Ramaco Resources, Inc (NASDAQ:METC) Q4 2021 Earnings Conference Call February 24, 2022 10:00 AM ET Company Participants Randy Atkins ??? Chairman and Chief Executive Officer Jeremy Sussman ??? Chief Financial Officer Chris Blanchard ??? Chief Operating Officer Jason Fannin ??? Chief Commercial Officer Conference Call Participants Lucas Pipes ??? B. Riley Securities David Gagliano ??? BMO Capital Markets Nathan Martin ??? The Benchmark Operator Welcome to the Ramaco Resources, Inc., Fourth Quarter 2021 earni ...

E RAMACO 3rd Quarter 2021 Investor Presentation Ramaco Resources November 2021 Disclaimer Forward Looking Statements The information in this presentation includes "forward-looking statements." All statements, other than statements of historical fact included in this presentation, regarding our strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects, plans and objectives of management are forward-looking statements. When used in this presentation, the words ...

Financial Data and Key Metrics Changes - The company reported its highest third quarter adjusted EBITDA in history at $17.8 million, up over $17 million from the previous year [30] - Earnings per share increased to $0.16, representing a more than 240% increase year-over-year [30] - The company anticipates a significant increase in full-year 2021 EBITDA compared to 2020's $19 million, with Q4 expected to be the highest quarter since going public [12][30] Business Line Data and Key Metrics Changes - The company has increased its 2021 production guidance to 2.2 million to 2.4 million tons, up from previous estimates [31] - Sales guidance for 2021 has been adjusted to 2.3 million to 2.4 million tons [31] - The average cash mining cost for the Elk Creek complex is projected to be $63 to $65 per ton, up from $61 to $65 previously, but down from $70 in 2020 [31] Market Data and Key Metrics Changes - The company has secured 1.7 million tons of domestic sales for 2022 at an average price of $196 per ton [33] - The market for metallurgical coal remains strong, with a significant supply-demand imbalance expected to persist into 2022 [50] - U.S. met coal production is down 15% from 2019 levels, indicating a tight supply situation [51] Company Strategy and Development Direction - The company plans to return capital to shareholders and has approved the payment of a regular dividend, with details to be announced before year-end [21][22] - The acquisition of Amonate assets is expected to enhance production capabilities and operational synergies, with a target of reaching 5 million tons of production in the coming years [20][24] - The company aims to maintain a low-cost production model while exploring future growth opportunities beyond its core business [27][28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving a significant multiple of EBITDA in 2022 compared to 2021, with a strong demand for steel and metallurgical coal [12][15] - The company anticipates that the fourth quarter of 2021 will produce the strongest EBITDA on record [34] - Management highlighted the importance of maintaining a fortress balance sheet with little to no debt, positioning the company as a formidable cash generation machine [26] Other Important Information - The company has increased its revolver from $30 million to $40 million, extending the maturity date to year-end 2024 [34] - The company ended the quarter with a record liquidity figure of $74 million, not accounting for the Amonate acquisition payment [34] Q&A Session Summary Question: Can you quantify the value of synergies from the Amonate acquisition? - Management indicated significant savings from trucking costs and the absence of royalties on Amonate coal, estimating a payback period of less than 1.5 years [56][58] Question: What are the capital intensity expectations for future growth? - Management stated that future growth plans would not be capital intensive and would be logical transitions for the company [61] Question: What are the capital allocation plans beyond the regular dividend? - Management mentioned that all options are on the table, but the focus is currently on establishing a regular dividend [76] Question: Can you provide insights on inflationary pressures and hiring challenges? - Management acknowledged inflationary pressures on raw materials and labor but expressed confidence in maintaining staffing levels for growth plans [88] Question: How has transportation service been affected? - Management noted that some Q4 sales might slip into 2022 due to logistics slowdowns, with rail rates influenced by market indices [91] Question: What should analysts consider regarding tax situations and sales-related costs? - Management clarified that the tax situation is largely non-cash and provided a breakdown of sales-related costs, emphasizing direct royalties and severance taxes [106][109]

[FORM 10-Q](index=1&type=section&id=FORM%2010-Q) [Cautionary Note Regarding Forward-Looking Statements](index=4&type=section&id=CAUTIONARY%20NOTE%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) This section outlines forward-looking statements, emphasizing their basis on current expectations and assumptions, subject to various risks and uncertainties - Forward-looking statements are based on management's current expectations and assumptions, subject to risks and uncertainties[9](index=9&type=chunk) - Potential factors influencing forward-looking statements include **COVID-19 impact**, **production levels**, **economic conditions in the metallurgical coal and steel industries**, **capital project timing**, **reserve estimates**, **financing ability**, **regulatory compliance**, and **market competition**[10](index=10&type=chunk) - The company disclaims any duty to update forward-looking statements to reflect events or circumstances after the report date, except as required by applicable law[15](index=15&type=chunk) [Part I. Financial Information](index=7&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) Financial Highlights (Q3 2021 vs Q3 2020 & YTD 2021 vs YTD 2020) | Metric | 3 Months Ended Sep 30, 2021 | 3 Months Ended Sep 30, 2020 | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | | :----------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Revenue | $76,377 thousand | $39,459 thousand | $195,889 thousand | $117,769 thousand | | Net income (loss) | $7,035 thousand | $(4,776) thousand | $21,120 thousand | $(162) thousand | | Basic EPS | $0.16 | $(0.11) | $0.48 | $0.00 | | Diluted EPS | $0.16 | $(0.11) | $0.48 | $0.00 | Balance Sheet Snapshot (Sep 30, 2021 vs Dec 31, 2020) | Metric | Sep 30, 2021 | Dec 31, 2020 | | :--------------------------- | :------------------- | :------------------- | | Total Assets | $299,084 thousand | $228,623 thousand | | Total Liabilities | $105,277 thousand | $59,528 thousand | | Total Stockholders' Equity | $193,807 thousand | $169,095 thousand | | Cash and cash equivalents | $46,672 thousand | $5,300 thousand | - Net cash from operating activities significantly increased to **$37.8 million** for the nine months ended September 30, 2021, from **$0.9 million** in the prior year[28](index=28&type=chunk) [Item 1. Financial Statements](index=7&type=section&id=Item%201.