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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Warrior Met Coal Inc | NYSE:HCC | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.74 | 1.13% | 66.23 | 66.60 | 64.10 | 65.68 | 621,683 | 01:00:00 |
ý
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the quarterly period ended June 30, 2017
|
|
or
|
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the transition period from to
|
Delaware
(State or other jurisdiction of
incorporation or organization)
|
|
81-0706839
(I.R.S Employer
Identification No.)
|
16243 Highway 216
Brookwood, Alabama
(Address of principal executive offices)
|
|
35444
(Zip Code)
|
Large accelerated filer
o
|
|
Accelerated filer
o
|
|
Non-accelerated filer
ý
(Do not check if a
smaller reporting company)
|
|
Smaller reporting company
o
|
Emerging growth company
ý
|
|
|
|
|
|
|
|
|
||
|
||
|
||
|
||
|
||
Item 1A
.
|
||
•
|
successful implementation of our business strategies;
|
•
|
a substantial or extended decline in pricing or demand for met coal;
|
•
|
global steel demand and the downstream impact on met coal prices;
|
•
|
inherent difficulties and challenges in the coal mining industry that are beyond our control;
|
•
|
geologic, equipment, permitting, site access, operational risks and new technologies related to mining;
|
•
|
impact of weather and natural disasters on demand and production;
|
•
|
our relationships with, and other conditions affecting, our customers;
|
•
|
unavailability of, or price increases in, the transportation of our met coal;
|
•
|
competition and foreign currency fluctuations;
|
•
|
our ability to comply with covenants in our asset-based revolving credit facility (“ABL Facility”);
|
•
|
significant cost increases and fluctuations, and delay in the delivery of raw materials, mining equipment and purchased components;
|
•
|
work stoppages, negotiation of labor contracts, employee relations and workforce availability;
|
•
|
adequate liquidity and the cost, availability and access to capital and financial markets;
|
•
|
any consequences related to our transfer restrictions under our certificate of incorporation;
|
•
|
our obligations surrounding reclamation and mine closure;
|
•
|
inaccuracies in our estimates of our met coal reserves;
|
•
|
our ability to develop or acquire met coal reserves in an economically feasible manner;
|
•
|
challenges to our licenses, permits and other authorizations;
|
•
|
challenges associated with environmental, health and safety laws and regulations;
|
•
|
regulatory requirements associated with federal, state and local regulatory agencies, and such agencies’ authority to order temporary or permanent closure of our mines;
|
•
|
climate change concerns and our operations’ impact on the environment;
|
•
|
failure to obtain or renew surety bonds on acceptable terms, which could affect our ability to secure reclamation and coal lease obligations;
|
•
|
costs associated with our pension and benefits, including post-retirement benefits;
|
•
|
costs associated with our workers’ compensation benefits;
|
•
|
litigation, including claims not yet asserted;
|
•
|
our ability to continue paying our quarterly dividend or pay any special dividend;
|
•
|
our ability to commence a stock repurchase program; and
|
•
|
terrorist attacks or security threats, including cybersecurity threats;
|
|
|
Successor
|
||||||
|
|
June 30, 2017 (Unaudited)
|
|
December 31,
2016 |
||||
|
|
|
|
|
||||
ASSETS
|
|
|
|
|
||||
Current assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
155,792
|
|
|
$
|
150,045
|
|
Short-term investments
|
|
17,501
|
|
|
17,501
|
|
||
Trade accounts receivable
|
|
92,551
|
|
|
65,896
|
|
||
Other receivables
|
|
4,700
|
|
|
5,901
|
|
||
Inventories, net
|
|
75,286
|
|
|
