LEXINGTON, Ky., Nov. 4, 2024
/PRNewswire/ -- Ramaco Resources, Inc. (NASDAQ: METC, METCB,
"Ramaco" or the "Company"), is a leading operator and developer of
high-quality, low-cost metallurgical coal in Central Appalachia and future developer of
rare earth and critical minerals in Wyoming. Today it reported financial results
for the three months and nine months ended September 30, 2024.
THIRD QUARTER 2024 HIGHLIGHTS
- For the quarter ended September 30,
2024, the Company had adjusted earnings before interest,
taxes, depreciation, amortization, certain non-operating expenses,
and equity-based compensation ("Adjusted EBITDA", a non-GAAP
measure), of $23.6 million, compared
to $28.8 million in the second
quarter of 2024. (See "Reconciliation of Non-GAAP Measures"
below.)
- For the quarter ended September 30,
2024, the Company had net income of $(0.2) million, compared to $5.5 million in the second quarter of 2024 and
$19.5 million in the third quarter of
2023. Class A diluted EPS was $(0.03)
for the quarter ended September 30,
2024, compared to $0.08 for
the quarter ended June 30, 2024 and
$0.40 for the quarter ended
September 30, 2023. Excluding the
one-time closure of the Company's Knox Creek Jawbone mine
(discussed below), net income would have been approximately
$1 million and Class A diluted EPS
would have been $0.00.
- Non-GAAP cash cost per ton sold declined quarterly by
$6 per ton in the third quarter of
2024 to $102 per ton, as production
increased by 8% to 972,000 tons sequentially despite one fewer work
week in the third quarter. (See "Reconciliation of Non-GAAP
Measures" below.) Furthermore, non-GAAP cash costs per ton sold
were below $100 per ton in both
August and September, as our low-cost Ram No. 3 mine and the third
section at our Stonecoal Alma mine reached full production. Third
quarter of 2024 cash costs have declined by $16 per ton since first quarter of 2024 cash
costs.
- Due to both improved productivity and continued increases in
production, third quarter sales of 1,023,000 tons and third quarter
production of 972,000 tons were both quarterly records.
- U.S. metallurgical coal indices fell $15 per ton, or 7% on average in the third
quarter of 2024 versus the second quarter, and $25 per ton, or 12% versus the third quarter of
2023. Year to date indices have fallen by $85 per ton or 32%. Despite these declines,
non-GAAP cash margins per ton sold1 this quarter
remained at $34 per ton, or 25%, down
just $1 per ton sequentially, as a
result of the Company's solid operational
performance.
|
____________________
|
|
1
|
Non-GAAP cash margin
per ton sold is a non-GAAP measure that is equal to Non-GAAP
revenue per ton sold (FOB mine) minus Non-GAAP cash cost per ton
sold (FOB mine). Management believes these measures allow us to
more effectively monitor changes in coal prices and costs from
period to period by excluding certain items which are beyond our
control. Please see "Reconciliation of Non-GAAP Measures" for more
information.
|
|
|
MARKET COMMENTARY / 2025 OUTLOOK
Sales and Marketing:
- For 2024, total sales commitments are 4.1 million tons as of
September 30, which equates to more
than 100% of the high end of 2024 production guidance. 1.3 million
tons are committed to North American customers at an average
realized fixed price of $168 per ton.
In addition, 2.0 million already shipped tons were committed to
seaborne customers at an average realized index-based fixed price
of $135 per ton. Overall, through the
third quarter 3.3 million tons have been committed at an
average realized price of $148 per
ton, excluding the impact of any demurrage. The Company has 0.8
million tons of unpriced index export business committed for
delivery in the fourth quarter of 2024.
- For 2025, total sales commitments are now 2.7 million tons
as of early November, of which 1.6 million tons are fixed price at
$152 per ton sold to mostly North
American customers. As of this date, a portion of the Company's
higher priced specialty coal has not yet been committed, in-line
with traditional customer sales cadence. We anticipate these future
sales will raise the total 2025 fixed price average.
Production:
- The Company's four main production growth initiatives for
2024 remain on track and on budget. These include:
- The addition of 600,000 combined annualized high vol tons
from the Elk Creek complex's Ram 3
surface / highwall mine and the third section at the Stonecoal Alma
mine. Both of these mines were at full production as of
September 2024.
- The commission of the prep plant at Maben in late October, in-line with
expectations. This will reduce trucking costs at this complex by
approximately $40 per ton.
- The addition of 300,000 tons of annualized low vol
production at the third section at the Berwind mine. First production should commence
before year-end 2024.
- The Company anticipates average annual mine costs of
$90-95 per ton on a combined basis at
all these new mines.
- The Company began proactively reducing higher cost
production in the current pricing environment. In October, the Knox
Creek Jawbone mine was closed, which was both nearing end of mine
life and the Company's only loss making mine.
- On a monthly basis, mine costs dropped from $120 per ton in March to $93 per ton in September or roughly a 25% decline
throughout the year.
Guidance:
- Overall production and sales guidance is being reduced by
0.2 million tons at the midpoint to 3.7 – 3.9 million tons and 3.9
– 4.1 million tons, respectively.
