Warrior Met Coal Announces Third Quarter 2017 Results BROOKWOOD, Ala.
Sales volume increases 279% compared to prior year period to 2.1
million short tons
Production volume increases 180% compared to prior year period to 1.6
million short tons
Company records net income of $119.7 million and Adjusted EBITDA of
$107.3 million
Warrior Met Coal, Inc. (NYSE:HCC) (“Warrior” or the “Company”) today
announced results for the third quarter ended September 30, 2017.
Warrior is the leading dedicated U.S. based producer and exporter of
high quality metallurgical (“met”) coal for the global steel industry.
Warrior reported third quarter 2017 net income of $119.7 million, or
$2.27 per diluted share, compared to a net loss of $33.6 million, or
$0.64 per diluted share, in the third quarter of 2016. The Company
reported Adjusted EBITDA of $107.3 million in the third quarter of 2017,
compared to an Adjusted EBITDA loss of $5.8 million in the prior year
period. The market for high quality premium met coal continued to be
very volatile in this reporting period, reflecting higher Chinese demand
and ongoing disruptions to supply from U.S. and Australian miners.
“Warrior’s results in this quarter continue to reflect the strong demand
for our premium met coal and our industry leading margins,” commented
Walt Scheller, CEO of Warrior. "Strong sales volume coupled with high
price realization and an exceptionally low cost structure enabled us to
achieve strong free cash flow conversion. Our continued robust results
validate Warrior as the premier and only publicly traded 'pure-play' met
coal producer in the U.S."
Operating Results
Warrior continued to make progress in the ramp up of mining operations
toward its historical annual production level of approximately 8.0
million short tons. The Company produced 1.6 million short tons of met
coal in the third quarter of 2017, nearly three times the amount
produced in the prior year period. “We are undertaking the moves
necessary to increase our production levels in a responsible manner, and
that work will continue in the months ahead as we move closer to
achieving the nameplate production capacity in our two mines,” Mr.
Scheller added.
Additional Financial Results
Total revenues were $312.0 million for the third quarter of 2017,
including $303.0 million in mining revenues, which consisted of met coal
sales of 2.1 million short tons at an average selling price of $144.06
per short ton. Sales volume increased 279% over the third quarter of
2016 and increased 8% over the second quarter of 2017, reflecting both
strong continued production and strong demand from customers. Warrior
capitalized on the strong pricing environment in the quarter by selling
down higher than normal inventory levels built from strong production
performance in the first half of the year.
Cost of sales for the third quarter of 2017 were $189.6 million, or
60.8% of total revenues, and included mining costs, transportation and
royalty costs. Cash cost of sales (free-on-board port) per short ton
increased by $7.65 to $89.91 in the third quarter compared to the second
quarter of 2017. Selling, general and administrative expenses for the
third quarter of 2017 were $9.2 million, or 3.0% of total revenues.
Depreciation and depletion costs for the third quarter of 2017 were
$23.4 million, or 7.5% of total revenues. Warrior incurred interest
expense of $0.6 million and recognized an income tax benefit of $37.6
million, or $0.71 per share, for the third quarter of 2017, reflecting
the impact of the favorable Internal Revenue Service ("IRS") Private
Letter Ruling ("PLR") the Company received in the third quarter of 2017
discussed in further detail below.
Cash Flow and Liquidity
The Company continued to generate strong cash flows from operating
activities in the third quarter of 2017 of $116.1 million. Net working
capital excluding cash increased by $22.7 million from the second
quarter of 2017, primarily due to higher sales volumes, lower inventory,
and a tax refund receivable. Capital expenditures for the third quarter
2017 were $34.4 million, resulting in free cash flow of $81.7 million,
which was $76.6 million higher than in the prior year period. Cash flows
used in financing activities were flat at $3.4 million for the quarter
when compared to the second quarter of 2017.
The Company’s available liquidity as of the end of the quarter was
$334.1 million, consisting of cash and cash equivalents of $234.1
million and $100.0 million available under its Asset-Based Revolving
Credit Agreement.
