%









Coal margin per ton (1):








CAPP Operations

$

52.58



$

39.24



$

13.34



34.0

%

NAPP Operations

$

4.03



$

9.07



$

(5.04)



(55.6)

%

Trading and Logistics Operations

$

14.54



$

19.94



$

(5.40)



(27.1)

%


(1) Coal margin per ton for our reportable segments is calculated as coal sales realization per ton for our reportable segments less cost of coal sales per ton for our reportable segments. Coal margin per ton is not shown for our All Other category since it has no coal sales or coal production related to our continuing operations.



Six Months Ended June 30,


Increase (Decrease)

(In thousands, except for per ton data)

2018


2017


$ or Tons


%

Revenues:








Coal revenues:








Steam

$

111,984



$

166,255



$

(54,271)



(32.6)

%

Met

714,573



614,645



99,928



16.3

%

Freight and handling fulfillment revenues

176,976



129,919



47,057



36.2

%

Other revenues

7,717



3,968



3,749



94.5

%

Total revenues

$

1,011,250



$

914,787



$

96,463



10.5

%









Tons sold:








Steam

2,679



3,961



(1,282)



(32.4)

%

Met

5,523



4,466



1,057



23.7

%

Total

8,202



8,427



(225)



(2.7)

%









Coal sales realization per ton (1):








Steam

$

41.80



$

41.97



$

(0.17)



(0.4)

%

Met

$

129.38



$

137.63



$

(8.25)



(6.0)

%

Average

$

100.78



$

92.67



$

8.11



8.8

%




Six Months Ended June 30,


Increase (Decrease)

(In thousands, except for per ton data)

2018


2017


$ or Tons


%

Coal revenues (1):








CAPP Operations

$

286,723



$

259,975



$

26,748



10.3

%

NAPP Operations

132,166



175,001



(42,835)



(24.5)

%

Trading and Logistics Operations

407,668



345,924



61,744



17.8

%

Total coal revenues

$

826,557



$

780,900



$

45,657



5.8

%









Tons sold:








CAPP Operations

2,138



2,048



90



4.4

%

NAPP Operations

2,986



4,038



(1,052)



(26.1)

%

Trading and Logistics Operations

3,078



2,341



737



31.5

%









Coal sales realization per ton (1):








CAPP Operations

$

134.11



$

126.94



$

7.17



5.6

%

NAPP Operations

$

44.26



$

43.34



$

0.92



2.1

%

Trading and Logistics Operations

$

132.45



$

147.77



$

(15.32)



(10.4)

%

Average

$

100.78



$

92.67



$

8.11



8.8

%


(1) Does not include $177.0 million of freight and handling fulfillment revenues for the six months ended June 30, 2018.



Six Months Ended June 30,


Increase (Decrease)

(In thousands, except for per ton data)

2018


2017


$ or Tons


%

Cost of coal sales (exclusive of items shown separately below)

$

629,128



$

571,320



$

57,808



10.1

%

Freight and handling costs

176,976



129,919



47,057



36.2

%

Depreciation, depletion and amortization

22,810



17,788



5,022



28.2

%

Amortization of acquired intangibles, net

11,310



34,243



(22,933)



(67.0)

%

Selling, general and administrative expenses (exclusive of depreciation, depletion and amortization shown separately above)

31,108



40,148



(9,040)



(22.5)

%

Merger related costs

3,883





3,883



100.0

%

Secondary offering costs



3,438



(3,438)



(100.0)

%

Total other operating (income) loss:








Gain on disposal of assets

(16,502)





(16,502)



(100.0)

%

Mark-to-market adjustment for acquisition-related obligations



2,382



(2,382)



(100.0)

%

Gain on settlement of acquisition-related obligations

(292)



(9,200)



8,908



96.8

%

Other expenses

288



81



207



255.6

%

Total costs and expenses

858,709



790,119



$

68,590



8.7

%

Other income (expense):








Interest expense

(17,984)



(19,614)



1,630



8.3

%

Interest income

322



73



249



341.1

%

Loss on early extinguishment of debt



(38,701)



38,701



100.0

%

Equity loss in affiliates

(1,233)



(1,709)



476



27.9

%

Bargain purchase gain



642



(642)



(100.0)

%

Miscellaneous income, net

(583)



(192)



(391)



(203.6)

%

Total other expense, net

(19,478)



(59,501)



40,023



67.3

%

Income tax expense

(121)



(15,811)



15,690



99.2

%

Net income from continuing operations

$

132,942



$

49,356



$

83,586



169.4

%









Cost of coal sales:








CAPP Operations

$

168,170



$

151,484



$

16,686



11.0

%

NAPP Operations

$

119,116



$

125,647



$

(6,531)



(5.2)

%

Trading and Logistics Operations

$

341,842



$

294,381



$

47,461



16.1

%









Tons sold:








CAPP Operations

2,138



2,048



$

90



4.4

%

NAPP Operations

2,986



4,038



$

(1,052)



(26.1)

%

Trading and Logistics Operations

3,078



2,341



$

737



31.5

%









Cost of coal sales per ton:








CAPP Operations

$

78.66



$

73.97



$

4.69



6.3

%

NAPP Operations

$

39.89



$

31.12



$

8.77



28.2

%

Trading and Logistics Operations

$

111.06



$

125.75



$

(14.69)



(11.7)

%









Coal margin per ton (1):








CAPP Operations

$

55.45



$

52.97



$

2.48



4.7

%

NAPP Operations

$

4.37



$

12.22



$

(7.85)



(64.2)

%

Trading and Logistics Operations

$

21.39



$

22.02



$

(0.63)



(2.9)

%


(1) Coal margin per ton for our reportable segments is calculated as coal sales realization per ton for our reportable segments less cost of coal sales per ton for our reportable segments. Coal margin per ton is not shown for our All Other category since it has no coal sales or coal production related to our continuing operations.

 

Cision View original content with multimedia:http://www.prnewswire.com/news-releases/contura-announces-second-quarter-2018-results-300698204.html

SOURCE Contura Energy, Inc.


Source: PR Newswire (August 16, 2018 - 8:00 AM EDT)

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