Met or exceeded both sales and production
volume targets for the full year
Continues to make excellent progress in
developing its world-class Blue Creek growth project, funded
through $701.1 million of cash flows from operations
Outlines guidance for 2024
Warrior Met Coal, Inc. (NYSE:HCC) (“Warrior” or the “Company”)
today announced results for the fourth quarter and full-year 2023.
Warrior is the leading dedicated U.S.-based producer and exporter
of high-quality steelmaking coal for the global steel industry.
Fourth Quarter and Full Year Highlights
- Achieved net income of $128.9 million and Adjusted EBITDA of
$163.7 million in the fourth quarter and $478.6 million and $698.9
million for the full year 2023, respectively
- Recorded 34% increase in sales volumes and 21% increase in
production volumes for the full year, run rates not seen since
2020
- Achieved record high annual production at Mine 4 of 2.5 million
short tons
- Generated $701.1 million of cash from operating activities
during 2023, enabling an all-time record high amount of capital
expenditures and mine development of $524.8 million in the growth
of the business and the early retirement of 50% of senior secured
debt.
- Made excellent progress in developing the world class Blue
Creek growth project, which remains on schedule, and invested
$127.8 million in Blue Creek for the fourth quarter and $319.1
million for the full year 2023
- Raised the quarterly dividend by 17% for the second consecutive
year and returned excess cash to stockholders in a discretionary
special dividend of $0.88 per share
- Guiding to favorable outlook in 2024
“Our fourth quarter results reflect the culmination of a highly
productive year where we made meaningful progress on strategic
priorities to build significant, sustainable shareholder value,”
said Walt Scheller, CEO of Warrior. “We were pleased to end the
year on a strong note, delivering within the top half of our full
year guidance which would have been slightly better by 129,000
short tons of shipments had our last two customer vessels made it
to the terminal on their original schedule. Moreover, as a result
of our operational expertise in combination with market pricing, we
were gratified to deliver on our financial targets and guidance for
the year. We also generated strong cash flow from operations which
allowed us to fund the 2023 investment in the world class Blue
Creek growth project from our operations, while reducing leverage
by nearly 50%.”
“We continue to make excellent progress in developing Blue
Creek,” Scheller said. “We remain on track for the first
development tons from continuous miner units in the third quarter
of 2024 and the longwall is scheduled to start up in the second
quarter of 2026. We expect approximately 200,000 short tons of
production of High Vol A coal from the continuous miner units in
2024.”
“Looking ahead to the global markets for steelmaking coal, we
believe the tightness in supply, especially of premium quality
coals such as those in our Mine 7, is supporting higher pricing.
While spot demand from our customers in the Atlantic Basin is weak,
overall demand from our contracted customers is stable and demand
continues to grow in the Pacific Basin. Our full-year outlook
encompasses this favorable landscape, and we expect that 2024 could
be another strong operational year for Warrior, driven by expected
higher coal production and sales,” Scheller concluded.
Warrior reported fourth quarter 2023 net income of $128.9
million, or $2.47 per diluted share, compared to net income of
$99.7 million, or 1.93 per diluted share, in the fourth quarter of
2022. Adjusted net income for the fourth quarter of 2023 was $2.49
per diluted share compared to an adjusted net income of $1.90 per
diluted share in the fourth quarter of 2022. The Company reported
Adjusted EBITDA of $163.7 million in the fourth quarter of 2023,
compared to Adjusted EBITDA of $147.5 million in the fourth quarter
of 2022.
For the full year, Warrior reported net income of $478.6 million
and adjusted net income of $498.9 million, or net income of $9.20
per diluted share and adjusted net income of $9.59 per diluted
share in 2023, compared to net income of $641.3 million and
adjusted net income of $666.1 million, or net income of $12.40 per
diluted share and adjusted net income of $12.88 per diluted share,
in 2022. The Company reported Adjusted EBITDA of $698.9 million for
the full year 2023 compared to $994.2 million for the full year
2022.
Operating Results Sales volumes in the fourth quarter of
2023 were 1.5 million short tons, consistent with the fourth
quarter of 2022. Sales volumes for the full year 2023 were 7.5
million short tons, or an increase of 34% compared to 2022
primarily due to continued improved performance by our rail
transportation provider and the McDuffie Terminal, which enabled
Warrior to export more product. In addition, higher production was
primarily due to both Mine No. 4 and Mine No. 7 operating at higher
capacity levels in 2023 compared to 2022, driven by additional
employees returning from the labor strike during 2023.