Company Outlook
In light of the Company's third quarter performance, Warrior is updating
its guidance for the full year 2017 as follows:
|
|
|
|
Coal sales
|
|
|
6.1 - 6.3 million short tons
|
Coal production
|
|
|
6.2 - 6.5 million short tons
|
Cash cost of sales (free-on-board port)
|
|
|
$89 - $95 per short ton
|
Capital expenditures
|
|
|
$97 - $110 million
|
Selling, general and administrative expenses
|
|
|
$29 - $31 million
|
|
|
|
|
Factors that may affect outlook include:
- Hard coking coal index pricing
- 3 longwall operation moves in the fourth quarter of 2017
- Excludes transaction or other non-recurring costs
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
GAAP cost of sales. These items typically include non-cash asset
retirement obligation accretion expenses, mine idling expenses and other
non-recurring indirect mining expenses that are difficult to predict in
advance in order to include a GAAP estimate.
IRS Private Letter Ruling
On September 21, 2017, the Company reported that the IRS issued a PLR
that favorably impacts the Company’s analysis of its ability to utilize
its net operating loss carryforwards (“NOLs”) for federal income tax
purposes. Prior to the issuance of the PLR, the Company applied an
annual limitation on the utilization of NOLs pursuant to Section 382 of
the Internal Revenue Code, and, accordingly, expected to pay a
significantly higher amount of income taxes for 2017. Following the
issuance of the PLR, the Company believes that its NOLs will not be
subject to the annual limit of Section 382 as previously applied during
2017. However, the Company expects to be subject to the Alternative
Minimum Tax. During the third quarter of 2017, the Company recorded a
year-to-date adjustment to reflect the change in application of Section
382 in computing income tax expense. The Company expects that its NOLs
will be less than the amounts previously disclosed due to the change in
the application of Section 382, as a result of the PLR. The Company now
expects its federal NOLs to total approximately $1.8 billion to $2.0
billion. The Company plans to provide an updated estimate of its NOLs by
the end of this fiscal year.
Regular Quarterly Dividend
On October 25, 2017, the board of directors of the Company (the “Board”)
declared a regular quarterly cash dividend of $0.05 per share, totaling
$2.7 million, which will be paid on November 10, 2017, to stockholders
of record as of the close of business on November 3, 2017.
Senior Secured Notes Offering and Special Dividend
On November 2, 2017, the Company consummated a private offering (the
“Offering”) of $350.0 million aggregate principal amount of 8.00% Senior
Secured Notes due 2024 (the “Notes”) to qualified institutional buyers
pursuant to Rule 144A under the Securities Act of 1933, as amended (the
“Securities Act”), and to certain non-U.S. persons in transactions
outside the United States in accordance with Regulation S under the
Securities Act. The Company will use the net proceeds of approximately
$340.0 million from the Offering, together with cash on hand of
approximately $260.0 million, to pay a special cash dividend of
approximately $600.0 million, or $11.21 per share, to all of its
stockholders on a pro rata basis (the "Special Dividend"). On November
2, 2017, the Board declared the Special Dividend to be paid on November
22, 2017 to stockholders of record as of the close of business on
November 13, 2017.
Use of Non-GAAP Financial Measures
This release contains the use of certain U.S. non-GAAP (“Generally
Accepted Accounting Principles”) financial measures. These non-GAAP
financial measures are provided as supplemental information for
financial measures prepared in accordance with GAAP. Management believes
that these non-GAAP financial measures provide additional insights into
the performance of the Company, and they reflect how management analyzes
Company performance and compares that performance against other
companies. These non-GAAP financial measures may not be comparable to
other similarly titled measures used by other entities. The definition
of these non-GAAP financial measures and a reconciliation of non-GAAP to
GAAP financial measures is provided in the financial tables section of
this release.
Conference Call
The Company will hold a conference call to discuss its third quarter
2017 results today, November 9, 2017, 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 7:30 p.m. ET November 9,
2017 through 7:30 p.m. ET on December 8, 2017. The replay will be
available by calling: 1-877-344-7529 (domestic) or 1-412-317-0088
(international) and entering passcode 10113840.
