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Alpha Announces Second Quarter 2021 Results

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·19 min read
In this article:
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- Reports net loss from continuing operations of $18.6 million for the second quarter 2021

- Posts Adjusted EBITDA of $39.9 million for the second quarter 2021

- Continues strong cost management across the enterprise

- Strengthens realizations for Atlantic-priced Met business in the quarter

- Accelerates payment to retire certain LCC restructuring-related obligations ahead of schedule

- Increases 2021 production guidance; adjusts SG&A and CapEx guidance

BRISTOL, Tenn., Aug. 6, 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 second quarter ending June 30, 2021.

(PRNewsfoto/Alpha Metallurgical Resources, Inc.)
(PRNewsfoto/Alpha Metallurgical Resources, Inc.)


(millions, except per share)


Three months ended


June 30, 2021

Mar. 31, 2021

June 30, 2020

Net loss(2)

$(18.6)

$(32.7)

$(81.7)

Net loss(2) per diluted share

$(1.01)

$(1.78)

$(4.47)

Adjusted EBITDA(1)

$39.9

$28.9

$7.1

Operating cash flow(3)

$(6.3)

$(19.1)

$79.0

Capital expenditures(3)

$(17.6)

$(20.4)

$(41.5)

Tons of coal sold(2)

4.0

4.1

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.
2. From continuing operations.
3. Includes discontinued operations.

"This has been a very challenging year for the coal industry, whether dealing with the pandemic or navigating the disruption of the coal supply resulting from the dispute between Australia and China; however, our team at Alpha stayed focused and disciplined. While we didn't have any greater insights or vision into the markets than others as we started the year, we believed that if we continued our efforts to modernize our coal operations with newer and more efficient mines, streamline decision making and allocate capital for projects that support our diversified product offerings to meet customer demands, we would be rewarded for those efforts when the markets rebounded," said David Stetson, Alpha's chair and chief executive officer. "As we look to the back half of the year and into the promising 2022 markets, we think those efforts are beginning to pay off. The capital investments we made over the past several years have matured, and the diversity of our product offerings continues to provide us with optionality in the marketplace, where demand remains high. With increased pricing and strong margins, we plan to build our cash balance and take aggressive steps to pay down our existing debt."

Financial Performance

Alpha reported a net loss from continuing operations of $18.6 million, or $1.01 per diluted share, for the second quarter 2021. In the first quarter 2021, the company had a net loss from continuing operations of $32.7 million or $1.78 per diluted share.

Total Adjusted EBITDA was $39.9 million for the second quarter, compared with $28.9 million in the first quarter 2021.

Coal Revenues


(millions)


Three months ended


June 30, 2021

Mar. 31, 2021

Met Segment

$376.8

$359.9

All Other

$16.6

$25.6




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

$312.5

$299.9

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

$16.5

$25.2



Tons Sold

(millions)


Three months ended


June 30, 2021

Mar. 31, 2021

Met Segment

3.7

3.7

All Other

0.3

0.4

__________________________________

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


June 30, 2021

Mar. 31, 2021

Met Segment

$83.38

$82.00

All Other

$60.45

$61.59

__________________________________

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

In the second quarter our net realized pricing for the Met segment was $83.38, however, our export sales into markets not tied to Australian indices averaged $101.80 per ton for the quarter. "Alpha has long standing contractual arrangements that have historically provided us with excellent margins and access to the one of the fastest growing markets for Met coal. Those arrangements are tied to Australian indices, which resulted in net realizations of $67.77 in the second quarter, weighing down our overall net realizations," Andy Eidson, Alpha's president and chief financial officer, said. "It is important to note that the Australian premium hard coking coal index has increased nearly 60% from the average during the second quarter, with the current pricing of approximately $215 per metric ton bringing it in line with Atlantic Basin pricing. Approximately 21% of our met production at the midpoint of full-year guidance is unpriced and should benefit from this improved pricing environment in the back half of the year."