- These reductions in guidance will have a minimal impact to
overall earnings. The Company's updated guidance can be seen in the
"Financial Guidance" section of this press release.
- The midpoint of full-year 2024 cash cost guidance is being
reduced to $106 – $109 per ton sold versus the prior $105 – $111 per
ton. In line with this updated cash cost guidance, overall mine
costs on a normalized basis are anticipated to exit the year below
the $100 per ton range. After
adjusting for two weeks of vacation periods in the fourth quarter,
the Company anticipates cash costs to be similar in both the third
and fourth quarter of 2024.
- The high-end of 2024 sales guidance remains at roughly a 5
million ton per annum exit run rate.
- The midpoint of cash selling, general, and administrative
guidance is reduced by 10%, from $40
million to $36 million.
- The Company continues to progress on additional mining and
testing at its rare earth and critical mineral Brook Mine in
Sheridan, Wyoming. We anticipate
that The Fluor Corporation will provide a preliminary
techno-economic analysis of the project in early December. Fluor
will also be engaged in the future design and engineering for the
commercial demonstration processing facility which Ramaco hopes to
begin constructing in 2025.
MANAGEMENT COMMENTARY
Randall Atkins, Ramaco Resources'
Chairman and Chief Executive Officer commented, "The story backdrop
behind Ramaco's and the entire met coal industry's results this
year is directly tied to the continuing export of China's overproduction of steel, both to the
developed and developing world. This has led world steel companies
to both cut back on their own production and to reduce the price
they are willing to pay for their met coal feedstock.
Despite that macro headwind, Ramaco's third quarter operational
results were our strongest operational quarter of the year. In
simple terms, we acted on those areas we could control and
succeeded in both reducing costs and increasing production for the
second consecutive quarter. We anticipate the same positive
operational progress next quarter as we end the year.
Our financial results were lower this quarter than in the second
quarter due to the $15 per ton
sequential decline in U.S. met coal indices impacting revenue. Both
the U.S. low vol and high vol indices fell quarterly by roughly 7%
on average in the third quarter and by roughly 32% since the start
of the year. Despite this continued decline in pricing, we both
produced and shipped a record amount of coal in the third
quarter.
Our strong operational and productivity execution also led to
another large sequential decline in cash costs that averaged in the
mid $90 per ton range for both August
and September. Indeed, our mine costs have declined by roughly 25%
through the year. Cash margins per ton also held steady near the
$34 per ton level or 25% in both the
second and third quarters despite declining prices.
We expect operational results should again improve in the fourth
quarter, as our production and sales continue to grow. We
anticipate a sales increase in the fourth quarter to provide a
year-end exit run rate in excess of 5 million tons at the high end
of guidance, with cash costs also below $100 per ton on a normalized basis, excluding the
vacation periods.
Our four main 2024 growth initiatives remain both on track and
on budget.
- The high vol additions at our Elk
Creek complex should ultimately add roughly 600,000
annualized tons to overall 2024 Elk Creek production. These are
from the Ram 3 surface / highwall mine and the third section at the
Stonecoal Alma mine, which were both fully online as of
September.
- The prep plant at our low vol Maben complex was commissioned on time and on
budget at the end of October and will reduce current trucking costs
by approximately $40 per ton at this
complex.
- The addition in the fourth quarter of the third section at the
main Berwind low vol mine will
ultimately add roughly 300,000 annualized tons of production.
- Importantly, all of these new mines are anticipated to have
average mine costs in the $90-95 per
ton range on a combined basis.
On the supply side, there was perhaps a silver lining to the
continued decline in met coal pricing. Higher cost U.S. met coal
production is beginning to come offline and rationalize. U.S. Mine
Safety & Health Administration data suggests that third quarter
U.S. metallurgical coal production fell by more than 8%
sequentially. This would equate to a 6+ million-ton annual decline.
Absent meaningful pricing improvement we anticipate production will
continue to decline further in the fourth quarter. These
dislocations may create opportunities for us as we move forward. We
are already now seeing it on the hiring front.
On the demand side, as we look ahead to 2025 it is possible that
Chinese steel exports may be restricted in many world markets by
tariffs. This may boost steel and met coal pricing in our
traditional markets. The Chinese government may also enact more
aggressive fiscal stimulus measures, which might have similar
potential to improve pricing. We shall wait and see.
I am pleased to report on how our forward 2025 sales book has
been filled so far. Total 2025 sales commitments are now up to 2.7
million tons, of which 1.6 million tons are fixed price at
$152 per ton to mostly North American
customers. In the near future we expect also to settle the
remainder of our traditional higher-priced annual specialty coal
domestic business for 2025.
On our rare earth and critical minerals front at the Brook Mine
in Wyoming, we continue to make
strong progress. As an observation, the testing complexity of
critical mineral commercial development is very different from
metallurgical coal. We are fortunate to have an array of
experienced groups to assist us which are involved in our rare
earth testing, mine planning and processing design.
We are in the advanced stages of completing our preliminary
techno-economic report with the Fluor Corporation. We expect it to
be finalized shortly to review at our Board meeting in early
December. Lastly, we continue to plan toward commencement of the
construction of our rare earth demonstration facility in mid to
late 2025. We expect to make further announcements on this overall
progress after the Board meeting.
