RAMACO RESOURCES REPORTS FOURTH QUARTER AND FULL-YEAR 2023 RESULTS

Published

LEXINGTON, Ky., March 7, 2024 /PRNewswire/ -- Ramaco Resources, Inc. (NASDAQ: METC, METCB, "Ramaco" or the "Company"), a leading operator and developer of high-quality, low-cost metallurgical coal, today reported financial results for the three months and twelve months ended December 31, 2023.

FOURTH QUARTER AND FULL-YEAR 2023 HIGHLIGHTS 

  • For the three months ended December 31, 2023, the Company had adjusted earnings before interest, taxes, depreciation, amortization, certain non-operating expenses, and equity-based compensation ("Adjusted EBITDA", a non-GAAP measure), of $58.5 million, compared to $45.4 million in the third quarter of 2023. For the twelve months ended December 31, 2023, the Company had Adjusted EBITDA of $182.1 million compared to $204.6 million in 2022. (See "Reconciliations of Non-GAAP Measure" below.)
  • For the three months ended December 31, 2023, the Company had net income of $30.0 million, compared to $19.5 million in the third quarter of 2023. For the twelve months ended December 31, 2023, the Company had net income of $82.3 million, compared to $116.0 million in 2022. While EPS is a complicated comparative measure due to the mid-year 2023 issuance of the Class B shares, we would note that there were 43.9 million fully diluted Class A shares outstanding in the fourth quarter of 2023.
  • The fourth quarter of 2023 was easily the Company's strongest financial quarter of the year. While U.S. metallurgical coal indices rose in the fourth quarter of 2023 compared to the prior two quarters, indices were still more than 10% below first quarter of 2023 levels. The Company's strong fourth quarter was due to the execution on its growth strategy. Specifically, in the second half of 2023 the Company shipped at a 4 million ton per annum run rate in both the third and fourth quarters, compared to a roughly 3 million ton per annum run rate in the first half of the year.
  • During the fourth quarter, the Company repaid the final $10 million of debt related to the 2022 Ramaco Coal acquisition. Excluding amounts drawn on the Revolving Credit Facility, the Company reduced term debt by $55 million in 2023. The Company ended 2023 with $48 million of term debt outstanding, excluding the Revolving Credit Facility, and $42 million of cash. Lastly, the Company ended 2023 with a record level of liquidity of $91 million, compared to its $49 million at year-end 2022.

MARKET COMMENTARY / 2024 OUTLOOK

  • The Company reiterates all prior full-year 2024 guidance other than depreciation, depletion, and amortization expense, which can be seen in the "Financial Guidance" section of today's press release.
  • As noted in its February 2024 market update, since early December the Company has committed an additional 1.9 million tons for sale into export markets in 2024 at index-linked pricing, bringing total current sales commitments for delivery in 2024 to 3.9 million tons. This consists of 1.5 million tons committed to North American customers at an average realized price of $167 per ton and an additional 2.4 million tons committed at mostly index-linked pricing for delivery to export customers. This would equate to 100% of sales at the low end of the Company's original 2024 production guidance of 3.9 million tons.
  • In its February 2024 market update, based on this material increase to 2024 committed sales, the Company raised both its sales and production guidance. Today, the Company reiterates both its full year sales guidance of 4.2 - 4.6 million tons and production guidance of 4.0 - 4.4 million tons. The Company's pricing mix for 2024 would be approximately one-third domestic fixed price and two-thirds export index-linked business at the midpoint of sales guidance.
  • Depending on continued market conditions, the Company believes that an annual sales run-rate above guidance may be achievable by year-end 2024. This would include sales of more than 0.5 million tons of both purchased coal and carryover inventory from 2023.
  • Last month, the Company completed the purchase of an existing idled coal preparation plant which is being relocated to its Maben Complex in West Virginia. The purchase price of the plant was $3 million. This year the Company anticipates spending an additional $8 million in initial development capital expenditures related to the plant. We expect that the plant will be operational by the fourth quarter of 2024. This will materially reduce both overall trucking and mine cash costs at Maben where current production is trucked to Ramaco's Berwind preparation plant at a haul rate cost of over $40 per clean ton.
  • The Company anticipates first quarter shipments of 800,000 – 950,000 tons of coal and expects an increasing cadence throughout 2024. Specifically, the first half of 2024 should see shipments around a 4 million ton per annum run rate, whereas the second half of 2024 should be closer to a 5 million ton per annum run rate. This second half increase will come from the addition of 0.4 million tons per annum at the Ram 3 surface and highwall mine at Elk Creek, as well as 0.3 million tons per annum from the third section at the Berwind mine. Overall mine costs are expected to decline as volumes are anticipated to increase sequentially each quarter throughout 2024.
  • The Company has just entered into an agreement to both extend and increase the size of its existing Revolver facility with KeyBank, NA and a bank syndicate. The new facility will increase the Revolver from $125 million to $200 million with an accordion feature to increase the ultimate size by an additional amount of $75 million to $275 million. The term of the new facility will now be five years, increased from an original three years. The finalization of the new syndicated facility is expected to be completed early in the second quarter. The funding will be available for general corporate purposes.
  • The Company expects that Weir International, Inc. will release its updated Exploration Target report on the Company's rare earth deposit in Wyoming, later this month. At that time the Company will both release a statement as well as hold a separate analyst and investor conference call regarding the findings.