The table below provides a breakdown of our Met segment coal sold in the second quarter by pricing mechanism, illustrating the contrast between Australian and Atlantic pricing found in the average realization for the quarter.


(in millions, except per ton data)

Met Segment Sales

Three months ended June 30, 2021


Tons Sold

Coal Revenues

Realization/ton(1)

% of Met Tons Sold

Export - Other Pricing Mechanisms

1.2

$125.8

$101.80

37%

Domestic

1.2

$103.6

$87.98

35%

Export - Australian Indexed

0.9

$63.3

$67.77

28%

Total Met Coal Revenues

3.3

$292.8

$87.45

100%

Thermal Coal Revenues

0.4

$19.7

$49.36


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

3.7

$312.5

$83.38


__________________________________

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


June 30, 2021

Mar. 31, 2021

Cost of Coal Sales

$346.8

$347.4

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

$273.8

$279.9




(per ton)

Met Segment(1)

$69.94

$71.72

All Other(1)

$42.77

$43.05

__________________________________

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

"The transition from higher cost and lower efficiency mines to our new mines such as Road Fork 52 and Lynn Branch enabled us to maintain our costs near the lower end of guidance," said Jason Whitehead, executive vice president and chief operating officer. In the second quarter, the company's Met segment cost of coal sales improved to an average of $69.94 per ton, down from $71.72 in the prior quarter.

Cost of coal sales for the All Other category dropped slightly as well to $42.77 in the second quarter as compared to an average cost of $43.05 in the first quarter.

Liquidity and Capital Resources

"Alpha posted another solid quarter of financial performance, especially in light of the lingering headwinds from the weak Australian indices that limited our overall realizations for the period," said Eidson. "While our cash balance decreased during the quarter due primarily to inventory build, our total liquidity increased by $24 million."

"Subsequent to the quarter end, we made a $21 million payment to eliminate the West Virginia Lexington Coal Company (LCC) note a year ahead of schedule and, after the negotiated return of $14 million of related surety collateral, at a lower net cash outflow than was previously expected. This early extinguishment of a legacy liability is further evidence of our commitment to strategically reducing debt and strengthening the company's balance sheet," Eidson said.

Cash used in operating activities for the second quarter of 2021 was $6.3 million, compared to the prior period in which cash used in operating activities was $19.1 million. Cash used in operating activities includes discontinued operations. Second quarter 2021 capital expenditures were $17.6 million compared to $20.4 million in capital expenditures for first quarter.

As of June 30, 2021, Alpha had $72.3 million in unrestricted cash and $134.8 million in restricted cash, deposits and investments. Total long-term debt, including the current portion of long-term debt as of June 30, 2021, was $579.7 million. At the end of the second quarter, the company had total liquidity of $132.3 million, which represents an increase of over 20% compared to our total liquidity at the end of the first quarter, including cash and cash equivalents of $72.3 million and $60.0 million in 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 June 30, 2021, the company had no borrowings and $128.8 million in letters of credit outstanding under the ABL.

Operational Update

As part of Alpha's ongoing portfolio optimization efforts, the company is adding a fourth section at the Road Fork 52 mine, increasing its potential production of Low Volatile coal at a mine that has exceeded productivity expectations since its inception. Developing the fourth section at Road Fork 52 will require a modest amount of capital for the 2021 year, and we are raising our capital expenditures guidance as a result. Given the current market landscape and the tightness of existing coal supply, we believe this is a beneficial investment to bring additional incremental tonnage online before the end of the calendar year.

The company is considering other potential bolt-on or development projects for the near term, all of which would require modest projected capital expenditures. More information will be provided if these projects advance.

"On the whole, our mines performed well in the second quarter, reducing Met segment cost of sales by nearly $2 per ton and continuing robust production levels, leading us to slightly increase production guidance for the full year," said Whitehead. "In addition to maintaining strong operational fundamentals, we continually look for opportunities to incrementally add value or improve our existing processes. In our view, the fourth section at Road Fork is not only a prudent use of capital with a payback expected in less than six months, but also it enables us to put some extra Alpha tons into a tight market."