About Warrior Met Coal
Warrior Met Coal is a large scale, low-cost U.S. based producer and
exporter of premium hard coking coal (“HCC”), operating highly efficient
longwall operations in its underground mines located in Alabama. The HCC
that Warrior produces from the Blue Creek coal seam contains very low
sulfur and has strong coking properties and is of a similar quality to
coal referred to as the 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 HCC industry index
average. Warrior sells all of its met coal production to steel producers
in Europe, South America and Asia. For more information about Warrior
Met Coal, 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. The words
“believe,” “expect,” “anticipate,” “plan,” “intend,” “estimate,”
“project,” “target,” “foresee,” “should,” “would,” “could,” “potential,”
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; legislation and
regulations relating to the Clean Air Act and other environmental
initiatives; regulatory requirements associated with federal, state and
local regulatory agencies, and such agencies’ authority to order
temporary or permanent closure of the Company’s mines; operational,
logistical, geological, permit, license, labor and weather-related
factors, including equipment, permitting, site access, operational risks
and new technologies related to mining; the Company’s obligations
surrounding reclamation and mine closure; inaccuracies in the Company’s
estimates of its met coal reserves; the Company’s ability to develop or
acquire met coal reserves in an economically feasible manner;
significant cost increases and fluctuations, and delay in the delivery
of raw materials, mining equipment and purchased components; competition
and foreign currency fluctuations; fluctuations in the amount of cash
the Company generates from operations, including cash necessary to pay
any special or quarterly dividend or to initiate a stock repurchase
program; the Company’s ability to comply with covenants in its credit
facility or indenture relating to the 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 filings with the U.S.
Securities and Exchange Commission (“SEC”), including its Registration
Statement on Form S-1 (File No. 333-216499), Form 10-Q for the quarterly
period ended September 30, 2017, and Form 8-K filed on October 19, 2017
and other reports filed from time to time with 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.
Note Regarding “Predecessor” Comparisons
The Company’s results on a “Predecessor” basis relate to the assets
acquired and liabilities assumed by Warrior Met Coal, LLC from Walter
Energy, Inc. in the asset acquisition described in the Company’s
Registration Statement on Form S-1 (File No. 333-216499) and the related
periods ending on or prior to March 31, 2016. The Company’s results on a
“Successor” basis relate to Warrior Met Coal, LLC and its subsidiaries
for periods beginning as of April 1, 2016 and Warrior Met Coal, Inc.
after giving effect to its corporate conversion on April 12, 2017 from a
Delaware limited liability company into a Delaware corporation. The
historical costs and expenses reflected in the Predecessor combined
results of operations include an allocation for certain corporate
functions historically provided by Walter Energy, Inc. Certain functions
critical to the Predecessor’s operations were centralized and managed by
Walter Energy, Inc. Historically, the centralized functions have
included executive senior management, financial reporting, financial
planning and analysis, accounting, shared services, information
technology, tax, risk management, treasury, legal, human resources, and
strategy and development. The costs of each of these services has been
allocated to the Predecessor on the basis of the Predecessor’s relative
headcount, revenue and total assets to that of Walter Energy, Inc.
WARRIOR MET COAL, INC.