MANAGEMENT COMMENTARY

Randall Atkins, Ramaco Resources' Chairman and Chief Executive Officer commented, "Our fourth quarter results highlight the growth trajectory we have pursued. As we sit here today, we are essentially targeting over the coming years a doubling of the level of our 2023 production levels.

This quarter's strong performance was despite a lack of strength in market pricing over the back half of the year. While U.S. metallurgical coal pricing indices indeed rose in the fourth quarter of 2023, they ended the year more than 10% below first quarter of 2023 levels.

Our stronger fourth quarter was fundamentally due to a sales increase of shipping at a 4 million ton per annum run rate during the second half of the year as compared to a 3 million ton rate in the first half. We hope to increase this tempo in sales growth as we move into 2024.

In early December, we announced 2 million tons of committed sales for 2024. Since then, we have almost doubled committed sales to 3.9 million tons. This level now stands at 100% of the low end of our original 2024 production guidance of 3.9 million tons. As a result of this material increase in committed sales, we recently raised both our 2024 sales and production guidance.

Today, we anticipate 2024 sales of 4.2 - 4.6 million tons and production of 4.0 - 4.4 million tons. This year roughly two-thirds of our anticipated sales will be exported at index-linked pricing. We expect international prices will remain relatively strong throughout 2024, given that investment in new metallurgical coal supply remains fundamentally muted. Depending on continued market conditions we hope to end 2024 with sales exceeding guidance.

In February, we completed the $3 million purchase of an existing coal preparation plant which will be relocated to our Maben Complex. We will spend another $8 million in initial development to move, relocate, reassemble and upgrade the plant, which should be operational by the fourth quarter of this year. Had we built a new comparable plant, the price was estimated at roughly $40 million.

Once operational, the plant will meaningfully reduce both overall trucking and mine cash costs at Maben. Looking forward it also provides the optionality to have a preparation facility already in place to handle additional future production from a larger deep mine complex at Maben, should we elect to pursue such development in the future.

2023 was also a pivotal year for Ramaco in terms of its balance sheet management. Excluding amounts drawn on the Revolver, we reduced term debt by $55 million in 2023, ending the year with just $48 million of term debt outstanding, versus $42 million of cash. On a full year basis, we ended the year with less than half of the $102 million of term debt outstanding that we started the year with, excluding the Revolver.

We also ended 2023 with a record amount of $91 million in liquidity, compared to $49 million at year-end 2022. Given our expected continued growth we expect to retire all debt outstanding in 2024 should we choose. Additionally, to provide greater levels of future liquidity for our growth plans, we have entered into an agreement with our main lender KeyBank, NA to increase the overall size of our Revolver to up to $275 million, with a new five-year extension of its term. We view this enhanced facility as both a validation of our creditworthiness and a meaningful strengthening of our liquidity.