The Company produced 2.0 million short tons of met coal in the
fourth quarter of 2023 compared to 1.5 million short tons in the
fourth quarter of 2022. For the full year 2023, the Company
produced 7.6 million short tons, or an increase of 21% compared to
2022. Inventory levels increased to 968 thousand short tons at the
end of December 31, 2023 from 489 thousand short tons as of
September 30, 2023.
Additional Financial Results Total revenues were $363.8
million in the fourth quarter of 2023, which compares to total
revenues of $344.8 million in the fourth quarter of 2022. The
average net selling price of the Company's steelmaking coal
increased 3% from $227.21 per short ton in the fourth quarter of
2022 to $234.56 per short ton in the fourth quarter of 2023. While
the Company continued to achieve some of the highest prices for
premium Mine 7 Low Vol steelmaking coal, its Mine 4 steelmaking
coal transitioned in the second half of the year from a Mid Vol to
a High Vol A quality that typically trades at a larger discount to
the price of Mine 7 quality.
Cost of sales for the fourth quarter of 2023 was $186.8 million
compared to $180.7 million for the fourth quarter of 2022. Cash
cost of sales (free-on-board port) for the fourth quarter of 2023
were $185.0 million, or 51.5% of mining revenues, compared to
$179.2 million, or 54.3% of mining revenues for the same period of
2022. Cash cost of sales (free-on-board port) per short ton
decreased to $120.69 in the fourth quarter of 2023 from $123.40 in
the fourth quarter of 2022, primarily attributable to increased
sales volumes.
Selling, general and administrative expenses for the fourth
quarter of 2023 were $13.0 million, or 3.6% of total revenues and
were slightly higher than the same period last year of 3.4% of
total revenues, primarily due to higher employee related costs.
Depreciation and depletion costs for the fourth quarter of 2023
were $25.6 million, or 7.0% of total revenues. Warrior achieved net
interest income of $7.8 million during the fourth quarter of 2023,
compared to net interest income of $1.7 million in the fourth
quarter of 2022. Interest income earned on cash investments
exceeded interest expense on outstanding notes and equipment leases
in each quarter of 2023.
Business interruption expenses were $0.2 million in the fourth
quarter of 2023 and represent ongoing legal expenses associated
with labor negotiations even though the labor strike ended earlier
in 2023. In the prior year comparable quarter, these expenses were
$3.4 million and represented non-recurring expenses for incremental
safety, security, legal and labor negotiations, and other expenses
that were directly attributable to the labor strike. There were no
idle mine expenses in any period of 2023 and were $2.0 million in
the fourth quarter of 2022 and represented expenses incurred with
the reduced operations at the mines during the labor strike, such
as electricity, insurance and maintenance labor.
Income tax expense was $12.4 million in the fourth quarter of
2023 on income of $141.2 million primarily driven by an income tax
benefit for depletion expense and foreign-derived intangible
income. This compares to an income tax expense of $19.7 million in
the fourth quarter of 2022.
Cash Flow and Liquidity The Company generated cash flows
from operating activities in the fourth quarter of 2023 of $245.1
million, compared to $195.0 million in the fourth quarter of 2022.
Capital expenditures and mine development for the fourth quarter of
2023 were $182.5 million, primarily reflecting the development of
the Blue Creek growth project, resulting in free cash flow of $62.6
million. Capital expenditures during the fourth quarter of 2023 for
the development of Blue Creek were $127.8 million, $319.1 million
for the full year 2023 and $366.0 million project-to-date.
Net working capital, excluding cash, for the fourth quarter of
2023 decreased by $90.3 million from the third quarter of 2023,
primarily reflecting a decrease in accounts receivable due to lower
sales volumes, partially offset by higher inventories, and lower
net accounts payable and accrued expenses.
Cash flows used in financing activities for the fourth quarter
of 2023 were $11.3 million, primarily due to payments of capital
lease obligations of $7.3 million and the payment of the regular
quarterly dividend of $3.7 million.
The Company generated $701.1 million of cash flows from
operating activities for the full year 2023 compared to $841.9
million in 2022. Capital expenditures and mine development costs
for the full year 2023 were $524.8 million, including $319.1
million for the development of Blue Creek. Cash flows used in
financing activities for the full year 2023 were $265.2 million,
primarily due to the retirement of debt of $162.4 million, payment
of regular and special cash dividends of $61.1 million and payments
on capital lease obligations of $32.3 million.
