Achieves milestone in pending merger with
CONSOL Energy with the October expiration of HSR waiting
period
Receives all necessary international approvals to
complete the merger
Manages through extended outage of
CBT shiploader to ship 2.1 million tons of coking
coal
Declares fixed quarterly cash dividend of
$0.25 per share payable on
November 26
ST. LOUIS,
Nov. 5,
2024 /PRNewswire/ -- Arch Resources, Inc. (NYSE:
ARCH) ("Arch" or the "company") today reported a net loss of
$6.2 million, or $0.34 per diluted share, in the third quarter of
2024, compared with net income of $73.7
million, or $3.91 per diluted
share, in the prior-year period. Arch had adjusted earnings before
interest, taxes, depreciation, depletion, amortization, accretion
on asset retirement obligations, and non-operating expenses
("adjusted EBITDA")[1] of $44.2
million in the third quarter of 2024. This compares to
$126.3 million of adjusted EBITDA in
the third quarter of 2023. Revenues totaled $617.9 million for the three months ended
September 30, 2024, versus
$744.6 million in the prior-year
quarter.
In the third quarter of 2024, Arch addressed operating and
logistical challenges while laying the foundation for future value
creation, as it:
- Announced plans to merge with CONSOL Energy Inc. ("CONSOL") to
form a leading, global player in seaborne metallurgical and
high-rank thermal coal markets
- Positioned the Leer South mine for enhanced operating execution
in 2025 via the nearly completed transition to District 2
- Progressed through a stretch of challenging geology at the Leer
mine into a more advantageous reserve area that is expected to
support productive mining in 2025 and beyond
- Managed through a three-week outage of the shiploader at Curtis
Bay Terminal that reduced coking coal shipments by an estimated
200,000 tons, and
- Declared a $0.25 fixed dividend,
for a total payment of $4.6 million,
payable on November 26, 2024.
"Since the start of Q3, the Arch team has positioned the company
for long-term value creation and growth via the announcement of a
transformational merger, the near-completion of a multi-quarter
transition into more favorable geology at both our world-class
metallurgical mines, and strong continued progress in the
development of the geologically advantageous B-Seam reserves at our
export-focused, high-rank thermal West Elk mine," said Paul A. Lang, Arch's chief executive officer.
"While Q4 results will be tempered by the fact that Leer and Leer
South won't start up in their new reserve areas until mid-November,
we expect a positive step-change in operational execution for the
coking coal portfolio in 2025. At the same time, we are making
excellent progress towards completing the merger, as evidenced by
the expiration of the Hart-Scott-Rodino waiting period and the
securing of all needed international approvals, as well as our
ongoing efforts to prepare for an efficient integration that
unlocks the significant synergistic value of the combination."
Operational and Financial Update
During Q3, the metallurgical marketing and logistics team
managed through challenges associated with a three-week outage of
the shiploader at the Curtis Bay Terminal in Baltimore that constrained coking coal
shipments, which totaled 2.1 million tons. On the production front,
both the metallurgical segment's longwalls were throttled back
while development work was completed in more advantageous reserve
areas, leading to higher-than-normal unit costs in Q3. Looking
ahead, the company expects both Leer and Leer South to deliver
much-enhanced operational execution beginning in mid-Q4 as well as
throughout 2025 due to these transitions.
During the third quarter, the thermal segment returned to
profitability, buoyed by an improved performance from the Powder
River Basin operations related to cost-cutting efforts and better
alignment between stripping activities and sales volumes. The West
Elk mine operated well but its contribution continued to be
dampened by lower realizations associated with lower-priced legacy
contracts – the vast majority of which are expected to expire at
year-end 2024 – and higher costs stemming from additional
continuous miner work related to the development of the highly
attractive B-Seam reserves.
Arch generated cash provided by operating activities of
$24.9 million in Q3, which included a
working capital build of $18.2
million. Arch paid down $5.1
million in debt and ended the third quarter with
$255.9 million in cash, cash
equivalents, and short-term investments, for a net cash position of
$127.7 million.
The just-declared dividend of $0.25 per share is payable on November 26, 2024 to stockholders of record on
November 15, 2024. Arch has deployed
more than $1.3 billion under its
capital return program since its relaunch in February 2022, including $736.0 million, or $39.03 per share, in dividends and $614.7 million in common stock and convertible
notes repurchases and retirements.
Merger Update
Arch currently expects the merger with CONSOL Energy to close by
the end of the first quarter of 2025. Completion of the merger is
subject to the satisfaction of the remaining customary closing
conditions, including approval by both companies' stockholders.