In summary, we expect to exit the year on a strong note with
both record annual sales and production and even lower normalized
mine costs. We are now well positioned on forward coal sales into
2025 and look forward to hopefully stronger seasonal pricing
markets as we start the year. Our rare earth development remains a
major unique transformational opportunity as we methodically move
toward hopefully beginning to realize its commercial potential in
the new year. Overall, we continue to transition into becoming an
even larger low cost met coal producer, with the hopeful addition
of an exciting rare earth and critical mineral future
potential."
Key operational and financial metrics are presented below
(unaudited):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Key Metrics
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3Q24
|
|
2Q24
|
Chg.
|
3Q23
|
Chg.
|
|
2024 YTD
|
|
2023 YTD
|
Chg.
|
|
Total Tons Sold
('000)
|
|
1,023
|
|
|
915
|
12 %
|
|
996
|
3 %
|
|
|
2,867
|
|
|
2,467
|
16 %
|
|
Revenue
($mm)
|
$
|
167.4
|
|
$
|
155.3
|
8 %
|
$
|
187.0
|
(10) %
|
|
$
|
495.4
|
|
$
|
490.8
|
1 %
|
|
Cost of Sales
($mm)
|
$
|
134.7
|
|
$
|
122.8
|
10 %
|
$
|
144.6
|
(7) %
|
|
$
|
397.2
|
|
$
|
354.4
|
12 %
|
|
Non-GAAP Revenue of
Tons Sold ($/Ton) 1
|
$
|
136
|
|
$
|
143
|
(5) %
|
$
|
157
|
(13) %
|
|
$
|
145
|
|
$
|
169
|
(14) %
|
|
Non-GAAP Cash Cost of
Sales ($/Ton) 1
|
$
|
102
|
|
$
|
108
|
(6) %
|
$
|
113
|
(10) %
|
|
$
|
109
|
|
$
|
111
|
(2) %
|
|
Non-GAAP Cash Margins
on Tons Sold ($/Ton)
|
$
|
34
|
|
$
|
35
|
(3) %
|
$
|
44
|
(23) %
|
|
$
|
36
|
|
$
|
58
|
(38) %
|
|
Net Income (Loss)
($mm)
|
$
|
(0.2)
|
|
$
|
5.5
|
(104) %
|
$
|
19.5
|
(101) %
|
|
$
|
7.3
|
|
$
|
52.3
|
(86) %
|
|
Diluted EPS - Class A
Common Stock
|
$
|
(0.03)
|
|
$
|
0.08
|
(136) %
|
$
|
0.40
|
(107) %
|
|
$
|
0.05
|
|
$
|
1.14
|
(96) %
|
|
Diluted EPS - Class B
Common Stock
|
$
|
0.06
|
|
$
|
0.18
|
(69) %
|
$
|
0.16
|
(65) %
|
|
$
|
0.46
|
|
$
|
0.16
|
185 %
|
|
Adjusted EBITDA ($mm)
1
|
$
|
23.6
|
|
$
|
28.8
|
(18) %
|
$
|
45.4
|
(48) %
|
|
$
|
76.6
|
|
$
|
123.7
|
(38) %
|
|
Capex ($mm)
2
|
$
|
17.8
|
|
$
|
21.4
|
(17) %
|
$
|
16.9
|
5 %
|
|
$
|
57.9
|
|
$
|
64.9
|
(11) %
|
|
Adjusted EBITDA less
Capex ($mm)
|
$
|
5.8
|
|
$
|
7.4
|
(21) %
|
$
|
28.5
|
(80) %
|
|
$
|
18.7
|
|
$
|
58.8
|
(68) %
|
|
(1)
|
See "Reconciliation
of Non-GAAP Measures."
|
|
(2)
|
2024 YTD include
$3mm for the purchase price of the preparation plant that was
relocated to Maben.
|
|
Differences may
occur due to rounding.
|
|
THIRD QUARTER 2024 PERFORMANCE
In the following paragraphs, all references to "quarterly"
periods or to "the quarter" refer to the third quarter of 2024,
unless specified otherwise.
Year over Year Quarterly Comparison
Overall production in the quarter was 972,000 tons, up 35% from
the same period of 2023. The Elk
Creek complex produced 639,000 tons, up 59% from last year.
The third quarter of 2024 benefited from both solid overall
operational and productivity execution, as well as the successful
ramp-up of the new Ram 3 surface/highwall mine and the third
section at our Stonecoal Alma mine. The Berwind, Knox Creek, and Maben complexes increased production to
333,000 tons in the quarter, up 5% from the same period last
year.
Quarterly pricing was $136 per
ton, which was 13% lower compared to $157 per ton in the third quarter of 2023. The
decline was due to the year-over-year decrease in both U.S. and
worldwide metallurgical coal price indices. Cash costs were
$102 per ton sold, excluding
transportation costs, alternative mineral development costs, and
idle mine costs, which was a 10% decrease from the same period in
2023.
As a result of the above, cash margins were $34 per ton during the quarter, down from
$44 per ton in the same period of
2023. This was based on non-GAAP revenue (FOB mine) and non-GAAP
cash cost of sales (FOB mine).