The Company’s total liquidity as of December 31, 2023 was $845.6
million, consisting of cash and cash equivalents of $738.2 million
and available liquidity under its ABL Facility of $107.4 million,
net of outstanding letters of credit of $8.7 million.
Capital Allocation On February 9, 2024, the Board of
Directors (the "Board") declared a regular quarterly cash dividend
of $0.08 per share, which was an increase of 14% over the regular
cash dividend declared by the Board on October 24, 2023, totaling
approximately $4.2 million, which the Company plans to distribute
on February 26, 2024 to stockholders of record as of the close of
business on February 20, 2024. This marks the third consecutive
year the Company has raised its quarterly dividend while developing
its world class Blue Creek reserves.
In addition, on February 9, 2024, the Board declared a special
cash dividend (the "March 2024 Special Dividend") of $0.50 per
share, totaling approximately $26.3 million, which the Company
plans to distribute on March 7, 2024, to stockholders of record as
of the close of business on March 1, 2024. The Company continues to
demonstrate its previous commitment to returning excess cash to
stockholders while driving long-term growth with its investment in
the development of its Blue Creek reserves.
Any future special dividends or stock repurchases from excess
cash flows will be at the discretion of the Board and subject to
consideration of several factors including business and market
conditions, future financial performance, and other strategic
investment opportunities. The Company will also seek to optimize
its capital structure to improve returns to stockholders while
allowing flexibility for the Company to pursue very selective
strategic growth opportunities that can provide compelling
stockholder returns.
Progress at Blue Creek Warrior invested approximately
$319.1 million during 2023 on the development of the Blue Creek
reserves, which brings the project to date spending to
approximately $366.0 million. The Company expects to spend $325 to
$375 million in 2024 on the continued development of the Blue Creek
reserves. During 2023, the Company initiated important and highly
beneficial project scope changes that will require incremental
capital expenditures of $120 - $130 million over the life of the
project while lowering operating costs, increasing flexibility to
manage risks, and make better use of multi-channel transportation
methods. This amount is in addition to the originally estimated
project cost of $700 million. At the same time, the Company
indicated that it was experiencing inflationary cost increases
ranging from 25 to 35 percent in both operating and capital
expenditures in relation to labor, construction materials and
certain equipment. For now, Warrior expects this cost inflation
trend to continue during the remainder of the project development
period.
Blue Creek represents one of the last remaining untapped premium
quality High Vol A coal reserves in the U.S., which should achieve
premium prices. Warrior expects incremental annualized production
of 4.8 million short tons of premium High Vol A steelmaking coal
after the start-up of the longwall, which the Company expects will
enhance and strengthen its already strong global cost curve
positioning and deliver incremental profit margins and cash
flows.
Company Outlook The Company's outlook for 2024 is subject
to many risks that may impact performance, such as market
conditions in the steel and steelmaking coal industries and overall
global economic and competitive conditions, all as more fully
described under Forward-Looking Statements. The Company's guidance
for the full year 2024 is outlined below.
Coal sales
7.4 - 8.2 million short tons
Coal production
7.4 - 8.0 million short tons
Cash cost of sales (free-on-board
port)
$125 - $135 per short ton
Capital expenditures for sustaining
existing mines
$100 - $110 million
Blue Creek project and other discretionary
capital expenditures
$335 - $390 million
Mine development costs
$28 - $38 million
Selling, general and administrative
expenses
$55 - $65 million
Interest expense
$13 - $18 million
Interest income
$20 - $25 million
Income tax expense
14% - 18%
Key factors that may affect outlook include:
- Four planned longwall moves (Q1, Q3, and Q4 has two
moves),
- HCC index pricing, geography of sales and freight rates,
- Exclusion of other non-recurring costs,
- New labor contract, and
- Inflationary pressures.
The Company's guidance for its capital expenditures consists of
sustaining capital spending of approximately $100-$110 million,
including regulatory and gas requirements, and discretionary
capital spending of $325-$375 million for the development of the
Blue Creek reserves and $10 - $15 million for the final 4 North
bunker construction.
The Company's production guidance contains approximately 200,000
short tons of High Vol A steelmaking coal in the second half of
2024 from the continuous miner units from the Blue Creek reserves,
which are expected to be sold in 2025 when the preparation plant
comes online.
