AMR
$69.62
Alpha Metallurgical Resources
($.75)
(1.07%)
Earnings Details
3rd Quarter September 2021
Friday, November 5, 2021 7:30:00 AM
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Summary

Alpha Metallurgical Resources (AMR) Recent Earnings

Alpha Metallurgical Resources (AMR) reported 3rd Quarter September 2021 earnings of $4.43 per share on revenue of $648.8 million. The consensus earnings estimate was $5.45 per share on revenue of $471.8 million.

Alpha Metallurgical Resources (NYSE: AMR) is a Tennessee-based mining company with operations across Virginia and West Virginia. With customers across the globe, high-quality reserves and significant port capacity, Alpha reliably supplies metallurgical products to the steel industry.

Results
Reported Earnings
$4.43
Earnings Whisper
-
Consensus Estimate
$5.45
Reported Revenue
$648.8 Mil
Revenue Estimate
$471.8 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Alpha Announces Third Quarter 2021 Results

BRISTOL, Tenn., Nov. 5, 2021 /PRNewswire/ -- Alpha Metallurgical Resources, Inc. (NYSE: AMR), a leading U.S. supplier of metallurgical products for the steel industry, today reported results for the third quarter ending September 30, 2021.


(millions, except per share)


Three months ended


Sept. 30, 2021

June 30, 2021

Sept. 30, 2020

Net income (loss)(2)

$83.7

$(18.6)

$(68.5)

Net income (loss)(2) per diluted share

$4.43

$(1.01)

$(3.74)

Adjusted EBITDA(1)

$148.2

$39.9

$12.4

Operating cash flow(3)

$96.0

$(6.3)

$(5.9)

Capital expenditures(3)

$(22.3)

$(17.6)

$(27.8)

Tons of coal sold(2)

4.7

4.0

4.0

__________________________________

1. These are non-GAAP financial measures. A reconciliation of Net Income to Adjusted EBITDA is included in tables accompanying the financial schedules.

2. From continuing operations.

3. Includes discontinued operations.

"We have consistently reiterated that Alpha is well-positioned to capitalize on market opportunities and this quarter's outstanding performance is proof of our ability to deliver on those high expectations," said David Stetson, Alpha's chair and chief executive officer. "Additionally, we made meaningful progress on our commitment to deleveraging the company by reducing our overall long-term debt and legacy obligations by more than $75 million during the quarter. We expect to continue this positive momentum to create value for our shareholders, and we look forward to what we believe will be a productive and successful 2022."

Financial Performance

Alpha reported net income from continuing operations of $83.7 million, or $4.43 per diluted share, for the third quarter 2021. In the second quarter 2021, the company had a net loss from continuing operations of $18.6 million or $1.01 per diluted share.

Total Adjusted EBITDA was $148.2 million for the third quarter, compared with $39.9 million in the second quarter 2021.

Coal Revenues


(millions)


Three months ended


Sept. 30, 2021

June 30, 2021

Met Segment

$625.4

$376.8

All Other

$21.7

$16.6




Met Segment (excl. freight & handling)(1)

$497.2

$312.5

All Other (excl. freight & handling)(1)

$21.7

$16.5



Tons Sold

(millions)


Three months ended


Sept. 30, 2021

June 30, 2021

Met Segment

4.4

3.7

All Other

0.3

0.3

__________________________________

1. Represents Non-GAAP coal revenues which is defined and reconciled under "Non-GAAP Financial Measures" and "Results of Operations."

 

Coal Sales Realization(1)


(per ton)


Three months ended


Sept. 30, 2021

June 30, 2021

Met Segment

$113.51

$83.38

All Other

$62.43

$60.45

__________________________________

1. Represents Non-GAAP coal sales realization which is defined and reconciled under "Non-GAAP Financial Measures" and "Results of Operations."

In the third quarter our net realized pricing for the Met segment was $113.51, while net realization in the All Other category was $62.43.

"As expected, third quarter met export realizations came in strong thanks to the robust market and the outstanding work of our sales team to capitalize on it," said Andy Eidson, Alpha's president and chief financial officer. "The vast midyear improvement in the Australian indices is now evident in our financial performance, with third quarter realizations on export tons tied to Aussie indices up $91.10, or 134%, from second quarter levels. Realizations for export tons priced against other mechanisms were up $23.64, or 23%, from second quarter realizations."

The table below provides a breakdown of our Met segment coal sold in the third quarter by pricing mechanism.


(in millions, except per ton data)

Met Segment Sales

Three months ended Sept. 30, 2021


Tons Sold

Coal Revenues

Realization/ton(1)

% of Met Tons Sold

Export - Other Pricing Mechanisms

2.2

$274.3

$125.44

56%

Domestic

1.0

$89.2

$86.05

27%

Export - Australian Indexed

0.7

$106.1

$158.87

17%

Total Met Coal Revenues

3.9

$469.7

$120.68

100%

Thermal Coal Revenues

0.5

$27.5

$56.38


Total Met Segment Coal Revenues (excl. freight & handling)(1)

4.4

$497.2

$113.51


__________________________________

1. Represents Non-GAAP coal sales realization which is defined and reconciled under "Non-GAAP Financial Measures" and "Results of Operations."

 

Cost of Coal Sales


(in millions, except per ton data)


Three months ended


Sept. 30, 2021

June 30, 2021

Cost of Coal Sales

$488.2

$346.8

Cost of Coal Sales (excl. freight &
handling/idle)
(1)

$352.1

$273.8




(per ton)

Met Segment(1)

$76.62

$69.94

All Other(1)

$47.47

$42.77

__________________________________

1. Represents Non-GAAP cost of coal sales and Non-GAAP cost of coal sales per ton which is defined and reconciled under "Non-GAAP Financial Measures" and "Results of Operations."

"In higher pricing environments, costs of coal sales increase due to a number of factors outside our direct control, including royalties and taxes," said Jason Whitehead, executive vice president and chief operating officer. "Similar to many other companies, we're also experiencing some inflationary pressure with the cost of materials increasing. Despite these challenges, I'm proud of our operations teams for remaining disciplined and continuing to manage the costs we can control."