39,420
|
|
||
Prepaid expenses
|
|
16,684
|
|
|
12,010
|
|
||
Total current assets
|
|
362,514
|
|
|
290,773
|
|
||
Mineral interests, net
|
|
134,597
|
|
|
143,231
|
|
||
Property, plant and equipment, net
|
|
495,072
|
|
|
496,959
|
|
||
Other long-term assets
|
|
18,178
|
|
|
16,668
|
|
||
Total assets
|
|
$
|
1,010,361
|
|
|
$
|
947,631
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
||||
Current liabilities:
|
|
|
|
|
||||
Accounts payable
|
|
$
|
13,821
|
|
|
$
|
6,043
|
|
Accrued expenses
|
|
61,791
|
|
|
47,339
|
|
||
Other current liabilities
|
|
4,622
|
|
|
8,405
|
|
||
Current portion of long-term debt
|
|
2,906
|
|
|
2,849
|
|
||
Total current liabilities
|
|
83,140
|
|
|
64,636
|
|
||
Long-term debt
|
|
2,257
|
|
|
3,725
|
|
||
Deferred income taxes
|
|
1,944
|
|
|
1,944
|
|
||
Asset retirement obligations
|
|
97,708
|
|
|
96,050
|
|
||
Other long-term liabilities
|
|
28,192
|
|
|
28,309
|
|
||
Total liabilities
|
|
213,241
|
|
|
194,664
|
|
||
Commitments and contingencies (Note 9)
|
|
|
|
|
||||
Stockholders’ Equity:
|
|
|
|
|
||||
Common stock, $0.01 par value per share (Authorized-140,000,000 shares, issued and outstanding-53,444,810 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
|
|
610,759
|
|
|
802,107
|
|
||
Retained earnings (accumulated deficit)
|
|
185,827
|
|
|
(49,673
|
)
|
||
Total stockholders’ equity
|
|
797,120
|
|
|
752,967
|
|
||
Total liabilities and stockholders’ equity
|
|
$
|
1,010,361
|
|
|
$
|
947,631
|
|
|
Successor
(Unaudited) |
|
|
Predecessor
|
||||||||||||
|
For the three
months ended June 30, |
|
For the six
months ended June 30, |
|
|
For the three
months ended March 31, |
||||||||||
|
2017
|
|
2016
|
|
2017
|
|
|
2016
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
|
||||||||
Sales
|
$
|
351,788
|
|
|
$
|
85,415
|
|
|
$
|
592,844
|
|
|
|
$
|
65,154
|
|
Other revenues
|
11,582
|
|
|
6,059
|
|
|
24,490
|
|
|
|
6,229
|
|
||||
Total revenues
|
363,370
|
|
|
91,474
|
|
|
617,334
|
|
|
|
71,383
|
|
||||
Costs and expenses:
|
|
|
|
|
|
|
|
|
||||||||
Cost of sales (exclusive of items shown separately below)
|
160,152
|
|
|
103,866
|
|
|
266,296
|
|
|
|
72,297
|
|
||||
Cost of other revenues (exclusive of items shown separately below)
|
7,795
|
|
|
5,126
|
|
|
15,974
|
|
|
|
4,698
|
|
||||
Depreciation and depletion
|
19,650
|
|
|
15,821
|
|
|
34,232
|
|
|
|
28,958
|
|
||||
Selling, general and administrative
|
8,660
|
|
|
5,815
|
|
|
13,830
|
|
|
|
9,008
|
|
||||
Other postretirement benefits
|
—
|
|
|
—
|
|
|
—
|
|
|
|
6,160
|
|
||||
Restructuring costs
|
—
|
|
|
—
|
|
|
—
|
|
|
|
3,418
|
|
||||
Transaction and other costs
|
3,837
|
|
|
10,475
|
|
|
12,873
|
|
|
|
—
|
|
||||
Total costs and expenses
|
200,094
|
|
|
141,103
|
|
|
343,205
|
|
|
|
124,539
|
|
||||
Operating income (loss)
|
163,276
|
|
|
(49,629
|
)
|
|
274,129
|
|
|
|
(53,156
|
)
|
||||
Interest expense, net
|
(642
|
)
|
|
(434
|
)
|
|
(1,250
|
)
|
|
|
(16,562
|
)
|
||||
Reorganization items, net
|
—
|
|
|
—
|
|
|
—
|
|
|
|
7,920
|
|
||||
Income (loss) before income tax expense
|
162,634
|
|
|
(50,063
|
)
|
|
272,879
|
|
|
|
(61,798
|
)
|
||||
Income tax expense
|
32,769
|
|
|
—
|
|
|
34,706
|
|
|
|
18
|
|
||||
Net income (loss)
|
$
|
129,865
|
|
|
$
|
(50,063
|
)
|
|
$
|
238,173
|
|
|
|
$
|
(61,816
|
)
|
Basic and diluted net income per share:
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss) per share—basic and diluted
|
$
|
2.46
|
|
|
$
|
(0.95
|
)
|
|
$
|
4.52
|
|
|
|
|
||
Weighted average number of shares outstanding—basic and diluted
|
52,721
|
|
|
52,640
|
|
|
52,702
|
|
|
|
|
|||||
Dividends per share:
|
$
|
0.05
|
|
|
$
|
—
|
|
|
$
|
3.61
|
|
|
|
|
|
Common Stock
|
|
Preferred Stock
|
|
Additional Paid in Capital
|
|
Retained Earnings (Accumulated
deficit)
|
|
Total
Stockholders’