Among many projected benefits, the merger:
- Joins best-in-sector operating platforms anchored by
world-class, high-quality, low-cost, long-lived longwall
coal-mining assets
- Creates a broad, diverse portfolio of coal qualities and blends
capable of serving multiple growth markets and geographies
- Expands North American logistics and export capabilities,
including ownership interests in two East Coast terminals and
longstanding relationships with West Coast and Gulf Coast
ports
- Creates visible revenue stream with meaningful upside
opportunities, balancing CONSOL's seaborne industrial business with
Arch's exposure to higher-value metallurgical coals and associated
demand dynamics
- Enables robust adjusted EBITDA and free cash flow
generation
- Is expected to unlock additional value creation from
$110 million to $140 million of annual cost savings and
synergies, and
- Creates the potential for robust capital returns and
investments in innovation and growth underpinned by
industry-leading cash generation and a strong balance sheet
Looking Ahead
"We are enthusiastic about the excellent progress the two
companies are making to bring the merger to a successful closing,
and remain focused on ensuring a speedy, efficient, and successful
integration," Lang said. "At the same time, we believe we have
positioned the metallurgical portfolio for a sustained period of
operational excellence. We are more confident than ever that the
pending merger will create a global industry leader well-equipped
to capitalize on promising market dynamics in both of its core
lines of business – global metallurgical and high-rank seaborne
thermal coal."
Given the pending merger, Arch has elected to discontinue formal
guidance at this time.
Arch Resources is a premier producer of high-quality
metallurgical products for the global steel industry. The company
operates large, modern and highly efficient mines that consistently
set the industry standard for both mine safety and environmental
stewardship. Arch Resources from time to time utilizes its website
– www.archrsc.com – as a channel of distribution for material
company information. To learn more about us and our premium
metallurgical products, go to www.archrsc.com.
Cautionary Statement Regarding Forward-Looking
Information
This press release contains "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, such as our expected future business and financial
performance, and intended to come within the safe harbor
protections provided by those sections. The words "should,"
"could," "appears," "estimates," "expects," "anticipates,"
"intends," "may," "plans," "predicts," "projects," "believes,"
"seeks," or "will" or other comparable words and phrases identify
forward-looking statements, which speak only as of the date of this
press release. Forward-looking statements by their nature address
matters that are, to different degrees, uncertain. Actual results
may vary significantly from those anticipated due to many factors,
including: the risk that an event, change or other circumstances
could give rise to the termination of the merger agreement; the
risk that a condition to closing of the merger may not be satisfied
on a timely basis or at all; the length of time necessary to close
the proposed merger; the risk that the merger may cause a loss of
management personnel and other key employees; the risk that the
businesses of the Company and CONSOL will not be integrated
successfully after the closing of the merger; the risk that the
anticipated benefits of the merger may not be realized or may take
longer to realize than expected; the risk of litigation related to
the proposed merger; loss of availability, reliability and
cost-effectiveness of transportation facilities and fluctuations in
transportation costs; operating risks beyond our control, including
risks related to mining conditions, mining, processing and plant
equipment failures or maintenance problems, weather and natural
disasters, the unavailability of raw materials, equipment or other
critical supplies, mining accidents, and other inherent risks of
coal mining that are beyond our control; inflationary pressures on
and availability and price of mining and other industrial supplies;
changes in coal prices, which may be caused by numerous factors
beyond our control, including changes in the domestic and foreign
supply of and demand for coal and the domestic and foreign demand
for steel and electricity; volatile economic and market conditions;
the effects of foreign and domestic trade policies, actions or
disputes on the level of trade among the countries and regions in
