Ramaco Resources(METC) - 2025 Q1 - Quarterly Results

First Quarter 2025 Highlights Ramaco reported a net loss of $9.5 million and Adjusted EBITDA of $9.8 million in Q1 2025, achieving record production and top-tier cash margins despite challenging market conditions Q1 2025 Key Financial Results | Metric | Value | Change vs Q1 2024 | | :--- | :--- | :--- | | Net Income (million USD) | $(9.5) | Down from $2.0 million | | Adjusted EBITDA (million USD) | $9.8 | Down 60% | | Diluted EPS (Class A) (USD) | $(0.19) | Down from $(0.00) | | Non-GAAP Cash Cost per Ton (USD/ton) | $98 | Down 17% | | Non-GAAP Cash Margin per Ton (USD/ton) | $24 | Down 35% | | Non-GAAP Realized Sales Price (USD/ton) | $122 | Down 21% | - Achieved a quarterly production record, with output annualizing to 4.0 million tons, despite weather-related disruptions causing a loss of approximately 0.1 million tons[6] - Total sales commitments for 2025 stand at 3.7 million tons, representing over 90% of the midpoint of production guidance. Of this, 2.2 million tons are committed at a combined average fixed price of $141 per ton[6] - The Board of Directors declared a quarterly cash dividend of $0.1811 per share on Class B common stock[6][10] - Significant progress was made on the Brook Mine rare earth element (REE) project, with plans to start large-scale carbon ore mining in June 2025 and a pilot processing facility by Fall 2025. An updated technical report estimates the TREO deposit at approximately 1.7 million tons[8][10] Management Commentary Management highlighted Ramaco's operational outperformance in a challenging market, strategic production adjustments, and significant progress on the rare earth elements project Metallurgical Coal Business Review Ramaco achieved top-tier cash margins and realized prices in Q1 despite a weak metallurgical coal market, strategically lowering 2025 production guidance while maintaining expansion flexibility - Achieved the highest cash margins per ton and the highest realized sales price among its publicly traded peer group in Q1 2025[14] - Strategically reducing 2025 production and sales guidance to avoid selling into the current "oversold and underpriced spot market"[17] - Maintains the option to increase production to an exit run-rate above 5 million tons per annum and has plans for a 2 million ton expansion at the Maben and Berwind complexes, which would take overall production to 6.5-7.0 million tons over 24-36 months once initiated[18][19] Rare Earths and Critical Minerals (REE/CM) Business Update Ramaco is advancing its Brook Mine REE/CM project, with large-scale ore mining starting June 2025, an updated 1.7 million ton TREO estimate, and a target for commercial oxide production by 2028 - The Brook Mine will be the first new rare earth mine in the U.S. in over 70 years, with large-scale production of ore beginning in June 2025[23] - Hired Michael Woloschuk from Fluor Corporation as Executive Vice President for Critical Minerals to oversee the Brook Mine's development[24] - An updated technical report from Weir estimates the deposit at 1.7 million tons of TREO, with average concentrations of 450-570 ppm and hydrometallurgical tests showing primary recoveries over 80%[25][28] - The commercial development timeline targets pilot operations producing concentrate in 2026 and full-scale oxide production by 2028 or earlier[29] Corporate and Board Updates Former U.S. Senator Joe Manchin has been appointed as an independent director to Ramaco's Board, bringing valuable experience for coal operations and rare earths initiatives - Former U.S. Senator Joe Manchin has been appointed to the Board of Directors as the newest independent director[31] Financial and Operational Performance Ramaco achieved record Q1 2025 production of 989,000 tons with improved cash costs, but revenue and margins declined due to lower realized pricing, ending the quarter with $118.4 million in liquidity Key Financial Metrics Summary Q1 2025 profitability declined significantly, with a net loss of $9.5 million and Adjusted EBITDA of $9.8 million, primarily due to a 21% year-over-year decrease in revenue per ton Q1 2025 Key Metrics vs. Prior Periods | Key Metrics | 1Q25 | 4Q24 | Chg. | 1Q24 | Chg. | | :--- | :--- | :--- | :--- | :--- | :--- | | Total Tons Sold (k tons) | 946 | 1,122 | (16)% | 929 | 2% | | Revenue (million USD) | $134.7 | $170.9 | (21)% | $172.7 | (22)% | | Non-GAAP Cash Margins (USD/Ton) | $24 | $33 | (27)% | $37 | (35)% | | Net Income (Loss) (million USD) | $(9.5) | $3.9 | (344)% | $2.0 | (575)% | | Diluted EPS - Class A | $(0.19) | $0.06 | (400)% | $(0.00) | (3,778)% | | Adjusted EBITDA (million USD) | $9.8 | $29.2 | (66)% | $24.2 | (60)% | | Capex (million USD) | $20.3 | $11.9 | 70% | $18.7 | 8% | Quarterly Performance Analysis Q1 production increased 17% year-over-year to a record 989,000 tons with cash costs improving 17% to $98/ton, though realized pricing fell 21% to $122/ton - Year-over-Year: Overall production increased 17% to a record 989,000 tons, while cash costs decreased 17% to $98 per ton. Realized pricing fell 21% to $122 per ton[38][39] - Sequential Quarter: Production rose 4% from Q4 2024. Realized pricing fell 5% from $129 to $122 per ton, reflecting weaker market indices. Cash costs were stable at $98 per ton compared to $96 in Q4 2024[41][42][43] Balance Sheet and Liquidity Ramaco's liquidity reached $118.4 