In the third quarter, the company's Met segment cost of coal sales increased to an average of $76.62 per ton as compared to $69.94 per ton in the prior quarter. Cost of coal sales for the All Other category increased to $47.47 in the third quarter from a second quarter average cost of $42.77 per ton.

Liquidity and Capital Resources

"Beyond Alpha's very positive revenue results, we reduced our long-term debt and legacy obligations by over $75 million during the third quarter," said Eidson. "In addition to $6.6 million in scheduled long-term principal payments for the quarter, we elected to make a voluntary prepayment of $31.0 million in principal on the term loan, and we repurchased, at a discount, roughly $18.7 million in outstanding principal borrowings from existing lenders. Coupled with the previously-announced $21.2 million payment in July to extinguish the reclamation funding obligations with the West Virginia Department of Environmental Protection (WVDEP), these actions should serve as a roadmap for what shareholders can expect from us in the coming quarters as we continue strengthening our balance sheet."

"Subsequent to the quarter end, we made an early payment of $4 million to the WVDEP eliminate the legacy obligations related to water treatment in West Virginia. Additionally, we made a payment of $3.3 million to fully satisfy the remaining legacy reclamation funding and water treatment obligations owed to the State of Kentucky. This follows our early extinguishment of the West Virginia reclamation funding obligations that was announced last quarter. These examples further demonstrate our strong commitment to debt reduction and deleveraging the company," Eidson said. 

Cash provided by operating activities for the third quarter of 2021 was $96.0 million, which includes the receipt of the $70 million tax refund and related interest, compared to the prior period in which cash used in operating activities was $6.3 million. Cash provided by operating activities includes discontinued operations. Third quarter 2021 capital expenditures were $22.3 million compared to $17.6 million in capital expenditures in the second quarter.  

As of September 30, 2021, Alpha had $78.3 million in unrestricted cash and $121.7 million in restricted cash, deposits and investments. Total long-term debt, including the current portion of long-term debt as of September 30, 2021, was $505.2 million. At the end of the third quarter, the company had total liquidity of $183.3 million, which represents an increase of 38% compared to our total liquidity at the end of the second quarter, including cash and cash equivalents of $78.3 million and $105.0 million of unused availability under the Asset-Based Revolving Credit Facility (ABL). The future available capacity under the ABL is subject to inventory and accounts receivable collateral requirements and the maintenance of certain financial ratios. As of September 30, 2021, the company had no borrowings and $120.0 million in letters of credit outstanding under the ABL. 

Operational Update and Planned 2022 Investments

"Alpha's exceptional third quarter performance is a testament to the continued dedication of our operations teams and the success of our ongoing portfolio optimization efforts," said Whitehead. "With Slabcamp, our sole remaining thermal mine, on pace to close in the summer of next year, our 2022 production guidance reflects the final stage of our transition to a pure-play metallurgical resources company. As we look forward to capitalizing on current market opportunities, 2022 Met segment production is expected to increase slightly over the already-increased full year 2021 guidance level. I'm confident that our teams across the enterprise have the ability to deliver on these ambitious goals we've outlined for the coming year."

During the quarter, a number of key structural milestones were met to add the fourth section at Road Fork 52, putting the project ahead of schedule and allowing the section to begin producing in mid-October. Additionally, the company has recently completed its budget for 2022, and our capital expenditures guidance for next year includes several important projects that will help modernize and strategically improve Alpha's operations and prep plant infrastructure. These upgrades are expected to provide increased efficiency and extend the life of these facilities in return for modest levels of capital investment.

Whitehead commented on the importance of capex projects in 2022: "As we envision what Alpha can do in the next several years, we recognize the critical role that preparation plants play in washing and loading the coal we mine and preparing it for delivery to our customers. In partnership with our sales teams, we aim to maximize these facilities, and we believe modest investment in a few of our plants will allow for additional output and better capabilities for the specific coal qualities we're sending through each facility. Additionally, we plan to begin development on the Cedar Grove No. 3 mine and the Glen Alum mine in the coming year. Both of these locations are adjacent to current Alpha operations in West Virginia, allowing us to leverage existing infrastructure as we expand into these mines. Lastly, we have decided to move ahead with adding a fourth section at our Lynn Branch mine. All together, we see this group of projects as a boost to the organization's future efficiency and effectiveness. Furthermore, we believe we can accomplish each of these in a timely manner and at a very reasonable investment level. Therefore, at the midpoint, our capex guidance for next year includes an increased maintenance capital projection of approximately $120 million dollars to account for inflation, and roughly $55 million to invest in Alpha's future through various projects across the organization."

2021 Full-Year Guidance Adjustments

The company is increasing its 2021 cost of coal sales guidance in light of increased labor costs, inflationary pressure for certain supplies, such as steel used in roof support and diesel fuel, as well as higher royalties and taxes due to higher sales prices. Met segment cost of coal sales are now expected to be between $73.00 per ton and $77.00 per ton. Cost of coal sales for the All Other category is expected to remain in the existing range of $45.00 per ton and $49.00 per ton.

Additionally, with depreciation, depletion and amortization trending lower for the year, we are adjusting DD&A guidance down to a range of $100 million to $110 million from the prior range of $125 million to $145 million.

For 2021, Alpha has committed and priced approximately 96% of its metallurgical coal within the Met segment at an average price of $111.28 per ton and 98% of thermal coal in the Met segment at an average expected price of $55.76 per ton. In the All Other category the company is 90% committed and priced at an average price of $58.33 per ton.

Introducing 2022 Full-Year Guidance 

The company is issuing 2022 operating guidance with coal shipments expected to be in the range of 15.4 million tons to 17.0 million tons. Met segment volume is expected to be between 14.8 million to 16.2 million tons. Within the Met segment, pure metallurgical coal shipments for the year are expected to be between 14.0 million to 15.0 million tons, and incidental thermal shipments in this segment are expected to be between 0.8 million to 1.2 million tons. Our guidance range of 0.6 million tons to 0.8 million tons for the All Other category represents production expectations from our last remaining thermal operation, the Slabcamp mine, which is on track to close in the summer of 2022.