%20Financial%20Statements) This section presents Ramaco Resources' unaudited condensed consolidated financial statements for the period ended September 30, 2021 [Unaudited Condensed Consolidated Balance Sheets](index=7&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) | Metric | September 30, 2021 (in thousands) | December 31, 2020 (in thousands) | | :-------------------------------- | :-------------------------------- | :--------------------------------- | | Total Assets | $299,084 | $228,623 | | Total Liabilities | $105,277 | $59,528 | | Total Stockholders' Equity | $193,807 | $169,095 | | Cash and cash equivalents | $46,672 | $5,300 | | Accounts receivable | $37,592 | $20,299 | | Inventories | $13,880 | $11,947 | | Accounts payable | $21,157 | $11,742 | | Senior notes, net | $32,245 | — | - Total assets increased by approximately **$70.5 million**, primarily driven by a significant increase in cash and cash equivalents and accounts receivable[19](index=19&type=chunk) - Total liabilities increased by approximately **$45.7 million**, largely due to increases in accounts payable and the issuance of senior notes[19](index=19&type=chunk) [Unaudited Condensed Consolidated Statements of Operations](index=9&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations) | Metric | 3 Months Ended Sep 30, 2021 (in thousands) | 3 Months Ended Sep 30, 2020 (in thousands) | 9 Months Ended Sep 30, 2021 (in thousands) | 9 Months Ended Sep 30, 2020 (in thousands) | | :----------------------------- | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | | Revenue | $76,377 | $39,459 | $195,889 | $117,769 | | Operating income (loss) | $8,767 | $(7,582) | $17,032 | $(10,741) | | Net income (loss) | $7,035 | $(4,776) | $21,120 | $(162) | | Basic EPS | $0.16 | $(0.11) | $0.48 | $0.00 | | Diluted EPS | $0.16 | $(0.11) | $0.48 | $0.00 | - Revenue increased by **93.5%** for the three months ended September 30, 2021, and by **66.3%** for the nine months ended September 30, 2021, compared to the respective prior periods[20](index=20&type=chunk) - The company reported a significant turnaround from a net loss of **$(4.8) million** in Q3 2020 to a net income of **$7.0 million** in Q3 2021, and from a net loss of **$(0.2) million** to a net income of **$21.1 million** for the nine months ended September 30, 2021[20](index=20&type=chunk) [Unaudited Condensed Consolidated Statements of Stockholders' Equity](index=10&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) | Metric | January 1, 2021 (in thousands) | September 30, 2021 (in thousands) | | :----------------------- | :----------------------------- | :-------------------------------- | | Total Stockholders' Equity | $169,095 | $193,807 | | Net income | $21,120 (YTD) | | | Stock-based compensation | $3,919 (YTD) | | - Total stockholders' equity increased by **$24.7 million** from January 1, 2021, to September 30, 2021, primarily due to net income and stock-based compensation[24](index=24&type=chunk) [Unaudited Condensed Consolidated Statements of Cash Flows](index=11&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) | Metric | 9 Months Ended Sep 30, 2021 (in thousands) | 9 Months Ended Sep 30, 2020 (in thousands) | | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | | Net cash from operating activities | $37,757 | $947 | | Net cash from investing activities | $(17,642) | $(20,515) | | Net cash from financing activities | $20,847 | $20,541 | | Net change in cash and cash equivalents | $40,962 | $973 | - Net cash from operating activities saw a substantial increase to **$37.8 million** for the nine months ended September 30, 2021, compared to **$0.9 million** in the prior year[28](index=28&type=chunk) - The company experienced a significant net increase in cash and cash equivalents of **$41.0 million** for the nine months ended September 30, 2021[28](index=28&type=chunk) [Notes to Unaudited Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) [NOTE 1—BUSINESS](index=12&type=section&id=NOTE%201%E2%80%94BUSINESS) - Ramaco Resources, Inc. is an operator and developer of high-quality, low-cost metallurgical coal in southern West Virginia, southwestern Virginia, and southwestern Pennsylvania[31](index=31&type=chunk) - After declining demand in 2020 due to COVID-19, the company observed increased demand for metallurgical coal in 2021, driven by global economic recovery and significant increases in U.S. steel prices[32](index=32&type=chunk) [NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=12&type=section&id=NOTE%202%E2%80%94SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) - Interim financial statements are unaudited, condensed, and prepared in accordance with SEC rules and GAAP, relying on management estimates and assumptions[34](index=34&type=chunk)[35](index=35&type=chunk) - The company is self-insured for certain workers' compensation claims, with an estimated aggregate liability of **$3.5 million** at September 30, 2021[37](index=37&type=chunk) - Sales to the top three customers accounted for approximately **64%** of total revenue for the three months ended September 30, 2021, and **59%** for the nine months ended September 30, 2021[41](index=41&type=chunk) [NOTE 3—PROPERTY, PLANT AND EQUIPMENT](index=14&type=section&id=NOTE%203%E2%80%94PROPERTY,%20PLANT%20AND%20EQUIPMENT) | (In thousands) | September 30, 2021 | December 31, 2020 | | :----------------------------------- | :----------------- | :---------------- | | Plant and equipment | $161,566 | $155,173 | | Construction in process | $4,890 | $7,245 | | Capitalized mine development costs | $88,713 | $74,279 | | Less: accumulated depreciation and amortization | $(73,494) | $(56,242) | | Total property, plant and equipment, net | $181,675 | $180,455 | - Net property, plant, and equipment increased slightly to **$181.7 million** at September 30, 2021, from **$180.5 million** at December 31, 2020[44](index=44&type=chunk) | (In thousands) | 3 Months Ended Sep 30, 2021 | 3 Months Ended Sep 30, 2020 | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | | :----------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Total depreciation and amortization | $6,751 | $5,258 | $18,861 | $15,601 | [NOTE 4—DEBT](index=15&type=section&id=NOTE%204%E2%80%94DEBT) - The company has a Revolving Credit Facility with **$27.1 million** remaining availability and a Term Loan with an outstanding principal balance of **$4.2 million** at September 30, 2021[47](index=47&type=chunk)[48](index=48&type=chunk) - On July 13, 2021, the company completed an offering of **$34.5 million** in 9.00% Senior Unsecured Notes due 2026[51](index=51&type=chunk) - The company was in compliance with all debt covenants under the Credit Agreement at September 30, 2021[49](index=49&type=chunk) [NOTE 5—LEASES](index=17&type=section&id=NOTE%205%E2%80%94LEASES) - The company holds various financing leases for mining equipment, generally with terms up to 36 months, and one operating lease for office space expiring mid-2022[56](index=56&type=chunk) | (In thousands) | September 30, 2021 | December 31, 2020 | | :--------------------------------- | :----------------- | :---------------- | | Total right-of-use assets | $8,941 | $110 | | Total lease liabilities | $7,948 | $110 | [NOTE 6—SBA PAYCHECK PROTECTION PROGRAM LOAN](index=19&type=section&id=NOTE%206%E2%80%94SBA%20PAYCHECK%20PROTECTION%20PROGRAM%20LOAN) - The **$8.4 million** PPP Loan received in April 2020 was fully forgiven by the SBA on July 29, 2021[61](index=61&type=chunk) - The company recognized **$8.4 million** as other income in 2020 due to the anticipated forgiveness of the PPP Loan[60](index=60&type=chunk) [NOTE 7—EQUITY](index=19&type=section&id=NOTE%207%E2%80%94EQUITY) - At September 30, 2021, there was **$8.5 million** of total unrecognized compensation cost related to unvested restricted stock, to be recognized over a weighted-average period of 1.8 