With respect to our Brook Mine rare earth element ("REE") project, we expect to receive an updated independent Target Exploration report from Weir International this month. When this report is released we will provide our own commentary, as well as host a separate analyst call to discuss its conclusions and our path forward. In the interim, we have continued to work with our national lab partners at the National Energy Technology Laboratory to advance the potential commercial development of our deposit.

In summary, these are exciting times and 2024 is a pivotal year ahead for Ramaco. We are hitting stride on several fronts at the same time. We are executing on our core growth strategy on the metallurgical coal side of the business, meaningfully reducing our debt, substantially growing our dividend, and making important advances on the commercial development of our Brook Mine REE project."

Key operational and financial metrics are presented below: 

Key Metrics

4Q23

3Q23

Chg.

4Q22

Chg.

2023 YTD

2022 YTD

Chg.

Total Tons Sold ('000)

988

996

(1) %

675

46 %

3,455

2,450

41 %

Revenue ($mm)

$

202.7

$

187.0

8 %

$

135.2

50 %

$

693.5

$

565.7

23 %

Cost of Sales ($mm)

$

139.4

$

144.6

(4) %

$

95.4

46 %

$

493.8

$

333.0

48 %

Non-GAAP Pricing of Company Produced Tons ($/Ton)

$

173

$

157

10 %

$

182

(5) %

$

169

$

207

(18) %

Non-GAAP Cash Cost of Sales - Company Produced ($/Ton)*

$

107

$

114

(6) %

$

114

(6) %

$

109

$

105

4 %

Non-GAAP Cash Margins on Company Produced ($/Ton)

$

66

$

43

53 %

$

68

(3) %

$

60

$

102

(41) %

Net Income ($mm)

$

30.0

$

19.5

54 %

$

14.4

109 %

$

82.3

$

116.0

(29) %

Adjusted EBITDA ($mm)

$

58.5

$

45.4

29 %

$

31.9

83 %

$

182.1

$

204.6

(11) %

Capex ($mm)

$

18.0

$

16.9

6 %

$

31.6

(43) %

$

82.9

$

123.0

(33) %

Adjusted EBITDA less Capex ($ mm) 

$

40.5

$

28.5

42 %

$

0.3

13143 %

$

99.2

$

81.5

22 %

* Adjusted to include the royalty savings from the Ramaco Coal transaction for 2022. Excludes Berwind idle costs.

FOURTH QUARTER AND FULL-YEAR 2023 PERFORMANCE

In the following paragraphs, all references to "quarterly" periods or to "the quarter" refer to the fourth quarter of 2023, unless specified otherwise.

Year over Year Quarterly Comparison

Overall production in the quarter was 745,000 tons, up 7% from the same period of 2022. The Elk Creek complex produced 412,000 tons, down 23% from 537,000 tons last year. This was in-line with the Company's plan to reduce its above normal inventory levels at Elk Creek. The Berwind, Knox Creek, and Maben complexes increased production to 333,000 tons in the quarter, up 111% from the same period last year. The main Berwind mine produced at a roughly 600,000 ton per annum run rate (adjusted for vacation periods) in the fourth quarter of 2023.

Production and costs were positively impacted by economies of scale on the back of higher year-over-year tons produced and sold. This cost reduction came despite annual inflation rates running well above recent historical averages. Total quarterly sales were 988,000 tons, up 46% from 675,000 tons sold in the fourth quarter of 2022. This was the second straight quarter that the Company shipped at a 4 million ton per annum run rate.

Quarterly pricing was $173 per ton on Company produced coal sold, which was 5% lower compared to $182 per ton in the fourth quarter of 2022. This mirrored the year-over-year decline in U.S. metallurgical coal price indices. Company produced cash mine costs were $107 per ton sold, excluding transportation costs, which was a 6% decrease from the same period in 2022. As a result of the lower realized prices, cash margins on Company produced coal were $66 per ton during the quarter, down from $68 per ton in the same period of 2022. This was based on non-GAAP revenue (FOB mine) and non-GAAP cash cost of sales (FOB mine).