Equity
|
||||||||||
Balance at December 31, 2016 (Successor)
|
$
|
533
|
|
|
$
|
—
|
|
|
$
|
802,107
|
|
|
$
|
(49,673
|
)
|
|
$
|
752,967
|
|
Net income
|
—
|
|
|
—
|
|
|
|
|
|
238,173
|
|
|
238,173
|
|
|||||
Dividends paid ($3.61 per share)
|
—
|
|
|
—
|
|
|
(190,000
|
)
|
|
(2,673
|
)
|
|
(192,673
|
)
|
|||||
Purchase accounting measurement period adjustment (See Note 3)
|
—
|
|
|
—
|
|
|
(3,525
|
)
|
|
—
|
|
|
(3,525
|
)
|
|||||
Equity award modification (See Note 10)
|
—
|
|
|
—
|
|
|
1,255
|
|
|
—
|
|
|
1,255
|
|
|||||
Stock compensation
|
—
|
|
|
—
|
|
|
922
|
|
|
—
|
|
|
922
|
|
|||||
Common shares issued
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|||||
Balance at June 30, 2017 (Successor) (Unaudited)
|
$
|
534
|
|
|
$
|
—
|
|
|
$
|
610,759
|
|
|
$
|
185,827
|
|
|
$
|
797,120
|
|
|
Successor
(Unaudited)
|
|
|
Predecessor
|
||||||||||||
|
For the three
months ended June 30, |
|
For the six months ended June 30,
|
|
|
For the three
months ended March 31, |
||||||||||
|
2017
|
|
2016
|
|
2017
|
|
|
2016
|
||||||||
OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss)
|
$
|
129,865
|
|
|
$
|
(50,063
|
)
|
|
$
|
238,173
|
|
|
|
$
|
(61,816
|
)
|
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
|
|
|
|
|
|
|
|
|
||||||||
Depreciation and depletion
|
19,650
|
|
|
15,821
|
|
|
34,232
|
|
|
|
28,958
|
|
||||
Deferred income tax expense
|
—
|
|
|
—
|
|
|
—
|
|
|
|
18
|
|
||||
Stock based compensation expense
|
922
|
|
|
125
|
|
|
922
|
|
|
|
390
|
|
||||
Non-cash reorganization items
|
—
|
|
|
—
|
|
|
—
|
|
|
|
(18,882
|
)
|
||||
Amortization of debt issuance costs and debt discount, net
|
427
|
|
|
376
|
|
|
889
|
|
|
|
10,164
|
|
||||
Accretion of asset retirement obligations
|
904
|
|
|
735
|
|
|
1,899
|
|
|
|
1,169
|
|
||||
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Trade accounts receivable
|
3,629
|
|
|
(28,041
|
)
|
|
(26,655
|
)
|
|
|
15,097
|
|
||||
Other receivables
|
1,442
|
|
|
124
|
|
|
1,200
|
|
|
|
1,070
|
|
||||
Inventories
|
(4,339
|
)
|
|
14,677
|
|
|
(32,931
|
)
|
|
|
677
|
|
||||
Prepaid expenses and other current assets
|
(2,507
|
)
|
|
(9,675
|
)
|
|
(4,674
|
)
|
|
|
13,020
|
|
||||
Accounts payable
|
(2,459
|
)
|
|
(7,349
|
)
|
|
7,778
|
|
|
|
(15,338
|
)
|
||||
Accrued expenses and other current liabilities
|
17,072
|
|
|
28,593
|
|
|
10,017
|
|
|
|
(16,083
|
)
|
||||
Other
|
(3,202
|
)
|
|
5,789
|
|
|
(3,893
|
)
|
|
|
858
|
|
||||
Net cash provided by (used in) operating activities
|
161,404
|
|
|
(28,888
|
)
|
|
226,957
|
|
|
|
(40,698
|
)
|
||||
INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
||||||||
Purchase of property, plant and equipment
|
(16,885
|
)
|
|
(6,014
|
)
|
|
(28,263
|
)
|
|
|
(5,422
|
)
|
||||
Proceeds from sale of property, plant and equipment
|
—
|
|
|
34
|
|
|
—
|
|
|
|
—
|
|
||||
Cash paid for acquisition, net of cash acquired
|
—
|
|
|
(24,107
|
)
|
|
—
|
|
|
|
—
|
|
||||
Proceeds from termination of life insurance policy
|
—
|
|
|
12,857
|
|
|
—
|
|
|
|
—
|
|
||||
Purchases of short-term investments
|
—
|
|
|
(17,000
|
)
|
|
—
|
|
|
|
—
|
|
||||
Net cash used in investing activities
|
(16,885
|
)
|
|
(34,230
|
)
|
|
(28,263
|
)
|
|
|
(5,422
|
)
|
||||
FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
||||||||
Dividends paid
|
(2,673
|
)
|
|
—
|
|
|
(192,673
|
)
|
|
|
—
|
|
||||
Proceeds from Rights Offering
|
—
|
|
|
200,000
|
|
|
—
|
|
|
|
—
|
|
||||
Proceeds from issuance of debt
|
—
|
|
|
—
|
|
|
—
|
|
|
|
15,723
|
|
||||
Retirements of debt
|
(766
|
)
|
|
(765
|
)
|
|
(1,531
|
)
|
|
|
(285
|
)
|
||||
Net cash transfers to Parent
|
—
|
|
|
—
|
|
|
—
|
|
|
|
(13,290
|
)
|
||||
Debt issuance costs paid
|
—
|
|
|
(4,515
|
)
|
|
—
|
|
|
|
(8,388
|
)
|
||||
Net cash provided by (used in) financing activities
|
(3,439
