Alpha Metallurgical Resources : Fourth Quarter 2024 News Release

Published: 2025-02-28 07:36:53 ET AMR

FOR IMMEDIATE RELEASE

Alpha Announces Financial Results for Fourth Quarter and Full Year 2024

BRISTOL, Tenn., February 28, 2025 - Alpha Metallurgical Resources, Inc. (NYSE: AMR), a leading U.S. supplier of metallurgical products for the steel industry, today reported financial results for the fourth quarter and full year ending December 31, 2024.

(millions, except per share)

Three months ended

Dec. 31, 2024

Sept. 30, 2024

Dec. 31, 2023

Net (loss) income

($2.1)

$3.8

$176.0

Net (loss) income per diluted share

($0.16)

$0.29

$12.88

Adjusted EBITDA(1)

$53.2

$49.0

$266.3

Operating cash flow

$56.3

$189.5

$199.4

Capital expenditures

($42.7)

($31.5)

($61.5)

Tons of coal sold

4.1

4.6

__________________________________

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

"As expected, the weak metallurgical coal market negatively impacted our results for the fourth quarter," said Andy Eidson, Alpha's chief executive officer. "We continue to see lower levels of

met coal demand which is keeping pricing subdued. As always, we strive to accurately assess the landscape and take actions as necessary to match our business to those realities. The adjustments we're announcing today to our full year 2025 guidance for met coal shipment volumes and costs of coal sales are reflective of lower amounts of purchased coal than previously expected, as well as the impact of severe weather in both January and February on our operating plans. As we look ahead, our priorities continue to be the safe operation of our mines and the financial protection of the business against these difficult market circumstances."

Financial Performance

Alpha reported a net loss of $2.1 million, or $0.16 per diluted share, for the fourth quarter 2024, as compared to net income of $3.8 million, or $0.29 per diluted share, in the third quarter.

Total Adjusted EBITDA was $53.2 million for the fourth quarter, compared to $49.0 million in the third quarter.

Coal Revenues

(millions)

Three months ended

Dec. 31, 2024

Sept. 30, 2024

Met Segment

$615.4

$669.8

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

$519.3

$550.7

Tons Sold

(millions)

Three months ended

Dec. 31, 2024

Sept. 30, 2024

Met Segment

4.1

__________________________________

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, 2024

Sept. 30, 2024

Met Segment

$127.84

$132.76

__________________________________

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

Fourth quarter net realized pricing for the Met segment was $127.84 per ton.

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

(in millions, except per ton data)

Met Segment Sales

Three months ended Dec. 31, 2024

Tons Sold

Coal Revenues

Realization/ton(1)

% of Met Tons

Sold

Export - Other Pricing Mechanisms

1.7

$206.9

$122.24

46%

Domestic

1.0

$156.4

$158.93

26%

Export - Australian Indexed

1.0

$130.3

$124.71

28%

Total Met Coal Revenues

3.7

$493.7

$132.63

100%

Thermal Coal Revenues

0.3

$25.6

$75.39

Total Met Segment Coal Revenues

4.1

$519.3

$127.84

(excl. freight & handling)(1)

__________________________________

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, 2024

Sept. 30, 2024

Met Segment

$540.8

$598.7

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

$442.0

$474.0

(per ton)

Met Segment(1)

$108.82

$114.27

__________________________________

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 Met segment cost of coal sales decreased to an average of $108.82 per ton in the fourth quarter, compared to $114.27 per ton in the third quarter.

Liquidity and Capital Resources

Cash provided by operating activities in the fourth quarter decreased to $56.3 million as compared to $189.5 million in the third quarter. The third quarter benefited from a decrease in working capital of $144.5 million. Capital expenditures for the fourth quarter were $42.7 million compared to $31.5 million for the third quarter.

As of December 31, 2024, the company had total liquidity of $519.4 million, including cash and cash equivalents of $481.6 million and $112.9 million of unused availability under the asset-

based revolving credit facility (ABL), partially offset by a minimum required liquidity of $75.0 million as required by the ABL. As of December 31, 2024, the company had no borrowings and $42.1 million in letters of credit outstanding under the ABL, a reduction of $15.0 million in letters of credit outstanding as compared to the third quarter. Total long-term debt, including the current portion of long-term debt as of December 31, 2024, was $5.8 million.

Share Repurchase Program

As previously announced, Alpha's board of directors authorized a share repurchase program allowing for the expenditure of up to $1.5 billion for the repurchase of the company's common stock. As of February 21, 2025, the company has acquired approximately 6.6 million shares of common stock at a cost of approximately $1.1 billion, or approximately $165.74 per share. The number of common stock shares outstanding as of February 21, 2025 was 13,052,684. The outstanding share count does not include the potentially dilutive effect of 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.