Quarter over Quarter Comparison

Fourth quarter production was 745,000 tons, up 26,000 tons compared with the third quarter of 2023. The primary driver was the main Berwind mine ramping up production to a normal annualized run-rate of roughly 600,000 tons. Total quarterly sales volume of 988,000 tons was roughly comparable to the third quarter of 2023. Significantly, this was the second consecutive quarter where the Company both reduced inventory and shipped at a 4 million ton per annum run rate.

The realized price of $173 per ton during the fourth quarter was up from $157 per ton in the third quarter 2023 reflecting stronger overall market conditions. On the back of stronger production, fourth quarter cash costs of $107 per ton on Company produced coal compared favorably to $114 per ton in the third quarter of 2023. Correspondingly, cash margins on Company produced coal were $66 per ton during the fourth quarter, increasing from $43 per ton in the third quarter, based on non-GAAP revenue (FOB mine) and non-GAAP cash cost of sales (FOB mine).

BALANCE SHEET AND LIQUIDITY

As of December 31, 2023, the Company had liquidity of $90.6 million, consisting of $42.0 million of cash plus $48.6 million of availability under our revolving credit facility. This was almost double the total liquidity of $49.1 million as of December 31, 2022.

At year-end 2023, accounts receivable increased year over year by $55.7 million, reflective of the material increases in both overall and seaborne sales. Fourth quarter of 2023 capital expenditures totaled $18.0 million. This was down materially from $31.6 million in the same period of 2022, as the majority of capital expenditures for the Company's near-term growth projects had been incurred.

The Company's effective quarterly tax rate was 23%. For the fourth quarter of 2023, the Company recognized income tax expense of $8.8 million. The Company anticipates an overall tax rate of 20-25% in 2024.

The following summarizes key sales, production and financial metrics for the periods noted:

Three months ended

Year ended December 31

December 31

September 30,

December 31

In thousands, except per ton amounts

2023

2023

2022

2023

2022

Sales Volume (tons)

Company

927

949

643

3,299

2,396

Purchased

60

46

32

156

54

Total

988

996

675

3,455

2,450

Company Production (tons)

Elk Creek Mining Complex

412

402

537

2,031

2,033

Berwind Mining Complex (includes Knox Creek and Maben)

333

317

158

1,143

651

Total

745

719

695

3,174

2,684

Company Produced Financial Metrics (a)

Average revenue per ton

$

173

$

157

$

182

$

169

$

207

Average cash costs of coal sold*

107

114

114

109

105

Average cash margin per ton

$

66

$

43

$

68

$

60

$

102

Elk Creek Financial Metrics (a)

Average revenue per ton

$

181

$

172

$

193

$

179

$

208

Average cash costs of coal sold*

104

111

101

102

96

Average cash margin per ton

$

77

$

61

$

92

$

77

$

112

Purchased Coal Financial Metrics (a)

Average revenue per ton

$

205

$

164

$

152

$

203

$

203

Average cash costs of coal sold

107

101

119

132

158

Average cash margin per ton

$

98

$

63

$

33

$

71

$

45

Capital Expenditures

$

17,980

$

16,908

$

31,628

$

82,904

$

123,012

(a)

Excludes transportation. Cash costs of coal sold are defined and reconciled under "Reconciliation of Non-GAAP Measures."

* Adjusted to include the royalty savings from the Ramaco Coal transaction for 2022. Excludes Berwind idle costs.

 

FINANCIAL GUIDANCE

(In thousands, except per ton amounts and percentages)

Full-Year

Full-Year

2024 Guidance

2023

Company Production (tons)

4,000 - 4,400

3,174

Sales (tons) (a)

4,200 - 4,600

3,455

Cash Costs Per Ton Sold - Company Produced (b)

$

105 - 111

$

109

Other

Capital Expenditures (c)

$

53,000 - 63,000

$

82,904

Selling, general and administrative expense (d)

$

38,000 - 42,000

$

35,926

Depreciation, depletion, and amortization expense

$

62,000 - 68,000

$

54,252

Interest expense, net

$

4,000 - 5,000

$

8,903

Effective tax rate

    20 - 25%

21 %

Idle Mine Costs

$

0

$

3,978

(a)

Includes purchased coal.

