Challenging Geology, Transportation Issues Contribute to
Fewer Shipped Tons and Higher Cost
of Coal Sales for the Quarter
BRISTOL,
Tenn., Jan. 30, 2023 /PRNewswire/ -- Alpha
Metallurgical Resources, Inc. (NYSE: AMR) ("Alpha" or the
"Company"), a leading U.S. supplier of metallurgical products for
the steel industry, today announced preliminary, unaudited
financial results for the fourth quarter ending December 31, 2022.
|
(millions, except per
share)
|
|
Three months
ended
|
|
Dec. 31,
2022
|
Net
income
|
$220.7
|
Net income per
diluted share
|
$13.37
|
Adjusted
EBITDA(1)
|
$247.9
|
Tons of coal
sold
|
3.9
|
__________________________________
1. These are
non-GAAP financial measures. A reconciliation of Net Income to
Adjusted EBITDA is included in tables accompanying the financial
schedules.
|
"In advance of our formal earnings announcement in late
February, we are providing an initial look at what ended up being a
challenging quarter from a production and cost standpoint," said
Andy Eidson, Alpha's chief executive
officer. "Our volumes for the quarter came in lower than expected
due to a confluence of negative factors, chiefly some challenging,
but temporary, geological conditions at a few of our largest mines
and transportation issues in moving our coal from the mines to
preparation plants and train loadouts. When combined with a few
weather-related power outages, delays resulting from shortage of
certain component equipment parts, and holiday shutdowns limiting
additional work hours available to recover lost production, these
headwinds made for a weaker-than-anticipated quarter and
higher-than-projected cost environment."
Eidson continued: "We have taken steps to address these issues.
Mine advance rates in January are back to normal levels at the
mines where we experienced late-2022 issues, and we believe the
geological issues are now behind us. We are also seeing improvement
in the ability to move coal from the mines to our plants, and we
have taken proactive steps to shore up our parts and equipment
supply chain. We look forward to sharing more detail about these
efforts on our February 23 earnings
conference call."
Preliminary Financial Performance
Alpha expects to report net income of $220.7 million, or $13.37 per diluted share, for the fourth quarter
2022.
For the fourth quarter, total Adjusted EBITDA was $247.9 million.
Coal
Revenues
|
|
|
(millions)
|
|
Three months
ended
|
|
Dec. 31,
2022
|
Met
Segment
|
$804.9
|
All
Other
|
$16.3
|
|
|
Met Segment
(excl. freight & handling)(1)
|
$699.0
|
All Other
(excl. freight & handling)(1)
|
$16.3
|
|
|
Tons Sold
|
(millions)
|
|
Three months
ended
|
|
Dec. 31,
2022
|
Met
Segment
|
3.8
|
All
Other
|
0.1
|
__________________________________
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
|
|
Dec. 31,
2022
|
Met
Segment
|
$186.29
|
All
Other
|
$126.10
|
__________________________________
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
|
|
Dec. 31,
2022
|
Cost of Coal
Sales
|
$549.1
|
Cost of Coal Sales
(excl. freight & handling/idle)(1)
|
$434.3
|
|
|
|
(per ton)
|
Met
Segment(1)
|
$112.97
|
All
Other(1)
|
$80.76
|
__________________________________
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."
|
Alpha's chief financial officer, Todd
Munsey, commented on the preliminary results for full year
2022: "Due to the operational challenges alongside increased labor
and benefits costs for our workforce, we expect to report Non-GAAP
costs per ton slightly above the top end of our full year guidance
range for Met segment cost of coal sales. While our fourth quarter
2022 results clearly underperformed our expectations, 2022 was a
year of record financial performance. We believe this performance
is an indicator of the collective team's capabilities that we
expect to build on and highlight in the current year."
As of December 31, 2022, Alpha had
total liquidity of $441.1 million, including cash and cash
equivalents of $301.9 million,
short-term investments of $46.1
million, and $93.1 million of
unused availability under the 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 December 31,
2022, the company had no borrowings and $61.9 million in letters of credit outstanding
under the ABL.
Share Repurchase Program
In 2022, Alpha's board of directors authorized a share
repurchase program allowing for the expenditure of up to
$1 billion for the repurchase of the
company's common stock. As of December 31,
2022, the company had acquired approximately 3.5 million
shares of common stock at a cost of approximately $517 million. The number of common stock shares
outstanding as of December 31, 2022
was 15,552,676, not including the potentially dilutive effect of
unexercised warrant shares or unvested equity awards.
The timing and amount of share repurchases will continue to be
determined by the company's management based on its evaluation of
market conditions, the trading price of the stock, applicable legal
requirements, compliance with the provisions of the company's debt
agreements, and other factors.
Note About Preliminary Results
The financial results presented in this release are preliminary
and may change. This preliminary financial information includes
calculations or figures that have been prepared internally by
management. The Company's independent registered public accounting
firm has not finished its audit of, and does not express an opinion
with respect to, this data. There can be no assurance that the
Company's actual results for the periods presented herein will not
differ from the preliminary financial results presented herein, and
such changes could be material. These preliminary financial results
should not be viewed as a substitute for full financial statements
prepared in accordance with GAAP and are not necessarily indicative
of the results to be achieved for any future periods. This
preliminary financial information could be impacted by the effects
of the Company's financial closing procedures, final adjustments,
and other developments, including the ongoing audit of the
Company's consolidated financial statements.
Earnings Announcement and Conference Call
The company plans to announce its definitive fourth quarter 2022
financial results before the market opens on Thursday, February 23, 2023. The company also
expects to hold a conference call regarding its fourth quarter 2022
results on February 23, 2023, 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
877-407-0832 (domestic toll-free) or 201-689-8433 (international)
approximately 15 minutes prior to start time.