|
)
|
|
194,720
|
|
|
(194,204
|
)
|
|
|
(6,240
|
)
|
||||
Net increase (decrease) in cash and cash equivalents and restricted cash
|
141,080
|
|
|
131,602
|
|
|
4,490
|
|
|
|
(52,360
|
)
|
||||
Cash and cash equivalents and restricted cash at beginning of period
|
16,066
|
|
|
—
|
|
|
152,656
|
|
|
|
84,462
|
|
||||
Cash and cash equivalents and restricted cash at end of period
|
$
|
157,146
|
|
|
$
|
131,602
|
|
|
$
|
157,146
|
|
|
|
$
|
32,102
|
|
|
Successor
|
||||||
|
June 30, 2017
|
|
December 31,
2016
|
||||
Cash and cash equivalents
|
$
|
155,792
|
|
|
$
|
150,045
|
|
Restricted cash included in other long-term assets
|
1,354
|
|
|
2,611
|
|
||
Total cash and cash equivalents and restricted cash included in the Statements of Cash Flows
|
$
|
157,146
|
|
|
$
|
152,656
|
|
Final purchase price:
|
|
||
Cash paid
|
$
|
50,830
|
|
Fair value of First Lien Obligations relinquished in exchange for net assets of the Predecessor
|
598,607
|
|
|
Total purchase price
|
$
|
649,437
|
|
|
|
Predecessor
|
||||||
|
|
For the three months ended
March 31, 2016
|
||||||
(in thousands)
|
|
As
reported
|
|
Pro forma
|
||||
Revenue
|
|
$
|
71,383
|
|
|
$
|
71,383
|
|
Net loss
|
|
$
|
(61,816
|
)
|
|
$
|
(31,759
|
)
|
|
Successor
|
||||||
|
June 30, 2017
|
|
December 31, 2016
|
||||
Coal
|
$
|
52,738
|
|
|
$
|
18,788
|
|
Raw materials, parts, supplies and other, net
|
22,548
|
|
|
20,632
|
|
||
Total inventories, net
|
$
|
75,286
|
|
|
$
|
39,420
|
|
|
Successor
(Unaudited) |
||||||||||
|
For the three
months ended June 30, |
|
For the six
months ended June 30, |
||||||||
|
2017
|
|
2016
|
|
2017
|
||||||
Numerator:
|
|
|
|
|
|
||||||
Net income (loss)
|
$
|
129,865
|
|
|
$
|
(50,063
|
)
|
|
$
|
238,173
|
|
Denominator:
|
|
|
|
|
|
||||||
Weighted-average shares used to compute net income (loss) per share—basic and diluted
|
52,721
|
|
|
52,640
|
|
|
52,702
|
|
|||
Net income (loss) per share—basic and diluted
|
$
|
2.46
|
|
|
$
|
(0.95
|
)
|
|
$
|
4.52
|
|
|
|
Successor
|
||||||||||||||
|
|
Fair Value Measurements as of June 30, 2017 Using:
|
||||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
||||||||
Natural gas swap contracts
|
|
$
|
—
|
|
|
$
|
440
|
|
|
$
|
—
|
|
|
$
|
440
|
|
|
|
Successor
|
||||||||||||||
|
|
Fair Value Measurements as of December 31, 2016 Using:
|
||||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Natural gas swap contracts
|
|
$
|
—
|
|
|
$
|
3,784
|
|
|
$
|
—
|
|
|
$
|
3,784
|
|
|
Predecessor
|
||
|
For the three months
ended March 31, 2016
|
||
Professional fees
|
(10,962
|
)
|
|
Rejected executory contracts, leases and other
|
18,882
|
|
|
Reorganization items, net
|
$
|
7,920
|
|
|
Successor
|
|
|
Predecessor
|
||||||||||||
|
For the three
months ended June 30, |
|
For the six months ended June 30,
|
|
|
For the three
months ended March 31, |
||||||||||
|
2017
|
|
2016
|
|
2017
|
|
|
2016
|
||||||||
Revenues
|
|
|
|
|
|
|
|
|
||||||||
Mining
|
$
|
351,788
|
|
|
$
|
85,415
|
|
|
$
|
592,844
|
|
|
|
$
|
65,154
|
|
All other
|
11,582
|
|
|
6,059
|
|
|
24,490
|
|
|
|
6,229
|
|
||||
Total revenues
|
$
|
363,370
|
|
|
$
|
91,474
|
|
|
$
|
617,334
|
|
|
|
$
|
71,383
|
|
|
Successor
|
|
|
Predecessor
|
|||||||||||
|
For the three
months ended June 30, |
|
For the six months ended June 30,
|
|
|
For the three
months ended March 31, |
|||||||||
|
2017
|
|
2016
|
|
2017
|
|
|
2016
|
|||||||
Capital Expenditures
|
|
|
|
|
|
|
|
|
|||||||
Mining
|
16,093
|
|
|
$
|
5,343
|
|
|
$
|
26,586
|
|
|
|
$
|
4,588
|
|
All other
|
792
|
|
|
671
|
|
|
1,677
|
|
|
|
834
|
|
|||
Total capital expenditures
|
16,885
|
|
|
$
|
6,014
|
|
|
$
|
28,263
|
|
|
|
$
|
5,422
|
|
|
Successor
|
|
|
Predecessor
|
||||||||||||
|
For the three
months ended June 30, |
|
For the six months ended June 30,
|
|
|
For the three