Environmental, Social and Governance Sustainability The
Company recently published its annual corporate environmental,
social and governance sustainability report for 2023, which is
located at http://www.warriormetcoal.com/corporate-sustainability/.
The report was prepared in accordance with the codified standards
of the Sustainability Accounting Standards Board. The Company is
committed to transparency and open conversations surrounding
environmental, social and governance topics. Although Warrior's
underground steelmaking coal operations have a minimal
environmental impact compared to surface-mined thermal coal, the
Company strives to be an environmental steward by focusing on
preservation of the environment, monitoring energy use, reducing
greenhouse gas (GHG) emissions and effective land reclamation.
Use of Non-GAAP Financial Measures This release contains
the use of certain non-GAAP financial measures. These non-GAAP
financial measures are provided as supplemental information for
financial measures prepared in accordance with GAAP. Management
believes that these non-GAAP financial measures provide additional
insights into the performance of the Company, and they reflect how
management analyzes Company performance and compares that
performance against other companies. These non-GAAP financial
measures may not be comparable to other similarly titled measures
used by other entities. The definition of these non-GAAP financial
measures and a reconciliation of non-GAAP to GAAP financial
measures is provided in the financial tables section of this
release.
Conference Call The Company will hold a conference call
to discuss its fourth quarter 2023 results today, February 14,
2024, at 4:30 p.m. ET. To listen to the event live or access an
archived recording, please visit
http://investors.warriormetcoal.com/. To listen to the event, live
or access an archived recording, please visit
http://investors.warriormetcoal.com/. Analysts and investors who
would like to participate in the conference call should dial
1-844-340-9047 (domestic) or 1-412-858-5206 (international) 10
minutes prior to the start time and reference the Warrior Met Coal
conference call. Telephone playback will also be available from
6:30 p.m. ET February 14, 2024, until 6:30 p.m. ET on February 21,
2024. The replay will be available by calling: 1-877-344-7529
(domestic) or 1-412-317-0088 (international) and entering passcode
4141099.
About Warrior Warrior is a U.S.-based, environmentally
and socially minded supplier to the global steel industry. It is
dedicated entirely to mining non-thermal met coal used as a
critical component of steel production by metal manufacturers in
Europe, South America and Asia. Warrior is a large-scale, low-cost
producer and exporter of premium quality met coal, also known as
hard-coking coal (“HCC”), operating highly efficient longwall
operations in its underground mines based in Alabama. The HCC that
Warrior produces from the Blue Creek coal seam contains very low
sulfur, has strong coking properties and is of a similar quality to
coal referred to as the premium HCC produced in Australia. The
premium nature of Warrior’s HCC makes it ideally suited as a base
feed coal for steel makers and results in price realizations near
the S&P Global Platts Index price. For more information, please
visit www.warriormetcoal.com.
Forward-Looking Statements This press release contains,
and the Company’s officers and representatives may from time to
time make, forward-looking statements within the meaning of Section
27A of the Securities Act of 1933, as amended and Section 21E of
the Securities Exchange Act of 1934, as amended. All statements,
other than statements of historical facts, included in this press
release that address activities, events or developments that the
Company expects, believes or anticipates will or may occur in the
future are forward-looking statements, including statements
regarding 2024 guidance, sales and production growth, ability to
maintain cost structure, demand, anticipated prices for our coal,
management of liquidity, cash flows, expenses and expected capital
expenditures and working capital, the Company's pursuit of
strategic growth opportunities, the Company's future ability to
return excess cash to stockholders, as well as statements regarding
production, inflationary pressures, the impact of planned longwall
moves, the development of the Blue Creek project and anticipated
production generated by Blue Creek, and the outcome of the ongoing
negotiations with the labor union representing certain of our
hourly employees, including any potential impact to our 2024
outlook as a result of such outcome. The words “believe,” “expect,”
“anticipate,” “plan,” “intend,” “estimate,” “project,” “target,”
“foresee,” “should,” “would,” “could,” “potential,” “outlook,”
“guidance” or other similar expressions are intended to identify
forward-looking statements. However, the absence of these words
does not mean that the statements are not forward-looking. These
forward-looking statements represent management’s good faith
expectations, projections, guidance, or beliefs concerning future
events, and it is possible that the results described in this press
release will not be achieved. These forward-looking statements are
subject to risks, uncertainties and other factors, many of which
are outside of the Company’s control, that could cause actual
results to differ materially from the results discussed in the