For 2022, Alpha has committed and priced approximately 28% of its metallurgical coal within the Met segment at an average price of $195.43 per ton and 88% of thermal coal in the Met segment at an average expected price of $51.56 per ton. In the All Other category the company is 89% committed and priced at an average price of $56.49 per ton.

The company expects 2022 Met segment cost of coal sales per ton to be between $88.00 and $92.00, and costs for our All Other category are expected to be in the range of $58.00 to $62.00 per ton.

SG&A is expected to be in the range of $50 million to $54 million, excluding non-recurring expenses and non-cash stock compensation. Idle operations expense for 2022 is expected to be between $30 million and $40 million. The company expects cash interest expense to be in a range of $40 million to $45 million for 2022. Depreciation, depletion and amortization guidance is anticipated to be between $90 million and $110 million for the year. Our overall 2022 capital expenditures guidance of $160 million to $190 million includes a number of planned upgrades expected to enhance Alpha's longevity and positioning for the future. Lastly, the company expects its tax rate for 2022 to be in the 5% to 15% range.


2021 Guidance

2022 Guidance

in millions of tons

Low

High

Low

High

Metallurgical

13.0

14.0

14.0


15.0


Thermal

1.3

1.8

0.8


1.2


Met Segment

14.3

15.8

14.8


16.2


All Other

1.3

1.7

0.6


0.8


Total Shipments

15.6

17.5

15.4


17.0







Committed/Priced1,2,3

Committed

Average Price

Committed

Average Price

Metallurgical - Domestic


$88.55



$192.29


Metallurgical - Export


$123.02



$226.90


Metallurgical Total

96

%

$111.28


28

%

$195.43


Thermal

98

%

$55.76


88

%

$51.56


Met Segment

96

%

$105.45


32

%

$169.79


All Other

90

%

$58.33


89

%

$56.49







Committed/Unpriced1,3

Committed


Committed


Metallurgical Total

4

%


23

%


Thermal

%


%


Met Segment

4

%


21

%


All Other

3

%


%







Costs per ton4

Low

High

Low

High

Met Segment

$73.00


$77.00


$88.00


$92.00


All Other

$45.00


$49.00


$58.00


$62.00







In millions (except taxes)

Low

High

Low

High

SG&A5

$48

$52

$50


$54


Idle Operations Expense

$24

$30

$30


$40


Cash Interest Expense

$51

$55

$40


$45


DD&A

$100

$110

$90


$110


Capital Expenditures

$88

$98

$160


$190


Tax Rate6

%

5

%

5

%

15

%


Notes: 



1.

Based on committed and priced coal shipments as of October 29, 2021. Committed percentage based on the midpoint of shipment guidance range.

2. 

Actual average per-ton realizations on committed and priced tons recognized in future periods may vary based on actual freight expense in future periods relative to assumed freight expense embedded in projected average per-ton realizations.

3. 

Includes estimates of future coal shipments based upon contract terms and anticipated delivery schedules. Actual coal shipments may vary from these estimates.

4. 

Note: The Company is unable to present a quantitative reconciliation of its forward-looking non-GAAP cost of coal sales per ton sold financial measures to the most directly comparable GAAP measures without unreasonable efforts due to the inherent difficulty in forecasting and quantifying with reasonable accuracy significant items required for the reconciliation. The most directly comparable GAAP measure, GAAP cost of sales, is not accessible without unreasonable efforts on a forward-looking basis. The reconciling items include freight and handling costs, which are a component of GAAP cost of sales. Management is unable to predict without unreasonable efforts freight and handling costs due to uncertainty as to the end market and FOB point for uncommitted sales volumes and the final shipping point for export shipments. These amounts have historically varied and may continue to vary significantly from quarter to quarter and material changes to these items could have a significant effect on our future GAAP results.

5. 

Excludes expenses related to non-cash stock compensation and non-recurring expenses.

6.

Rate assumes no further ownership change limitations on the usage of net operating losses.

Conference Call

The company plans to hold a conference call regarding its third quarter 2021 results on November 5, 2021, at 10:00 a.m. Eastern time. The conference call will be available live on the investor section of the company's website at https://investors.alphametresources.com/investors. Analysts who would like to participate in the conference call should dial 844-200-6205 (domestic toll-free) or 929-526-1599 (international) approximately 15 minutes prior to start time. Please use the access code 475225 to join the call.

About Alpha Metallurgical Resources

Alpha Metallurgical Resources (NYSE: AMR) is a Tennessee-based mining company with operations across Virginia and West Virginia. With customers across the globe, high-quality reserves and significant port capacity, Alpha reliably supplies metallurgical products to the steel industry. For more information, visit www.AlphaMetResources.com.

Forward-Looking Statements

This news release includes forward-looking statements. These forward-looking statements are based on Alpha's expectations and beliefs concerning future events and involve risks and uncertainties that may cause actual results to differ materially from current expectations. These factors are difficult to predict accurately and may be beyond Alpha's control. Forward-looking statements in this news release or elsewhere speak only as of the date made. New uncertainties and risks arise from time to time, and it is impossible for Alpha to predict these events or how they may affect Alpha. Except as required by law, Alpha has no duty to, and does not intend to, update or revise the forward-looking statements in this news release or elsewhere after the date this release is issued. In light of these risks and uncertainties, investors should keep in mind that results, events or developments discussed in any forward-looking statement made in this news release may not occur. 