Sequential Quarter Comparison
Third quarter of 2024 production was 972,000 tons, up from the
second quarter by 8%. This was due to better productivity and the
production increases at the Company's Ram 3 surface/highwall and
Stonecoal Alma mines which began producing in June. Quarterly sales
volume of 1,023,000 tons was up from 915,000 tons in the second
quarter. This was due to the aforementioned production
increase.
Realized quarterly pricing of $136
per ton was down 5% from $143 per ton
in the second quarter. This reflected weaker market conditions and
lower index pricing as key U.S. metallurgical coal indices fell
roughly 7% in the third quarter versus the second quarter. They are
now down 32% since the end of 2023. Despite the sequential decline
in pricing, revenues increased 8% to $167
million from the second to the third quarter.
Quarterly cash costs of $102 per
ton compared to $108 per ton in the
second quarter of 2024. The continued meaningful cost improvement
resulted from an increase in production due to better productivity
and the production increase at Elk
Creek. Quarterly cash margins were $34 per ton or 25%, decreasing very slightly
despite the $7 per ton drop in
realized pricing from the second quarter of 2024. These figures are
based on non-GAAP revenue (FOB mine) and non-GAAP cash cost of
sales (FOB mine).
BALANCE SHEET AND LIQUIDITY
As of September 30, 2024, the
Company had liquidity of $80.8
million, consisting of $22.9
million of cash plus $57.9
million of availability under our revolving credit
facility. Liquidity was up from $71.3
million in the second quarter of 2024.
Quarterly capital expenditures totaled $17.8 million. This increased from $16.9 million for the same period of 2023 and
decreased from $21.4 million for the
second quarter of 2024. Year to date capital expenditures are
$54.9 million, excluding the
$3 million purchase price of the
Maben preparation plant.
We anticipate capital expenditures will decline meaningfully in
the fourth quarter 2024, versus the first three quarters of 2024.
This decline comes from the completion of the Company's Ram 3
surface / highwall and Stonecoal Alma mines that achieved full
production in September. Growth capital expenditures associated
with those mines have now already been incurred. The Company
expects 2024 capital expenditures to come in towards the high end
of the previous guidance range, largely due to timing, and updates
guidance accordingly.
The Company's year to date effective tax rate was 18%. For the
third quarter of 2024, the Company recognized income tax expense of
$0.1 million.
The following summarizes key sales, production and financial
metrics for the periods noted (unaudited):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
Nine months ended
|
|
|
September 30,
|
|
June 30,
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
In thousands, except per ton
amounts
|
|
2024
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales Volume
(tons)
|
|
|
1,023
|
|
|
915
|
|
|
996
|
|
|
2,867
|
|
|
2,467
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company Production (tons)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Elk Creek Mining
Complex
|
|
|
639
|
|
|
508
|
|
|
402
|
|
|
1,614
|
|
|
1,619
|
|
Berwind Mining Complex
(includes Knox Creek
and Maben)
|
|
|
333
|
|
|
393
|
|
|
317
|
|
|
1,103
|
|
|
810
|
|
Total
|
|
|
972
|
|
|
901
|
|
|
719
|
|
|
2,717
|
|
|
2,429
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per Ton Financial Metrics (a)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average revenue per
ton
|
|
$
|
136
|
|
$
|
143
|
|
$
|
157
|
|
$
|
145
|
|
$
|
169
|
|
Average cash costs of
coal sold
|
|
|
102
|
|
|
108
|
|
|
113
|
|
|
109
|
|
|
111
|
|
Average cash margin
per ton
|
|
$
|
34
|
|
$
|
35
|
|
$
|
44
|
|
$
|
36
|
|
$
|
58
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital Expenditures
(b)
|
|
$
|
17,785
|
|
$
|
21,405
|
|
$
|
16,908
|
|
$
|
57,920
|
|
$
|
64,924
|
|
____________________
|
|
(a)
|
Metrics are defined
and reconciled under "Reconciliation of Non-GAAP
Measures."
|
|
(b)
|
2024 YTD include
$3mm for the purchase price of the preparation plant that was
relocated to Maben.
|
|
|
|
FINANCIAL
GUIDANCE
|
|
|
(In thousands,
except per ton amounts and percentages)
|
|
|
|
|
|
|
|
|
Full-Year
|
|
Full-Year
|
|
|
2024 Guidance
|
|
2023
|
|
|
|
|
|
|
|
Company Production
(tons)
|
|
|
3,700 -
3,900
|
|
3,174
|
|
|
|
|
|
|
|
Sales (tons)
(a)
|
|
|
3,900 -
4,100
|
|
3,455
|
|
|
|
|
|
|
|
Cash Costs Per Ton Sold
(b)
|
|
$
|
106 - 109
|
$
|
110
|
|
|
|
|
|
|
|
Other
|
|
|
|
|
|
|
Capital Expenditures
(c)
|
|
$
|
61,000 -
65,000
|
$
|
82,904
|
|
Selling, general and
administrative expense (d)
|
|
$
|
34,000 -
38,000
|
$
|
35,926
|
|
Depreciation,
depletion, and amortization expense
|
|
$
|
65,000 -
69,000
|
$
|
54,252
|
|
Interest expense,
net
|
|
$
|
5,500 -
6,500
|
$
|
8,903
|
|
Effective tax rate
(e)
|
|
|
20 -
25%
|
|
21 %
|
|
Idle Mine
Costs
|
|
$
|
0
|
$
|
3,978
|
|
|
|
|
|
|
|
|
|
(a)
|
Includes purchased
coal.