forward-looking statements, including, without limitation,
fluctuations or changes in the pricing or demand for the Company’s
coal (or met coal generally) by the global steel industry; the
impact of global pandemics, such as the novel coronavirus
(“COVID-19”) on its business and that of its customers, including
the risk of a decline in demand for the Company's met coal due to
the impact of any such pandemic on steel manufacturers; the impact
of inflation on the Company, the impact of geopolitical events,
including the effects of the Russia-Ukraine war and the
Israel-Hamas war; the inability of the Company to effectively
operate its mines and the resulting decrease in production; the
inability of the Company to transport its products to customers due
to rail performance issues or the impact of weather and mechanical
failures at the McDuffie Terminal at the Port of Mobile; federal
and state tax legislation; changes in interpretation or assumptions
and/or updated regulatory guidance regarding the Tax Cuts and Jobs
Act of 2017; legislation and regulations relating to the Clean Air
Act and other environmental initiatives; regulatory requirements
associated with federal, state and local regulatory agencies, and
such agencies’ authority to order temporary or permanent closure of
the Company’s mines; operational, logistical, geological, permit,
license, labor and weather-related factors, including equipment,
permitting, site access, operational risks and new technologies
related to mining and labor strikes or slowdowns; the timing and
impact of planned longwall moves; the Company’s obligations
surrounding reclamation and mine closure; inaccuracies in the
Company’s estimates of its met coal reserves; any projections or
estimates regarding Blue Creek, including the expected returns from
this project, if any, and the ability of Blue Creek to enhance the
Company's portfolio of assets, the Company's expectations regarding
its future tax rate as well as its ability to effectively utilize
its net operating losses to reduce or eliminate its cash taxes; the
Company's ability to develop Blue Creek; the Company’s ability to
develop or acquire met coal reserves in an economically feasible
manner; significant cost increases and fluctuations, and delay in
the delivery of raw materials, mining equipment and purchased
components; competition and foreign currency fluctuations;
fluctuations in the amount of cash the Company generates from
operations, including cash necessary to pay any special or
quarterly dividend; the Company’s ability to comply with covenants
in its ABL Facility or indenture relating to its senior secured
notes; integration of businesses that the Company may acquire in
the future; adequate liquidity and the cost, availability and
access to capital and financial markets; failure to obtain or renew
surety bonds on acceptable terms, which could affect the Company’s
ability to secure reclamation and coal lease obligations; costs
associated with litigation, including claims not yet asserted; and
other factors described in the Company’s Form 10-K for the year
ended December 31, 2023 and other reports filed from time to time
with the Securities and Exchange Commission (the “SEC”), which
could cause the Company’s actual results to differ materially from
those contained in any forward-looking statement. The Company’s
filings with the SEC are available on its website at
www.warriormetcoal.com and on the SEC's website at www.sec.gov.
Any forward-looking statement speaks only as of the date on
which it is made, and, except as required by law, the Company does
not undertake any obligation to update or revise any
forward-looking statement, whether as a result of new information,
future events or otherwise. New factors emerge from time to time,
and it is not possible for the Company to predict all such
factors.
WARRIOR MET COAL, INC.
CONDENSED STATEMENTS OF OPERATIONS ($ in thousands, except per
share)
For the three months
ended
December 31,
For the twelve months
ended
December 31,
2023
2022
2023
2022
Revenues:
Sales
$
359,580
$
329,914
$
1,647,992
$
1,707,579
Other revenues
4,224
14,836
28,633
31,159
Total revenues
363,804
344,750
1,676,625
1,738,738
Costs and expenses:
Cost of sales (exclusive of items shown
separately below)
186,811
180,736
910,269
710,605
Cost of other revenues (exclusive of items
shown separately below)
4,683
927
37,486
27,047
Depreciation and depletion
25,573
28,306
127,356
115,279
Selling, general and administrative
12,991
11,806
51,817
48,791
Business interruption
190
3,371
8,291
23,455
Idle mine
—
1,996
—
12,137
Total costs and expenses
230,248
227,142
1,135,219
937,314
Operating income
133,556
117,608
541,406
801,424
Interest expense
(1,647
)
(6,820
)
(17,960
)
(31,433
)
Interest income
9,464
8,531
40,699
12,438
Loss on early extinguishment of debt
—
—
(11,699
)
—
Other (expense) income
(146
)
—
(1,027
)
675
Income before income tax expense
$
141,227
$
119,319
$
551,419
$
783,104
Income tax expense
12,351
19,665
72,790
141,806
Net income
$
128,876
$
99,654
$
478,629
$
641,298
Basic and diluted net income per
share:
Net income per share—basic
$
2.48
$
1.93
$
9.21
$
12.42
Net income per share—diluted
$
2.47
$
1.93
$
9.20
$
12.40
Weighted average number of shares
outstanding—basic
$
52,019
51,654
51,973
51,622
Weighted average number of shares
outstanding—diluted
52,122
51,760
52,045
51,715
Dividends per share:
$
0.07
$
0.06
$
1.16
$
1.54
WARRIOR MET COAL, INC.