Investor Contact
InvestorRelations@AlphaMetResources.com

Alex Rotonen, CFA
423.956.6882

Media Contact
CorporateCommunications@AlphaMetResources.com

Emily O'Quinn
423.573.0369

FINANCIAL TABLES FOLLOW

Non-GAAP Financial Measures

The discussion below contains "non-GAAP financial measures." These are financial measures which either exclude or include amounts that are not excluded or included in the most directly comparable measures calculated and presented in accordance with generally accepted accounting principles in the United States ("U.S. GAAP" or "GAAP"). Specifically, we make use of the non-GAAP financial measures "Adjusted EBITDA," "non-GAAP coal revenues," "non-GAAP cost of coal sales," "non-GAAP coal margin," and "Adjusted cost of produced coal sold." We use Adjusted EBITDA to measure the operating performance of our segments and allocate resources to the segments. Adjusted EBITDA does not purport to be an alternative to net income (loss) as a measure of operating performance or any other measure of operating results or liquidity presented in accordance with GAAP. We use non-GAAP coal revenues to present coal revenues generated, excluding freight and handling fulfillment revenues. Non-GAAP coal sales realization per ton for our operations is calculated as non-GAAP coal revenues divided by tons sold. We use non-GAAP cost of coal sales to adjust cost of coal sales to remove freight and handling costs, depreciation, depletion and amortization - production (excluding the depreciation, depletion and amortization related to selling, general and administrative functions), accretion on asset retirement obligations, amortization of acquired intangibles, net, and idled and closed mine costs. Non-GAAP cost of coal sales per ton for our operations is calculated as non-GAAP cost of coal sales divided by tons sold. Non-GAAP coal margin per ton for our coal operations is calculated as non-GAAP coal sales realization per ton for our coal operations less non-GAAP cost of coal sales per ton for our coal operations. We also use Adjusted cost of produced coal sold to distinguish the cost of captive produced coal from the effects of purchased coal. The presentation of these measures should not be considered in isolation, or as a substitute for analysis of our results as reported under GAAP.

Management uses non-GAAP financial measures to supplement GAAP results to provide a more complete understanding of the factors and trends affecting the business than GAAP results alone. The definition of these non-GAAP measures may be changed periodically by management to adjust for significant items important to an understanding of operating trends and to adjust for items that may not reflect the trend of future results by excluding transactions that are not indicative of our core operating performance. Furthermore, analogous measures are used by industry analysts to evaluate the Company's operating performance. Because not all companies use identical calculations, the presentations of these measures may not be comparable to other similarly titled measures of other companies and can differ significantly from company to company depending on long-term strategic decisions regarding capital structure, the tax jurisdictions in which companies operate, and capital investments.

Included below are reconciliations of non-GAAP financial measures to GAAP financial measures.

ALPHA METALLURGICAL RESOURCES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

(Amounts in thousands, except share and per share data)



Three Months Ended September 30,


Nine Months Ended September 30,


2021


2020


2021


2020

Revenues:








Coal revenues

$

647,129



$

335,189



$

1,426,039



$

1,089,764


Other revenues

1,712



403



4,330



2,572


Total revenues

648,841



335,592



1,430,369



1,092,336


Costs and expenses:








Cost of coal sales (exclusive of items shown separately below)

488,169



309,693



1,182,360



979,180


Depreciation, depletion and amortization

24,519



49,236



80,261



143,921


Accretion on asset retirement obligations

6,674



6,737



19,970



19,945


Amortization of acquired intangibles, net

2,980



2,074



9,402



4,466


Asset impairment and restructuring



(226)



(561)



53,981


Selling, general and administrative expenses (exclusive of depreciation, depletion and amortization shown separately above)

15,264



14,501



44,891



42,010


Total other operating loss (income):








Mark-to-market adjustment for acquisition-related obligations

11,676



3,624



18,009



(13,425)


Other income

(457)



(1,310)



(5,290)



(2,023)


Total costs and expenses

548,825



384,329



1,349,042



1,228,055


Income (loss) from operations

100,016



(48,737)



81,327



(135,719)


Other (expense) income:








Interest expense

(17,338)



(18,746)



(53,290)



(56,238)


Interest income

54



376



322



6,874


Equity loss in affiliates

(643)



(1,295)



(1,161)



(3,085)


Miscellaneous income (loss), net

1,812



(131)



5,425



(452)


Total other expense, net

(16,115)



(19,796)



(48,704)



(52,901)


Income (loss) from continuing operations before income taxes

83,901



(68,533)



32,623



(188,620)


Income tax (expense) benefit

(208)



45



(211)



2,200


Net income (loss) from continuing operations

83,693



(68,488)



32,412



(186,420)


Discontinued operations:








Loss from discontinued operations before income taxes

(429)



(149)



(1,067)



(160,326)


Loss from discontinued operations

(429)



(149)



(1,067)



(160,326)


Net income (loss)

$

83,264



$

(68,637)



$

31,345



$

(346,746)










Basic income (loss) per common share:








Income (loss) from continuing operations

$

4.54



$

(3.74)



$

1.76



$

(10.19)


Loss from discontinued operations

(0.03)



(0.01)



(0.06)



(8.77)


Net income (loss)

$

4.51



$

(3.75)



$

1.70



$

(18.96)










Diluted income (loss) per common share:








Income (loss) from continuing operations

$

4.43



$

(3.74)



$

1.73



$

(10.19)


Loss from discontinued operations

(0.03)



(0.01)



(0.06)



(8.77)


Net income (loss)

$

4.40



$

(3.75)



$

1.67



$

(18.96)










Weighted average shares – basic

18,445,709



18,319,947



18,426,639



18,290,346


Weighted average shares – diluted

18,913,352



18,319,947



18,783,643



18,290,346


 

ALPHA METALLURGICAL RESOURCES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

(Amounts in thousands, except share and per share data)



September 30, 2021


December 31, 2020

Assets




Current assets:




Cash and cash equivalents

$

78,283



$

139,227


Trade accounts receivable, net of allowance for doubtful accounts of $325 and $293 as of September 30, 2021 and December 31, 2020

335,287



145,670


Inventories, net

124,534



108,051


Prepaid expenses and other current assets

31,723



106,252


Current assets - discontinued operations

1,391



10,935


Total current assets

571,218



510,135


Property, plant, and equipment, net of accumulated depreciation and amortization of $436,205 and $382,423 as of September 30, 2021 and December 31, 2020

356,305



363,620


Owned and leased mineral rights, net of accumulated depletion and amortization of $48,968 and $35,143 as of September 30, 2021 and December 31, 2020

449,901



463,250


Other acquired intangibles, net of accumulated amortization of $31,349 and $25,700 as of September 30, 2021 and December 31, 2020