2021 Full-Year Guidance Adjustments

The company is increasing its 2021 operating guidance with coal shipments now expected to be in the range of 15.6 million tons to 17.5 million tons, up from the prior range of 14.8 million to 16.2 million tons. Met segment volume is expected to be between 14.3 million to 15.8 million tons, up from the prior range of 13.5 million to 14.5 million tons. Within the Met segment, pure metallurgical coal shipments for the year are expected to be between 13.0 million to 14.0 million tons, up from the prior range of 12.5 million to 13.0 million tons, and incidental thermal shipments in this segment are expected to be between 1.3 million to 1.8 million tons, up from the prior range of 1.0 million to 1.5 million tons. Our volume expectations for the All Other category remain unchanged at the previously issued guidance range of 1.3 million tons to 1.7 million tons.

For 2021, Alpha has committed and priced approximately 79% of its metallurgical coal within the Met segment at an average price of $89.78 per ton and 98% of thermal coal in the Met segment at an average expected price of $52.68 per ton. In the All Other category the company is fully committed and priced at an average price of $59.66 per ton.

The company's 2021 Met segment cost of coal sales per ton remains unchanged and is expected to be between $68.00 and $74.00 and our All Other category is expected to be in the range of $45.00 to $49.00 per ton.

The company is updating its SG&A guidance from the prior range of $44 million to $49 million to a new range of $48 million to $52 million, excluding non-recurring expenses and non-cash stock compensation, reflecting a market-driven increase in accrued incentive compensation. Our overall 2021 capital expenditures guidance is also being updated from the prior range of $75 million to $95 million to a new range of $88 million to $98 million because of the Road Fork 52 expansion. Depreciation, depletion and amortization guidance is expected to be between $125 million and $145 million for the year. Cash interest expense guidance is unchanged in the range of $51 million and $55 million.


2021 Guidance

in millions of tons

Low

High

Metallurgical

13.0


14.0


Thermal

1.3


1.8


Met Segment

14.3


15.8


All Other

1.3


1.7


Total Shipments

15.6


17.5





Committed/Priced1,2,3

Committed

Average Price

Metallurgical - Domestic


$87.86


Metallurgical - Export


$91.24


Metallurgical Total

79

%

$89.78


Thermal

98

%

$52.68


Met Segment

81

%

$85.30


All Other

100

%

$59.66





Committed/Unpriced1,3

Committed


Metallurgical Total

18

%


Thermal

2

%


Met Segment

17

%


All Other

4

%





Costs per ton4

Low

High

Met Segment

$68.00


$74.00


All Other

$45.00


$49.00





In millions (except taxes)

Low

High

SG&A5

$48


$52


Idle Operations Expense

$24


$30


Cash Interest Expense

$51


$55


DD&A

$125


$145


Capital Expenditures

$88


$98


Tax Rate

%

5

%

Notes:

  1. Based on committed and priced coal shipments as of July 26, 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.

Conference Call

The company plans to hold a conference call regarding its second quarter 2021 results on August 6, 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 866-235-9918 (domestic toll-free) or 412-542-4110 (international) approximately 15 minutes prior to the start of 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 June 30,


Six Months Ended June 30,


2021


2020


2021


2020

Revenues:








Coal revenues

$

393,458



$

353,115



$

778,910



$

754,575


Other revenues

1,817



825



2,618



2,169


Total revenues

395,275



353,940



781,528



756,744


Costs and expenses:








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

346,763



335,267



694,191



669,487


Depreciation, depletion and amortization

27,304



47,069



55,742



94,685


Accretion on asset retirement obligations

6,648



6,569



13,296



13,208


Amortization of acquired intangibles, net

2,553



1,881



6,422



2,392


Asset impairment and restructuring



20,498



(561)



54,207


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

14,645



12,028



29,627



27,509


Total other operating (income) loss:








Mark-to-market adjustment for acquisition-related obligations

3,157



(2,052)



6,333



(17,049)