million as of March 31, 2025, comprising $43.5 million in cash and $74.9 million in credit facility availability, with quarterly capital expenditures at $20.3 million - Total liquidity was $118.4 million as of March 31, 2025, consisting of $43.5 million in cash and $74.9 million in credit facility availability[44] - Quarterly capital expenditures were $20.3 million, up from $18.7 million in Q1 2024[45] 2025 Outlook and Guidance Ramaco updated its 2025 guidance, lowering production and sales volumes, tightening cost forecasts, and reducing capital expenditures, with 3.7 million tons already committed Updated Financial Guidance Ramaco revised its 2025 guidance, lowering production and sales volumes, reducing cost per ton and capital expenditures, but increasing SG&A due to higher legal expenses Full-Year 2025 Guidance | Metric | 2025 Guidance | Prior Guidance / Note | | :--- | :--- | :--- | | Production (k tons) | 3,900 - 4,300 | Down from 4,200 - 4,600k | | Sales (k tons) | 4,100 - 4,500 | Down from 4,400 - 4,800k | | Cash Costs Per Ton Sold (USD/ton) | $96 - $102 | Down from $97 - $103 | | Capital Expenditures (million USD) | $55 - $65 | Down from $60M - $70M | | SG&A Expense (million USD) | $36 - $40 | Up from $34M - $38M | | DD&A Expense (million USD) | $71 - $76 | Down from $73M - $78M | Committed Sales Volume As of March 31, 2025, Ramaco secured sales commitments for 3.7 million tons, including 2.2 million tons at a fixed average price of $141 per ton Committed 2025 Sales Volume (as of March 31, 2025) | Category | Volume (million tons) | Average Price (USD/ton) | | :--- | :--- | :--- | | North America, fixed priced | 1.6 | $152 | | Seaborne, fixed priced | 0.6 | $111 | | Total, fixed priced | 2.2 | $141 | | Index priced | 1.5 | N/A | | Total committed tons | 3.7 | N/A | Consolidated Financial Statements (Unaudited) The unaudited financial statements for Q1 2025 show a net loss of $9.5 million, total assets of $685.7 million, and $26.0 million in net cash from operating activities Consolidated Statements of Operations Ramaco reported a net loss of $9.5 million in Q1 2025, a reversal from prior year's income, driven by a 22% decrease in revenue to $134.7 million Q1 2025 vs Q1 2024 Statement of Operations (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Revenue (USD thousands) | $134,656 | $172,676 | | Total costs and expenses (USD thousands) | $146,678 | $169,401 | | Operating (loss) income (USD thousands) | $(12,022) | $3,275 | | Net (loss) income (USD thousands) | $(9,457) | $2,032 | Consolidated Balance Sheets As of March 31, 2025, total assets increased to $685.7 million, total liabilities rose to $330.5 million due to credit facility draw, and total stockholders' equity decreased to $355.2 million Balance Sheet Summary (in thousands) | Category | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Current Assets (USD thousands) | $163,967 | $167,634 | | Total Assets (USD thousands) | $685,735 | $674,686 | | Total Current Liabilities (USD thousands) | $124,361 | $122,428 | | Total Liabilities (USD thousands) | $330,487 | $311,880 | | Total Stockholders' Equity (USD thousands) | $355,248 | $362,806 | Consolidated Statement of Cash Flows Q1 2025 saw net cash from operating activities at $26.0 million, net cash used for investing at $22.3 million, and a net increase in cash of $10.5 million for the quarter Q1 2025 vs Q1 2024 Cash Flow Summary (in thousands) | Cash Flow Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash from operating activities (USD thousands) | $26,039 | $25,188 | | Net cash used for investing activities (USD thousands) | $(22,256) | $(18,665) | | Net cash provided by (used for) financing activities (USD thousands) | $6,674 | $(17,982) | | Net change in cash (USD thousands) | $10,457 | $(11,459) | Reconciliation of Non-GAAP Measures This section reconciles non-GAAP financial measures, including Adjusted EBITDA, non-GAAP revenue per ton, and cash cost per ton, to their GAAP equivalents by adjusting for specific non-operating and non-cash items Adjusted EBITDA Reconciliation Adjusted EBITDA for Q1 2025 was $9.8 million, a significant decrease from prior periods, reconciled from a net loss of $9.5 million by adding back non-cash and non-operating items Reconciliation of Net Income to Adjusted EBITDA (in thousands) | Line Item | Q1 2025 | Q4 2024 | Q1 2024 | | :--- | :--- | :--- | :--- | | Net (loss) income (USD thousands) | $(9,457) | $3,858 | $2,032 | | Depreciation, depletion, and amortization (USD thousands) | 17,542 | 16,706 | 15,220 | | Interest expense, net (USD thousands) | 2,230 | 1,614 | 1,332 | | Income tax (benefit) expense (USD thousands) | (4,290) | 2,212 | 540 | | Stock-based compensation (USD thousands) | 3,361 | 4,211 | 4,702 | | Adjusted EBITDA (USD thousands) | $9,788 | $29,196 | $24,180 | Non-GAAP Revenue and Cash Cost Per Ton Reconciliation Non-GAAP revenue (FOB mine) for Q1 2025 was $115.6 million ($122 per ton) and non-GAAP cash cost was $92.8 million ($98 per ton), derived by adjusting GAAP figures for transportation and other specific costs Q1 2025 Non-GAAP Revenue & Cost per Ton (in thousands) | Metric | GAAP Value (USD thousands) | Adjustments (USD thousands) | Non-GAAP Value (USD thousands) | Per Ton (USD) | | :--- | :--- | :--- | :--- | :--- | | Revenue | $134,656 | $(19,042) | $115,614 | $122 | | Cost of Sales | $114,132 | $(21,369) | $92,763 | $98 |