QUARTERLY SUPPLEMENTAL
FINANCIAL DATA AND RECONCILIATION OF NON-GAAP FINANCIAL
MEASURES
QUARTERLY SUPPLEMENTAL FINANCIAL
DATA:
For the three months
ended
December 31,
For the twelve months
ended
December 31,
(short tons in thousands)(1)
2023
2022
2023
2022
Tons sold
1,533
1,452
7,518
5,621
Tons produced
1,970
1,468
7,646
6,315
Average net selling price
$
234.56
$
227.21
$
219.21
$
303.79
Cash cost of sales (free on board port)
per short ton(2)
$
120.69
$
123.40
$
120.29
$
125.50
Cost of production %
61
%
60
%
60
%
53
%
Transportation and royalties %
39
%
40
%
40
%
47
%
(1) 1 short ton is equivalent to 0.907185
metric tons.
RECONCILIATION OF CASH COST OF SALES
(FREE-ON-BOARD PORT) TO COST OF SALES REPORTED UNDER U.S.
GAAP:
(In thousands)
For the three months
ended
December 31,
For the twelve months
ended
December 31,
2023
2022
2023
2022
Cost of sales
$
186,811
$
180,736
$
910,269
$
710,605
Asset retirement obligation accretion and
valuation adjustments
(490
)
(321
)
(2,109
)
(1,801
)
Stock compensation expense
(1,310
)
(1,243
)
(3,841
)
(3,379
)
Cash cost of sales (free-on-board
port)(2)
$
185,011
$
179,172
$
904,319
$
705,425
(2) Cash cost of sales (free-on-board
port) is based on reported cost of sales and includes items such as
freight, royalties, labor, fuel and other similar production and
sales cost items, and may be adjusted for other items that,
pursuant to GAAP, are classified in the Condensed Statements of
Operations as costs other than cost of sales, but relate directly
to the costs incurred to produce met coal. Our cash cost of sales
per short ton is calculated as cash cost of sales divided by the
short tons sold. Cash cost of sales per short ton is a non-GAAP
financial measure which is not calculated in conformity with U.S.
GAAP and should be considered supplemental to, and not as a
substitute or superior to financial measures calculated in
conformity with GAAP. We believe cash cost of sales per ton is a
useful measure of performance and we believe it aids some investors
and analysts in comparing us against other companies to help
analyze our current and future potential performance. Cash cost of
sales per ton may not be comparable to similarly titled measures
used by other companies.
WARRIOR MET COAL, INC.
QUARTERLY SUPPLEMENTAL FINANCIAL DATA AND RECONCILIATION OF
NON-GAAP FINANCIAL MEASURES (CONTINUED)
RECONCILIATION OF ADJUSTED EBITDA TO
AMOUNTS REPORTED UNDER U.S. GAAP:
For the three months
ended
December 31,
For the twelve months
ended
December 31,
(In thousands)
2023
2022
2023
2022
Net income
$
128,876
$
99,654
$
478,629
$
641,298
Interest (income) expense, net
(7,817
)
(1,711
)
(22,739
)
18,995
Income tax expense
12,351
19,665
72,790
141,806
Depreciation and depletion
25,573
28,306
127,356
115,279
Asset retirement obligation accretion and
valuation adjustments
1,649
(725
)
4,535
1,941
Stock compensation expense
3,767
3,371
18,300
17,621
Other non-cash accretion and valuation
adjustments
(1,036
)
(6,386
)
205
(5,344
)
Non-cash mark-to-market (gain) loss on gas
hedges
—
—
(1,227
)
27,708
Loss on early extinguishment of debt
—
—
11,699
—
Business interruption
190
3,371
8,291
23,455
Idle mine
—
1,996
—
12,137
Other expense (income)
146
—
1,027
(675
)
Adjusted EBITDA (3)
$
163,699
$
147,541
$
698,866
$
994,221
Adjusted EBITDA margin (4)
45.0
%
42.8
%
41.7
%
57.2
%
(3) Adjusted EBITDA is defined as net
income before net interest (income) expense, income tax expense,
depreciation and depletion, non-cash asset retirement obligation
accretion and valuation adjustments, non-cash stock compensation
expense, other non-cash accretion and valuation adjustments,
non-cash mark-to-market (gain) loss on gas hedges, loss on early
extinguishment of debt, business interruption expenses, idle mine
expenses and other income. Adjusted EBITDA is not a measure of
financial performance in accordance with GAAP, and we believe items
excluded from Adjusted EBITDA are significant to a reader in
understanding and assessing our financial condition. Therefore,
Adjusted EBITDA should not be considered in isolation, nor as an
alternative to net income, income from operations, cash flows from
operations or as a measure of our profitability, liquidity, or
performance under GAAP. We believe that Adjusted EBITDA presents a
useful measure of our ability to incur and service debt based on
ongoing operations. Furthermore, analogous measures are used by
industry analysts to evaluate our operating performance. Investors
should be aware that our presentation of Adjusted EBITDA may not be
comparable to similarly titled measures used by other
companies.