|
|
CONDENSED STATEMENTS OF OPERATIONS
|
($ in thousands, except per share)
|
|
|
Successor
(Unaudited)
|
|
|
Predecessor
|
|
For the three months ended September 30,
|
|
For the nine months ended September 30,
|
|
For the six months ended September 30,
|
|
|
For the three months ended March 31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
2016
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
Sales
|
$
|
302,958
|
|
|
$
|
44,395
|
|
|
$
|
895,802
|
|
|
$
|
129,810
|
|
|
|
$
|
65,154
|
|
Other revenues
|
8,997
|
|
|
8,496
|
|
|
33,487
|
|
|
14,555
|
|
|
|
6,229
|
|
Total revenues
|
311,955
|
|
|
52,891
|
|
|
929,289
|
|
|
144,365
|
|
|
|
71,383
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
Cost of sales (exclusive of items shown separately below)
|
189,564
|
|
|
51,787
|
|
|
455,860
|
|
|
155,653
|
|
|
|
72,297
|
|
Cost of other revenues (exclusive of items shown separately below)
|
6,985
|
|
|
6,998
|
|
|
22,959
|
|
|
12,124
|
|
|
|
4,698
|
|
Depreciation and depletion
|
23,393
|
|
|
22,538
|
|
|
57,625
|
|
|
38,359
|
|
|
|
28,958
|
|
Selling, general and administrative
|
9,243
|
|
|
4,516
|
|
|
23,073
|
|
|
10,331
|
|
|
|
9,008
|
|
Other postretirement benefits
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
6,160
|
|
Restructuring costs
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
3,418
|
|
Transaction and other costs
|
—
|
|
|
—
|
|
|
12,873
|
|
|
10,475
|
|
|
|
—
|
|
Total costs and expenses
|
229,185
|
|
|
85,839
|
|
|
572,390
|
|
|
226,942
|
|
|
|
124,539
|
|
Operating income (loss)
|
82,770
|
|
|
(32,948
|
)
|
|
356,899
|
|
|
(82,577
|
)
|
|
|
(53,156
|
)
|
Interest expense, net
|
(640
|
)
|
|
(694
|
)
|
|
(1,890
|
)
|
|
(1,128
|
)
|
|
|
(16,562
|
)
|
Reorganization items, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
7,920
|
|
Income (loss) before income tax expense (benefit)
|
82,130
|
|
|
(33,642
|
)
|
|
355,009
|
|
|
(83,705
|
)
|
|
|
(61,798
|
)
|
Income tax expense (benefit)
|
(37,587
|
)
|
|
—
|
|
|
(2,881
|
)
|
|
—
|
|
|
|
18
|
|
Net income (loss)
|
$
|
119,717
|
|
|
$
|
(33,642
|
)
|
|
$
|
357,890
|
|
|
$
|
(83,705
|
)
|
|
|
$
|
(61,816
|
)
|
Basic and diluted net income (loss) per share (1):
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per share—basic and diluted
|
$
|
2.27
|
|
|
$
|
(0.64
|
)
|
|
$
|
6.79
|
|
|
$
|
(1.59
|
)
|
|
|
|
Weighted average number of shares outstanding—basic and diluted
|
52,777
|
|
|
52,640
|
|
|
52,727
|
|
|
52,640
|
|
|
|
|
Dividends per share:
|
$
|
0.05
|
|
|
$
|
—
|
|
|
$
|
3.66
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) On April 12, 2017, in connection with the Company’s
initial public offering (“IPO”), Warrior Met Coal, LLC filed a
certificate of conversion, whereby Warrior Met Coal, LLC effected
a corporate conversion from a Delaware limited liability company
to a Delaware corporation and changed its name to Warrior Met
Coal, Inc. In connection with this corporate conversion, the
Company filed a certificate of incorporation. Pursuant to the
Company’s certificate of incorporation, the Company is authorized
to issue up to 140,000,000 shares of common stock $0.01 par value
per share and 10,000,000 shares of preferred stock $0.01 par value
per share. The number of shares and per share amounts of common
stock have been retroactively recast to reflect the corporate
conversion.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
WARRIOR MET COAL, INC.
|
|
QUARTERLY SUPPLEMENTAL FINANCIAL DATA AND
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
|
|
QUARTERLY SUPPLEMENTAL FINANCIAL DATA:
|
|
|
|
Successor
(Unaudited)
|
|
|
Predecessor
|
|
|
For the three months ended September 30,
|
|
For the nine months ended September 30,
|
|
For the six months ended September 30,
|
|
|
For the three months ended March 31,
|
(short tons in thousands)(1)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
2016
|
Tons sold
|
|
2,103
|
|
|
555
|
|
|
5,172
|
|
|
1,682
|
|
|
|
856
|
|
Tons produced
|
|
1,620
|
|
|
578
|
|
|
5,142
|
|
|
1,490
|
|
|
|
883
|
|
Average selling price
|
|
$
|
144.06
|
|
|
$
|
79.99
|
|
|
$
|
173.20
|
|
|
$
|
77.18
|
|
|
|
$
|
76.11
|
|
HCC benchmark/index price (2)
|
|
$
|
154.53
|
|
|
$
|
83.92
|
|
|
$
|
196.36
|
|
|
$
|
80.06
|
|
|
|
$
|
73.50
|
|
Cash cost of sales (free on board port) per short ton (3)
|
|
$
|
89.91
|
|
|
$
|
86.51
|
|
|
$
|
87.86
|
|
|
$
|
69.95
|
|
|
|
$
|
63.30
|
|
(1) 1 short ton is equivalent to 0.907185 metric tons.