which we operate, the competitiveness of our exports, or our
ability to export; the effects of significant foreign conflicts;
the loss of, or significant reduction in, purchases by our largest
customers; our relationships with, and other conditions affecting
our customers and our ability to collect payments from our
customers; risks related to our international growth; competition,
both within our industry and with producers of competing energy
sources, including the effects from any current or future
legislation or regulations designed to support, promote or mandate
renewable energy sources; alternative steel production technologies
that may reduce demand for our coal; our ability to secure new coal
supply arrangements or to renew existing coal supply arrangements;
cyber-attacks or other security breaches that disrupt our
operations, or that result in the unauthorized release of
proprietary, confidential or personally identifiable information;
our ability to acquire or develop coal reserves in an economically
feasible manner; inaccuracies in our estimates of our coal
reserves; defects in title or the loss of a leasehold interest; the
availability and cost of surety bonds; including potential
collateral requirements; we may not have adequate insurance
coverage for some business risks; disruptions in the supply of coal
from third parties; decreases in the coal consumption of electric
power generators could result in less demand and lower prices for
thermal coal; our ability to pay dividends or repurchase shares of
our common stock according to our announced intent or at all; the
loss of key personnel or the failure to attract additional
qualified personnel and the availability of skilled employees and
other workforce factors; public health emergencies, such as
pandemics or epidemics, could have an adverse effect on our
business; existing and future legislation and regulations affecting
both our coal mining operations and our customers' coal usage,
governmental policies and taxes, including those aimed at reducing
emissions of elements such as mercury, sulfur dioxides, nitrogen
oxides, particulate matter or greenhouse gases; increased pressure
from political and regulatory authorities, along with environmental
and climate change activist groups, and lending and investment
policies adopted by financial institutions and insurance companies
to address concerns about the environmental impacts of coal
combustion; increased attention to environmental, social or
governance matters; our ability to obtain or renew various permits
necessary for our mining operations; risks related to regulatory
agencies ordering certain of our mines to be temporarily or
permanently closed under certain circumstances; risks related to
extensive environmental regulations that impose significant costs
on our mining operations, and could result in litigation or
material liabilities; the accuracy of our estimates of reclamation
and other mine closure obligations; the existence of hazardous
substances or other environmental contamination on property owned
or used by us; and risks related to tax legislation and our ability
to use net operating losses and certain tax credits. All
forward-looking statements in this press release, as well as all
other written and oral forward-looking statements attributable to
us or persons acting on our behalf, are expressly qualified in
their entirety by the cautionary statements contained in this
section and elsewhere in this press release. These factors are not
necessarily all of the important factors that could affect us.
These risks and uncertainties, as well as other risks of which we
are not aware or which we currently do not believe to be material,
may cause our actual future results to be materially different from
those expressed in our forward-looking statements. These
forward-looking statements speak only as of the date on which such
statements were made, and we do not undertake to update our
forward-looking statements, whether as a result of new information,
future events or otherwise, except as may be required by the
federal securities laws. For a description of some of the risks and
uncertainties that may affect our future results, you should see
the "Risk Factors" in Item 1A of our Annual Report on Form 10 K for
the year ended December 31, 2023 and
subsequent Quarterly Reports on Form 10 Q.
# # #
|
____________________
|
|
1 Adjusted EBITDA is defined and
reconciled in the "Reconciliation of Non-GAAP measures" in this
release.
|
|
Arch Resources, Inc.
and Subsidiaries
|
|
Condensed