(b)

Excludes idle mine costs.

(c)

Excludes capitalized interest for 2023

(d)

Excludes stock-based compensation

 

Committed 2024 Sales Volume(a)

 

(In millions, except per ton amounts)

2024

Volume

Average Price

North America, fixed priced

1.5

$

167

Seaborne, fixed priced

0.2

$

159

Total, fixed priced

1.7

$

166

Index priced

2.2

Total committed tons

3.9

(a)

Amounts as of February 29, 2024 and include purchased coal. Totals may not add due to rounding.

ABOUT RAMACO RESOURCES

Ramaco Resources, Inc. is an operator and developer of high-quality, low-cost metallurgical coal in southern West Virginia, and southwestern Virginia. Its executive offices are in Lexington, Kentucky, with operational offices in Charleston, West Virginia and Sheridan, Wyoming. The Company currently has four active metallurgical coal mining complexes in Central Appalachia and one development rare earth and coal mine near Sheridan, Wyoming in the initial stages of production. In 2023, the Company announced that a major rare earth deposit of primary magnetic rare earths was discovered at its mine near Sheridan, Wyoming. Contiguous to the Wyoming mine, the Company operates a carbon research and pilot facility related to the production of advanced carbon products and materials from coal. In connection with these activities, it holds a body of roughly 60 intellectual property patents, pending applications, exclusive licensing agreements and various trademarks. News and additional information about Ramaco Resources, including filings with the Securities and Exchange Commission, are available at http://www.ramacoresources.com. For more information, contact investor relations at (859) 244-7455.

FOURTH QUARTER AND FULL-YEAR 2023 CONFERENCE CALL

Ramaco Resources will hold its quarterly conference call and webcast at 9:00 AM Eastern Time (ET) on Friday, March 8, 2024. An accompanying slide deck will be available at https://www.ramacoresources.com/investors/investor-presentations/ immediately before the conference call.

To participate in the live teleconference on March 8, 2024:

Domestic Live: (877) 317-6789International Live: (412) 317-6789Conference ID: Ramaco Resources, Inc.Web link: Click Here 

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

Certain statements contained in this news release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent Ramaco Resources' expectations or beliefs concerning guidance, future events, anticipated revenue, future demand and production levels, macroeconomic trends, the development of ongoing projects, costs and expectations regarding operating results, and it is possible that the results described in this news release will not be achieved. These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of Ramaco Resources' control, which could cause actual results to differ materially from the results discussed in the forward-looking statements. These factors include, without limitation, unexpected delays in our current mine development activities, the ability to successfully ramp up production at the Berwind and Knox Creek complexes, failure of our sales commitment counterparties to perform, increased government regulation of coal in the United States or internationally, the further decline of demand for coal in export markets and underperformance of the railroads, the expected benefits of the Ramaco Coal and Maben acquisitions to the Company's shareholders, the anticipated benefits and impacts of the Ramaco Coal and Maben acquisitions, and the Company's ability to successfully develop the Brook Mine, including whether the increase in the Company's exploration target and estimates for such mine are realized. Any forward-looking statement speaks only as of the date on which it is made, and, except as required by law, Ramaco Resources does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. New factors emerge from time to time, and it is not possible for Ramaco Resources to predict all such factors. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements found in Ramaco Resources' filings with the Securities and Exchange Commission ("SEC"), including its Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. The risk factors and other factors noted in Ramaco Resources' SEC filings could cause its actual results to differ materially from those contained in any forward-looking statement.