|
(2) Beginning in the second quarter of 2017, a
quarterly benchmark for hard coking coal was not set and was
replaced with an index methodology.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RECONCILIATION OF CASH COST OF SALES (FREE-ON-BOARD PORT) TO
COST OF SALES REPORTED UNDER U.S. GAAP:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Successor
(Unaudited)
|
|
|
Predecessor
|
(in thousands)
|
|
For the three months ended September 30,
|
|
For the nine months ended September 30,
|
|
For the six months ended September 30,
|
|
|
For the three months ended March 31,
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
2016
|
Cost of sales
|
|
$
|
189,564
|
|
|
$
|
51,787
|
|
|
$
|
455,860
|
|
|
$
|
155,653
|
|
|
|
$
|
72,297
|
|
Asset retirement obligation accretion
|
|
(441
|
)
|
|
(714
|
)
|
|
(1,324
|
)
|
|
(981
|
)
|
|
|
(93
|
)
|
Stock compensation expense
|
|
(39
|
)
|
|
—
|
|
|
(114
|
)
|
|
—
|
|
|
|
—
|
|
Mine No. 4 idle costs
|
|
—
|
|
|
(3,340
|
)
|
|
—
|
|
|
(8,682
|
)
|
|
|
(10,173
|
)
|
VEBA contribution
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(25,000
|
)
|
|
|
—
|
|
Other (operating overhead, etc.)
|
|
—
|
|
|
278
|
|
|
—
|
|
|
(3,336
|
)
|
|
|
(7,843
|
)
|
Cash cost of sales (free on board port)(3)
|
|
$
|
189,084
|
|
|
$
|
48,011
|
|
|
$
|
454,422
|
|
|
$
|
117,654
|
|
|
|
$
|
54,188
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3) Cash cost of sales (free on board port) is based on
reported cost of sales and includes items such as freight,
royalties, labor, fuel and other similar production and sales cost
items, and may be adjusted for other items that, pursuant to GAAP,
are classified in the Condensed Statements of Operations as costs
other than cost of sales, but relate directly to the costs
incurred to produce met coal. Our cash cost of sales per short ton
is calculated as cash cost of sales divided by the short tons
sold. Cash cost of sales per short ton is a non-GAAP financial
measure which is not calculated in conformity with U.S. Generally
Accepted Accounting Principles (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:
|
|
|
|
|
Successor (Unaudited)
|
|
|
Predecessor
|
|
|
|
For the three months ended September 30,
|
|
|
For the nine months ended September 30,
|
|
|
For the six months ended September 30,
|
|
|
For the three months ended March 31,
|
(in thousands)
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
|
2016
|
Net income (loss)
|
|
|
$
|
119,717
|
|
|
|
$
|
(33,642
|
)
|
|
|
$
|
357,890
|
|
|
|
$
|
(83,705
|
)
|
|
|
$
|
(61,816
|
)
|
Interest expense, net
|
|
|
640
|
|
|
|
694
|
|
|
|
1,890
|
|
|
|
1,128
|
|
|
|
16,562
|
|
Income tax expense (benefit)
|
|
|
(37,587
|
)
|
|
|
—
|
|
|
|
(2,881
|
)
|
|
|
—
|
|
|
|
18
|
|
Depreciation and depletion
|
|
|
23,393
|
|
|
|
22,538
|
|
|
|
57,625
|
|
|
|
38,359
|
|
|
|
28,958
|
|
Asset retirement obligation accretion
|
|
|
940
|
|
|
|
1,227
|
|
|
|
2,839
|
|
|
|
1,962
|
|
|
|
1,169
|
|
Stock compensation expense
|
|
|
233
|
|
|
|
—
|
|
|
|
1,155
|
|
|
|
125
|
|
|
|
390
|
|
Transaction and other costs
|
|
|
—
|
|
|
|
—
|
|
|
|
12,873
|
|
|
|
10,475
|
|
|
|
—
|
|
Reorganization items, net
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(7,920
|
)
|
Restructuring costs
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
3,418
|
|
Mine No. 4 idle costs
|
|
|
—
|
|
|
|
3,340
|
|
|
|
—
|
|
|
|
8,682
|
|
|
|
10,173
|
|
VEBA contribution
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
25,000
|
|
|
|
—
|
|
Adjusted EBITDA (4)
|
|
|
$
|
107,336
|
|
|
|
$
|
(5,843
|
)
|
|
|
$
|
431,391
|
|
|
|
$
|
2,026
|
|
|
|
$
|
(9,048
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4) 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, transaction and other costs,
net reorganization items, restructuring costs, Voluntary
Employees' Beneficiary Association ("VEBA") contribution and Mine
No. 4 idle costs. 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.