Consolidated Statements of Operations
|
|
(In thousands,
except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2024
|
2023
|
|
2024
|
2023
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
Revenues
|
$
617,899
|
$
744,601
|
|
$
1,906,840
|
$
2,371,826
|
|
|
|
|
|
|
|
Costs, expenses and
other operating
|
|
|
|
|
|
|
Cost of sales
(exclusive of items shown separately below)
|
558,596
|
596,889
|
|
1,655,003
|
1,774,753
|
|
Depreciation, depletion
and amortization
|
40,890
|
36,717
|
|
118,149
|
108,273
|
|
Accretion on asset
retirement obligations
|
5,869
|
5,292
|
|
17,608
|
15,877
|
|
Selling, general and
administrative expenses
|
20,603
|
24,279
|
|
68,708
|
73,092
|
|
Merger related
costs
|
7,002
|
-
|
|
7,002
|
-
|
|
Severance costs related
to voluntary separation plan
|
6,649
|
-
|
|
6,649
|
-
|
|
Other operating income,
net
|
(5,461)
|
(2,858)
|
|
(23,854)
|
(10,037)
|
|
634,148
|
660,319
|
|
1,849,265
|
1,961,958
|
|
|
|
|
|
|
|
Income (loss) from
operations
|
(16,249)
|
84,282
|
|
57,575
|
409,868
|
|
|
|
|
|
|
|
Interest expense,
net
|
|
|
|
|
|
|
Interest
expense
|
(3,912)
|
(3,120)
|
|
(12,161)
|
(10,783)
|
|
Interest and investment
income
|
5,665
|
4,803
|
|
17,168
|
12,340
|
|
1,753
|
1,683
|
|
5,007
|
1,557
|
|
|
|
|
|
|
|
Income (loss) before
nonoperating expenses
|
(14,496)
|
85,965
|
|
62,582
|
411,425
|
|
|
|
|
|
|
|
Nonoperating
expenses
|
|
|
|
|
|
|
Non-service related
pension and postretirement benefit credits
|
1,667
|
4,507
|
|
1,096
|
5,692
|
|
Net loss resulting from
early retirement of debt
|
-
|
-
|
|
-
|
(1,126)
|
|
1,667
|
4,507
|
|
1,096
|
4,566
|
|
|
|
|
|
|
|
Income (loss) before
income taxes
|
(12,829)
|
90,472
|
|
63,678
|
415,991
|
|
(Benefit from)
provision for income taxes
|
(6,608)
|
16,781
|
|
(887)
|
66,839
|
|
|
|
|
|
|
|
Net income
(loss)
|
$
(6,221)
|
$
73,691
|
|
$
64,565
|
$
349,152
|
|
|
|
|
|
|
|
Net income (loss)
per common share
|
|
|
|
|
|
|
Basic earnings (loss)
per share
|
$
(0.34)
|
$
4.05
|
|
$
3.55
|
$
19.20
|
|
Diluted earnings (loss)
per share
|
$
(0.34)
|
$
3.91
|
|
$
3.50
|
$
18.12
|
|
|
|
|
|
|
|
Weighted average
shares outstanding
|
|
|
|
|
|
|
Basic weighted average
shares outstanding
|
18,097
|
18,187
|
|
18,180
|
18,189
|
|
Diluted weighted
average shares outstanding
|
18,097
|
18,840
|
|
18,450
|
19,270
|
|
|
|
|
|
|
|
Dividends declared per
common share
|
$
0.25
|
$
3.97
|
|
$
3.01
|
$
9.53
|
|
|
|
|
|
|
|
Adjusted EBITDA
(A)
|
$
44,161
|
$
126,291
|
|
$
206,983
|
$
534,018
|
|
|
|
(A)
|
Adjusted EBITDA is
defined and reconciled under "Reconciliation of Non-GAAP Measures"
later in this release.
|
|
Arch Resources, Inc.
and Subsidiaries
|
|
Condensed
Consolidated Balance Sheets
|
|
(In
thousands)
|
|
|
|
|
|
|
|
September
30,
|
December
31,
|
|
2024
|
2023
|
|
(Unaudited)
|
|
|
Assets
|
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
$
219,595
|
$
287,807
|
|
Short-term
investments
|
36,347
|
32,724
|
|
Restricted
cash
|
1,100
|
1,100
|
|
Trade accounts
receivable
|
239,994
|
273,522
|
|
Other
receivables
|
8,580
|
13,700
|
|
Inventories
|
235,091
|
244,261
|
|
Other current
assets
|
47,716
|
64,653
|
|
Total current
assets
|
788,423
|
917,767
|
|
|
|
|
Property, plant and
equipment, net
|
1,238,534
|
1,228,891
|
|
|
|
|
Other
assets
|
|
|
|
Deferred income
taxes
|
126,608
|
124,024
|
|
Equity
investments
|
23,088
|
22,815
|
|
Fund for asset
retirement obligations
|
147,932
|
142,266
|
|
Other noncurrent
assets
|
46,293
|
48,410
|
|
Total other
assets
|
343,921
|
337,515
|
|
Total assets
|
$
2,370,878
|
$
2,484,173
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
Current
liabilities
|
|
|
|
Accounts
payable
|
$
153,189
|
$
205,001
|
|
Accrued expenses and
other current liabilities
|
112,767
|
127,617
|
|
Current maturities of
debt
|
126,897
|
35,343
|
|
Total current
liabilities
|
392,853
|
367,961
|
|
Long-term
debt
|
-
|
105,252
|
|
Asset retirement
obligations
|
267,486
|
255,740
|
|
Accrued pension
benefits
|
816
|
878
|
|
Accrued postretirement
benefits other than pension
|
46,530
|
47,494
|
|
Accrued workers'
compensation
|
158,902
|
154,650
|
|
Other noncurrent
liabilities
|
60,337
|
72,742
|
|
Total
liabilities
|
926,924
|
1,004,717
|
|
|
|
|
Stockholders'
equity
|
|
|
|
Common Stock
|
308
|
306
|
|
Paid-in
capital
|
764,202
|
720,029
|
|
Retained
earnings
|
1,839,125
|
1,830,018
|
|
Treasury stock, at
cost
|
(1,193,884)
|
(1,109,679)
|
|
Accumulated other
comprehensive income
|
34,203
|
38,782
|
|
Total stockholders'
equity
|
1,443,954
|
1,479,456
|
|
Total liabilities and
stockholders' equity
|
$
2,370,878
|
$
2,484,173
|
|
Arch Resources, Inc.