months ended March 31, |
||||||||||
|
2017
|
|
2016
|
|
2017
|
|
|
2016
|
||||||||
Segment Adjusted EBITDA
|
$
|
191,636
|
|
|
$
|
(18,451
|
)
|
|
$
|
326,548
|
|
|
|
$
|
(7,143
|
)
|
Other revenues
|
11,582
|
|
|
6,059
|
|
|
24,490
|
|
|
|
6,229
|
|
||||
Cost of other revenues
|
(7,795
|
)
|
|
(5,126
|
)
|
|
(15,974
|
)
|
|
|
(4,698
|
)
|
||||
Depreciation and depletion
|
(19,650
|
)
|
|
(15,821
|
)
|
|
(34,232
|
)
|
|
|
(28,958
|
)
|
||||
Selling, general and administrative
|
(8,660
|
)
|
|
(5,815
|
)
|
|
(13,830
|
)
|
|
|
(9,008
|
)
|
||||
Other postretirement benefits
|
—
|
|
|
—
|
|
|
—
|
|
|
|
(6,160
|
)
|
||||
Restructuring charges
|
—
|
|
|
—
|
|
|
—
|
|
|
|
(3,418
|
)
|
||||
Transaction and other costs
|
(3,837
|
)
|
|
(10,475
|
)
|
|
(12,873
|
)
|
|
|
—
|
|
||||
Interest expense, net
|
(642
|
)
|
|
(434
|
)
|
|
(1,250
|
)
|
|
|
(16,562
|
)
|
||||
Reorganization items, net
|
—
|
|
|
—
|
|
|
—
|
|
|
|
7,920
|
|
||||
Income tax expense
|
(32,769
|
)
|
|
—
|
|
|
(34,706
|
)
|
|
|
(18
|
)
|
||||
Net income (loss)
|
$
|
129,865
|
|
|
$
|
(50,063
|
)
|
|
$
|
238,173
|
|
|
|
$
|
(61,816
|
)
|
|
Successor
(Unaudited) |
|
|
Predecessor
|
||||||||||||
|
For the three
months ended June 30, |
|
For the six
months ended June 30, |
|
|
For the three
months ended March 31, |
||||||||||
|
2017
|
|
2016
|
|
2017
|
|
|
2016
|
||||||||
(in thousands)
|
|
|
|
|
||||||||||||
Segment Adjusted EBITDA
|
$
|
191,636
|
|
|
$
|
(18,451
|
)
|
|
$
|
326,548
|
|
|
|
$
|
(7,143
|
)
|
Metric tons sold
|
1,762
|
|
|
1,022
|
|
|
2,784
|
|
|
|
777
|
|
||||
Metric tons produced
|
1,732
|
|
|
828
|
|
|
3,195
|
|
|
|
801
|
|
||||
Average selling price per metric ton
|
$
|
199.65
|
|
|
$
|
83.57
|
|
|
$
|
212.94
|
|
|
|
$
|
83.85
|
|
Cash cost of sales per metric ton
|
$
|
90.62
|
|
|
$
|
68.14
|
|
|
$
|
95.30
|
|
|
|
$
|
69.74
|
|
Adjusted EBITDA
|
$
|
188,482
|
|
|
$
|
8,073
|
|
|
$
|
323,947
|
|
|
|
$
|
(9,048
|
)
|
•
|
our operating performance as compared to the operating performance of other companies in the coal industry, without regard to financing methods, historical cost basis or capital structure;
|
•
|
the ability of our assets to generate sufficient cash flow to pay distributions;
|
•
|
our ability to incur and service debt and fund capital expenditures; and
|
•
|
the viability of acquisitions and other capital expenditure projects and the returns on investment of various investment opportunities.
|
•
|
our operating performance as compared to the operating performance of other companies in the coal industry, without regard to financing methods, historical cost basis or capital structure; and
|
•
|
the viability of acquisitions and other capital expenditure projects and the returns on investment of various investment opportunities.
|
|
Successor
(Unaudited) |
|
|
Predecessor
|
||||||||||||
|
For the three
months ended June 30, |
|
For the six
months ended June 30, |
|
|
For the three
months ended March 31, |
||||||||||
|
2017
|
|
2016
|
|
2017
|
|
|
2016
|
||||||||
(in thousands)
|
|
|
|
|
||||||||||||
Cost of sales
|
$
|
160,152
|
|
|
$
|
103,866
|
|
|
$
|
266,296
|
|
|
|
$
|
72,297
|
|
Asset retirement obligation accretion
|
(401
|
)
|
|
(267
|
)
|
|
(882
|
)
|
|
|
(93
|
)
|
||||
Stock compensation expense
|
(75
|
)
|
|
—
|
|
|
(75
|
)
|
|
|
—
|
|
||||
Mine No. 4 idle costs
(1)
|
—
|
|
|
(5,342
|
)
|
|
—
|
|
|
|
(10,173
|
)
|
||||
VEBA contribution
(2)
|
—
|
|
|
(25,000
|
)
|
|
—
|
|
|
|
—
|
|
||||
Other (operating overhead, etc.)
|
—
|
|
|
(3,614
|
)
|
|
—
|
|
|
|
(7,843
|
)
|
||||
Cash cost of sales
|
$
|
159,676
|
|
|
$
|
69,643
|
|
|
$
|
265,339
|
|
|
|
$
|
54,188
|
|
(1)
|
Represents idle costs incurred, such as electricity, insurance and maintenance labor. This mine was idled in early 2016 and restarted in August 2016.