2025 Guidance Adjustments and Performance Update

Alpha is reducing its full-year 2025 guidance for metallurgical coal shipment volumes. The new metallurgical coal shipments guidance range is 14.5 million tons to 15.5 million tons, down from the prior range of 15.0 million tons to 16.0 million tons. Additionally, the company is increasing its 2025 cost of coal sales guidance range to $103.00 to $110.00 per ton, up from the prior range of $103.00 to $108.00 per ton.

As of February 20, 2025, Alpha has committed and priced approximately 32% of its metallurgical coal for 2025 at an average price of $143.81 per ton and 95% of its thermal coal for the year at an average price of $80.74 per ton.

2025 Guidance

in millions of tons

Low

High

Metallurgical

14.5

15.5

Thermal

1.0

1.4

Met Segment - Total Shipments

15.5

16.9

Committed/Priced1,2,3

Committed

Average Price

Metallurgical - Domestic

$152.94

Metallurgical - Export

$113.11

Metallurgical Total

$143.81

Thermal

$80.74

Met Segment

37 %

$131.73

Committed/Unpriced1,3

Committed

Metallurgical Total

Thermal

- %

Met Segment

53 %

Costs per ton4

Low

High

Met Segment

$103.00

$110.00

In millions (except taxes)

Low

High

SG&A5

$53

$59

Idle Operations Expense

$18

$28

Net Cash Interest Income

$10

DD&A

$165

$185

Capital Expenditures

$152

$182

Capital Contributions to Equity Affiliates6

$44

$54

Cash Tax Rate

5 %

Notes:

Annual Meeting of Stockholders

The board of directors has scheduled the annual meeting of stockholders for May 7, 2025.

Conference Call

The company plans to hold a conference call regarding its fourth quarter results on February 28, 2025, 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://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. See Alpha's filings with the U.S. Securities and Exchange Commission for more information.

FINANCIAL TABLES FOLLOW

Non-GAAP Financial Measures

The discussion below contains "non-GAAP financial measures." These are financial measures that 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," and "non-GAAP coal margin." In addition to net income, we use Adjusted EBITDA to measure the operating performance of our reportable segment. Adjusted EBITDA does not purport to be an alternative to net income as a measure of operating performance or any other measure of operating results, financial performance, or liquidity presented in accordance with GAAP. Moreover, this measure is not calculated identically by all companies and therefore may not be comparable to similarly titled measures used by other companies. Adjusted EBITDA is presented because management believes it is a useful indicator of the financial performance of our coal operations. 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. 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, capital investments and other factors.

Included below are reconciliations of non-GAAP financial measures to GAAP financial measures. For comparability purposes, certain immaterial segment information for the three and twelve months ended December 31, 2023 have been recast to conform to the current year presentation.

ALPHA METALLURGICAL RESOURCES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS (Amounts in thousands, except share and per share data)

Three Months Ended December 31,

Year Ended December 31,

2024

2023

2024

2023

Revenues:

Coal revenues

615,383

957,127

2,946,579

3,456,630

Other revenues

1,964

2,864

10,706

14,787

Total revenues

617,347

959,991

2,957,285

3,471,417

Costs and expenses:

Cost of coal sales (exclusive of items shown

540,754

668,879

2,451,601

2,356,138

separately below)

Depreciation, depletion and amortization

40,836

42,638

167,331

136,869

Accretion on asset retirement obligations

6,324

6,371

25,050

25,500

Amortization of acquired intangibles, net

1,675

2,065

6,700

8,523

Selling, general and administrative expenses

(exclusive of depreciation, depletion and

16,831

26,139

74,000

82,390

amortization shown separately above)

Other operating loss (income)

936

577

4,749

(1,088)

Total costs and expenses

607,356

746,669

2,729,431

2,608,332

Income from operations

9,991

213,322

227,854

863,085

Other (expense) income:

Interest expense

(583)

(1,601)

(3,811)

(6,923)

Interest income

4,952

3,022

18,208

11,933

Loss on extinguishment of debt

(2,753)

Equity loss in affiliates

(5,734)

(6,681)

(20,302)

(18,263)

Miscellaneous expense, net

(2,940)

(763)

(11,199)

(1,620)

Total other expense, net

(4,305)

(8,776)

(17,104)

(17,626)

Income before income taxes

5,686

204,546

210,750

845,459

Income tax expense

(7,815)

(28,530)

(23,171)

(123,503)

Net (loss) income

(2,129)

176,016

187,579

721,956

Basic (loss) income per common share

(0.16)

13.35

14.41

51.18

Diluted (loss) income per common share

(0.16)