and Subsidiaries
|
|
Condensed
Consolidated Statements of Cash Flows
|
|
(In
thousands)
|
|
|
|
|
|
|
|
Nine Months Ended
September 30,
|
|
2024
|
2023
|
|
(Unaudited)
|
|
Operating
activities
|
|
|
|
Net income
|
$
64,565
|
$
349,152
|
|
Adjustments to
reconcile to cash from operating activities:
|
|
|
|
Depreciation, depletion
and amortization
|
118,149
|
108,273
|
|
Accretion on asset
retirement obligations
|
17,608
|
15,877
|
|
Deferred income
taxes
|
(1,345)
|
66,561
|
|
Employee stock-based
compensation expense
|
15,819
|
19,699
|
|
Amortization relating
to financing activities
|
2,168
|
1,317
|
|
Gain on disposals and
divestitures, net
|
(213)
|
(714)
|
|
Reclamation work
completed
|
(6,038)
|
(17,642)
|
|
Contribution to fund
asset retirement obligations
|
(5,667)
|
(4,421)
|
|
Changes in:
|
|
|
|
Receivables
|
39,936
|
(49,950)
|
|
Inventories
|
9,169
|
(10,199)
|
|
Accounts payable,
accrued expenses and other current liabilities
|
(62,824)
|
(31,241)
|
|
Income taxes,
net
|
258
|
(999)
|
|
Other
|
20,774
|
8,105
|
|
Cash provided by
operating activities
|
212,359
|
453,818
|
|
|
|
|
Investing
activities
|
|
|
|
Capital
expenditures
|
(126,888)
|
(121,030)
|
|
Minimum royalty
payments
|
(988)
|
(1,113)
|
|
Proceeds from disposals
and divestitures
|
219
|
1,363
|
|
Purchases of short-term
investments
|
(41,397)
|
(23,386)
|
|
Proceeds from sales of
short-term investments
|
38,244
|
30,417
|
|
Investments in and
advances to affiliates, net
|
(10,330)
|
(12,210)
|
|
Cash used in investing
activities
|
(141,140)
|
(125,959)
|
|
|
|
|
Financing
activities
|
|
|
|
Proceeds from issuance
of term loan due 2025
|
20,000
|
-
|
|
Payments on term loan
due 2025
|
(6,666)
|
-
|
|
Payments on term loan
due 2024
|
(3,502)
|
(2,250)
|
|
Payments on convertible
debt
|
-
|
(58,430)
|
|
Net payments on other
debt
|
(23,717)
|
(30,568)
|
|
Debt financing
costs
|
(1,516)
|
-
|
|
Purchase of treasury
stock
|
(30,747)
|
(122,502)
|
|
Dividends
paid
|
(68,944)
|
(183,790)
|
|
Payments for taxes
related to net share settlement of equity awards
|
(24,339)
|
(27,230)
|
|
Proceeds from warrants
exercised
|
-
|
43,949
|
|
Cash used in financing
activities
|
(139,431)
|
(380,821)
|
|
|
|
|
Decrease in cash and
cash equivalents, including restricted cash
|
(68,212)
|
(52,962)
|
|
Cash and cash
equivalents, including restricted cash, beginning of
period
|
288,907
|
237,159
|
|
|
|
|
Cash and cash
equivalents, including restricted cash, end of
period
|
$
220,695
|
$
184,197
|
|
|
|
|
Cash and cash
equivalents, including restricted cash, end of
period
|
|
|
|
Cash and cash
equivalents
|
$
219,595
|
$
183,097
|
|
Restricted
cash
|
1,100
|
1,100
|
|
|
|
|
$
220,695
|
$
184,197
|
|
Arch Resources, Inc.
and Subsidiaries
|
|
Schedule of
Consolidated Debt
|
|
(In
thousands)
|
|
|
|
|
|
|
September
30,
|
December
31,
|
|
|
2024
|
2023
|
|
|
(Unaudited)
|
|
|
|
|
|
|
Term loan due 2025
($13.3 million face value)
|
|
$
13,333
|
$
-
|
|
Term loan due 2024
($0.0 million face value)
|
|
-
|
3,502
|
|
Tax exempt bonds ($98.1
million face value)
|
|
98,075
|
98,075
|
|
Other
|
|
16,812
|
40,529
|
|
Debt issuance
costs
|
|
(1,323)
|
(1,511)
|
|
|
126,897
|
140,595
|
|
Less: current
maturities of debt
|
|
126,897
|
35,343
|
|
Long-term
debt
|
|
$
-
|
$
105,252
|
|
|
|
|
|
Calculation of net
(cash) debt
|
|
|
|
|
Total debt (excluding
debt issuance costs)
|
|
$
128,220
|
$
142,106
|
|
Less liquid
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
219,595
|
287,807
|
|
Short term
investments
|
|
36,347
|
32,724
|
|
|
255,942
|
320,531
|
|
Net (cash)
debt
|
|
$ (127,722)
|
$ (178,425)
|
|
Arch Resources, Inc.