Other income

(3,608)



(45)



(4,833)



(713)


Total costs and expenses

397,462



421,215



800,217



843,726


Loss from operations

(2,187)



(67,275)



(18,689)



(86,982)


Other (expense) income:








Interest expense

(17,962)



(19,316)



(35,952)



(37,492)


Interest income

104



5,530



268



6,498


Equity loss in affiliates

(384)



(1,047)



(518)



(1,790)


Miscellaneous income (loss), net

1,847



395



3,613



(321)


Total other expense, net

(16,395)



(14,438)



(32,589)



(33,105)


Loss from continuing operations before income taxes

(18,582)



(81,713)



(51,278)



(120,087)


Income tax (expense) benefit

(8)



(33)



(3)



2,155


Net loss from continuing operations

(18,590)



(81,746)



(51,281)



(117,932)


Discontinued operations:








Loss from discontinued operations before income taxes

(401)



(156,555)



(638)



(160,177)


Loss from discontinued operations

(401)



(156,555)



(638)



(160,177)


Net loss

$

(18,991)



$

(238,301)



$

(51,919)



$

(278,109)










Basic and diluted loss per common share:








Loss from continuing operations

$

(1.01)



$

(4.47)



$

(2.78)



$

(6.45)


Loss from discontinued operations

(0.02)



(8.55)



(0.04)



(8.77)


Net loss

$

(1.03)



$

(13.02)



$

(2.82)



$

(15.22)










Weighted average shares – basic and diluted

18,438,699



18,304,853



18,416,946



18,275,382



ALPHA METALLURGICAL RESOURCES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

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



June 30, 2021


December 31, 2020

Assets




Current assets:




Cash and cash equivalents

$

72,337



$

139,227


Trade accounts receivable, net of allowance for doubtful accounts of $175 and $293 as of June 30, 2021 and December 31, 2020

206,693



145,670


Inventories, net

144,416



108,051


Prepaid expenses and other current assets

108,515



106,252


Current assets - discontinued operations

2,157



10,935


Total current assets

534,118



510,135


Property, plant, and equipment, net of accumulated depreciation and amortization of $418,677 and $382,423 as of June 30, 2021 and December 31, 2020

357,152



363,620


Owned and leased mineral rights, net of accumulated depletion and amortization of $45,505 and $35,143 as of June 30, 2021 and December 31, 2020

452,887



463,250


Other acquired intangibles, net of accumulated amortization of $32,286 and $25,700 as of June 30, 2021 and December 31, 2020

81,610



88,196


Long-term restricted cash

92,758



96,033


Other non-current assets

134,781



149,382


Non-current assets - discontinued operations

9,477



9,473


Total assets

$

1,662,783



$

1,680,089


Liabilities and Stockholders' Equity




Current liabilities:




Current portion of long-term debt

$

29,404



$

28,830


Trade accounts payable

97,938



...

58,413


Acquisition-related obligations – current

22,866



19,099


Accrued expenses and other current liabilit...ies

154,067



140,406


Current liabilities - discontinued operations

7,101



12,306


Total current liabilities

311,376



259,054


Long-term debt

550,263



553,697


Acquisition-related obligations - long-term

11,972



20,768


Workers' compensation and black lung obligations

231,029



230,081


Pension obligations

198,549



218,671


Asset retirement obligations

140,840



140,074


Deferred income taxes

483



480


Other non-current liabilities

28,444



28,072


Non-current liabilities - discontinued operations

27,496



29,090


Total liabilities

1,500,452



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 June 30, 2021 and 20.6 million issued and 18.3 million outstanding at December 31, 2020

208



206


Additional paid-in capital

782,586



779,424


Accumulated other comprehensive loss

(100,321)



(111,985)


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

(107,694)



(107,014)


Accumulated deficit

(412,448)



(360,529)


Total stockholders' equity

162,331



200,102


Total liabilities and stockholders' equity

$

1,662,783



$

1,680,089


ALPHA METALLURGICAL RESOURCES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(Amounts in thousands)