78,547



88,196


Long-term restricted cash

84,001



96,033


Other non-current assets

126,502



149,382


Non-current assets - discontinued operations

9,477



9,473


Total assets

$

1,675,951



$

1,680,089


Liabilities and Stockholders' Equity




Current liabilities:




Current portion of long-term debt

$

7,976



$

28,830


Trade accounts payable

90,335



58,413


Acquisition-related obligations – current

26,266



19,099


Accrued expenses and other current liabilities

160,732



140,406


Current liabilities - discontinued operations

7,095



12,306


Total current liabilities

292,404



259,054


Long-term debt

497,191



553,697


Acquisition-related obligations - long-term

18,966



20,768


Workers' compensation and black lung obligations

228,858



230,081


Pension obligations

191,888



218,671


Asset retirement obligations

141,925



140,074


Deferred income taxes

479



480


Other non-current liabilities

29,403



28,072


Non-current liabilities - discontinued operations

26,740



29,090


Total liabilities

1,427,854



1,479,987


Commitments and Contingencies




Stockholders' Equity




Preferred stock - par value $0.01, 5.0 million shares authorized, none issued




Common stock - par value $0.01, 50.0 million shares authorized, 20.8 million issued and 18.4 million outstanding at September 30, 2021 and 20.6 million issued and 18.3 million outstanding at December 31, 2020

208



206


Additional paid-in capital

783,781



779,424


Accumulated other comprehensive loss

(98,908)



(111,985)


Treasury stock, at cost: 2.4 million shares at September 30, 2021 and 2.3 million shares at December 31, 2020

(107,800)



(107,014)


Accumulated deficit

(329,184)



(360,529)


Total stockholders' equity

248,097



200,102


Total liabilities and stockholders' equity

$

1,675,951



$

1,680,089


 

ALPHA METALLURGICAL RESOURCES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(Amounts in thousands)



Nine Months Ended September 30,


2021


2020

Operating activities:




Net income (loss)

$

31,345



$

(346,746)


Adjustments to reconcile net income (loss) to net cash provided by operating activities:




Depreciation, depletion and amortization

80,261



154,466


Amortization of acquired intangibles, net

9,402



5,180


Accretion of acquisition-related obligations discount

1,004



2,882


Amortization of debt issuance costs and accretion of debt discount

9,351



11,087


Mark-to-market adjustment for acquisition-related obligations

18,009



(13,425)


Gain on disposal of assets

(5,342)



(2,179)


Asset impairment and restructuring

(561)



221,453


Accretion on asset retirement obligations

19,970



23,806


Employee benefit plans, net

6,685



15,135


Deferred income taxes

(1)



33,011


Stock-based compensation

4,351



4,200


Equity loss in affiliates

1,161



3,085


Other, net

(4,381)



(5,356)


Changes in operating assets and liabilities

(100,681)



(33,566)


Net cash provided by operating activities

70,573



73,033


Investing activities:




Capital expenditures

(60,386)



(118,896)


Proceeds on disposal of assets

7,471



3,131


Purchases of investment securities

(15,474)



(18,618)


Maturity of investment securities

10,508



12,678


Capital contributions to equity affiliates

(4,473)



(3,196)


Other, net

52



68


Net cash used in investing activities

(62,302)



(124,833)


Financing activities:




Proceeds from borrowings on long-term debt



57,500


Repurchases of long-term debt

(18,415)




Principal repayments of long-term debt

(61,869)



(58,315)


Principal repayments of financing lease obligations

(1,527)



(2,291)


Debt issuance costs

(319)




Common stock repurchases and related expenses

(786)



(171)


Net cash used in financing activities

(82,916)



(3,277)


Net decrease in cash and cash equivalents and restricted cash

(74,645)



(55,077)


Cash and cash equivalents and restricted cash at beginning of period

244,571



347,680


Cash and cash equivalents and restricted cash at end of period

$

169,926



$

292,603


The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the Condensed Consolidated Balance Sheets that sum to the total of the same such amounts shown in the Condensed Consolidated Statements of Cash Flows.


As of September 30,


2021


2020

Cash and cash equivalents

$

78,283



$

161,434


Short-term restricted cash (included in prepaid expenses and other current assets)

7,642



7,104


Long-term restricted cash

84,001



124,065


Total cash and cash equivalents and restricted cash shown in the Condensed Consolidated Statements of Cash Flows

$

169,926



$

292,603


 

ALPHA METALLURGICAL RESOURCES, INC. AND SUBSIDIARIES

ADJUSTED EBITDA RECONCILIATION

(Amounts in thousands)



Three Months Ended


Nine Months Ended September 30,


June 30,
2021


September 30,
2021


September 30,
2020


2021


2020

Net (loss) income from continuing operations

$

(18,590)



$

83,693



$

(68,488)



$

32,412



$

(186,420)


Interest expense

17,962



17,338



18,746



53,290



56,238


Interest income

(104)



(54)



(376)



(322)



(6,874)


Income tax expense (benefit)

8



208



(45)



211



(2,200)


Depreciation, depletion and amortization

27,304



24,519



49,236



80,261



143,921


Non-cash stock compensation expense

979



1,188



1,078



4,351



4,200


Mark-to-market adjustment - acquisition-related obligations

3,157



11,676



3,624



18,009



(13,425)


Accretion on asset retirement obligations

6,648



6,674



6,737



19,970



19,945


Asset impairment and restructuring (1)





(226)



(561)



53,981


Management restructuring costs (2)









940


Loss on partial settlement of benefit obligations









1,230


Amortization of acquired intangibles, net

2,553



2,980



2,074



9,402



4,466


Adjusted EBITDA

$

39,917



$

148,222



$

12,360



$

217,023



$

76,002



(1) Asset impairment and restructuring for the nine months ended September 30, 2021 was primarily comprised of a credit to restructuring expense as a result of the strategic actions announced during the second quarter of 2020 and subsequent changes to severance and employee-related benefits. For the three and nine months ended September 30, 2020, asset impairment and restructuring charges were recorded as a result of weakening coal market conditions and the strategic actions with respect to two thermal coal mining complexes. 