and Subsidiaries
|
|
Operational
Performance
|
|
(In millions, except
per ton data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
September 30, 2024
|
Three Months
Ended
June 30, 2024
|
Three Months
Ended
September 30, 2023
|
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
|
Metallurgical
|
|
|
|
|
|
|
|
Tons Sold
|
2.4
|
|
2.2
|
|
2.3
|
|
|
|
|
|
|
|
|
|
Segment
Sales
|
$ 282.5
|
$
115.55
|
$ 286.2
|
$
131.97
|
$
355.0
|
$ 151.33
|
|
Segment Cash Cost of
Sales
|
229.4
|
93.81
|
197.4
|
91.03
|
226.7
|
96.63
|
|
Segment Cash
Margin
|
53.1
|
21.74
|
88.8
|
40.94
|
128.3
|
54.70
|
|
|
|
|
|
|
|
|
Thermal
|
|
|
|
|
|
|
|
Tons Sold
|
13.8
|
|
11.1
|
|
16.8
|
|
|
|
|
|
|
|
|
|
Segment
Sales
|
$ 232.2
|
$ 16.86
|
$ 199.7
|
$ 18.03
|
$
281.6
|
$
16.73
|
|
Segment Cash Cost of
Sales
|
220.4
|
16.00
|
200.1
|
18.07
|
259.0
|
15.39
|
|
Segment Cash
Margin
|
11.8
|
0.86
|
(0.4)
|
(0.04)
|
22.7
|
1.34
|
|
|
|
|
|
|
|
|
Total Segment Cash
Margin
|
$ 64.9
|
|
$ 88.4
|
|
$
151.0
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
(20.6)
|
|
(22.5)
|
|
(24.3)
|
|
|
Other
|
(0.1)
|
|
(5.9)
|
|
(0.4)
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$ 44.2
|
|
$ 59.9
|
|
$
126.3
|
|
|
Arch Resources, Inc.
and Subsidiaries
|
|
Reconciliation of
NON-GAAP Measures
|
|
(In thousands,
except per ton data)
|
|
|
|
|
|
|
Included in the
accompanying release, we have disclosed certain non-GAAP measures
as defined by Regulation G.
The following reconciles these items to the most directly
comparable GAAP measure.
|
|
|
|
|
|
|
Non-GAAP Segment
coal sales per ton sold
|
|
|
|
|
|
|
Non-GAAP Segment coal
sales per ton sold is calculated as segment coal sales revenues
divided by segment tons sold. Segment coal sales revenues are
adjusted for transportation costs, and may be adjusted for other
items that, due to generally accepted accounting principles, are
classified in "Other operating income, net" on the Consolidated
Statements of Operations, but relate to price protection on the
sale of coal. Segment coal sales per ton sold is not a measure of
financial performance in accordance with generally accepted
accounting principles. We believe segment coal sales per ton sold
provides useful information to investors as it better reflects our
revenue for the quality of coal sold and our operating results by
including all income from coal sales. The adjustments made to
arrive at these measures are significant in understanding and
assessing our financial condition. Therefore, segment coal sales
revenues should not be considered in isolation, nor as an
alternative to coal sales revenues under generally accepted
accounting principles.