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 AND MEDIA CONTACT: EMILY O'QUINN
InvestorRelations@AlphaMetResources.com
CorporateCommunications@AlphaMetResources.com
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
ADJUSTED EBITDA
RECONCILIATION
(Amounts in
thousands)
|
|
|
Three Months
Ended
December 31, 2022
|
Net income
|
$
220,680
|
Interest
expense
|
1,747
|
Interest
income
|
(1,775)
|
Income tax
benefit
|
(7,748)
|
Depreciation, depletion
and amortization
|
23,930
|
Non-cash stock
compensation expense
|
3,381
|
Mark-to-market
adjustment - acquisition-related obligations
|
(1,735)
|
Accretion on asset
retirement obligations
|
5,943
|
Amortization of
acquired intangibles, net
|
3,460
|
Adjusted
EBITDA
|
$
247,883
|
ALPHA
METALLURGICAL RESOURCES, INC. AND SUBSIDIARIES
RESULTS OF
OPERATIONS
|
|
|
Three Months Ended
December 31, 2022
|
(In thousands,
except for per ton data)
|
Met
|
|
All
Other
|
|
Consolidated
|
Coal
revenues
|
$
804,876
|
|
$
16,266
|
|
$
821,142
|
Less: Freight and
handling fulfillment revenues
|
(105,911)
|
|
1
|
|
(105,910)
|
Non-GAAP Coal
revenues
|
$
698,965
|
|
$
16,267
|
|
$
715,232
|
Tons sold
|
3,752
|
|
129
|
|
3,881
|
Non-GAAP Coal sales
realization per ton
|
$
186.29
|
|
$
126.10
|
|
$
184.29
|
|
|
|
|
|
|
Cost of coal sales
(exclusive of items shown separately below)
|
$
541,547
|
|
$
7,596
|
|
$
549,143
|
Depreciation, depletion
and amortization - production (1)
|
19,575
|
|
4,083
|
|
23,658
|
Accretion on asset
retirement obligations
|
3,412
|
|
2,531
|
|
5,943
|
Amortization of
acquired intangibles, net
|
2,517
|
|
943
|
|
3,460
|
Total Cost of coal
sales
|
$
567,051
|
|
$
15,153
|
|
$
582,204
|
Less: Freight and
handling costs
|
(105,911)
|
|
1
|
|
(105,910)
|
Less:
Depreciation, depletion and amortization - production
(1)
|
(19,575)
|
|
(4,083)
|
|
(23,658)
|
Less: Accretion on
asset retirement obligations
|
(3,412)
|
|
(2,531)
|
|
(5,943)
|
Less: Amortization of
acquired intangibles, net
|
(2,517)
|
|
(943)
|
|
(3,460)
|
Less: Idled and closed
mine costs
|
(11,754)
|
|
2,821
|
|
(8,933)
|
Non-GAAP Cost of coal
sales
|
$
423,882
|
|
$
10,418
|
|
$
434,300
|
Tons sold
|
3,752
|
|
129
|
|
3,881
|
Non-GAAP Cost of coal
sales per ton
|
$
112.97
|
|
$
80.76
|
|
$
111.90
|
|
(1) Depreciation, depletion and
amortization - production excludes the depreciation, depletion and
amortization related to selling, general and administrative
functions.
|
|
Three Months Ended
December 31, 2022
|
(In thousands,
except for per ton data)
|
Met
|
|
All
Other
|
|
Consolidated
|
Coal
revenues
|
$
804,876
|
|
$
16,266
|
|
$
821,142
|
Less: Total Cost of
coal sales (per table above)
|
(567,051)
|
|
(15,153)
|
|
(582,204)
|
GAAP Coal
margin
|
$
237,825
|
|
$
1,113
|
|
$
238,938
|
Tons sold
|
3,752
|
|
129
|
|
3,881
|
GAAP Coal margin per
ton
|
$
63.39
|
|
$
8.63
|
|
$
61.57
|
|
|
|
|
|
|
GAAP Coal
margin
|
$
237,825
|
|
$
1,113
|
|
$
238,938
|
Add: Depreciation,
depletion and amortization - production (1)
|
19,575
|
|
4,083
|
|
23,658
|
Add: Accretion on asset
retirement obligations
|
3,412
|
|
2,531
|
|
5,943
|
Add: Amortization of
acquired intangibles, net
|
2,517
|
|
943
|
|
3,460
|
Add: Idled and closed
mine costs
|
11,754
|
|
(2,821)
|
|
8,933
|
Non-GAAP Coal
margin
|
$
275,083
|
|
$
5,849
|
|
$
280,932
|
Tons sold
|
3,752
|
|
129
|
|
3,881
|
Non-GAAP Coal margin
per ton
|
$
73.32
|
|
$
45.34
|
|
$
72.39
|
|
(1) Depreciation, depletion and
amortization - production excludes the depreciation, depletion and
amortization related to selling, general and administrative
functions.
|
|
Three Months Ended
December 31, 2022
|
(In thousands,
except for per ton data)
|
Met
|
|
All
Other
|
|
Consolidated
|
Non-GAAP Cost of coal
sales
|
$
423,882
|
|
$
10,418
|
|
$
434,300
|
Less: cost of purchased
coal sold
|
(37,238)
|
|
—
|
|
(37,238)
|
Adjusted cost of
produced coal sold
|
$
386,644
|
|
$
10,418
|
|
$
397,062
|
Produced tons
sold
|
3,561
|
|
130
|
|
3,691
|
Adjusted cost of
produced coal sold per ton (1)
|
$
108.58
|
|
$
80.14
|
|
$
107.58
|
|
(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.
|
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SOURCE Alpha Metallurgical Resources, Inc.