|
|
RECONCILIATION OF ADJUSTED NET INCOME TO AMOUNTS REPORTED UNDER
U.S. GAAP:
|
|
|
|
Successor (Unaudited)
|
|
|
Predecessor
|
(in thousands, except per share amounts)
|
|
|
For the three months ended September 30,
|
|
|
For the nine months ended September 30,
|
|
|
For the six months ended September 30,
|
|
|
For the three months ended March 31,
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
|
2016
|
Net income (loss)
|
|
|
$
|
119,717
|
|
|
|
$
|
(33,642
|
)
|
|
|
$
|
357,890
|
|
|
|
$
|
(83,705
|
)
|
|
|
$
|
(61,816
|
)
|
Transaction and other costs, net of tax
|
|
|
—
|
|
|
|
—
|
|
|
|
12,873
|
|
|
|
10,475
|
|
|
|
—
|
|
Reorganization items, net, net of tax
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(7,918
|
)
|
Restructuring costs, net of tax
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
3,417
|
|
Mine No. 4 idle costs, net of tax
|
|
|
—
|
|
|
|
3,340
|
|
|
|
—
|
|
|
|
8,682
|
|
|
|
10,170
|
|
VEBA contribution
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
25,000
|
|
|
|
—
|
|
Adjusted net income (loss) (5)
|
|
|
$
|
119,717
|
|
|
|
$
|
(30,302
|
)
|
|
|
$
|
370,763
|
|
|
|
$
|
(39,548
|
)
|
|
|
$
|
(56,147
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of basic and diluted shares outstanding
|
|
|
52,777
|
|
|
|
52,640
|
|
|
|
52,727
|
|
|
|
52,640
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted basic and diluted income (loss) per share:
|
|
|
$
|
2.27
|
|
|
|
$
|
(0.58
|
)
|
|
|
$
|
7.03
|
|
|
|
$
|
(0.75
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(5) Adjusted net income (loss) is defined as net income
(loss) net of the following items net of tax (based on each
respective period's effective tax rate): transaction and other
costs, reorganization items, net, restructuring costs, Mine No. 4
idle costs and VEBA contributions. Adjusted net income (loss) is
not a measure of financial performance in accordance with GAAP,
and we believe items excluded from adjusted net income (loss) are
significant to the reader in understanding and assessing our
results of operations. Therefore, adjusted net income (loss)
should not be considered in isolation, nor as an alternative to
net income under GAAP. We believe adjusted net income (loss) 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 (loss) may not be comparable to similarly
titled measures used by other companies.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WARRIOR MET COAL, INC.