|
|
|
|
|
|
|
Quarter ended
September 30, 2024
|
Metallurgical
|
Thermal
|
All
Other
|
Consolidated
|
|
(In
thousands)
|
|
|
|
|
|
GAAP Revenues in the
Condensed Consolidated Statements of Operations
|
$
361,916
|
$
255,983
|
$
-
|
$
617,899
|
|
Less: Adjustments to
reconcile to Non-GAAP Segment coal sales
revenue
|
|
|
|
|
|
Transportation
costs
|
79,370
|
23,802
|
-
|
103,172
|
|
Non-GAAP Segment coal
sales revenues
|
$
282,546
|
$
232,181
|
$
-
|
$
514,727
|
|
Tons
sold
|
2,445
|
13,769
|
|
|
|
Coal sales per ton
sold
|
$
115.55
|
$
16.86
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter ended
June 30, 2024
|
Metallurgical
|
Thermal
|
All
Other
|
Consolidated
|
|
(In
thousands)
|
|
|
|
|
|
GAAP Revenues in the
Condensed Consolidated Statements of Operations
|
$
375,958
|
$
232,793
|
$
-
|
$
608,751
|
|
Less: Adjustments to
reconcile to Non-GAAP Segment coal sales
revenue
|
|
|
|
|
|
Transportation
costs
|
89,794
|
33,126
|
-
|
122,920
|
|
Non-GAAP Segment coal
sales revenues
|
$
286,164
|
$
199,667
|
$
-
|
$
485,831
|
|
Tons
sold
|
2,168
|
11,073
|
|
|
|
Coal sales per ton
sold
|
$
131.97
|
$
18.03
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter ended
September 30, 2023
|
Metallurgical
|
Thermal
|
All
Other
|
Consolidated
|
|
(In
thousands)
|
|
|
|
|
|
GAAP Revenues in the
Condensed Consolidated Statements of Operations
|
$
432,835
|
$
311,766
|
$
-
|
$
744,601
|
|
Less: Adjustments to
reconcile to Non-GAAP Segment coal sales
revenue
|
|
|
|
|
|
Transportation
costs
|
77,806
|
30,128
|
-
|
107,934
|
|
Non-GAAP Segment coal
sales revenues
|
$
355,029
|
$
281,638
|
$
-
|
$
636,667
|
|
Tons
sold
|
2,346
|
16,831
|
|
|
|
Coal sales per ton
sold
|
$
151.33
|
$
16.73
|
|
|
|
Arch Resources, Inc.
and Subsidiaries
|
|
Reconciliation of
NON-GAAP Measures
|
|
(In thousands,
except per ton data)
|
|
|
|
|
|
|
Non-GAAP Segment
cash cost per ton sold
|
|
|
|
|
|
|
Non-GAAP Segment cash
cost per ton sold is calculated as segment cash cost of coal sales
divided by segment tons sold. Segment cash cost of coal sales is
adjusted for transportation costs, and may be adjusted for other
items that, due to generally accepted accounting principles, are
classified in "Other operating income, net" on the Consolidated
Statements of Operations, but relate directly to the costs incurred
to produce coal. Segment cash cost per ton sold is not a measure of
financial performance in accordance with generally accepted
accounting principles. We believe segment cash cost per ton sold
better reflects our controllable costs and our operating results by
including all costs incurred to produce coal. The adjustments made
to arrive at these measures are significant in understanding and
assessing our financial condition. Therefore, segment cash cost of
coal sales should not be considered in isolation, nor as an
alternative to cost of sales under generally accepted accounting
principles.
|
|
|
|
|
|
|
Quarter ended
September 30, 2024
|
Metallurgical
|
Thermal
|
All
Other
|
Consolidated
|
|
(In
thousands)
|
|
|
|
|
|
GAAP Cost of sales in
the Condensed Consolidated Statements of Operations
|
$
308,758
|
$
243,257
|
$
6,581
|
$
558,596
|
|
Less: Adjustments to
reconcile to Non-GAAP Segment cash cost of coal
sales
|
|
|
|
|
|
Diesel fuel risk
management derivative settlements classified in "Other operating
income, net"
|
-
|
(900)
|
-
|
(900)
|
|
Transportation
costs
|
79,370
|
23,802
|
-
|
103,172
|
|
Cost of coal sales from
idled or otherwise disposed operations
|
-
|
-
|
4,646
|
4,646
|
|
Other (operating
overhead, certain actuarial, etc.)
|
-
|
-
|
1,935
|
1,935
|
|
Non-GAAP Segment cash
cost of coal sales
|
$
229,388
|
$
220,355
|
$
-
|
$
449,743
|
|
Tons sold
|
2,445
|
13,769
|
|
|
|
Cash cost per ton
sold
|
$
93.81
|
$
16.00
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter ended
June 30, 2024
|
Metallurgical
|
Thermal
|
All
Other
|
Consolidated
|
|
(In
thousands)
|
|
|
|
|
|
GAAP Cost of sales in
the Condensed Consolidated Statements of Operations
|
$
287,187
|
$
232,298
|
$
9,199
|
$
528,684
|
|
Less: Adjustments to
reconcile to Non-GAAP Segment cash cost of coal
sales
|
|
|
|
|
|
Diesel fuel risk
management derivative settlements classified in "Other operating
income, net"
|
-
|
(900)
|
-
|
(900)
|
|
Transportation
costs
|
89,794
|
33,126
|
-
|
122,920
|
|
Cost of coal sales from
idled or otherwise disposed operations
|
-
|
-
|
4,692
|
4,692
|
|
Other (operating
overhead, certain actuarial, etc.)