|
(2)
|
We entered into a new initial collective bargaining agreement with the United Mine Workers Association ("UMWA") pursuant to which we agreed to contribute $25.0 million to a Voluntary Employees' Beneficiary Association ("VEBA") trust formed and administered by the UMWA.
|
•
|
our operating performance as compared to the operating performance of other companies in the coal industry, without regard to financing methods, historical cost basis or capital structure; and
|
•
|
the viability of acquisitions and other capital expenditure projects and the returns on investment of various investment opportunities.
|
|
Successor
(Unaudited) |
|
|
Predecessor
|
||||||||||||
|
For the three
months ended June 30, |
|
For the six
months ended June 30, |
|
|
For the three
months ended March 31, |
||||||||||
|
2017
|
|
2016
|
|
2017
|
|
|
2016
|
||||||||
|
|
|
|
|
||||||||||||
Net income (loss)
|
$
|
129,865
|
|
|
$
|
(50,063
|
)
|
|
$
|
238,173
|
|
|
|
$
|
(61,816
|
)
|
Interest expense, net
|
642
|
|
|
434
|
|
|
1,249
|
|
|
|
16,562
|
|
||||
Income tax expense
|
32,769
|
|
|
—
|
|
|
34,706
|
|
|
|
18
|
|
||||
Depreciation and depletion
|
19,650
|
|
|
15,821
|
|
|
34,232
|
|
|
|
28,958
|
|
||||
Asset retirement obligation accretion
(1)
|
797
|
|
|
939
|
|
|
1,792
|
|
|
|
1,169
|
|
||||
Stock compensation expense
(2)
|
922
|
|
|
125
|
|
|
922
|
|
|
|
390
|
|
||||
Transaction and other costs
(3)
|
3,837
|
|
|
10,475
|
|
|
12,873
|
|
|
|
—
|
|
||||
Reorganization items, net
(4)
|
—
|
|
|
—
|
|
|
—
|
|
|
|
(7,920
|
)
|
||||
Restructuring costs
(5)
|
—
|
|
|
—
|
|
|
—
|
|
|
|
3,418
|
|
||||
Mine No. 4 idle costs
(6)
|
—
|
|
|
5,342
|
|
|
—
|
|
|
|
10,173
|
|
||||
VEBA contribution
(7)
|
—
|
|
|
25,000
|
|
|
—
|
|
|
|
—
|
|
||||
Adjusted EBITDA
|
$
|
188,482
|
|
|
$
|
8,073
|
|
|
$
|
323,947
|
|
|
|
$
|
(9,048
|
)
|
(1)
|
Represents non-cash accretion expense associated with our asset retirement obligations.
|
(2)
|
Represents non-cash stock compensation expense associated with equity awards.
|
(3)
|
Represents non-recurring costs incurred by the Company in connection with our IPO.
|
(4)
|
Represents expenses and income directly associated with the Predecessor’s Chapter 11 Cases (as defined in Note 1 and Note 13 to the condensed financial statements).
|
(5)
|
Represents cost and expenses in connection with workforce reductions at Mine No. 4 and Mine No. 7 and corporate headquarters. (See Note 14 to the condensed financial statements)
|
(6)
|
Represents idle costs incurred, such as electricity, insurance and maintenance labor. This mine was idled in early 2016 and restarted in August 2016.
|
(7)
|
We entered into a new initial collective bargaining agreement with the UMWA pursuant to which we agreed to contribute $25.0 million to a VEBA trust formed and administered by the UMWA.
|
|
Successor
|
|||||
|
For the three months ended June 30,
|
|||||
(in thousands)
|
2017
|
|
2016
|
|||
Revenues:
|
|
|
|
|||
Sales
|
$
|
351,788
|
|
|
85,415
|
|
Other revenues
|
11,582
|
|
|
6,059
|
|
|
Total revenues
|
363,370
|
|
|
91,474
|
|
|
Costs and expenses:
|
|
|
|
|||
Cost of sales (exclusive of items shown separately below)
|
160,152
|
|
|
103,866
|
|
|
Cost of other revenues (exclusive of items shown separately below)
|
7,795
|
|
|
5,126
|
|
|
Depreciation and depletion
|
19,650
|
|
|
15,821
|
|
|
Selling, general and administrative
|
8,660
|
|
|
5,815
|
|
|
Transaction and other costs
|
3,837
|
|
|
10,475
|
|
|
Total costs and expenses
|
200,094
|
|
|
141,103
|
|
|
Operating income
|
163,276
|
|
|
(49,629
|
)
|
|
Interest expense, net
|
(642
|
)
|
|
(434
|
)
|
|
Income before income taxes
|
162,634
|
|
|
(50,063
|
)
|
|
Income tax expense
|
32,769
|
|
|
—
|
|
|
Net income
|
$
|
129,865
|
|
|
(50,063
|
)
|
|
Successor
|
||||||
|
For the three months ended June 30,
|
||||||
|
2017
|
|
2016
|
||||