Six Months Ended June 30,


2021


2020

Operating activities:




Net loss

$

(51,919)



$

(278,109)


Adjustments to reconcile net loss to net cash used in operating activities:




Depreciation, depletion and amortization

55,742



103,727


Amortization of acquired intangibles, net

6,422



2,961


Accretion of acquisition-related obligations discount

723



2,227


Amortization of debt issuance costs and accretion of debt discount

6,480



7,389


Mark-to-market adjustment for acquisition-related obligations

6,333



(17,049)


Gain on disposal of assets

(4,878)



(755)


Asset impairment and restructuring

(561)



217,882


Accretion on asset retirement obligations

13,296



14,679


Employee benefit plans, net

5,744



10,605


Deferred income taxes

3



33,032


Stock-based compensation

3,162



3,121


Equity loss in affiliates

518



1,790


Other, net

(220)



92


Changes in operating assets and liabilities

(66,296)



(22,654)


Net cash (used in) provided by operating activities

(25,451)



78,938


Investing activities:




Capital expenditures

(38,039)



(91,090)


Proceeds on disposal of assets

6,801



1,285


Purchases of investment securities

(15,470)



(18,607)


Maturity of investment securities

7,766



10,653


Capital contributions to equity affiliates

(1,895)



(2,416)


Other, net

35



47


Net cash used in investing activities

(40,802)



(100,128)


Financing activities:




Proceeds from borrowings on debt



57,500


Principal repayments of debt

(6,159)



(29,559)


Principal repayments of notes payable

(1,362)



(574)


Principal repayments of financing lease obligations

(1,002)



(1,614)


Debt issuance costs

(226)




Common stock repurchases and related expenses

(680)



(155)


Net cash (used in) provided by financing activities

(9,429)



25,598


Net (decrease) increase in cash and cash equivalents and restricted cash

(75,682)



4,408


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

$

168,889



$

352,088


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 June 30,


2021


2020

Cash and cash equivalents

$

72,337



$

238,438


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

3,794



3,720


Long-term restricted cash

92,758



109,930


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

$

168,889



$

352,088


ALPHA METALLURGICAL RESOURCES, INC. AND SUBSIDIARIES

ADJUSTED EBITDA RECONCILIATION

(Amounts in thousands)



Three Months Ended


Six Months Ended June 30,


March 31, 2021


June 30, 2021


June 30, 2020


2021


2020

Net loss from continuing operations

$

(32,691)



$

(18,590)



$

(81,746)



$

(51,281)



$

(117,932)


Interest expense

17,990



17,962



19,316



35,952



37,492


Interest income

(164)



(104)



(5,530)



(268)



(6,498)


Income tax (benefit) expense

(5)



8



33



3



(2,155)


Depreciation, depletion and amortization

28,438



27,304



47,069



55,742



94,685


Non-cash stock compensation expense

2,184



979



1,044



3,163



3,122


Mark-to-market adjustment - acquisition-related obligations

3,176



3,157



(2,052)



6,333



(17,049)


Accretion on asset retirement obligations

6,648



6,648



6,569



13,296



13,208


Asset impairment and restructuring (1)

(561)





20,498



(561)



54,207


Management restructuring costs (2)









940


Loss on partial settlement of benefit obligations





63





1,230


Amortization of acquired intangibles, net

3,869



2,553



1,881



6,422



2,392


Adjusted EBITDA

$

28,884



$

39,917



$

7,145



$

68,801



$

63,642


(1) Asset impairment and restructuring for the three months ended March 31, 2021 and the six months ended June 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 six months ended June 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 March 31, 2021

(In thousands, except for per ton data)

Met


All Other


Consolidated

Coal revenues

$

359,893



$

25,559



$

385,452


Less: Freight and handling fulfillment revenues

(60,011)



(369)



(60,380)


Non-GAAP Coal revenues

$

299,882



$

25,190



$

325,072


Tons sold

3,657



409



4,066


Non-GAAP Coal sales realization per ton

$

82.00



$

61.59



$

79.95








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

$

325,895



$

21,533



$

347,428


Depreciation, depletion and amortization - production (1)