|
|
(b)
|
Excludes
transportation costs, alternative mineral development costs, and
idle mine costs.
|
|
(c)
|
Excludes capitalized
interest. Excludes $3mm for the purchase price of the preparation
plant that was relocated to Maben for 2024.
|
|
(d)
|
Excludes stock-based
compensation.
|
|
(e)
|
Normalized to
exclude discrete items.
|
|
|
|
Committed 2024 Sales
Volume(a)
|
|
(In millions, except
per ton amounts) (unaudited)
|
|
|
|
|
|
|
|
|
2024
|
|
|
Volume
|
|
Average Price
|
|
North America, fixed
priced
|
|
1.3
|
|
$
|
168
|
|
Seaborne, fixed
priced
|
|
2.0
|
|
$
|
135
|
|
Total, fixed
priced
|
|
3.3
|
|
$
|
148
|
|
Index priced
|
|
0.8
|
|
|
|
|
Total committed
tons
|
|
4.1
|
|
|
|
|
|
|
(a)
|
Amounts as of
September 30, 2024 include purchased coal. Totals may not add due
to rounding. Does not include committed sales expected to be
fulfilled in later years.
|
|
|
ABOUT RAMACO RESOURCES
Ramaco Resources, Inc. is an operator and developer of
high-quality, low-cost metallurgical coal in southern West Virginia, and southwestern Virginia and a developing producer of rare
earth and critical minerals in Wyoming. Its executive offices are in
Lexington, Kentucky, with
operational offices in Charleston, West
Virginia and Sheridan,
Wyoming. The Company currently has four active metallurgical
coal mining complexes in Central
Appalachia and one development rare earth and coal mine near
Sheridan, Wyoming in the initial
stages of production. In 2023, the Company announced that a major
deposit of primary magnetic rare earths and critical minerals was
discovered at its mine near Sheridan,
Wyoming. Contiguous to the Wyoming mine, the Company operates a carbon
research and pilot facility related to the production of advanced
carbon products and materials from coal. In connection with these
activities, it holds a body of roughly 60 intellectual property
patents, pending applications, exclusive licensing agreements and
various trademarks. News and additional information about Ramaco
Resources, including filings with the Securities and Exchange
Commission, are available at http://www.ramacoresources.com.
For more information, contact investor relations at (859)
244-7455.
THIRD QUARTER 2024 CONFERENCE CALL
Ramaco Resources will hold its quarterly conference call and
webcast at 9:00 AM Eastern Time (ET)
on Tuesday, November 5, 2024. An
accompanying slide deck will be available at
https://www.ramacoresources.com/investors/investor-presentations/ immediately
before the conference call.
To participate in the live teleconference on November 5, 2024:
Domestic Live: (877) 317-6789
International Live: (412) 317-6789
Conference ID: Ramaco Resources Third Quarter 2024
Results
Web link: Click Here
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING
STATEMENTS
Certain statements contained in this news release constitute
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. These forward-looking
statements represent Ramaco Resources' expectations or beliefs
concerning guidance, future events, anticipated revenue, future
demand and production levels, macroeconomic trends, the development
of ongoing projects, costs and expectations regarding operating
results, and it is possible that the results described in this news
release will not be achieved. These forward-looking statements are
subject to risks, uncertainties and other factors, many of which
are outside of Ramaco Resources' control, which could cause actual
results to differ materially from the results discussed in the
forward-looking statements. These factors include, without
limitation, unexpected delays in our current mine development
activities, the ability to successfully ramp up production at our
complexes in accordance with the Company's growth initiatives,
failure of our sales commitment counterparties to perform,
increased government regulation of coal in the United States or internationally, the
further decline of demand for coal in export markets and
underperformance of the railroads, the expected benefits of the
Ramaco Coal and Maben acquisitions to the Company's
shareholders, the anticipated benefits and impacts of the Ramaco
Coal and Maben acquisitions, and the Company's ability to
successfully develop the Brook Mine, including whether the increase
in the Company's exploration target and estimates for such mine are
realized. Any forward-looking statement speaks only as of the date
on which it is made, and, except as required by law, Ramaco
Resources 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 Ramaco Resources to predict all such
factors. When considering these forward-looking statements, you
should keep in mind the risk factors and other cautionary
statements found in Ramaco Resources' filings with the Securities
and Exchange Commission ("SEC"), including its Annual Report on
Form 10-K and Quarterly Reports on Form 10-Q. The risk factors and
other factors noted in Ramaco Resources' SEC filings could cause
its actual results to differ materially from those contained in any
forward-looking statement.
|
Ramaco Resources, Inc.
