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
endedSeptember 30,
For the six months
endedSeptember 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.
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
endedSeptember 30,
For the six months
endedSeptember 30,
For the threemonths 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
endedSeptember 30,
For the six months
endedSeptember 30,
For the threemonths 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
endedSeptember 30,
For the six months
endedSeptember 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
endedSeptember 30,
For the six months
endedSeptember 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
endedSeptember 30,
For the six months
endedSeptember 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
endedSeptember 30,
For the six months
endedSeptember 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.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20171109006487/en/
Warrior Met Coal, Inc.For Investors:Dale W. Boyles,
205-554-6129dale.boyles@warriormetcoal.comorFor Media:William
Stanhouse, 205-554-6131william.stanhouse@warriormetcoal.com
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