26,536



1,723



28,259


Accretion on asset retirement obligations

3,385



3,263



6,648


Amortization of acquired intangibles, net

4,051



(182)



3,869


Total Cost of coal sales

$

359,867



$

26,337



$

386,204


Less: Freight and handling costs

(60,011)



(369)



(60,380)


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

(26,536)



(1,723)



(28,259)


Less: Accretion on asset retirement obligations

(3,385)



(3,263)



(6,648)


Less: Amortization of acquired intangibles, net

(4,051)



182



(3,869)


Less: Idled and closed mine costs

(3,603)



(3,556)



(7,159)


Non-GAAP Cost of coal sales

$

262,281



$

17,608



$

279,889


Tons sold

3,657



409



4,066


Non-GAAP Cost of coal sales per ton

$

71.72



$

43.05



$

68.84


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


Three Months Ended March 31, 2021

(In thousands, except for per ton data)

Met


All Other


Consolidated

Coal revenues

$

359,893



$

25,559



$

385,452


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

(359,867)



(26,337)



(386,204)


GAAP Coal margin

$

26



$

(778)



$

(752)


Tons sold

3,657



409



4,066


GAAP Coal margin per ton

$

0.01



$

(1.90)



$

(0.18)








GAAP Coal margin

$

26



$

(778)



$

(752)


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

26,536



1,723



28,259


Add: Accretion on asset retirement obligations

3,385



3,263



6,648


Add: Amortization of acquired intangibles, net

4,051



(182)



3,869


Add: Idled and closed mine costs

3,603



3,556



7,159


Non-GAAP Coal margin

$

37,601



$

7,582



$

45,183


Tons sold

3,657



409



4,066


Non-GAAP Coal margin per ton

$

10.28



$

18.54



$

11.11


(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: 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 June 30, 2020

(In thousands, except for per ton data)

Met


All Other


Consolidated

Coal revenues

$

316,319



$

36,796



$

353,115


Less: Freight and handling fulfillment revenues

(54,852)



(4,634)



(59,486)


Non-GAAP Coal revenues

$

261,467



$

32,162



$

293,629


Tons sold

3,204



649



3,853


Non-GAAP Coal sales realization per ton

$

81.61



$

49.56



$

76.21








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

$

297,266



$

38,001



$

335,267


Depreciation, depletion and amortization - production (1)

38,779



7,953



46,732


Accretion on asset retirement obligations

3,551



3,018



6,569


Amortization of acquired intangibles, net

2,759



(878)



1,881


Total Cost of coal sales

$

342,355



$

48,094



$

390,449


Less: Freight and handling costs

(54,852)



(4,634)



(59,486)


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

(38,779)



(7,953)



(46,732)


Less: Accretion on asset retirement obligations

(3,551)



(3,018)



(6,569)


Less: Amortization of acquired intangibles, net

(2,759)



878



(1,881)


Less: Idled and closed mine costs

(3,906)



(3,961)



(7,867)


Non-GAAP Cost of coal sales

$

238,508



$

29,406



$

267,914


Tons sold

3,204



649



3,853


Non-GAAP Cost of coal sales per ton

$

74.44



$

45.31



$

69.53


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


Three Months Ended June 30, 2020

(In thousands, except for per ton data)

Met


All Other


Consolidated

Coal revenues

$

316,319



$

36,796



$

353,115


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

(342,355)



(48,094)



(390,449)


GAAP Coal margin

$

(26,036)



$

(11,298)



$

(37,334)


Tons sold

3,204



649



3,853


GAAP Coal margin per ton

$

(8.13)



$

(17.41)



$

(9.69)








GAAP Coal margin

$

(26,036)



$

(11,298)



$

(37,334)


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

38,779



7,953



46,732


Add: Accretion on asset retirement obligations

3,551



3,018



6,569


Add: Amortization of acquired intangibles, net

2,759



(878)