|
|
Unaudited
Consolidated Statements of Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
September 30,
|
|
Nine months ended
September 30,
|
|
In thousands, except per share
amounts
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
167,411
|
|
$
|
186,966
|
|
$
|
495,403
|
|
$
|
490,795
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and
expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales
(exclusive of items shown separately
below)
|
|
|
134,731
|
|
|
144,635
|
|
|
397,214
|
|
|
354,383
|
|
Asset retirement
obligations accretion
|
|
|
354
|
|
|
349
|
|
|
1,063
|
|
|
1,049
|
|
Depreciation,
depletion, and amortization
|
|
|
17,811
|
|
|
14,443
|
|
|
48,909
|
|
|
39,850
|
|
Selling, general, and
administrative
|
|
|
12,921
|
|
|
11,458
|
|
|
37,932
|
|
|
37,519
|
|
Total costs and
expenses
|
|
|
165,817
|
|
|
170,885
|
|
|
485,118
|
|
|
432,801
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
|
|
1,594
|
|
|
16,081
|
|
|
10,285
|
|
|
57,994
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense),
net
|
|
|
(76)
|
|
|
11,333
|
|
|
3,075
|
|
|
15,076
|
|
Interest expense,
net
|
|
|
(1,696)
|
|
|
(2,447)
|
|
|
(4,509)
|
|
|
(7,274)
|
|
Income (loss) before
tax
|
|
|
(178)
|
|
|
24,967
|
|
|
8,851
|
|
|
65,796
|
|
Income tax
expense
|
|
|
61
|
|
|
5,505
|
|
|
1,517
|
|
|
13,521
|
|
Net income
(loss)
|
|
$
|
(239)
|
|
$
|
19,462
|
|
$
|
7,334
|
|
$
|
52,275
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per
common share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic - Single class
(through 6/20/2023)
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
0.71
|
|
Basic - Class
A
|
|
$
|
(0.03)
|
|
$
|
0.41
|
|
$
|
0.05
|
|
$
|
0.44
|
|
Total
|
|
$
|
(0.03)
|
|
$
|
0.41
|
|
$
|
0.05
|
|
$
|
1.15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic - Class
B
|
|
$
|
0.06
|
|
$
|
0.17
|
|
$
|
0.48
|
|
$
|
0.17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted - Single class
(through 6/20/23)
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
0.70
|
|
Diluted - Class
A
|
|
$
|
(0.03)
|
|
$
|
0.40
|
|
$
|
0.05
|
|
$
|
0.44
|
|
Total
|
|
$
|
(0.03)
|
|
$
|
0.40
|
|
$
|
0.05
|
|
$
|
1.14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted - Class
B
|
|
$
|
0.06
|
|
$
|
0.16
|
|
$
|
0.46
|
|
$
|
0.16
|
|
Ramaco Resources, Inc.
|
|
Unaudited
Consolidated Balance Sheets
|
|
|
|
|
|
|
|
|
In thousands, except per-share
amounts
|
|
September 30, 2024
|
|
December 31, 2023
|
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
22,864
|
|
$
|
41,962
|
|
Accounts
receivable
|
|
|
62,905
|
|
|
96,866
|
|
Inventories
|
|
|
53,051
|
|
|
37,163
|
|
Prepaid expenses and
other
|
|
|
7,853
|
|
|
13,748
|
|
Total current
assets
|
|
|
146,673
|
|
|
189,739
|
|
Property, plant, and
equipment, net
|
|
|
476,748
|
|
|
459,091
|
|
Financing lease
right-of-use assets, net
|
|
|
12,014
|
|
|
10,282
|
|
Advanced coal
royalties
|
|
|
3,884
|
|
|
2,964
|
|
Other
|
|
|
6,076
|
|
|
3,760
|
|
Total Assets
|
|
$
|
645,395
|
|
$
|
665,836
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
53,783
|
|
$
|
51,624
|
|
Accrued
liabilities
|
|
|
48,378
|
|
|
52,225
|
|
Current portion of
asset retirement obligations
|
|
|
110
|
|
|
110
|
|
Current portion of
long-term debt
|
|
|
383
|
|
|
56,534
|
|
Current portion of
financing lease obligations
|
|
|
6,134
|
|
|
5,456
|
|
Insurance financing
liability
|
|
|
—
|
|
|
4,037
|
|
Total current
liabilities
|
|
|
108,788
|
|
|
169,986
|
|
Asset retirement
obligations, net
|
|
|
31,325
|
|
|
28,850
|
|
Long-term debt,
net
|
|
|
43,141
|
|
|
349
|
|
Long-term financing
lease obligations, net
|
|
|
6,684
|
|
|
4,915
|
|
Senior notes,
net
|
|
|
33,646
|
|
|
33,296
|
|
Deferred tax liability,
net
|
|
|
54,573
|
|
|
54,352
|
|
Other long-term
liabilities
|
|
|
5,414
|
|
|
4,483
|
|
Total
liabilities
|
|
|
283,571
|
|
|
296,231
|
|
|
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
Equity
|
|
|
|
|
|
|
|
Preferred stock, $0.01
par value
|
|
|
—
|
|
|
—
|
|
Class A common stock,
$0.01 par value
|
|
|
438
|
|
|
440
|
|
Class B common stock,
$0.01 par value
|
|
|
87
|
|
|
88
|
|
Additional paid-in
capital
|
|
|
281,079
|
|
|
277,133
|
|
Retained
earnings
|
|
|
80,220
|
|
|
91,944
|
|
Total stockholders'
equity
|
|
|
361,824
|
|
|
369,605
|
|
Total Liabilities and
Stockholders' Equity
|
|
$
|
645,395
|
|
$
|
665,836
|
|
Ramaco Resources, Inc.