|
-
|
-
|
4,507
|
4,507
|
|
Non-GAAP Segment cash
cost of coal sales
|
$
197,393
|
$
200,072
|
$
-
|
$
397,465
|
|
Tons sold
|
2,168
|
11,073
|
|
|
|
Cash cost per ton
sold
|
$
91.03
|
$
18.07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter ended
September 30, 2023
|
Metallurgical
|
Thermal
|
All
Other
|
Consolidated
|
|
(In
thousands)
|
|
|
|
|
|
GAAP Cost of sales in
the Condensed Consolidated Statements of Operations
|
$
304,511
|
$
288,518
|
$
3,860
|
$
596,889
|
|
Less: Adjustments to
reconcile to Non-GAAP Segment cash cost of coal
sales
|
|
|
|
|
|
Diesel fuel risk
management derivative settlements classified in "Other operating
income, net"
|
-
|
(564)
|
-
|
(564)
|
|
Transportation
costs
|
77,806
|
30,128
|
-
|
107,934
|
|
Cost of coal sales from
idled or otherwise disposed operations
|
-
|
-
|
1,184
|
1,184
|
|
Other (operating
overhead, certain actuarial, etc.)
|
-
|
-
|
2,676
|
2,676
|
|
Non-GAAP Segment cash
cost of coal sales
|
$
226,705
|
$
258,954
|
$
-
|
$
485,659
|
|
Tons sold
|
2,346
|
16,831
|
|
|
|
Cash cost per ton
sold
|
$
96.63
|
$
15.39
|
|
|
|
Arch Resources, Inc.
and Subsidiaries
|
|
Reconciliation of
Non-GAAP Measures
|
|
(In
thousands)
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA is
defined as net income attributable to the Company before the effect
of net interest expense, income taxes, depreciation, depletion and
amortization, accretion on asset retirement obligations and
nonoperating expenses. Adjusted EBITDA may also be adjusted for
items that may not reflect the trend of future results by excluding
transactions that are not indicative of the Company's core
operating performance.
|
|
|
Adjusted EBITDA is not
a measure of financial performance in accordance with generally
accepted accounting principles, and items excluded from Adjusted
EBITDA are significant 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 generally accepted
accounting principles. The Company uses adjusted EBITDA to measure
the operating performance of its segments and allocate resources to
the segments. Furthermore, analogous measures are used by industry
analysts and investors 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. The table below shows how we calculate Adjusted
EBITDA.
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2024
|
2023
|
|
2024
|
2023
|
|
(Unaudited)
|
|
(Unaudited)
|
|
Net income
(loss)
|
$
(6,221)
|
$
73,691
|
|
$
64,565
|
$
349,152
|
|
(Benefit from)
provision for income taxes
|
(6,608)
|
16,781
|
|
(887)
|
66,839
|
|
Interest expense,
net
|
(1,753)
|
(1,683)
|
|
(5,007)
|
(1,557)
|
|
Depreciation, depletion
and amortization
|
40,890
|
36,717
|
|
118,149
|
108,273
|
|
Accretion on asset
retirement obligations
|
5,869
|
5,292
|
|
17,608
|
15,877
|
|
Merger related
costs
|
7,002
|
-
|
|
7,002
|
-
|
|
Severance cost related
to voluntary separation plan
|
6,649
|
-
|
|
6,649
|
-
|
|
Non-service related
pension and postretirement benefit credits
|
(1,667)
|
(4,507)
|
|
(1,096)
|
(5,692)
|
|
Net loss resulting from
early retirement of debt
|
-
|
-
|
|
-
|
1,126
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
44,161
|
$
126,291
|
|
$
206,983
|
$
534,018
|
|
EBITDA from idled or
otherwise disposed operations
|
4,101
|
30
|
|
11,493
|
8,726
|
|
Selling, general and
administrative expenses
|
20,603
|
24,279
|
|
68,708
|
73,092
|
|
Other
|
(1,851)
|
1,095
|
|
(1,360)
|
7,189
|
|
|
|
|
|
|
|
Segment Adjusted EBITDA
from coal operations
|
$
67,014
|
$
151,695
|
|
$
285,824
|
$
623,025
|
|
|
|
|
|
|
|
Segment Adjusted
EBITDA
|
|
|
|
|
|
|
Metallurgical
|
54,167
|
128,322
|
|
270,978
|
524,218
|
|
Thermal
|
12,847
|
23,373
|
|
14,846
|
98,807
|
|
|
|
|
|
|
|
Total Segment Adjusted
EBITDA
|
$
67,014
|
$
151,695
|
|
$
285,824
|
$
623,025
|
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SOURCE Arch Resources, Inc.