Met Coal (metric tons in thousands)
|
|
|
|
||||
Metric tons sold
|
1,762
|
|
|
1,022
|
|
||
Metric tons produced
|
1,732
|
|
|
828
|
|
||
Average selling price per metric ton
|
$
|
199.65
|
|
|
$
|
83.57
|
|
Cash cost of sales per metric ton
|
$
|
90.62
|
|
|
$
|
68.14
|
|
|
Successor
|
|
|
|||
(in thousands)
|
For the
six months
ended
June 30,
2017
(Unaudited)
|
|
% of
Total
Revenues
|
|||
Revenues:
|
|
|
|
|||
Sales
|
$
|
592,844
|
|
|
96.0
|
%
|
Other revenues
|
24,490
|
|
|
4.0
|
%
|
|
Total revenues
|
617,334
|
|
|
100.0
|
%
|
|
Costs and expenses:
|
|
|
|
|||
Cost of sales (exclusive of items shown separately below)
|
266,296
|
|
|
43.1
|
%
|
|
Cost of other revenues (exclusive of items shown separately below)
|
15,974
|
|
|
2.6
|
%
|
|
Depreciation and depletion
|
34,232
|
|
|
5.5
|
%
|
|
Selling, general and administrative
|
13,830
|
|
|
2.2
|
%
|
|
Transaction and other costs
|
12,873
|
|
|
2.1
|
%
|
|
Total costs and expenses
|
343,205
|
|
|
55.6
|
%
|
|
Operating income
|
274,129
|
|
|
44.4
|
%
|
|
Interest expense, net
|
(1,250
|
)
|
|
(0.2
|
)%
|
|
Income before income taxes
|
272,879
|
|
|
44.2
|
%
|
|
Income tax expense
|
34,706
|
|
|
5.6
|
%
|
|
Net income
|
$
|
238,173
|
|
|
38.6
|
%
|
|
Successor
|
||
|
For the
six months
ended
June 30,
2017
(Unaudited)
|
||
Met Coal (metric tons in thousands)
|
|
||
Metric tons sold
|
2,784
|
|
|
Metric tons produced
|
3,195
|
|
|
Average selling price per metric ton
|
$
|
212.94
|
|
Cash cost of sales per metric ton
|
$
|
95.30
|
|
|
Predecessor
|
|
|
|||
(in thousands)
|
For the
three
months
ended
March 31,
2016
|
|
% of
Total
Revenues
|
|||
Revenues:
|
|
|
|
|||
Sales
|
$
|
65,154
|
|
|
91.3
|
%
|
Other revenues
|
6,229
|
|
|
8.7
|
%
|
|
Total revenues
|
71,383
|
|
|
100.0
|
%
|
|
Costs and expenses:
|
|
|
|
|||
Cost of sales (exclusive of items shown separately below)
|
72,297
|
|
|
101.3
|
%
|
|
Cost of other revenues (exclusive of items shown separately below)
|
4,698
|
|
|
6.6
|
%
|
|
Depreciation and depletion
|
28,958
|
|
|
40.6
|
%
|
|
Selling, general and administrative
|
9,008
|
|
|
12.6
|
%
|
|
Other postretirement benefits
|
6,160
|
|
|
8.6
|
%
|
|
Restructuring cost
|
3,418
|
|
|
4.8
|
%
|
|
Total costs and expenses
|
124,539
|
|
|
174.5
|
%
|
|
Operating loss
|
(53,156
|
)
|
|
(74.5
|
)%
|
|
Interest expense, net
|
(16,562
|
)
|
|
(23.2
|
)%
|
|
Reorganization items, net
|
7,920
|
|
|
11.1
|
%
|
|
Loss before income taxes
|
(61,798
|
)
|
|
(86.6
|
)%
|
|
Income tax expense
|
18
|
|
|
—
|
|
|
Net loss
|
$
|
(61,816
|
)
|
|
(86.6
|
)%
|
|
Predecessor
|
||
|
For the
three months
ended
March 31,
2016
|
||
Met Coal (metric tons in thousands)
|
|
||
Metric tons sold
|
777
|
|
|
Metric tons produced
|
801
|
|
|
Average selling price per metric ton
|
$
|
83.85
|
|
Cash cost of sales per metric ton
|
$
|
69.74
|
|
|
Successor
(Unaudited) |
|
|
Predecessor
|
||||||||||||
|
For the three
months ended June 30, |
|
For the six
months ended June 30, |
|
|
For the three
months ended March 31, |
||||||||||
|
2017
|
|
2016
|
|
2017
|
|
|
2016
|
||||||||
|
|
|
|
|
||||||||||||
Net cash provided by (used in) operating activities
|
$
|
161,404
|
|
|
$
|
(28,888
|
)
|
|
$
|
226,957
|
|
|
|
$
|
(40,698
|
)
|
Net cash used in investing activities
|
(16,885
|
)
|
|
(34,230
|
)
|
|
(28,263
|
)
|
|
|
(5,422
|
)
|
||||
Net cash provided by (used in) financing activities
|
(3,439
|
)
|
|
194,720
|
|
|
(194,204
|
)
|
|
|
(6,240
|
)
|
||||
Net increase (decrease) in cash and cash equivalents and restricted cash
|
$
|
141,080
|
|
|
$
|
131,602
|
|
|
$
|
4,490
|
|
|
|
$
|
(52,360
|
)
|
Exhibit
Number |
|
Description
|
3.1
|
|
Certificate of Incorporation of Warrior Met Coal, Inc. (incorporated by reference to Exhibit 3.1 to the Registrant's Current Report on Form S-8 (File No. 333-217389) filed with the Commission on April 19, 2017).