|
|
Unaudited Statement
of Cash Flows
|
|
|
|
|
|
|
Nine months ended
September 30,
|
|
In thousands
|
2024
|
2023
|
|
Cash flows from
operating activities
|
|
|
|
|
|
Net income
|
$
|
7,334
|
$
|
52,275
|
|
Adjustments to
reconcile net income to net cash from operating
activities:
|
|
|
|
|
|
Accretion of asset
retirement obligations
|
|
1,063
|
|
1,049
|
|
Depreciation,
depletion, and amortization
|
|
48,909
|
|
39,850
|
|
Amortization of debt
issuance costs
|
|
664
|
|
566
|
|
Stock-based
compensation
|
|
13,255
|
|
9,706
|
|
Other
|
|
(18)
|
|
(4,912)
|
|
Deferred income
taxes
|
|
221
|
|
10,048
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
Accounts
receivable
|
|
33,961
|
|
(22,460)
|
|
Prepaid expenses and
other current assets
|
|
5,895
|
|
10,115
|
|
Inventories
|
|
(15,888)
|
|
(5,269)
|
|
Other assets and
liabilities
|
|
(2,504)
|
|
(816)
|
|
Accounts
payable
|
|
2,576
|
|
19,253
|
|
Accrued
liabilities
|
|
1,515
|
|
10,071
|
|
Net cash from
operating activities
|
|
96,983
|
|
119,476
|
|
|
|
|
|
|
Cash flow from
investing activities:
|
|
|
|
|
|
Capital
expenditures
|
|
(45,632)
|
|
(64,924)
|
|
Maben preparation plant
capital expenditures
|
|
(12,288)
|
|
—
|
|
Other
|
|
(182)
|
|
7,158
|
|
Net cash used for
investing activities
|
|
(58,102)
|
|
(57,766)
|
|
|
|
|
|
|
Cash flows from
financing activities
|
|
|
|
|
|
Proceeds from
borrowings
|
|
136,500
|
|
95,000
|
|
Proceeds from stock
option exercises
|
|
534
|
|
—
|
|
Payments of
dividends
|
|
(24,474)
|
|
(18,049)
|
|
Repayment of
borrowings
|
|
(149,921)
|
|
(87,225)
|
|
Repayment of Ramaco
Coal acquisition financing - related party
|
|
—
|
|
(30,000)
|
|
Repayments of insurance
financing
|
|
(4,032)
|
|
(3,848)
|
|
Repayments of equipment
finance leases
|
|
(6,740)
|
|
(4,954)
|
|
Shares surrendered for
withholding taxes
|
|
(9,846)
|
|
(5,323)
|
|
Net cash used
financing activities
|
|
(57,979)
|
|
(54,399)
|
|
|
|
|
|
|
Net change in cash and
cash equivalents and restricted cash
|
|
(19,098)
|
|
7,311
|
|
Cash and cash
equivalents and restricted cash, beginning of period
|
|
42,781
|
|
36,473
|
|
Cash and cash
equivalents and restricted cash, end of period
|
$
|
23,683
|
$
|
43,784
|
Reconciliation of Non-GAAP Measures (Unaudited)
Adjusted EBITDA
Adjusted EBITDA is used as a supplemental non-GAAP financial
measure by management and external users of our financial
statements, such as industry analysts, investors, lenders, and
rating agencies. We believe Adjusted EBITDA is useful because
it allows us to evaluate our operating performance more
effectively.