years[64](index=64&type=chunk) | Restricted Stock Activity | Shares | Weighted Average Grant Date Fair Value | | :------------------------ | :---------- | :------------------------------------- | | Outstanding at Dec 31, 2020 | 2,845,525 | $4.28 | | Granted | 1,592,659 | $4.37 | | Vested | (321,075) | $8.03 | | Forfeited | (129,279) | $4.11 | | Outstanding at Sep 30, 2021 | 3,987,830 | $4.02 | [NOTE 8—COMMITMENTS AND CONTINGENCIES](index=19&type=section&id=NOTE%208%E2%80%94COMMITMENTS%20AND%20CONTINGENCIES) - At September 30, 2021, the company had **$15.8 million** in reclamation bonding requirements and **$4.6 million** in contingent liabilities under take-or-pay transportation arrangements[66](index=66&type=chunk)[68](index=68&type=chunk) - A jury returned a verdict in favor of the company for **$7.7 million** in compensatory damages and an additional **$25.0 million** for inconvenience and aggravation in a lawsuit against Federal Insurance Company, though this verdict is not yet final and has not been recognized as a gain[71](index=71&type=chunk) [NOTE 9—REVENUE](index=21&type=section&id=NOTE%209%E2%80%94REVENUE) | (In thousands) | 3 Months Ended Sep 30, 2021 | 3 Months Ended Sep 30, 2020 | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | North American revenues | $47,954 | $27,284 | $105,611 | $89,795 | | Export revenues | $28,423 | $12,175 | $90,278 | $27,974 | | Total revenues | $76,377 | $39,459 | $195,889 | $117,769 | - Total revenues increased significantly, with export revenues showing a particularly strong growth of **133%** for the nine months ended September 30, 2021, compared to the prior year[72](index=72&type=chunk) - As of September 30, 2021, the company had outstanding performance obligations for the remainder of 2021 of approximately **0.5 million tons** at an average fixed price of **$84/ton** and **0.1 million tons** with index-based pricing[72](index=72&type=chunk) [NOTE 10—INCOME TAXES](index=21&type=section&id=NOTE%2010%E2%80%94INCOME%20TAXES) | (In thousands) | 3 Months Ended Sep 30, 2021 | 3 Months Ended Sep 30, 2020 | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | | :----------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Total income tax expense (benefit) | $1,588 | $(1,407) | $1,650 | $(38) | - The effective tax rate, excluding discrete items, was **21%** for Q3 2021 and **13%** for YTD 2021[75](index=75&type=chunk) - Discrete items included a tax benefit of **$0.2 million** for legislative changes in Virginia and West Virginia for Q3 2021, and a **$1.6 million** benefit for YTD 2021[75](index=75&type=chunk) [NOTE 11—EARNINGS (LOSS) PER SHARE](index=23&type=section&id=NOTE%2011%E2%80%94EARNINGS%20(LOSS)%20PER%20SHARE) | (In thousands, except per share amounts) | 3 Months Ended Sep 30, 2021 | 3 Months Ended Sep 30, 2020 | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | | :--------------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Net income (loss) | $7,035 | $(4,776) | $21,120 | $(162) | | Basic EPS | $0.16 | $(0.11) | $0.48 | $(0.00) | | Diluted EPS | $0.16 | $(0.11) | $0.48 | $(0.00) | - Basic and diluted EPS significantly improved from a loss of **$(0.11)** in Q3 2020 to a gain of **$0.16** in Q3 2021, and from a loss of **$(0.00)** to a gain of **$0.48** for YTD 2021[76](index=76&type=chunk) [NOTE 12—RELATED PARTY TRANSACTIONS](index=23&type=section&id=NOTE%2012%E2%80%94RELATED%20PARTY%20TRANSACTIONS) - The company has mineral leases and surface rights agreements with Ramaco Coal, LLC, a related party. Royalties paid to Ramaco Coal totaled **$1.3 million** for Q3 2021 and **$3.9 million** for YTD 2021[77](index=77&type=chunk) - Charges to Ramaco Coal for shared administrative services were **$40 thousand** for Q3 2021 and **$79 thousand** for YTD 2021[78](index=78&type=chunk)[79](index=79&type=chunk) [NOTE 13—SUBSEQUENT EVENTS](index=25&type=section&id=NOTE%2013%E2%80%94SUBSEQUENT%20EVENTS) - The company completed 2022 domestic sales negotiations, contracting to sell **1.67 million tons** of coal at an average price of **$196 per short ton FOB mine**, representing **54%** of projected 2022 production[80](index=80&type=chunk) - An Asset Purchase Agreement was entered into on October 26, 2021, to acquire certain assets for **$30 million**, with closing expected in mid-November 2021[81](index=81&type=chunk) - The Board of Directors authorized the initiation of a regular quarterly dividend to be paid starting in the first quarter of 2022, and the Revolving Credit Facility was increased by **$10 million** to **$40 million** with an extended maturity to December 31, 2024[82](index=82&type=chunk)[83](index=83&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial performance, highlighting increased revenue, return to profitability, strategic developments, liquidity, and non-GAAP measures [Overview](index=26&type=section&id=Overview) - The company's primary revenue source is metallurgical coal sales, with a **261 million ton** reserve base as of September 30, 2021[86](index=86&type=chunk) - The company plans to grow production to approximately **5 million clean tons** of metallurgical coal, subject to market conditions and capital deployment[86](index=86&type=chunk) - In Q3 2021, **0.6 million tons** of coal were sold, with **75%** in North American markets and **25%** in export markets[88](index=88&type=chunk) - Increased demand and significantly higher U.S. steel prices in 2021 are attributed to global economic recovery and large-scale government stimulus measures[90](index=90&type=chunk) [Recent Developments](index=26&type=section&id=Recent%20Developments) - Ramaco has contracted to sell **1.67 million tons** of coal for 2022 domestic sales at an average price of **$196 per short ton FOB mine**, representing **54%** of projected 2022 production[92](index=92&type=chunk) - The company entered into an Asset Purchase Agreement to acquire assets for **$30 million**, with closing expected in mid-November 2021[94](index=94&type=chunk) - The Board of Directors authorized the initiation of a regular quarterly dividend starting in the first quarter of 2022[95](index=95&type=chunk) - The Revolving Credit Facility was increased by **$10 million** to **$40 million**, and its maturity date was extended to December 31, 2024[96](index=96&type=chunk) [Results of Operations](index=28&type=section&id=Results%20of%20Operations) | (In thousands) | 3 Months Ended Sep 30, 2021 | 3 Months Ended Sep 30, 2020 | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | | :----------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Revenue | $76,377 | $39,459 | $195,889 | $117,769 | | Operating income (loss) | $8,767 | $(7,582) | $17,032 | $(10,741) | | Net income (loss) | $7,035 | $(4,776) | $21,120 | $(162) | | Adjusted EBITDA | $17,805 | $637 | $47,429 | $19,863 | - Net income and Adjusted EBITDA were significantly higher in both the three and nine months ended September 30, 2021, compared to the same periods in 2020[97](index=97&type=chunk) - Sales volumes increased by **45%** during the nine months ended September 30, 2021, compared to the same period in 2020, largely due to the recovery from COVID-19 impacts[97](index=97&type=chunk) [Three Months Ended September 30, 2021 Compared to Three Months Ended September 30, 2020](index=30&type=section&id=Three%20Months%20Ended%20September%2030,%202021%20Compared%20to%20Three%20Months%20Ended%20September%2030,%202020) - Coal sales revenue increased **94%** to **$76.4 million** in Q3 2021, driven by a **50%** increase in tons sold (**644 thousand tons**) and a **35%** increase in revenue