1,881


Add: Idled and closed mine costs

3,906



3,961



7,867


Non-GAAP Coal margin

$

22,959



$

2,756



$

25,715


Tons sold

3,204



649



3,853


Non-GAAP Coal margin per ton

$

7.17



$

4.25



$

6.67


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


Six Months Ended June 30, 2021

(In thousands, except for per ton data)

Met


All Other


Consolidated

Coal revenues

$

736,732



$

42,178



$

778,910


Less: Freight and handling fulfillment revenues

(124,340)



(486)



(124,826)


Non-GAAP Coal revenues

$

612,392



$

41,692



$

654,084


Tons sold

7,405



682



8,087


Non-GAAP Coal sales realization per ton

$

82.70



$

61.13



$

80.88








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

$

657,134



$

37,057



$

694,191


Depreciation, depletion and amortization - production (1)

52,222



3,161



55,383


Accretion on asset retirement obligations

6,762



6,534



13,296


Amortization of acquired intangibles, net

6,686



(264)



6,422


Total Cost of coal sales

$

722,804



$

46,488



$

769,292


Less: Freight and handling costs

(124,340)



(486)



(124,826)


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

(52,222)



(3,161)



(55,383)


Less: Accretion on asset retirement obligations

(6,762)



(6,534)



(13,296)


Less: Amortization of acquired intangibles, net

(6,686)



264



(6,422)


Less: Idled and closed mine costs

(8,393)



(7,288)



(15,681)


Non-GAAP Cost of coal sales

$

524,401



$

29,283



$

553,684


Tons sold

7,405



682



8,087


Non-GAAP Cost of coal sales per ton

$

70.82



$

42.94



$

68.47


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


Six Months Ended June 30, 2021

(In thousands, except for per ton data)

Met


All Other


Consolidated

Coal revenues

$

736,732



$

42,178



$

778,910


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

(722,804)



(46,488)



(769,292)


GAAP Coal margin

$

13,928



$

(4,310)



$

9,618


Tons sold

7,405



682



8,087


GAAP Coal margin per ton

$

1.88



$

(6.32)



$

1.19








GAAP Coal margin

$

13,928



$

(4,310)



$

9,618


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

52,222



3,161



55,383


Add: Accretion on asset retirement obligations

6,762



6,534



13,296


Add: Amortization of acquired intangibles, net

6,686



(264)



6,422


Add: Idled and closed mine costs

8,393



7,288



15,681


Non-GAAP Coal margin

$

87,991



$

12,409



$

100,400


Tons sold

7,405



682



8,087


Non-GAAP Coal margin per ton

$

11.88



$

18.20



$

12.41


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


Six Months Ended June 30, 2020

(In thousands, except for per ton data)

Met


All Other


Consolidated

Coal revenues

$

678,722



$

75,853



$

754,575


Less: Freight and handling fulfillment revenues

(108,516)



(8,377)



(116,893)


Non-GAAP Coal revenues

$

570,206



$

67,476



$

637,682


Tons sold

6,531



1,271



7,802


Non-GAAP Coal sales realization per ton

$

87.31



$

53.09



$

81.73








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

$

590,324



$

79,163



$

669,487


Depreciation, depletion and amortization - production (1)

80,501



13,493



93,994


Accretion on asset retirement obligations

7,087



6,121



13,208


Amortization of acquired intangibles, net

5,340



(2,948)



2,392


Total Cost of coal sales

$

683,252



$

95,829



$

779,081


Less: Freight and handling costs

(108,516)



(8,377)



(116,893)


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

(80,501)



(13,493)



(93,994)


Less: Accretion on asset retirement obligations

(7,087)



(6,121)



(13,208)


Less: Amortization of acquired intangibles, net

(5,340)



2,948



(2,392)


Less: Idled and closed mine costs

(8,063)



(8,323)



(16,386)