12.88

14.28

49.30

Weighted average shares - basic

13,020,122

13,187,100

13,013,469

14,106,466

Weighted average shares - diluted

13,020,122

13,662,021

13,134,806

14,642,856

ALPHA METALLURGICAL RESOURCES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

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

Assets

December 31, 2024

December 31, 2023

Current assets:

Cash and cash equivalents

481,578

268,207

Trade accounts receivable, net of allowance for credit losses of $2,396 and $234 as of

December 31, 2024 and 2023, respectively

362,141

509,682

Inventories, net

169,269

231,344

Prepaid expenses and other current assets

23,681

39,064

Total current assets

1,036,669

1,048,297

Property, plant, and equipment, net of accumulated depreciation and amortization of

$667,260 and $558,905 as of December 31, 2024 and 2023, respectively

634,871

588,992

Owned and leased mineral rights, net of accumulated depletion and amortization of

$124,965 and $99,826 as of December 31, 2024 and 2023, respectively

443,467

451,160

Other acquired intangibles, net of accumulated amortization of $41,444 and $38,543 as

of December 31, 2024 and 2023, respectively

39,879

46,579

Long-term restricted cash

122,583

115,918

Long-term restricted investments

43,131

40,597

Deferred income taxes

6,516

8,028

Other non-current assets

111,592

106,486

Total assets

2,438,708

2,406,057

Liabilities and Stockholders' Equity

Current liabilities:

Current portion of long-term debt

2,916

3,582

Trade accounts payable

96,633

128,836

Accrued expenses and other current liabilities

151,560

177,512

Total current liabilities

251,109

309,930

Long-term debt

2,868

6,792

Workers' compensation and black lung obligations

182,961

189,226

Pension obligations

100,597

101,908

Asset retirement obligations

189,805

166,509

Deferred income taxes

40,486

39,142

Other non-current liabilities

21,385

18,622

Total liabilities

789,211

832,129

Commitments and Contingencies

Stockholders' Equity

Preferred stock - par value $0.01, 5,000,000 shares authorized, none issued

Common stock - par value $0.01, 50,000,000 shares authorized, 22,383,325 issued and

13,016,390 outstanding at December 31, 2024 and 22,058,135 issued and 12,938,679

outstanding at December 31, 2023

224

221

Additional paid-in capital

839,804

834,482

Accumulated other comprehensive loss

(50,082)

(40,587)

Treasury stock, at cost: 9,366,935 shares at December 31, 2024 and 9,119,456 shares at

December 31, 2023

(1,296,916)

(1,189,715)

Retained earnings

2,156,467

1,969,527

Total stockholders' equity

1,649,497

1,573,928

Total liabilities and stockholders' equity

2,438,708

2,406,057

ALPHA METALLURGICAL RESOURCES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands)

Year Ended December 31,

2024

2023

Operating activities:

Net income

187,579

721,956

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation, depletion and amortization

167,331

136,869

Amortization of acquired intangibles, net

6,700

8,523

Amortization of debt issuance costs and accretion of debt discount

1,118

1,947

Loss on extinguishment of debt

2,753

Gain on disposal of assets, net

(169)

(6,817)

Accretion on asset retirement obligations

25,050

25,500

Employee benefit plans, net

14,551

8,376

Deferred income taxes

5,563

39,722

Stock-based compensation

12,318

19,017

Equity loss in affiliates

20,302

18,263

Other, net

787

(363)

Changes in operating assets and liabilities

Trade accounts receivable, net

145,379

(102,477)

Inventories, net

64,203

(27,900)

Prepaid expenses and other current assets

14,658

7,596

Deposits

408

80,729

Other non-current assets

1,199

3,837

Trade accounts payable

(19,339)

15,666

Accrued expenses and other current liabilities

(5,972)

(9,087)

Acquisition-related obligations

(28,254)

Asset retirement obligations

(27,903)

(19,189)

Other non-current liabilities

(33,844)

(45,508)

Net cash provided by operating activities

579,919

851,159

Investing activities:

(198,848)

(245,373)

Capital expenditures

Proceeds on disposal of assets

1,029

8,173

Cash paid for business acquired

(11,919)

Purchases of investment securities

(48,730)

(207,065)

Sales and maturities of investment securities

48,036

320,961

Capital contributions to equity affiliates

(32,504)

(30,812)

Other, net

Net cash used in investing activities

(230,986)

(166,000)

Financing activities:

Principal repayments of long-term debt

(2,243)

(2,314)

Dividend and dividend equivalents paid

(3,077)

(113,013)

Common stock repurchases and related expenses

(122,299)

(540,071)

Other, net

(1,278)

(1,030)

Net cash used in financing activities

(128,897)

(656,428)

Disclaimer

Alpha Metallurgical Resources Inc. published this content on February 28, 2025, and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on February 28, 2025 at 12:33:46.467.