per ton sold (FOB mine) to **$105/ton**[100](index=100&type=chunk) - Cost of sales increased to **$54.8 million** due to higher tons sold, with cash cost per ton sold (FOB mine) rising slightly to **$72/ton** from **$69/ton**[101](index=101&type=chunk) - Interest expense, net, increased to **$0.9 million** from **$0.3 million**, primarily due to the issuance of Senior Notes in July 2021[104](index=104&type=chunk) [Nine Months Ended September 30, 2021 Compared to Nine Months Ended September 30, 2020](index=32&type=section&id=Nine%20Months%20Ended%20September%2030,%202021%20Compared%20to%20Nine%20Months%20Ended%20September%2030,%202020) - Coal sales revenue increased **66%** to **$195.9 million** for YTD 2021, with tons sold increasing **45%** to **1.8 million tons** and revenue per ton sold (FOB mine) increasing **13%** to **$98/ton**[109](index=109&type=chunk) - Cash cost per ton sold (FOB mine) improved to **$68/ton** from **$70/ton**, primarily due to higher production volumes leveraging fixed costs[110](index=110&type=chunk) - Other income for YTD 2021 was **$7.2 million**, primarily from the **$5.4 million** CARES Act Employee Retention Tax Credit[114](index=114&type=chunk) [Liquidity and Capital Resources](index=35&type=section&id=Liquidity%20and%20Capital%20Resources) - At September 30, 2021, the company had **$46.7 million** in cash and cash equivalents and **$27.1 million** available under existing credit agreements[119](index=119&type=chunk) - Cash flows from operating activities were **$37.8 million** for the first nine months of 2021[120](index=120&type=chunk) - Capital expenditures totaled **$17.6 million** for mine development and infrastructure during the first nine months of 2021[123](index=123&type=chunk) - The company believes current cash on hand, cash flow from operations, and available liquidity will be sufficient to meet capital expenditure and operating plans[121](index=121&type=chunk) - The **$8.4 million** PPP Loan was fully forgiven by the SBA on July 29, 2021[135](index=135&type=chunk) [Off-Balance Sheet Arrangements](index=39&type=section&id=Off-Balance%20Sheet%20Arrangements) - At September 30, 2021, the company had no material off-balance sheet arrangements[137](index=137&type=chunk) [Non-GAAP Financial Measures](index=39&type=section&id=Non-GAAP%20Financial%20Measures) - Adjusted EBITDA is defined as net income plus net interest expense, stock-based compensation, depreciation and amortization expenses, and any transaction-related costs[139](index=139&type=chunk) | (In thousands) | 3 Months Ended Sep 30, 2021 | 3 Months Ended Sep 30, 2020 | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | | :----------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net income (loss) | $7,035 | $(4,776) | $21,120 | $(162) | | EBITDA | $16,307 | $(581) | $43,049 | $16,316 | | Adjusted EBITDA | $17,805 | $637 | $47,429 | $19,863 | - Non-GAAP revenue per ton (FOB mine) and Non-GAAP cash cost per ton sold are presented to provide comparable metrics excluding transportation costs[140](index=140&type=chunk)[143](index=143&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=42&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section refers to comprehensive quantitative and qualitative disclosures about market risk, as detailed in the company's Annual Report - Quantitative and qualitative disclosures about market risk are incorporated by reference from Item 7A of the company's Annual Report[145](index=145&type=chunk) [Item 4. Controls and Procedures](index=42&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective as of September 30, 2021, with no significant internal control changes [Disclosure Controls and Procedures](index=42&type=section&id=Disclosure%20Controls%20and%20Procedures) - The principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures were effective as of September 30, 2021, at a reasonable assurance level[146](index=146&type=chunk) [Changes in Internal Control over Financial Reporting](index=42&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) - There were no significant changes in the company's internal control over financial reporting during the quarter ended September 30, 2021, that materially affected or are reasonably likely to materially affect it[148](index=148&type=chunk) [Part II. Other Information](index=43&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=43&type=section&id=Item%201.%20Legal%20Proceedings) Management believes no pending legal matters will materially affect financial condition, cash flows, or results of operations - Management believes no pending litigation, disputes, or claims will have a material adverse effect on the company's financial condition, cash flows, or results of operations[151](index=151&type=chunk) - A description of legal proceedings is included in Note 8 of the financial statements[151](index=151&type=chunk) [Item 1A. Risk Factors](index=43&type=section&id=Item%201A.%20Risk%20Factors) This section refers to risk factors detailed in the Annual Report on Form 10-K, with no material changes reported - Risk factors are described in Item 1A of the company's Annual Report and other SEC filings[152](index=152&type=chunk) - There have been no material changes in the company's risk factors from those described in its Annual Report[153](index=153&type=chunk) [Item 4. Mine Safety Disclosures](index=43&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Mine safety disclosures, as required by regulations, are provided in Exhibit 95.1 of this Quarterly Report - Mine safety disclosures are included in Exhibit 95.1 to this Quarterly Report[154](index=154&type=chunk) [Item 6. Exhibits](index=44&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Quarterly Report, including senior notes indentures, officer certifications, and mine safety disclosures - Exhibits include Indenture and First Supplemental Indenture for the **9.00% Senior Notes due 2026**[158](index=158&type=chunk) - Certifications of the Chief Executive Officer and Chief Financial Officer are included pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002[158](index=158&type=chunk) - Mine Safety Disclosure is filed as Exhibit 95.1[158](index=158&type=chunk) [Signatures](index=45&type=section&id=SIGNATURES) This section contains the official signatures of the registrant's authorized officers, affirming the report filing on November 2, 2021 - The report was signed by Randall W. Atkins, Chairman, Chief Executive Officer and Director, and Jeremy R. Sussman, Chief Financial Officer, on November 2, 2021[162](index=162&type=chunk)

Ramaco Resources Inc. (NASDAQ:METC) Q2 2021 Earnings Conference Call August 3, 2021 9:00 AM ET Company Participants Jeremy Sussman - Chief Financial Officer Randy Atkins - Chairman and CEO Chris Blanchard - COO Conference Call Participants Lucas Pipes - B. Riley Securities Nathan Martin - Benchmark Company Operator Good day, and thank you for standing by. Welcome to the Ramaco Resources, Incorporated Second Quarter 2021 Earnings Conference Call. [Operator Instructions] I would now like to hand the conferenc ...

RAMACO 2nd Quarter 2021 Investor Presentation Ramaco Resources August 2021 Disclaimer Forward Looking Statements The information in this presentation includes "forward-looking statements." All statements, other than statements of historical fact included in this presentation, regarding our strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects, plans and objectives of management are forward-looking statements. When used in this presentation, the words "cou ...