(2) Management restructuring costs are related to severance expense associated with senior management changes during the three months ended March 31, 2020.

 

 ALPHA METALLURGICAL RESOURCES, INC. AND SUBSIDIARIES

RESULTS OF OPERATIONS



Three Months Ended June 30, 2021

(In thousands, except for per ton data)

Met


All Other


Consolidated

Coal revenues

$

376,839



$

16,619



$

393,458


Less: Freight and handling fulfillment revenues

(64,329)



(117)



(64,446)


Non-GAAP Coal revenues

$

312,510



$

16,502



$

329,012


Tons sold

3,748



273



4,021


Non-GAAP Coal sales realization per ton

$

83.38



$

60.45



$

81.82








Cost of coal sales (exclusive of items shown separately below)

$

331,239



$

15,524



$

346,763


Depreciation, depletion and amortization - production (1)

25,686



1,438



27,124


Accretion on asset retirement obligations

3,377



3,271



6,648


Amortization of acquired intangibles, net

2,635



(82)



2,553


Total Cost of coal sales

$

362,937



$

20,151



$

383,088


Less: Freight and handling costs

(64,329)



(117)



(64,446)


Less:  Depreciation, depletion and amortization - production (1)

(25,686)



(1,438)



(27,124)


Less: Accretion on asset retirement obligations

(3,377)



(3,271)



(6,648)


Less: Amortization of acquired intangibles, net

(2,635)



82



(2,553)


Less: Idled and closed mine costs

(4,790)



(3,732)



(8,522)


Non-GAAP Cost of coal sales

$

262,120



$

11,675



$

273,795


Tons sold

3,748



273



4,021


Non-GAAP Cost of coal sales per ton

$

69.94



$

42.77



$

68.09



(1) Depreciation, depletion and amortization - production excludes the depreciation, depletion and amortization related to selling, general and administrative functions.

 


Three Months Ended June 30, 2021

(In thousands, except for per ton data)

Met


All Other


Consolidated

Coal revenues

$

376,839



$

16,619



$

393,458


Less: Total Cost of coal sales (per table above)

(362,937)



(20,151)



(383,088)


GAAP Coal margin

$

13,902



$

(3,532)



$

10,370


Tons sold

3,748



273



4,021


GAAP Coal margin per ton

$

3.71



$

(12.94)



$

2.58








GAAP Coal margin

$

13,902



$

(3,532)



$

10,370


Add: Depreciation, depletion and amortization - production (1)

25,686



1,438



27,124


Add: Accretion on asset retirement obligations

3,377



3,271



6,648


Add: Amortization of acquired intangibles, net

2,635



(82)



2,553


Add: Idled and closed mine costs

4,790



3,732



8,522


Non-GAAP Coal margin

$

50,390



$

4,827



$

55,217


Tons sold

3,748



273



4,021


Non-GAAP Coal margin per ton

$

13.44



$

17.68



$

13.73



(1) Depreciation, depletion and amortization - production excludes the depreciation, depletion and amortization related to selling, general and administrative functions.

 


Three Months Ended September 30, 2021

(In thousands, except for per ton data)

Met


All Other


Consolidated

Coal revenues

$

625,387



$

21,742



$

647,129


Less: Freight and handling fulfillment revenues

(128,192)



(18)



(128,210)


Non-GAAP Coal revenues

$

497,195



$

21,724



$

518,919


Tons sold

4,380



348



4,728


Non-GAAP Coal sales realization per ton

$

113.51



$

62.43



$

109.75








Cost of coal sales (exclusive of items shown separately below)

$

468,706



$

19,463



$

488,169


Depreciation, depletion and amortization - production (1)

23,181



1,160



24,341


Accretion on asset retirement obligations

3,408



3,266



6,674


Amortization of acquired intangibles, net

3,063



(83)



2,980


Total Cost of coal sales

$

498,358



$

23,806



$

522,164


Less: Freight and handling costs

(128,192)



(18)



(128,210)


Less:  Depreciation, depletion and amortization - production (1)

(23,181)



(1,160)



(24,341)


Less: Accretion on asset retirement obligations

(3,408)



(3,266)



(6,674)


Less: Amortization of acquired intangibles, net

(3,063)



83



(2,980)


Less: Idled and closed mine costs

(4,932)



(2,927)



(7,859)


Non-GAAP Cost of coal sales

$

335,582



$

16,518



$

352,100


Tons sold

4,380



348



4,728


Non-GAAP Cost of coal sales per ton

$

76.62



$

47.47



$

74.47



(1) Depreciation, depletion and amortization - production excludes the depreciation, depletion and amortization related to selling, general and administrative functions.

 


Three Months Ended September 30, 2021

(In thousands, except for per ton data)

Met


All Other


Consolidated

Coal revenues

$

625,387



$

21,742



$

647,129


Less: Total Cost of coal sales (per table above)

(498,358)



(23,806)



(522,164)


GAAP Coal margin

$

127,029



$

(2,064)



$

124,965


Tons sold

4,380



348



4,728


GAAP Coal margin per ton

$

29.00



$

(5.93)



$

26.43








GAAP Coal margin

$

127,029



$

(2,064)



$

124,965


Add: Depreciation, depletion and amortization - production (1)

23,181



1,160



24,341


Add: Accretion on asset retirement obligations

3,408



3,266



6,674


Add: Amortization of acquired intangibles, net

3,063



(83)



2,980


Add: Idled and closed mine costs

4,932



2,927



7,859


Non-GAAP Coal margin

$

161,613



$

5,206



$

166,819


Tons sold

4,380



348



4,728


Non-GAAP Coal margin per ton

$

36.90



$

14.96



$

35.28



(1) Depreciation, depletion and amortization - production excludes the depreciation, depletion and amortization related to selling, general and administrative functions.