 

Ramaco Resources, Inc.Unaudited Consolidated Statements of Operations

Three months ended December 31

Year ended December 31

In thousands, except per share amounts

2023

2022

2023

2022

Revenue

$

202,729

$

135,227

$

693,524

$

565,688

Costs and expenses

Cost of sales (exclusive of items shown separately below)

139,410

95,430

493,793

332,960

Asset retirement obligations accretion

354

(370)

1,403

1,115

Depreciation, depletion, and amortization

14,401

11,296

54,252

41,194

Selling, general, and administrative

11,313

10,750

48,831

40,032

Total costs and expenses

165,478

117,106

598,279

415,301

Operating income

37,251

18,121

95,245

150,387

Other income (expense), net

3,246

856

18,321

2,637

Interest expense, net

(1,630)

(1,506)

(8,903)

(6,829)

Income before tax

38,867

17,471

104,663

146,195

Income tax expense

8,829

3,085

22,350

30,153

Net income

$

30,038

$

14,386

$

82,313

$

116,042

Earnings per common share

Basic - Single class (through 6/20/2023)

$

N/A

$

0.33

$

0.71

$

2.63

Basic - Class A (6/21/2023 - 12/31/2023)

$

0.62

$

$

1.06

$

Total

$

0.62

$

0.33

$

1.77

$

2.63

Basic - Class B (6/21/2023 - 12/31/2023)

$

0.25

$

$

0.42

$

Diluted - Single class (through 6/20/23)

$

N/A

$

0.32

$

0.70

$

2.60

Diluted - Class A (6/21/2023 - 12/31/2023)

$

0.60

$

$

1.03

$

Total

$

0.60

$

0.32

$

1.73

$

2.60

Diluted - Class B (6/21/2023 - 12/31/2023)

$

0.24

$

$

0.40

$

 

Ramaco Resources, Inc.

Unaudited Consolidated Balance Sheets

In thousands, except per-share amounts

December 31, 2023

December 31, 2022

Assets

Current assets

Cash and cash equivalents

$

41,962

$

35,613

Accounts receivable

96,866

41,174

Inventories

37,163

44,973

Prepaid expenses and other

13,748

25,729

Total current assets

189,739

147,489

Property, plant, and equipment, net

459,091

429,842

Financing lease right-of-use assets, net

10,282

12,905

Advanced coal royalties

2,964

3,271

Other

3,760

2,832

Total Assets

$

665,836

$

596,339

Liabilities and Stockholders' Equity

Liabilities

Current liabilities

Accounts payable

$

51,624

$

34,825

Accrued liabilities

52,225

41,806

Current portion of asset retirement obligations

110

29

Current portion of long-term debt

56,534

35,639

Current portion of related party debt

40,000

Current portion of financing lease obligations

5,456

5,969

Insurance financing liability

4,037

4,577

Total current liabilities

169,986

162,845

Asset retirement obligations, net

28,850

28,856

Long-term debt, net

349

18,757

Long-term financing lease obligations, net

4,915

4,917

Senior notes, net

33,296

32,830

Deferred tax liability, net

54,352

35,637

Other long-term liabilities

4,483

3,299

Total liabilities

296,231

287,141

Commitments and contingencies

Stockholders' Equity

Preferred stock, $0.01 par value

Common stock, $0.01 par value *

442

Class A common stock, $0.01 par value *

440

Class B common stock, $0.01 par value

88

Additional paid-in capital

277,133

168,711

Retained earnings

91,944

140,045

Total stockholders' equity

369,605

309,198

Total Liabilities and Stockholders' Equity

$

665,836

$

596,339

* Common stock reclassified to Class A common stock during Q2 2023

 

Ramaco Resources, Inc.