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=7&type=section&id=Item%201.%20Financial%20Statements) Presents unaudited condensed consolidated financial statements and detailed notes on accounting policies, debt, leases, equity, revenue, and subsequent events [Unaudited Condensed Consolidated Balance Sheets](index=7&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) Total assets increased from **$228.6 million** to **$247.1 million** by June 30, 2021, driven by higher cash and inventories, with stockholders' equity also growing significantly | Metric | Dec 31, 2020 (in thousands) | Jun 30, 2021 (in thousands) | Change | | :-------------------------- | :-------------------------- | :-------------------------- | :----- | | Total Assets | $228,623 | $247,082 | +$18,459 | | Cash and cash equivalents | $5,300 | $19,394 | +$14,094 | | Inventories | $11,947 | $19,575 | +$7,628 | | Total Liabilities | $59,528 | $61,652 | +$2,124 | | Total Stockholders' Equity | $169,095 | $185,430 | +$16,335 | [Unaudited Condensed Consolidated Statements of Operations](index=9&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations) The company achieved significant revenue and net income growth for both the three and six months ended June 30, 2021, primarily due to increased sales volumes and improved metallurgical coal pricing | Metric (in thousands, except per-share) | 3 Months Ended Jun 30, 2021 | 3 Months Ended Jun 30, 2020 | YoY Change | 6 Months Ended Jun 30, 2021 | 6 Months Ended Jun 30, 2020 | YoY Change | | :------------------------------------ | :-------------------------- | :-------------------------- | :--------- | :-------------------------- | :-------------------------- | :--------- | | Revenue | $76,057 | $36,374 | +109.1% | $119,511 | $78,310 | +52.6% | | Total costs and expenses | $69,036 | $40,673 | +69.7% | $111,246 | $81,468 | +36.6% | | Operating income (loss) | $7,021 | $(4,299) | N/A | $8,265 | $(3,158) | N/A | | Net income | $9,942 | $2,652 | +274.9% | $14,085 | $4,614 | +205.3% | | Basic EPS | $0.23 | $0.06 | +283.3% | $0.32 | $0.11 | +190.9% | [Unaudited Condensed Consolidated Statements of Stockholders' Equity](index=10&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Stockholders%27%20Equity) Stockholders' equity increased from **$169.1 million** at January 1, 2021, to **$185.4 million** at June 30, 2021, primarily driven by net income and stock-based compensation | Metric (in thousands) | Balance at Jan 1, 2021 | Stock-based compensation | Net income | Restricted stock surrendered | Balance at Jun 30, 2021 | | :-------------------- | :--------------------- | :----------------------- | :--------- | :--------------------------- | :---------------------- | | Common Stock | $427 | $15 | $(1) | — | $441 | | Additional Paid-in Capital | $158,859 | $2,562 | $(326) | — | $161,095 | | Retained Earnings | $9,809 | — | $14,085 | — | $23,894 | | Total Stockholders' Equity | $169,095 | $3,077 | $14,085 | $(327) | $185,430 | [Unaudited Condensed Consolidated Statements of Cash Flows](index=11&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operating activities significantly increased to **$32.9 million** for the six months ended June 30, 2021, while investing activities saw reduced capital expenditures and financing activities resulted in a net cash outflow due to debt repayments | Metric (in thousands) | 6 Months Ended Jun 30, 2021 | 6 Months Ended Jun 30, 2020 | YoY Change | | :------------------------------------ | :-------------------------- | :-------------------------- | :--------- | | Net cash from operating activities | $32,922 | $6,833 | +381.8% | | Net cash from investing activities | $(8,551) | $(18,019) | +52.5% | | Net cash from financing activities | $(10,910) | $15,528 | N/A | | Net change in cash and cash equivalents | $13,461 | $4,342 | +210.0% | | Cash and cash equivalents, end of period | $20,171 | $11,207 | +80.0% | [Notes to Unaudited Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Provides detailed explanations and disclosures for the financial statements, covering business, accounting policies, debt, leases, equity, revenue, and subsequent events [NOTE 1—BUSINESS](index=12&type=section&id=NOTE%201%E2%80%94BUSINESS) Ramaco Resources, Inc. operates and develops high-quality metallurgical coal in West Virginia, Virginia, and Pennsylvania, experiencing increased demand and U.S. steel prices in 2021 - The company is an operator and developer of high-quality, low-cost metallurgical coal in southern West Virginia, southwestern Virginia, and southwestern Pennsylvania[31](index=31&type=chunk) - Global economic recovery in 2021 led to increased demand for metallurgical coal and significantly higher U.S. steel prices, contrasting with declining demand and spot prices in 2020 due to COVID-19[32](index=32&type=chunk) [NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=12&type=section&id=NOTE%202%E2%80%94SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note outlines the basis of presentation for interim financial statements, key accounting policies, and recent accounting pronouncements, including self-insurance and customer concentrations - The company is self-insured for workers' compensation claims, with an estimated aggregate liability of **$1.2 million** at June 30, 2021, and **$1.7 million** at December 31, 2020[37](index=37&type=chunk) - Sales to two customers accounted for approximately **46%** of total revenue for the three months ended June 30, 2021, and **52%** for the six months ended June 30, 2021, indicating customer concentration[41](index=41&type=chunk) - The adoption of ASU 2019-12 (Income Taxes) in Q1 2021 did not materially impact consolidated financial statements, and the company is assessing the impact of ASU No 2020-04 (Reference Rate Reform)[42](index=42&type=chunk)[43](index=43&type=chunk) [NOTE 3—PROPERTY, PLANT AND EQUIPMENT](index=14&type=section&id=NOTE%203%E2%80%94PROPERTY%2C%20PLANT%20AND%20EQUIPMENT) Net property, plant, and equipment slightly decreased to **$177.6 million** at June 30, 2021, with increased capitalized mine development costs offset by accumulated depreciation | Metric (in thousands) | Jun 30, 2021 | Dec 31, 2020 | | :-------------------------------- | :----------- | :----------- | | Plant and equipment | $158,959 | $155,173 | | Construction in process | $4,778 | $7,245 | | Capitalized mine development costs | $81,549 | $74,279 | | Less: accumulated depreciation and amortization | $(67,711) | $(56,242) | | Total property, plant and equipment, net | $177,575 | $180,455 | - Capitalized amounts related to coal reserves at non-operating properties totaled **$14.2 million** as of June 30, 2021, down from **$15.4 million** as of December 31, 2020[44](index=44&type=chunk) | Metric (in thousands) | 3 Months Ended Jun 30, 2021 | 3 Months Ended Jun 30, 2020 | 6 Months Ended Jun 30, 2021 | 6 Months Ended Jun 30, 2020 | | :-------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Total depreciation and amortization | $5,955 | $5,341 | $12,110 | $10,343 | [NOTE 4—DEBT](index=15&type=section&id=NOTE%204%E2%80%94DEBT) The company's debt includes a **$5.0 million** Term Loan and a **$30.0 million** Revolving Credit Facility, with an additional **$3.0 million** Equipment Financing Loan outstanding as