(4) Adjusted EBITDA margin is defined as
Adjusted EBITDA divided by total revenues.
RECONCILIATION OF ADJUSTED NET INCOME
TO AMOUNTS REPORTED UNDER U.S. GAAP:
(In thousands, except per share
amounts)
For the three months
ended
December 31,
For the twelve months
ended
December 31,
2023
2022
2023
2022
Net income
$
128,876
$
99,654
$
478,629
$
641,298
Asset retirement obligation accretion and
valuation adjustments, net of tax
1,300
(572
)
3,576
1,530
Other non-cash accretion and valuation
adjustments, net of tax
(817
)
(5,035
)
162
(4,214
)
Business interruption, net of tax
150
2,658
6,537
18,494
Idle mine, net of tax
—
1,574
—
9,570
Loss on early extinguishment of debt, net
of tax
—
—
9,225
—
Other expense (income), net of tax
115
—
810
(532
)
Adjusted net income (5)
$
129,624
$
98,279
$
498,939
$
666,146
Weighted average number of basic shares
outstanding
52,019
51,654
51,973
51,622
Weighted average number of diluted shares
outstanding
52,122
51,760
52,045
51,715
Adjusted basic net income per share:
$
2.49
$
1.90
$
9.60
$
12.90
Adjusted diluted net income per share:
$
2.49
$
1.90
$
9.59
$
12.88
(5) Adjusted net income is defined as net
income net of asset retirement obligation accretion and valuation
adjustment, other non-cash accretion and valuation adjustments,
business interruption expenses, idle mine expenses, loss on early
extinguishment of debt and other income, net of tax (based on each
respective period's effective tax rate). Adjusted net income is not
a measure of financial performance in accordance with GAAP, and we
believe items excluded from adjusted net income are significant to
the reader in understanding and assessing our results of
operations. Therefore, adjusted net income should not be considered
in isolation, nor as an alternative to net income under GAAP. We
believe adjusted net income is a useful measure of performance and
we believe it aids some investors and analysts in comparing us
against other companies to help analyze our current and future
potential performance. Adjusted net income may not be comparable to
similarly titled measures used by other companies.
WARRIOR MET COAL, INC.