Non-GAAP Cost of coal sales

$

473,745



$

62,463



$

536,208


Tons sold

6,531



1,271



7,802


Non-GAAP Cost of coal sales per ton

$

72.54



$

49.14



$

68.73


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


Six Months Ended June 30, 2020

(In thousands, except for per ton data)

Met


All Other


Consolidated

Coal revenues

$

678,722



$

75,853



$

754,575


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

(683,252)



(95,829)



(779,081)


GAAP Coal margin

$

(4,530)



$

(19,976)



$

(24,506)


Tons sold

6,531



1,271



7,802


GAAP Coal margin per ton

$

(0.69)



$

(15.72)



$

(3.14)








GAAP Coal margin

$

(4,530)



$

(19,976)



$

(24,506)


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

80,501



13,493



93,994


Add: Accretion on asset retirement obligations

7,087



6,121



13,208


Add: Amortization of acquired intangibles, net

5,340



(2,948)



2,392


Add: Idled and closed mine costs

8,063



8,323



16,386


Non-GAAP Coal margin

$

96,461



$

5,013



$

101,474


Tons sold

6,531



1,271



7,802


Non-GAAP Coal margin per ton

$

14.77



$

3.94



$

13.01


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


Three Months Ended March 31, 2021

(In thousands, except for per ton data)

Met


All Other


Consolidated

Non-GAAP Cost of coal sales

$

262,281



$

17,608



$

279,889


Less: cost of purchased coal sold

(18,264)





(18,264)


Adjusted cost of produced coal sold

$

244,017



$

17,608



$

261,625


Produced tons sold

3,424



409



3,833


Adjusted cost of produced coal sold per ton (1)

$

71.27



$

43.05



$

68.26


(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 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 June 30, 2020

(In thousands, except for per ton data)

Met


All Other


Consolidated

Non-GAAP Cost of coal sales

$

238,508



$

29,406



$

267,914


Less: cost of purchased coal sold

(22,932)



(9)



(22,941)


Adjusted cost of produced coal sold

$

215,576



$

29,397



$

244,973


Produced tons sold

2,895



648



3,543


Adjusted cost of produced coal sold per ton (1)

$

74.46



$

45.37



$

69.14


(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.


Six Months Ended June 30, 2021

(In thousands, except for per ton data)

Met


All Other


Consolidated

Non-GAAP Cost of coal sales

$

524,401



$

29,283



$

553,684


Less: cost of purchased coal sold

(42,906)





(42,906)


Adjusted cost of produced coal sold

$

481,495



$

29,283



$

510,778


Produced tons sold

6,921



682



7,603


Adjusted cost of produced coal sold per ton (1)

$

69.57



$

42.94



$

67.18


(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.


Six Months Ended June 30, 2020

(In thousands, except for per ton data)

Met


All Other


Consolidated

Non-GAAP Cost of coal sales

$

473,745



$

62,463



$

536,208


Less: cost of purchased coal sold

(53,266)



(902)



(54,168)


Adjusted cost of produced coal sold

$

420,479



$

61,561



$

482,040


Produced tons sold

5,859



1,258



7,117


Adjusted cost of produced coal sold per ton (1)

$

71.77



$

48.94



$

67.73


(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 June 30, 2021

(In thousands, except for per ton data)

Tons Sold


Coal Revenues


Non-GAAP Coal sales realization per ton


% of Tons Sold Total

Export - other pricing mechanisms

1,236



$

125,823



$

101.80



37

%

Domestic

1,178



103,643



$

87.98



35

%

Export - Australian indexed

934



63,300



$

67.77



28

%

Total Met segment - met coal

3,348



$

292,766



$

87.45



100

%

Met segment - thermal coal

400



19,744



$

49.36




Total Met segment Coal revenues

3,748



312,510



$

83.38




All Other Coal revenues

273



16,502



$

60.45




Non-GAAP Coal revenues

4,021



$

329,012



$

81.82




Add: Freight and handling fulfillment revenues



64,446






Coal revenues

4,021



$

393,458






Cision
Cision

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SOURCE Alpha Metallurgical Resources, Inc.