of June 30, 2021 - The Revolving Credit Facility has a **$30.0 million** availability, with no amount outstanding at June 30, 2021[47](index=47&type=chunk) - The Term Loan had an outstanding principal balance of **$5.0 million** at June 30, 2021[48](index=48&type=chunk) - The Equipment Financing Loan had an outstanding principal balance of **$3.0 million** at June 30, 2021[50](index=50&type=chunk) - The company was in compliance with all debt covenants under the Credit Agreement at June 30, 2021[49](index=49&type=chunk) [NOTE 5—LEASES](index=15&type=section&id=NOTE%205%E2%80%94LEASES) The company holds various financing leases for mining equipment and one operating lease for office space, with total right-of-use assets of **$5.8 million** and lease liabilities of **$5.4 million** at June 30, 2021 | Metric (in thousands) | Jun 30, 2021 | Dec 31, 2020 | | :-------------------- | :----------- | :----------- | | Total right-of-use assets | $5,813 | $110 | | Total lease liabilities | $5,395 | $110 | - Weighted average remaining lease term for financing leases is **2.8 years** with a discount rate of **4.1%**[55](index=55&type=chunk) [NOTE 6—SBA PAYCHECK PROTECTION PROGRAM LOAN](index=17&type=section&id=NOTE%206%E2%80%94SBA%20PAYCHECK%20PROTECTION%20PROGRAM%20LOAN) The company received an **$8.4 million** PPP Loan in April 2020, which was fully forgiven by the SBA on July 29, 2021, and recognized as other income in 2020 - The company received an **$8.4 million** PPP Loan in April 2020[56](index=56&type=chunk) - The PPP Loan was approved for full forgiveness by the SBA on July 29, 2021, and **$8.4 million** was recognized as other income in 2020[59](index=59&type=chunk)[60](index=60&type=chunk) [NOTE 7—EQUITY](index=19&type=section&id=NOTE%207%E2%80%94EQUITY) The company's stock-based compensation plan reserved **1.7 million** shares for future awards, with expenses totaling **$1.5 million** for Q2 2021 and **$2.6 million** for H1 2021 - **1.7 million shares** were reserved under the current stock-based compensation plan for future awards at June 30, 2021[61](index=61&type=chunk) - Stock-based compensation expense totaled **$1.5 million** for Q2 2021 and **$2.6 million** for H1 2021[63](index=63&type=chunk) - Unrecognized compensation cost related to unvested restricted stock was **$9.9 million** at June 30, 2021, to be recognized over a weighted-average period of **2.1 years**[63](index=63&type=chunk) [NOTE 8—COMMITMENTS AND CONTINGENCIES](index=19&type=section&id=NOTE%208%E2%80%94COMMITMENTS%20AND%20CONTINGENCIES) The company has **$15.7 million** in reclamation bonding, **$0.3 million** in surety bonds, and **$6.3 million** in contingent transportation commitments, alongside a **$32.7 million** jury verdict in the Chubb Insurance lawsuit that is not yet final - Total reclamation bonding requirements were **$15.7 million**, and surety bonds for performance obligations were **$0.3 million** at June 30, 2021[65](index=65&type=chunk) - Contingent liabilities under take-or-pay transportation arrangements totaled **$6.3 million**, expiring between December 31, 2021, and March 31, 2024[66](index=66&type=chunk) - On July 15, 2021, a jury awarded the company **$7.7 million** in compensatory damages and an additional **$25.0 million** for inconvenience and aggravation in the Chubb Insurance lawsuit, though the verdict is not final and not recognized as of June 30, 2021[71](index=71&type=chunk) [NOTE 9—REVENUE](index=21&type=section&id=NOTE%209%E2%80%94REVENUE) Total revenue significantly increased for both the three and six months ended June 30, 2021, driven by higher export revenues, with outstanding performance obligations for **0.8 million tons** at fixed prices and **0.1 million tons** at index-based pricing for the remainder of 2021 | Revenue (in thousands) | 3 Months Ended Jun 30, 2021 | 3 Months Ended Jun 30, 2020 | YoY Change | 6 Months Ended Jun 30, 2021 | 6 Months Ended Jun 30, 2020 | YoY Change | | :--------------------- | :-------------------------- | :-------------------------- | :--------- | :-------------------------- | :-------------------------- | :--------- | | North American revenues | $37,550 | $31,005 | +21.1% | $57,656 | $62,510 | -7.7% | | Export revenues | $38,507 | $5,369 | +617.2% | $61,855 | $15,800 | +291.5% | | Total revenues | $76,057 | $36,374 | +109.1% | $119,511 | $78,310 | +52.6% | - Outstanding performance obligations for the remainder of 2021 include approximately **0.8 million tons** at an average fixed price of **$86/ton** and **0.1 million tons** at index-based pricing[72](index=72&type=chunk) [NOTE 10—INCOME TAXES](index=21&type=section&id=NOTE%2010%E2%80%94INCOME%20TAXES) Income tax expense for the three and six months ended June 30, 2021, was significantly lower than in 2020, primarily due to a **$1.0 million** tax benefit from legislative changes in West Virginia, resulting in effective tax rates of **10%** and **9%** respectively | Metric (in thousands) | 3 Months Ended Jun 30, 2021 | 3 Months Ended Jun 30, 2020 | 6 Months Ended Jun 30, 2021 | 6 Months Ended Jun 30, 2020 | | :-------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Total income tax expense | $228 | $1,260 | $62 | $1,370 | - A tax benefit of **$1.0 million** (Q2 2021) and **$1.4 million** (H1 2021) was recognized due to legislative changes in West Virginia[73](index=73&type=chunk) - Effective tax rate (excluding discrete items) was **10%** for Q2 2021 (vs **21%** in Q2 2020) and **9%** for H1 2021 (vs **16%** in H1 2020)[73](index=73&type=chunk) [NOTE 11—EARNINGS PER SHARE](index=23&type=section&id=NOTE%2011%E2%80%94EARNINGS%20PER%20SHARE) Basic and diluted EPS significantly increased for both the three and six months ended June 30, 2021, reflecting higher net income | Metric (in thousands, except per share) | 3 Months Ended Jun 30, 2021 | 3 Months Ended Jun 30, 2020 | 6 Months Ended Jun 30, 2021 | 6 Months Ended Jun 30, 2020 | | :------------------------------------ | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Net income | $9,942 | $2,652 | $14,085 | $4,614 | | Basic EPS | $0.23 | $0.06 | $0.32 | $0.11 | | Diluted EPS | $0.23 | $0.06 | $0.32 | $0.11 | [NOTE 12—RELATED PARTY TRANSACTIONS](index=23&type=section&id=NOTE%2012%E2%80%94RELATED%20PARTY%20TRANSACTIONS) The company has mineral leases and surface rights agreements with Ramaco Coal, LLC, a related party, with royalties paid totaling **$1.5 million** for Q2 2021 and **$2.6 million** for H1 2021 - Royalties paid to related party Ramaco Coal, LLC were **$1.5 million** for the three months ended June 30, 2021, and **$2.6 million** for the six months ended June 30, 2021[76](index=76&type=chunk) [NOTE 13—SUBSEQUENT EVENTS](index=23&type=section&id=NOTE%2013%E2%80%94SUBSEQUENT%20EVENTS) Subsequent to June 30, 2021, the company completed a **$34.5 million** public offering of Senior Unsecured Notes, received full SBA forgiveness for its **$8.4 million** PPP Loan, and was awarded **$32.7 million** in a jury verdict for the Chubb Insurance lawsuit - On July 13, 2021, the company closed a public offering of **$34.5 million** in 9.00% Senior Unsecured Notes due 2026, with proceeds for general corporate purposes including acquisitions, capital expenditures, and working capital[77](index=77&type=chunk)[78](index=78&type=chunk) - On