CONDENSED STATEMENTS OF CASH FLOWS ($ in thousands)
For the three months
ended
December 31,
For the twelve months
ended
December 31,
2023
2022
2023
2022
OPERATING ACTIVITIES:
Net income
$
128,876
$
99,654
$
478,629
$
641,298
Non-cash adjustments to reconcile net
income to net cash provided by operating activities
31,854
50,846
216,762
283,855
Changes in operating assets and
liabilities:
Trade accounts receivable
169,899
63,346
53,601
(29,676
)
Income tax receivable
(7,833
)
—
(7,833
)
—
Inventories
(66,409
)
(6,587
)
(30,785
)
(79,845
)
Prepaid expenses and other receivables
(332
)
(766
)
(847
)
8,113
Accounts payable
(6,850
)
(12,051
)
215
(5,442
)
Accrued expenses and other current
liabilities
1,860
2,759
(8,645
)
22,803
Other
(5,974
)
(2,207
)
11
798
Net cash provided by operating
activities
245,091
194,994
701,108
841,904
INVESTING ACTIVITIES:
Purchases of property, plant and
equipment, and other
(180,854
)
(85,220
)
(491,674
)
(205,242
)
Mine development costs
(1,601
)
(13,245
)
(33,112
)
(48,935
)
Acquisition of leased mineral rights
—
—
—
(3,500
)
Acquisition, net of cash acquired
—
—
(2,421
)
2,533
Net cash used in investing activities
(182,455
)
(98,465
)
(527,207
)
(255,144
)
FINANCING ACTIVITIES:
Net cash used in financing activities
(11,250
)
(12,715
)
(265,184
)
(153,119
)
Net increase (decrease) in cash and cash
equivalents
51,386
83,814
(91,283
)
433,641
Cash and cash equivalents at beginning of
period
686,811
745,666
829,480
395,839
Cash and cash equivalents at end of
period
$
738,197
$
829,480
$
738,197
$
829,480
RECONCILIATION OF FREE CASH FLOW TO
AMOUNTS REPORTED UNDER U.S. GAAP:
(In thousands)
For the three months
ended
December 31,
For the twelve months
ended
December 31,
2023
2022
2023
2022
Net cash provided by operating
activities
$
245,091
$
194,994
$
701,108
$
841,904
Purchases of property, plant and equipment
and mine development costs
(182,455
)
(98,465
)
(524,786
)
(254,177
)
Free cash flow (6)
$
62,636
$
96,529
$
176,322
$
587,727
Free cash flow conversion (7)
38.3
%
65.4
%
25.2
%
59.1
%
(6) Free cash flow is defined as net cash
provided by operating activities less purchases of property, plant
and equipment and mine development costs. Free cash flow is not a
measure of financial performance in accordance with GAAP, and we
believe items excluded from net cash provided by operating
activities are significant to the reader in understanding and
assessing our results of operations. Therefore, free cash flow
should not be considered in isolation, nor as an alternative to net
cash provided by operating activities under GAAP. We believe free
cash flow is a useful measure of performance and we believe it aids
some investors and analysts in comparing us against other companies
to help analyze our current and future potential performance. Free
cash flow may not be comparable to similarly titled measures used
by other companies.
(7) Free cash flow conversion is defined
as free cash flow divided by Adjusted EBITDA.
WARRIOR MET COAL, INC.
CONDENSED BALANCE SHEETS ($ in thousands)
December 31,
2023
December 31,
2022
ASSETS
Current assets:
Cash and cash equivalents
$
738,197
$
829,480
Short-term investments
9,030
8,608
Trade accounts receivable
98,225
151,826
Income tax receivable
7,833
—
Inventories, net
183,949
154,039
Prepaid expenses and other receivables
31,932
29,156
Total current assets
1,069,166
1,173,109
Mineral interests, net
80,442
88,636
Property, plant and equipment, net
1,179,609
738,947
Deferred income taxes
5,854
7,572
Other long-term assets
21,987
19,831
Total assets
$
2,357,058
$
2,028,095
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Accounts payable
$
36,245
$
39,026
Accrued expenses
81,612
77,435
Short term financing lease liabilities
11,463
24,089
Other current liabilities
18,350
12,574
Total current liabilities
147,670
153,124
Long-term debt
153,023
302,588
Asset retirement obligations
71,666
64,581
Long-term financing lease liabilities
8,756
9,002
Deferred income taxes
74,531
23,378
Other long-term liabilities
26,966
27,907
Total liabilities
482,612
580,580
Stockholders’ Equity:
Common stock, $0.01 par value per share
(Authorized -140,000,000 shares, 54,240,764 issued and 52,018,923
outstanding as of December 31, 2023 and 53,875,409 issued and
51,653,568 outstanding as of December 31, 2022)
542
539
Preferred stock, $0.01 par value per share
(10,000,000 shares authorized, no shares issued and
outstanding)
—
—
Treasury stock, at cost (2,221,841 shares
as of December 31, 2023, and December 31, 2022)
(50,576
)
(50,576
)
Additional paid in capital
279,332
269,956
Retained earnings
1,645,148
1,227,596
Total stockholders’ equity
1,874,446
1,447,515
Total liabilities and stockholders’
equity
$
2,357,058
$
2,028,095
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240214579951/en/
For Investors: Dale W. Boyles, 205-554-6129
dale.boyles@warriormetcoal.com
For Media: D'Andre Wright, 205-554-6131
dandre.wright@warriormetcoal.com
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