|
|
CONDENSED STATEMENTS OF CASH FLOWS
|
($ in thousands)
|
|
|
|
|
Successor (Unaudited)
|
|
|
Predecessor
|
|
|
|
For the three months ended September 30,
|
|
|
For the nine months ended September 30,
|
|
|
For the six months ended September 30,
|
|
|
For the three
months ended
March 31,
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
|
2016
|
OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
|
$
|
119,717
|
|
|
|
$
|
(33,642
|
)
|
|
|
$
|
357,890
|
|
|
|
$
|
(83,705
|
)
|
|
|
$
|
(61,816
|
)
|
Non-cash adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities
|
|
|
19,620
|
|
|
|
24,219
|
|
|
|
57,562
|
|
|
|
41,276
|
|
|
|
21,817
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade accounts receivable
|
|
|
(35,990
|
)
|
|
|
22,588
|
|
|
|
(62,645
|
)
|
|
|
(5,453
|
)
|
|
|
15,097
|
|
Other receivables
|
|
|
(15,181
|
)
|
|
|
(1,696
|
)
|
|
|
(13,981
|
)
|
|
|
(1,572
|
)
|
|
|
1,070
|
|
Inventories
|
|
|
37,003
|
|
|
|
(5,876
|
)
|
|
|
4,072
|
|
|
|
8,801
|
|
|
|
677
|
|
Prepaid expenses and other current assets
|
|
|
(2,274
|
)
|
|
|
1,369
|
|
|
|
(6,948
|
)
|
|
|
(8,306
|
)
|
|
|
13,020
|
|
Accounts payable
|
|
|
2,772
|
|
|
|
(1,544
|
)
|
|
|
10,550
|
|
|
|
(8,893
|
)
|
|
|
(15,338
|
)
|
Accrued expenses and other current liabilities
|
|
|
(9,015
|
)
|
|
|
1,111
|
|
|
|
1,002
|
|
|
|
29,704
|
|
|
|
(16,083
|
)
|
Other
|
|
|
(543
|
)
|
|
|
992
|
|
|
|
(4,436
|
)
|
|
|
6,781
|
|
|
|
858
|
|
Net cash provided by (used in) operating activities
|
|
|
116,109
|
|
|
|
7,521
|
|
|
|
343,066
|
|
|
|
(21,367
|
)
|
|
|
(40,698
|
)
|
INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) investing activities
|
|
|
(34,408
|
)
|
|
|
6,500
|
|
|
|
(62,671
|
)
|
|
|
(27,730
|
)
|
|
|
(5,422
|
)
|
FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) financing activities
|
|
|
(3,440
|
)
|
|
|
(1,228
|
)
|
|
|
(197,644
|
)
|
|
|
193,492
|
|
|
|
(6,240
|
)
|
Net increase (decrease) in cash and cash equivalents and restricted
cash
|
|
|
78,261
|
|
|
|
12,793
|
|
|
|
82,751
|
|
|
|
144,395
|
|
|
|
(52,360
|
)
|
Cash and cash equivalents and restricted cash at beginning of period
|
|
|
157,146
|
|
|
|
131,602
|
|
|
|
152,656
|
|
|
|
—
|
|
|
|
84,462
|
|
Cash and cash equivalents and restricted cash at end of period
|
|
|
$
|
235,407
|
|
|
|
$
|
144,395
|
|
|
|
$
|
235,407
|
|
|
|
$
|
144,395
|
|
|
|
$
|
32,102
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RECONCILIATION OF FREE CASH FLOW TO AMOUNTS REPORTED UNDER U.S.
GAAP:
|
|
|
|
|
Successor (Unaudited)
|
|
|
Predecessor
|
(in thousands)
|
|
|
For the three months ended September 30,
|
|
|
For the nine months ended September 30,
|
|
|
For the six months ended September 30,
|
|
|
For the three months ended March 31,
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
|
2016
|
Net cash provided by (used in) operating activities
|
|
|
$
|
116,109
|
|
|
|
$
|
7,521
|
|
|
|
$
|
343,066
|
|
|
|
(21,367
|
)
|
|
|
$
|
(40,698
|
)
|
Purchases of property, plant and equipment
|
|
|
(34,408
|
)
|
|
|
(2,435
|
)
|
|
|
(62,671
|
)
|
|
|
(8,449
|
)
|
|
|
(5,422
|
)
|
Free cash flow (6)
|
|
|
$
|
81,701
|
|
|
|
$
|
5,086
|
|
|
|
$
|
280,395
|
|
|
|
$
|
(29,816
|
)
|
|
|
$
|
(46,120
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(6) Free cash flow is defined as net cash
provided by (used in) operating activities less purchases of
property, plant and equipment. Free cash flow is not a measure of
financial performance in accordance with GAAP, and we believe
items excluded from net cash provided by (used in) 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 (used in) 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.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WARRIOR MET COAL, INC.