 


Three Months Ended September 30, 2020

(In thousands, except for per ton data)

Met


All Other


Consolidated

Coal revenues

$

295,376



$

39,813



$

335,189


Less: Freight and handling fulfillment revenues

(49,742)



(3,015)



(52,757)


Non-GAAP Coal revenues

$

245,634



$

36,798



$

282,432


Tons sold

3,329



636



3,965


Non-GAAP Coal sales realization per ton

$

73.79



$

57.86



$

71.23








Cost of coal sales (exclusive of items shown separately below)

$

276,248



$

33,445



$

309,693


Depreciation, depletion and amortization - production (1)

41,178



7,724



48,902


Accretion on asset retirement obligations

3,800



2,937



6,737


Amortization of acquired intangibles, net

2,535



(461)



2,074


Total Cost of coal sales

$

323,761



$

43,645



$

367,406


Less: Freight and handling costs

(49,742)



(3,015)



(52,757)


Less:  Depreciation, depletion and amortization - production (1)

(41,178)



(7,724)



(48,902)


Less: Accretion on asset retirement obligations

(3,800)



(2,937)



(6,737)


Less: Amortization of acquired intangibles, net

(2,535)



461



(2,074)


Less: Idled and closed mine costs

(5,091)



(1,196)



(6,287)


Non-GAAP Cost of coal sales

$

221,415



$

29,234



$

250,649


Tons sold

3,329



636



3,965


Non-GAAP Cost of coal sales per ton

$

66.51



$

45.97



$

63.22



(1) Depreciation, depletion and amortization - production excludes the depreciation, depletion and amortization related to selling, general and administrative functions.

 


Three Months Ended September 30, 2020

(In thousands, except for per ton data)

Met


All Other


Consolidated

Coal revenues

$

295,376



$

39,813



$

335,189


Less: Total Cost of coal sales (per table above)

(323,761)



(43,645)



(367,406)


GAAP Coal margin

$

(28,385)



$

(3,832)



$

(32,217)


Tons sold

3,329



636



3,965


GAAP Coal margin per ton

$

(8.53)



$

(6.03)



$

(8.13)








GAAP Coal margin

$

(28,385)



$

(3,832)



$

(32,217)


Add: Depreciation, depletion and amortization - production (1)

41,178



7,724



48,902


Add: Accretion on asset retirement obligations

3,800



2,937



6,737


Add: Amortization of acquired intangibles, net

2,535



(461)



2,074


Add: Idled and closed mine costs

5,091



1,196



6,287


Non-GAAP Coal margin

$

24,219



$

7,564



$

31,783


Tons sold

3,329



636



3,965


Non-GAAP Coal margin per ton

$

7.28



$

11.89



$

8.02



(1) Depreciation, depletion and amortization - production excludes the depreciation, depletion and amortization related to selling, general and administrative functions.

 


Nine Months Ended September 30, 2021

(In thousands, except for per ton data)

Met


All Other


Consolidated

Coal revenues

$

1,362,119



$

63,920



$

1,426,039


Less: Freight and handling fulfillment revenues

(252,532)



(504)



(253,036)


Non-GAAP Coal revenues

$

1,109,587



$

63,416



$

1,173,003


Tons sold

11,785



1,030



12,815


Non-GAAP Coal sales realization per ton

$

94.15



$

61.57



$

91.53








Cost of coal sales (exclusive of items shown separately below)

$

1,125,840



$

56,520



$

1,182,360


Depreciation, depletion and amortization - production (1)

75,403



4,321



79,724


Accretion on asset retirement obligations

10,170



9,800



19,970


Amortization of acquired intangibles, net

9,749



(347)



9,402


Total Cost of coal sales

$

1,221,162



$

70,294



$

1,291,456


Less: Freight and handling costs

(252,532)



(504)



(253,036)


Less:  Depreciation, depletion and amortization - production (1)

(75,403)



(4,321)



(79,724)


Less: Accretion on asset retirement obligations

(10,170)



(9,800)



(19,970)


Less: Amortization of acquired intangibles, net

(9,749)



347



(9,402)


Less: Idled and closed mine costs

(13,325)



(10,215)



(23,540)


Non-GAAP Cost of coal sales

$

859,983



$

45,801



$

905,784


Tons sold

11,785



1,030



12,815


Non-GAAP Cost of coal sales per ton

$

72.97



$

44.47



$

70.68



(1) Depreciation, depletion and amortization - production excludes the depreciation, depletion and amortization related to selling, general and administrative functions.

 


Nine Months Ended September 30, 2021

(In thousands, except for per ton data)

Met


All Other


Consolidated

Coal revenues

$

1,362,119



$

63,920



$

1,426,039


Less: Total Cost of coal sales (per table above)

(1,221,162)



(70,294)



(1,291,456)


GAAP Coal margin

$

140,957



$

(6,374)



$

134,583


Tons sold

11,785



1,030



12,815


GAAP Coal margin per ton

$

11.96



$

(6.19)



$

10.50








GAAP Coal margin

$

140,957



$

(6,374)



$

134,583


Add: Depreciation, depletion and amortization - production (1)

75,403



4,321



79,724


Add: Accretion on asset retirement obligations

10,170



9,800



19,970


Add: Amortization of acquired intangibles, net

9,749



(347)



9,402


Add: Idled and closed mine costs

13,325



10,215



23,540


Non-GAAP Coal margin

$

249,604



$

17,615



$

267,219


Tons sold

11,785



1,030



12,815


Non-GAAP Coal margin per ton

$

21.18



$

17.10



$

20.85



(1) Depreciation, depletion and amortization - production excludes the depreciation, depletion and amortization related to selling, general and administrative functions.