Unaudited Statement of Cash Flows

Years ended December 31

In thousands

2023

2022

Cash flows from operating activities

Net income

$

82,313

$

116,042

Adjustments to reconcile net income to net cash from operating activities:

 Accretion of asset retirement obligations

1,403

1,115

 Depreciation, depletion, and amortization

54,252

41,194

 Amortization of debt issuance costs

776

491

 Stock-based compensation

12,905

8,222

 Loss on disposal of equipment

756

 Other income

(10,192)

(2,113)

 Deferred income taxes

18,714

29,229

 Changes in operating assets and liabilities:

Accounts receivable

(55,692)

3,279

Prepaid expenses and other current assets

14,361

(14,378)

Inventories

7,810

(29,182)

Other assets and liabilities

(430)

1,127

Accounts payable

24,549

12,727

Accrued liabilities

10,267

19,361

Net cash from operating activities

161,036

187,870

Cash flow from investing activities:

Capital expenditures

(82,904)

(123,012)

Acquisition of Ramaco Coal assets

(11,738)

Acquisition of Maben assets (bond recovery in 2023)

1,182

(11,897)

Acquisition of Amonate assets

(608)

Proceeds from sale of mineral rights

2,000

Insurance proceeds related to property, plant, and equipment

11,256

Capitalized interest

(1,137)

(1,061)

Net cash used for investing activities

(72,211)

(145,708)

Cash flows from financing activities

Proceeds from borrowings

130,000

42,000

Proceeds from stock option exercises

107

Payments of dividends

(25,820)

(20,041)

Repayment of borrowings

(127,514)

(26,026)

Repayment of Ramaco Coal acquisition financing - related party

(40,000)

(15,000)

Repayments of insurance financing

(5,207)

(1,290)

Repayments of equipment finance leases

(6,659)

(5,062)

Shares surrendered for withholding taxes

(7,317)

(3,183)

Net cash used financing activities

(82,517)

(28,495)

Net change in cash and cash equivalents and restricted cash

6,308

13,667

Cash and cash equivalents and restricted cash, beginning of period

36,473

22,806

Cash and cash equivalents and restricted cash, end of period

$

42,781

$

36,473

Reconciliation of Non-GAAP Measures

Adjusted EBITDA

Adjusted EBITDA is used as a supplemental non-GAAP financial measure by management and external users of our financial statements, such as industry analysts, investors, lenders, and rating agencies. We believe Adjusted EBITDA is useful because it allows us to evaluate our operating performance more effectively.

We define Adjusted EBITDA as net income plus net interest expense; equity-based compensation; depreciation, depletion, and amortization expenses; income taxes; certain non-operating expenses (charitable contributions), and accretion of asset retirement obligations. Its most comparable GAAP measure is net income. A reconciliation of net income to Adjusted EBITDA is included below. Adjusted EBITDA is not intended to serve as a substitute for GAAP measures of performance and may not be comparable to similarly-titled measures presented by other companies.

Q4

Q3

Q4

Year ended December 31

(In thousands)

2023

2023

2022

2023

2022

Reconciliation of Net Income to Adjusted EBITDA

Net income

$

30,038

$

19,462

$

14,386

$

82,313

$

116,042

 Depreciation, depletion, and amortization

14,401

14,443

11,296

54,252

41,194

 Interest expense, net

1,630

2,447

1,506

8,903

6,829

 Income tax expense

8,829

5,505

3,085

22,350

30,153

EBITDA

54,898

41,857

30,273

167,818

194,218

 Stock-based compensation

3,199

3,201

2,031

12,905

8,222

 Other non-operating expenses

1,000

 Accretion of asset retirement obligations

354

349

(370)

1,403

1,115

Adjusted EBITDA

$

58,451

$

45,407

$

31,934

$

182,126

$

204,555

Non-GAAP revenue and cash cost per ton

Non-GAAP revenue per ton (FOB mine) is calculated as coal sales revenue less transportation costs including demurrage costs, divided by tons sold. Non-GAAP cash cost per ton sold (FOB mine) is calculated as cash cost of coal sales less transportation costs and idle mine costs, divided by tons sold. We believe revenue per ton (FOB mine) and cash cost per ton (FOB mine) provide useful information to investors as these enable investors to compare revenue per ton and cash cost per ton for the Company against similar measures made by other publicly-traded coal companies and more effectively monitor changes in coal prices and costs from period to period excluding the impact of transportation costs, which are beyond our control. The adjustments made to arrive at these measures are significant in understanding and assessing the Company's financial performance. Revenue per ton sold (FOB mine) and cash cost per ton sold (FOB mine) are not measures of financial performance in accordance with GAAP and therefore should not be considered as a substitute for revenue and cost of sales under GAAP. The tables below show how we calculate non-GAAP revenue and cash cost per ton:

Non-GAAP revenue per ton

Three months ended December 31, 2023

Three months ended December 31, 2022

Company

Purchased

Company

Purchased

(In thousands, except per ton amounts)

Produced

Coal

Total

Produced

Coal

Total

Revenue

$

187,735

$

14,994

$

202,729

$

129,772

$

5,455

$

135,227

Less: Adjustments to reconcile to Non-GAAP revenue (FOB mine)

Transportation costs

(27,686)

(2,601)

(30,287)

(12,550)

(574)

(13,124)

Non-GAAP revenue (FOB mine)

$

160,049

$

12,393

$

172,442

$

117,222

$

4,881

$

122,103

Tons sold

927

60

988

643

32

675

Revenue per ton sold (FOB mine)

$

173

$

205

$

175

$

182

$

152

$

181

 

Three months ended September 30, 2023

Company

Purchased

(In thousands, except per ton amounts)

Produced

Coal

Total

Revenue

$

177,826

$

9,140

$

186,966

Less: Adjustments to reconcile to Non-GAAP revenue (FOB mine)

Transportation costs

(28,928)

(1,505)

(30,433)

Non-GAAP revenue (FOB mine)

$

148,898

$

7,635

$

156,533

Tons sold

949

46

996

Revenue per ton sold (FOB mine)

$

157

$

164

$

157

 

Year ended December 31, 2023

Year ended December 31, 2022

Company

Purchased

Company

Purchased

(In thousands, except per ton amounts)

Produced

Coal

Total

Produced

Coal

Total

Revenue

$

657,090

$

36,434

$

693,524

$

553,830

$

11,858

$

565,688

Less: Adjustments to reconcile to Non-GAAP revenue (FOB mine)

Transportation costs

(100,174)

(4,723)

(104,897)

(57,299)

(813)

(58,112)

Non-GAAP revenue (FOB mine)

$

556,916

$

31,711

$

588,627

$

496,531

$

11,045

$

507,576

Tons sold

3,299

156

3,455

2,396

54

2,450

Non-GAAP revenue per ton sold (FOB mine)

$

169

$

203

$

170

$

207

$

203

$

207

Non-GAAP cash cost per ton

Three months ended December 31, 2023

Three months ended December 31, 2022

Company

Purchased

Company

Purchased

(In thousands, except per ton amounts)

Produced

Coal

Total

Produced

Coal

Total

Cost of sales

$

130,362

$

9,048

$

139,410

$

91,014

$

4,416

$

95,430

Less: Adjustments to reconcile to Non-GAAP cash cost of sales

Transportation costs

(28,670)

(2,602)

(31,272)

(12,551)

(574)

(13,125)

Idle mine costs

(1,041)

(1,041)

(4,437)

(4,437)

Non-GAAP cash cost of sales

$

100,651

$

6,446

$

107,097

$

74,026

$

3,842

$

77,868

Tons sold

927

60

988

643

32

675

Cash cost per ton sold (FOB mine)

$

109

$

107

$

108

$

115

$

119

$

115

 

Three months ended September 30, 2023

Company

Purchased

(In thousands, except per ton amounts)

Produced

Coal

Total

Cost of sales

$

138,959

$

5,676

$

144,635

Less: Adjustments to reconcile to Non-GAAP cash cost of sales

Transportation costs

(29,249)

(1,005)

(30,254)

Idle mine costs

(378)

(378)

Non-GAAP cash cost of sales

$

109,332

$

4,671

$

114,003

Tons sold

949

46

996

Cash cost per ton sold (FOB mine)

$

115

$

101

$

114

 

Year ended December 31, 2023

Year ended December 31, 2022

Company

Purchased

Company

Purchased

(In thousands, except per ton amounts)

Produced

Coal

Total

Produced

Coal

Total

Cost of sales