|
|
CONDENSED BALANCE SHEETS
|
($ in thousands)
|
|
|
|
|
Successor
|
|
|
|
September 30, 2017
|
|
|
December 31, 2016
|
ASSETS
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
$
|
234,053
|
|
|
|
$
|
150,045
|
|
Short-term investments
|
|
|
17,501
|
|
|
|
17,501
|
|
Trade accounts receivable
|
|
|
128,541
|
|
|
|
65,896
|
|
Other receivables
|
|
|
19,881
|
|
|
|
5,901
|
|
Inventories, net
|
|
|
33,902
|
|
|
|
39,420
|
|
Prepaid expenses
|
|
|
18,958
|
|
|
|
12,010
|
|
Total current assets
|
|
|
452,836
|
|
|
|
290,773
|
|
Mineral interests, net
|
|
|
132,329
|
|
|
|
143,231
|
|
Property, plant and equipment, net
|
|
|
514,066
|
|
|
|
496,959
|
|
Other long-term assets
|
|
|
21,394
|
|
|
|
16,668
|
|
Total assets
|
|
|
$
|
1,120,625
|
|
|
|
$
|
947,631
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
Accounts payable
|
|
|
$
|
16,593
|
|
|
|
$
|
6,043
|
|
Accrued expenses
|
|
|
54,168
|
|
|
|
47,339
|
|
Other current liabilities
|
|
|
4,538
|
|
|
|
8,405
|
|
Current portion of long-term debt
|
|
|
2,936
|
|
|
|
2,849
|
|
Total current liabilities
|
|
|
78,235
|
|
|
|
64,636
|
|
Long-term debt
|
|
|
1,512
|
|
|
|
3,725
|
|
Asset retirement obligations
|
|
|
98,232
|
|
|
|
96,050
|
|
Other long-term liabilities
|
|
|
28,253
|
|
|
|
30,253
|
|
Total liabilities
|
|
|
206,232
|
|
|
|
194,664
|
|
Stockholders’ Equity (1):
|
|
|
|
|
|
|
Common stock, $0.01 par value per share (Authorized -140,000,000
shares, issued and outstanding - 53,446,284 and 53,442,532,
respectively)
|
|
|
534
|
|
|
|
533
|
|
Preferred stock, $0.01 par value per share (10,000,000 shares
authorized, no shares issued and outstanding)
|
|
|
—
|
|
|
|
—
|
|
Additional paid in capital
|
|
|
610,992
|
|
|
|
802,107
|
|
Retained earnings (accumulated deficit)
|
|
|
302,865
|
|
|
|
(49,673
|
)
|
Total stockholders’ equity
|
|
|
914,393
|
|
|
|
752,967
|
|
Total liabilities and stockholders’ equity
|
|
|
$
|
1,120,625
|
|
|
|
$
|
947,631
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) On April 12, 2017, in connection with the Company’s
initial public offering (“IPO”), Warrior Met Coal, LLC filed a
certificate of conversion, whereby Warrior Met Coal, LLC effected
a corporate conversion from a Delaware limited liability company
to a Delaware corporation and changed its name to Warrior Met
Coal, Inc. In connection with this corporate conversion, the
Company filed a certificate of incorporation. Pursuant to the
Company’s certificate of incorporation, the Company is authorized
to issue up to 140,000,000 shares of common stock, $0.01 par value
per share, and 10,000,000 shares of preferred stock, $0.01 par
value per share. The number of shares and per share amounts of
common stock have been retroactively recast to reflect the
corporate conversion.
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View source version on businesswire.com: http://www.businesswire.com/news/home/20171109006487/en/ Copyright Business Wire 2017
Source: Business Wire
(November 9, 2017 - 4:01 PM EST)
News by QuoteMedia
www.quotemedia.com
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