 


Nine Months Ended September 30, 2020

(In thousands, except for per ton data)

Met


All Other


Consolidated

Coal revenues

$

974,098



$

115,666



$

1,089,764


Less: Freight and handling fulfillment revenues

(158,258)



(11,392)



(169,650)


Non-GAAP Coal revenues

$

815,840



$

104,274



$

920,114


Tons sold

9,860



1,907



11,767


Non-GAAP Coal sales realization per ton

$

82.74



$

54.68



$

78.19








Cost of coal sales (exclusive of items shown separately below)

$

866,572



$

112,608



$

979,180


Depreciation, depletion and amortization - production (1)

121,679



21,217



142,896


Accretion on asset retirement obligations

10,887



9,058



19,945


Amortization of acquired intangibles, net

7,875



(3,409)



4,466


Total Cost of coal sales

$

1,007,013



$

139,474



$

1,146,487


Less: Freight and handling costs

(158,258)



(11,392)



(169,650)


Less:  Depreciation, depletion and amortization - production (1)

(121,679)



(21,217)



(142,896)


Less: Accretion on asset retirement obligations

(10,887)



(9,058)



(19,945)


Less: Amortization of acquired intangibles, net

(7,875)



3,409



(4,466)


Less: Idled and closed mine costs

(13,191)



(9,544)



(22,735)


Non-GAAP Cost of coal sales

$

695,123



$

91,672



$

786,795


Tons sold

9,860



1,907



11,767


Non-GAAP Cost of coal sales per ton

$

70.50



$

48.07



$

66.86



(1) Depreciation, depletion and amortization - production excludes the depreciation, depletion and amortization related to selling, general and administrative functions.

 


Nine Months Ended September 30, 2020

(In thousands, except for per ton data)

Met


All Other


Consolidated

Coal revenues

$

974,098



$

115,666



$

1,089,764


Less: Total Cost of coal sales (per table above)

(1,007,013)



(139,474)



(1,146,487)


GAAP Coal margin

$

(32,915)



$

(23,808)



$

(56,723)


Tons sold

9,860



1,907



11,767


GAAP Coal margin per ton

$

(3.34)



$

(12.48)



$

(4.82)








GAAP Coal margin

$

(32,915)



$

(23,808)



$

(56,723)


Add: Depreciation, depletion and amortization - production (1)

121,679



21,217



142,896


Add: Accretion on asset retirement obligations

10,887



9,058



19,945


Add: Amortization of acquired intangibles, net

7,875



(3,409)



4,466


Add: Idled and closed mine costs

13,191



9,544



22,735


Non-GAAP Coal margin

$

120,717



$

12,602



$

133,319


Tons sold

9,860



1,907



11,767


Non-GAAP Coal margin per ton

$

12.24



$

6.61



$

11.33



(1) Depreciation, depletion and amortization - production excludes the depreciation, depletion and amortization related to selling, general and administrative functions.

 


Three Months Ended June 30, 2021

(In thousands, except for per ton data)

Met


All Other


Consolidated

Non-GAAP Cost of coal sales

$

262,120



$

11,675



$

273,795


Less: cost of purchased coal sold

(24,642)





(24,642)


Adjusted cost of produced coal sold

$

237,478



$

11,675



$

249,153


Produced tons sold

3,497



273



3,770


Adjusted cost of produced coal sold per ton (1)

$

67.91



$

42.77



$

66.09



(1) Cost of produced coal sold per ton for our operations is calculated as non-GAAP cost of produced coal sold divided by produced tons sold.

 


Three Months Ended September 30, 2021

(In thousands, except for per ton data)

Met


All Other


Consolidated

Non-GAAP Cost of coal sales

$

335,582



$

16,518



$

352,100


Less: cost of purchased coal sold

(32,168)





(32,168)


Adjusted cost of produced coal sold

$

303,414



$

16,518



$

319,932


Produced tons sold

4,107



348



4,455


Adjusted cost of produced coal sold per ton (1)

$

73.88



$

47.47



$

71.81



(1) Cost of produced coal sold per ton for our operations is calculated as non-GAAP cost of produced coal sold divided by produced tons sold.

 


Three Months Ended September 30, 2020

(In thousands, except for per ton data)

Met


All Other


Consolidated

Non-GAAP Cost of coal sales

$

221,415



$

29,234



$

250,649


Less: cost of purchased coal sold

(12,511)



70



(12,441)


Adjusted cost of produced coal sold

$

208,904



$

29,304



$

238,208


Produced tons sold

3,142



636



3,778


Adjusted cost of produced coal sold per ton (1)

$

66.49



$

46.08



$

63.05



(1) Cost of produced coal sold per ton for our operations is calculated as non-GAAP cost of produced coal sold divided by produced tons sold.

 


Nine Months Ended September 30, 2021

(In thousands, except for per ton data)

Met


All Other


Consolidated

Non-GAAP Cost of coal sales

$

859,983



$

45,801



$

905,784


Less: cost of purchased coal sold

(75,074)





(75,074)


Adjusted cost of produced coal sold

$

784,909



$

45,801



$

830,710


Produced tons sold

11,028



1,030



12,058


Adjusted cost of produced coal sold per ton (1)

$

71.17



$

44.47



$

68.89



(1) Cost of produced coal sold per ton for our operations is calculated as non-GAAP cost of produced coal sold divided by produced tons sold.

 


Nine Months Ended September 30, 2020

(In thousands, except for per ton data)

Met


All Other


Consolidated

Non-GAAP Cost of coal sales

$

695,123



$

91,672



$

786,795


Less: cost of purchased coal sold

(65,777)



(832)



(66,609)


Adjusted cost of produced coal sold

$

629,346



$

90,840



$

720,186


Produced tons sold

9,001



1,894



10,895


Adjusted cost of produced coal sold per ton (1)

$

69.92



$

47.96



$

66.10



(1) Cost of produced coal sold per ton for our operations is calculated as non-GAAP cost of produced coal sold divided by produced tons sold.

 


Three Months Ended September 30, 2021

(In thousands, except for per ton data)

Tons Sold


Coal Revenues


Non-GAAP
Coal sales
realization per
ton


% of Met Tons
Sold

Export - other pricing mechanisms

2,187



$

274,328



$

125.44



56

%

Domestic

1,037



89,231



$

86.05



27

%

Export - Australian indexed

668



106,125



$

158.87



17

%

Total Met segment - met coal

3,892



$

469,684



$

120.68



100

%

Met segment - thermal coal

488



27,511



$

56.38




Total Met segment Coal revenues

4,380



497,195



$

113.51




All Other Coal revenues

348



21,724



$

62.43




Non-GAAP Coal revenues

4,728



$

518,919



$

109.75




Add: Freight and handling fulfillment revenues



128,210






Coal revenues

4,728



$

647,129






 

 

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SOURCE Alpha Metallurgical Resources, Inc.