July 29, 2021, the SBA approved full forgiveness for the **$8.4 million** PPP Loan[79](index=79&type=chunk)[80](index=80&type=chunk) - On July 15-16, 2021, a jury awarded the company **$32.7 million** (**$7.7 million** compensatory, **$25.0 million** inconvenience/aggravation) in the Chubb Insurance lawsuit, though the verdict is not final[79](index=79&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial performance, operations, recent developments, liquidity, capital resources, indebtedness, and non-GAAP measures [Overview](index=26&type=section&id=Overview) Ramaco Resources, Inc., a metallurgical coal producer with a **261-million-ton** reserve base, aims to grow production to **4-4.5 million clean tons**, experiencing increased demand and U.S. steel prices in Q2 2021 with **0.7 million tons** sold, **51%** to export markets - The company has a **261-million-ton** reserve base of high-quality metallurgical coal and plans to grow production to more than **4-4.5 million clean tons**[83](index=83&type=chunk) - In Q2 2021, the company sold **0.7 million tons** of coal, with **51%** going to export markets (Europe, South America, Asia, Africa), a significant shift from Q2 2020 where **85%** of sales were North American[85](index=85&type=chunk) - The global economic recovery in 2021 led to increased demand and significantly higher U.S. steel prices, reversing the declining demand and spot prices experienced in 2020 due to COVID-19[87](index=87&type=chunk) [Recent Developments](index=26&type=section&id=Recent%20Developments) Recent developments include a **$34.5 million** Senior Unsecured Notes offering, a **$32.7 million** favorable jury verdict in the Chubb Insurance litigation, and full forgiveness of the **$8.4 million** SBA Paycheck Protection Program Loan, all occurring in July 2021 - Completed a **$34.5 million** public offering of 9.00% Senior Unsecured Notes due 2026 on July 13, 2021, with proceeds for general corporate purposes including acquisitions, capital expenditures, and working capital[89](index=89&type=chunk)[91](index=91&type=chunk) - A jury returned a verdict in favor of the company for **$7.7 million** in compensatory damages and an additional **$25.0 million** for inconvenience and aggravation in the Chubb Insurance litigation on July 15-16, 2021[94](index=94&type=chunk) - The **$8.4 million** SBA Paycheck Protection Program Loan was approved for full forgiveness by the SBA on July 29, 2021[95](index=95&type=chunk) [Results of Operations](index=29&type=section&id=Results%20of%20Operations) The company reported significantly higher net income and Adjusted EBITDA for both the three and six months ended June 30, 2021, compared to 2020, driven by a **42%** increase in sales volumes and improved pricing, with other income including CARES Act Employee Retention Tax Credit in 2021 and PPP Loan forgiveness in 2020 | Metric (in thousands) | 3 Months Ended Jun 30, 2021 | 3 Months Ended Jun 30, 2020 | YoY Change | 6 Months Ended Jun 30, 2021 | 6 Months Ended Jun 30, 2020 | YoY Change | | :-------------------- | :-------------------------- | :-------------------------- | :--------- | :-------------------------- | :-------------------------- | :--------- | | Revenue | $76,057 | $36,374 | +109.1% | $119,511 | $78,310 | +52.6% | | Operating income (loss) | $7,021 | $(4,299) | N/A | $8,265 | $(3,158) | N/A | | Net income | $9,942 | $2,652 | +274.9% | $14,085 | $4,614 | +205.3% | | Adjusted EBITDA | $18,084 | $10,811 | +67.3% | $29,624 | $19,228 | +54.1% | - Sales volumes were **42%** higher during the six months ended June 30, 2021, compared to the same period in 2020, primarily due to the recovery from COVID-19 impacts[96](index=96&type=chunk) - The company recognized **$5.3 million** in CARES Act Employee Retention Tax Credit in H1 2021 and **$7.3 million** in PPP Loan forgiveness in H1 2020 as other income[96](index=96&type=chunk) [Three Months Ended June 30, 2021 Compared to Three Months Ended June 30, 2020](index=29&type=section&id=Three%20Months%20Ended%20June%2030%2C%202021%20Compared%20to%20Three%20Months%20Ended%20June%2030%2C%202020) Revenue increased by **109%** to **$76.1 million**, driven by a **90%** increase in tons sold and a **7%** increase in revenue per ton (FOB mine), while net income surged by **275%** | Metric (in thousands, except per ton) | 3 Months Ended Jun 30, 2021 | 3 Months Ended Jun 30, 2020 | YoY Change | | :------------------------------------ | :-------------------------- | :-------------------------- | :--------- | | Coal sales revenue | $76,057 | $36,374 | +109.1% | | Tons sold | 686 | 362 | +89.5% | | Revenue per ton sold (FOB mine) | $97 | $91 | +6.6% | | Cost of sales | $57,762 | $30,134 | +91.7% | | Cash cost per ton sold (FOB mine) | $70 | $74 | -5.4% | | Net income | $9,942 | $2,652 | +274.9% | - Other income for Q2 2021 included **$2.9 million** from the CARES Act Employee Retention Tax Credit, while Q2 2020 included **$7.3 million** from anticipated PPP Loan forgiveness[103](index=103&type=chunk) [Six Months Ended June 30, 2021 Compared to Six Months Ended June 30, 2020](index=31&type=section&id=Six%20Months%20Ended%20June%2030%2C%202021%20Compared%20to%20Six%20Months%20Ended%20June%2030%2C%202020) Revenue increased by **53%** to **$119.5 million**, primarily due to a **42%** increase in tons sold, with cash cost per ton (FOB mine) improving by **5.7%** to **$66**, and net income growing by **205%** | Metric (in thousands, except per ton) | 6 Months Ended Jun 30, 2021 | 6 Months Ended Jun 30, 2020 | YoY Change | | :------------------------------------ | :-------------------------- | :-------------------------- | :--------- | | Coal sales revenue | $119,511 | $78,310 | +52.6% | | Tons sold | 1,108 | 778 | +42.4% | | Revenue per ton sold (FOB mine) | $93 | $92 | +1.1% | | Cost of sales | $89,000 | $61,100 | +45.7% | | Cash cost per ton sold (FOB mine) | $66 | $70 | -5.7% | | Net income | $14,085 | $4,614 | +205.3% | - Other income for H1 2021 included **$5.3 million** from the CARES Act Employee Retention Tax Credit, while H1 2020 included **$7.3 million** from anticipated PPP Loan forgiveness[112](index=112&type=chunk) [Liquidity and Capital Resources](index=34&type=section&id=Liquidity%20and%20Capital%20Resources) At June 30, 2021, the company held **$19.4 million** in cash and **$30.0 million** in available credit, with **$32.9 million** in operating cash flow for H1 2021 primarily funding **$8.6 million** in capital expenditures and **$9.4 million** in net debt repayments - At June 30, 2021, the company had **$19.4 million** of cash and cash equivalents and **$30.0 million** available under its existing credit agreements for future borrowings[116](index=116&type=chunk) - Cash flows from operating activities were **$32.9 million** for the first six months of 2021, including a positive impact from working capital components of a net **$3.4 million**[117](index=117&type=chunk) - Capital expenditures were **$8.6 million**, principally for development of the Berwind mining complex and for infrastructure at the Elk Creek mining complex, with net repayments of borrowings totaling **$9.4 million**[120](index=120&type=chunk) - The company believes that current cash on hand, cash flow from operations, and