We define Adjusted EBITDA as net income plus net interest
expense; equity-based compensation; depreciation, depletion, and
amortization expenses; income taxes; certain other non-operating
items (income tax penalties and charitable contributions), and
accretion of asset retirement obligations. Its most comparable GAAP
measure is net income. A reconciliation of net income to Adjusted
EBITDA is included below. Adjusted EBITDA is not intended to serve
as a substitute for GAAP measures of performance and may not be
comparable to similarly titled measures presented by other
companies.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q3
|
|
|
Q2
|
|
|
Q3
|
|
Nine months ended
September 30,
|
|
(In thousands)
|
|
2024
|
|
|
2024
|
|
|
2023
|
|
2024
|
2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Net
Income (Loss) to Adjusted EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
$
|
(239)
|
|
$
|
5,541
|
|
$
|
19,462
|
|
$
|
7,334
|
$
|
52,275
|
|
Depreciation,
depletion, and amortization
|
|
17,811
|
|
|
15,879
|
|
|
14,443
|
|
|
48,909
|
|
39,850
|
|
Interest expense,
net
|
|
1,696
|
|
|
1,481
|
|
|
2,447
|
|
|
4,509
|
|
7,274
|
|
Income tax
expense
|
|
61
|
|
|
915
|
|
|
5,505
|
|
|
1,517
|
|
13,521
|
|
EBITDA
|
|
19,329
|
|
|
23,816
|
|
|
41,857
|
|
|
62,269
|
|
112,920
|
|
Stock-based
compensation
|
|
3,970
|
|
|
4,583
|
|
|
3,201
|
|
|
13,255
|
|
9,706
|
|
Other
non-operating
|
|
(36)
|
|
|
45
|
|
|
—
|
|
|
9
|
|
—
|
|
Accretion of asset
retirement obligations
|
|
354
|
|
|
354
|
|
|
349
|
|
|
1,063
|
|
1,049
|
|
Adjusted
EBITDA
|
$
|
23,617
|
|
$
|
28,798
|
|
$
|
45,407
|
|
$
|
76,596
|
$
|
123,675
|
Non-GAAP revenue and cash cost per ton
Non-GAAP revenue per ton (FOB mine) is calculated as coal sales
revenue less transportation costs including demurrage costs,
divided by tons sold. Non-GAAP cash cost per ton sold (FOB mine) is
calculated as cash cost of coal sales less transportation costs,
alternative mineral development costs, and idle and other costs,
divided by tons sold. We believe revenue per ton (FOB mine) and
cash cost per ton (FOB mine) provide useful information to
investors as these enable investors to compare revenue per ton and
cash cost per ton for the Company against similar measures made by
other publicly-traded coal companies and more effectively monitor
changes in coal prices and costs from period to period excluding
the impact of transportation costs, which are beyond our control,
and alternative mineral costs, which are more developmentally
focused currently. The adjustments made to arrive at these measures
are significant in understanding and assessing the Company's
financial performance. Revenue per ton sold (FOB mine) and cash
cost per ton sold (FOB mine) are not measures of financial
performance in accordance with GAAP and therefore should not be
considered as a substitute for revenue and cost of sales under
GAAP. The tables below show how we calculate non-GAAP revenue and
cash cost per ton:
|
Non-GAAP revenue per ton
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q3
|
|
|
Q2
|
|
|
Q3
|
|
Nine months ended
September 30,
|
|
(In thousands, except per ton
amounts)
|
|
|
2024
|
|
|
2024
|
|
|
2023
|
|
|
2024
|
|
|
2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
167,411
|
|
$
|
155,315
|
|
$
|
186,966
|
|
$
|
495,403
|
|
$
|
490,795
|
|
Less: Adjustments to
reconcile to Non-GAAP
revenue (FOB mine)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transportation
|
|
|
(28,582)
|
|
|
(24,218)
|
|
|
(30,433)
|
|
|
(81,086)
|
|
|
(74,610)
|
|
Non-GAAP revenue (FOB
mine)
|
|
$
|
138,829
|
|
$
|
131,097
|
|
$
|
156,533
|
|
$
|
414,317
|
|
$
|
416,185
|
|
Tons sold
|
|
|
1,023
|
|
|
915
|
|
|
996
|
|
|
2,867
|
|
|
2,467
|
|
Non-GAAP revenue per
ton sold (FOB mine)
|
|
$
|
136
|
|
$
|
143
|
|
$
|
157
|
|
$
|
145
|
|
$
|
169
|
|
Non-GAAP cash cost
per ton (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q3
|
|
|
Q2
|
|
|
Q3
|
|
Nine months ended
September 30,
|
|
(In thousands, except per ton
amounts)
|
|
2024
|
|
|
2024
|
|
|
2023
|
|
|
2024
|
|
|
2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
sales
|
$
|
134,731
|
|
$
|
122,770
|
|
$
|
144,635
|
|
$
|
397,214
|
|
$
|
354,383
|
|
Less: Adjustments to
reconcile to Non-GAAP cash
cost of sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transportation
costs
|
|
(28,551)
|
|
|
(22,872)
|
|
|
(30,254)
|
|
|
(80,299)
|
|
|
(74,467)
|
|
Alternative mineral
development costs
|
|
(1,363)
|
|
|
(1,124)
|
|
|
(1,200)
|
|
|
(3,618)
|
|
|
(2,746)
|
|
Idle and other
costs
|
|
(244)
|
|
|
(305)
|
|
|
(378)
|
|
|
(786)
|
|
|
(2,937)
|
|
Non-GAAP cash cost of
sales
|
$
|
104,573
|
|
$
|
98,469
|
|
$
|
112,803
|
|
$
|
312,511
|
|
$
|
274,233
|
|
Tons sold
|
|
1,023
|
|
|
915
|
|
|
996
|
|
|
2,867
|
|
|
2,467
|
|
Non-GAAP cash cost per
ton sold (FOB mine)
|
$
|
102
|
|
$
|
108
|
|
$
|
113
|
|
$
|
109
|
|
$
|
111
|
We do not provide reconciliations of our outlook for cash cost
per ton to cost of sales in reliance on the unreasonable efforts
exception provided for under Item 10(e)(1)(i)(B) of Regulation S-K.
We are 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.
# # #
View original
content:https://www.prnewswire.com/news-releases/ramaco-resources-reports-third-quarter-2024-results-302295819.html
SOURCE Ramaco Resources, Inc.