|
|
|
|
3.2
|
|
Bylaws of Warrior Met Coal, Inc. (incorporated by reference to Exhibit 3.2 to the Registrant's Current Report on Form S-8 (File No. 333-217389) filed with the Commission on April 19, 2017).
|
|
|
|
10.1*
|
|
Amendment No. 3 to Asset-Based Revolving Credit Agreement, dated as of May 15, 2017, to the Asset-Based Revolving Credit Agreement, dated as of April 1, 2016, among Warrior Met Coal, Inc. and certain of its subsidiaries, as borrowers, the guarantors party thereto, Citibank, N.A., as administrative agent and collateral agent, each lender providing additional commitment pursuant to the Amendment, as commitment increase lenders, and the other lenders party to the Credit Agreement, as existing lenders.
|
|
|
|
10.2*
|
|
Registration Rights Agreement, dated as of April 19, 2017, among Warrior Met Coal, Inc. and certain of its equity holders party thereto.
|
|
|
|
10.3†
|
|
Form of Warrior Met Coal, Inc. 2017 Equity Incentive Plan Restricted Stock Unit Award Agreement (incorporated by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K (File No. 001-38061) filed with the Commission on June 5, 2017).
|
|
|
|
31.1*
|
|
Certification of Chief Executive Officer Pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended.
|
|
|
|
31.2*
|
|
Certification of Chief Financial Officer Pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended.
|
|
|
|
32.1**
|
|
Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18. U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
95*
|
|
Mine Safety Disclosures Pursuant to Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K (17 CFR 299.104)
|
|
|
|
101*
|
|
XBRL (Extensible Business Reporting Language) - The following materials from Warrior Met Coal, Inc.'s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2017, formatted in XBRL (eXtensible Business Reporting Language): (i) the Condensed Balance Sheets, (ii) the Condensed Statements of Operations, (iii) the Condensed Statements of Changes in Stockholders' Equity, (v) the Condensed Statements of Cash Flows, and (vi) Notes to Condensed Financial Statements.
|
|
*
|
Filed herewith.
|
**
|
Furnished herewith.
|
†
|
Management contract, compensatory plan or arrangement.
|
|
Warrior Met Coal, Inc.
|
||
|
|
|
|
|
By:
|
|
/s/ Dale W. Boyles
|
|
|
|
Dale W. Boyles
|
|
|
|
Chief Financial Officer (on behalf of the registrant and as Principal Financial and Accounting Officer)
|
|
|
|
|
|
|
|
Date: August 3, 2017
|
Exhibit
Number |
|
Description
|
3.1
|
|
Certificate of Incorporation of Warrior Met Coal, Inc. (incorporated by reference to Exhibit 3.1 to the Registrant's Current Report on Form S-8 (File No. 333-217389) filed with the Commission on April 19, 2017).
|
|
|
|
3.2
|
|
Bylaws of Warrior Met Coal, Inc. (incorporated by reference to Exhibit 3.2 to the Registrant's Current Report on Form S-8 (File No. 333-217389) filed with the Commission on April 19, 2017).
|
|
|
|
10.1*
|
|
Amendment No. 3 to Asset-Based Revolving Credit Agreement, dated as of May 15, 2017, to the Asset-Based Revolving Credit Agreement, dated as of April 1, 2016, among Warrior Met Coal, Inc. and certain of its subsidiaries, as borrowers, the guarantors party thereto, Citibank, N.A., as administrative agent and collateral agent, each lender providing additional commitment pursuant to the Amendment, as commitment increase lenders, and the other lenders party to the Credit Agreement, as existing lenders.
|
|
|
|
10.2*
|
|
Registration Rights Agreement, dated as of April 19, 2017, among Warrior Met Coal, Inc. and certain of its equity holders party thereto.
|
|
|
|
10.3†
|
|
Form of Warrior Met Coal, Inc. 2017 Equity Incentive Plan Restricted Stock Unit Award Agreement (incorporated by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K (File No. 001-38061) filed with the Commission on June 5, 2017).
|
|
|
|
31.1*
|
|
Certification of Chief Executive Officer Pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended.
|
|
|
|
31.2*
|
|
Certification of Chief Financial Officer Pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended.
|
|
|
|
32.1**
|
|
Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18. U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
95*
|
|
Mine Safety Disclosures Pursuant to Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K (17 CFR 299.104)
|
|
|
|
101*
|
|
XBRL (Extensible Business Reporting Language) - The following materials from Warrior Met Coal, Inc.'s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2017, formatted in XBRL (eXtensible Business Reporting Language): (i) the Condensed Balance Sheets, (ii) the Condensed Statements of Operations, (iii) the Condensed Statements of Changes in Stockholders' Equity, (v) the Condensed Statements of Cash Flows, and (vi) Notes to Condensed Financial Statements.
|
|
*
|
Filed herewith.
|
**
|
Furnished herewith.
|
†
|
Management contract, compensatory plan or arrangement.
|
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