available liquidity under existing credit agreements will be sufficient to meet its capital expenditure and operating plans[118](index=118&type=chunk) [Indebtedness](index=36&type=section&id=Indebtedness) The company's debt structure includes a **$5.0 million** Term Loan and an undrawn **$30.0 million** Revolving Credit Facility, with a **$3.0 million** Equipment Financing Loan outstanding, and post-period, a **$34.5 million** Senior Unsecured Notes offering was completed and the **$8.4 million** PPP Loan was fully forgiven - At June 30, 2021, the Term Loan had an outstanding principal balance of **$5.0 million**, and the Revolving Credit Facility had **$30.0 million** available with no outstanding amount[124](index=124&type=chunk)[123](index=123&type=chunk) - The Equipment Financing Loan had an outstanding principal balance of **$3.0 million** at June 30, 2021[126](index=126&type=chunk) - On July 13, 2021, the company closed a **$34.5 million** public offering of 9.00% Senior Unsecured Notes due 2026[129](index=129&type=chunk) - On July 29, 2021, the **$8.4 million** SBA Paycheck Protection Program Loan was approved for full forgiveness[128](index=128&type=chunk) [Off-Balance Sheet Arrangements](index=37&type=section&id=Off-Balance%20Sheet%20Arrangements) As of June 30, 2021, the company reported no material off-balance sheet arrangements - No material off-balance sheet arrangements were reported as of June 30, 2021[131](index=131&type=chunk) [Non-GAAP Financial Measures](index=37&type=section&id=Non-GAAP%20Financial%20Measures) The company utilizes Adjusted EBITDA, non-GAAP revenue per ton (FOB mine), and non-GAAP cash cost per ton sold as supplemental measures to evaluate operating performance and monitor coal prices and costs, with Adjusted EBITDA significantly increasing for both Q2 and H1 2021 - Adjusted EBITDA is defined as net income plus net interest expense, stock-based compensation, depreciation and amortization expenses, and any transaction-related costs[133](index=133&type=chunk) | Metric (in thousands) | 3 Months Ended Jun 30, 2021 | 3 Months Ended Jun 30, 2020 | 6 Months Ended Jun 30, 2021 | 6 Months Ended Jun 30, 2020 | | :-------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Net income | $9,942 | $2,652 | $14,085 | $4,614 | | Adjusted EBITDA | $18,084 | $10,811 | $29,624 | $19,228 | - Non-GAAP revenue per ton (FOB mine) increased to **$97/ton** in Q2 2021 (from **$91/ton** in Q2 2020) and **$93/ton** in H1 2021 (from **$92/ton** in H1 2020)[135](index=135&type=chunk)[137](index=137&type=chunk) - Non-GAAP cash cost per ton sold (FOB mine) decreased to **$70/ton** in Q2 2021 (from **$74/ton** in Q2 2020) and **$66/ton** in H1 2021 (from **$70/ton** in H1 2020)[138](index=138&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=40&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section refers to the disclosures about market risk provided in Item 7A of the company's Annual Report - Market risk disclosures are incorporated by reference from Item 7A of the company's Annual Report[139](index=139&type=chunk) [Item 4. Controls and Procedures](index=40&type=section&id=Item%204.%20Controls%20and%20Procedures) The company's management concluded that disclosure controls and procedures were effective as of June 30, 2021, with no significant changes in internal control over financial reporting during the quarter - Disclosure controls and procedures were evaluated and deemed effective as of June 30, 2021, at a reasonable assurance level[140](index=140&type=chunk) - No significant changes in internal control over financial reporting occurred during the quarter ended June 30, 2021[142](index=142&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=41&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in routine litigation but believes no pending claims will have a material adverse effect on its financial condition, with specific details referenced in Note 8 of the financial statements - The company believes no pending litigation, disputes, or claims will have a material adverse effect on its financial condition, cash flows, or results of operations[145](index=145&type=chunk) - Further details on legal proceedings are provided in Note 8 to the Condensed Consolidated Financial Statements[145](index=145&type=chunk) [Item 1A. Risk Factors](index=41&type=section&id=Item%201A.%20Risk%20Factors) The company refers readers to the risk factors detailed in its Annual Report and other SEC filings, noting no material changes in risk factors from those previously described - Readers should carefully consider the risk factors and other cautionary statements described in the company's Annual Report and other SEC filings[146](index=146&type=chunk) - There have been no material changes in risk factors from those described in the Annual Report[147](index=147&type=chunk) [Item 4. Mine Safety Disclosures](index=41&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Information regarding mine safety violations and regulatory matters is included in Exhibit 95.1 of this Quarterly Report - Mine safety disclosures are provided in Exhibit 95.1 to this Quarterly Report[148](index=148&type=chunk) [Item 6. Exhibits](index=42&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed or furnished with the Form 10-Q, including indentures for senior notes, certifications (Sarbanes-Oxley Act), mine safety disclosures, and XBRL interactive data files - The report includes various exhibits such as indentures for 9.00% Senior Notes due 2026, CEO/CFO certifications (Sarbanes-Oxley Act), mine safety disclosures, and Inline XBRL documents[152](index=152&type=chunk) [SIGNATURES](index=43&type=section&id=SIGNATURES) The report is duly signed on behalf of Ramaco Resources, Inc. by Randall W. Atkins, Chairman, CEO, and Director, and Jeremy R. Sussman, Chief Financial Officer, on August 2, 2021 - The report was signed by Randall W Atkins (Chairman, CEO, and Director) and Jeremy R Sussman (Chief Financial Officer) on August 2, 2021[156](index=156&type=chunk)

RAMACO 1st Quarter 2021 Investor Presentation Ramaco Resources May 2021 Disclaimer Forward Looking Statements The information in this presentation includes "forward-looking statements." All statements, other than statements of historical fact included in this presentation, regarding our strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects, plans and objectives of management are forward-looking statements. When used in this presentation, the words "could, ...

Ramaco Resources, Inc. (NASDAQ:METC) Q1 2021 Earnings Conference Call May 13, 2021 9:00 AM ET Company Participants Jeremy Sussman ??? Chief Financial Officer Randy Atkins ??? Chairman and Chief Executive Officer Chris Blanchard ??? Chief Operating Officer Conference Call Participants Lucas Pipes ??? B. Riley Securities David Gagliano ??? BMO Capitals Operator Good day and thank you for standing by. Welcome to the Ramaco Resources, Incorporated First Quarter 2021 Earnings Conference Call. At this time, all p ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ⌧ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2021 or ◻ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-38003 RAMACO RESOURCES, INC. (Exact name of registrant as specified in its charter) | Delaware | 38-4018838 | ...