SunCoke Energy(SXC) - 2025 Q2 - Quarterly Results

Executive Summary & Business Highlights SunCoke Energy reported a decline in Q2 2025 net income and Adjusted EBITDA, while progressing with the Phoenix Global acquisition, extending its credit facility, and reaffirming full-year guidance Second Quarter 2025 Performance Overview SunCoke Energy reported a significant decline in Q2 2025 net income and Adjusted EBITDA compared to the prior year, primarily due to unfavorable timing and mix of contract and spot coke sales in Domestic Coke and lower volumes in Logistics Q2 2025 Consolidated Financial Highlights | Metric | Q2 2025 | Q2 2024 | Change | | :-------------------------- | :------ | :------ | :------- | | Net income attributable to SXC | $1.9M | $21.5M | $(19.6)M | | Consolidated Adjusted EBITDA | $43.6M | $63.5M | $(19.9)M | - Quarterly financial results were adversely impacted by the timing and mix of contract and spot coke sales in the Domestic Coke segment and lower volumes in the Logistics segment[3] Strategic Developments & Outlook SunCoke is progressing with the acquisition of Phoenix Global for $325 million, expected to close on August 1, 2025, and be immediately accretive, while also extending its revolving credit facility and reaffirming full-year 2025 guidance - Announced the acquisition of Phoenix Global for $325 million; all regulatory approvals have been received, transaction expected to close on August 1, 2025, and be immediately accretive[3][4] - Extension of revolving credit facility originally due June 2026 completed in July; now maturing in July 2030[4] - Reaffirming full-year 2025 Consolidated Adjusted EBITDA guidance range of $210 million - $225 million, with expectations for higher Adjusted EBITDA in the second half of the year[3][4] Consolidated Financial Results Consolidated financial results for Q2 2025 show a decrease in revenues, net income, and Adjusted EBITDA, primarily due to segment-specific challenges and transaction costs Three Months Ended June 30, 2025 For Q2 2025, consolidated revenues decreased by $36.8 million to $434.1 million, net income attributable to SXC dropped by $19.6 million to $1.9 million, and Adjusted EBITDA declined by $19.9 million to $43.6 million, primarily due to challenges in Domestic Coke and Logistics segments and transaction costs Consolidated Financial Performance (Q2 2025 vs Q2 2024) | Metric | Q2 2025 ($M) | Q2 2024 ($M) | Increase (decrease) ($M) | | :-------------------------- | :----------- | :----------- | :----------------------- | | Revenues | 434.1 | 470.9 | (36.8) | | Net income attributable to SXC | 1.9 | 21.5 | (19.6) | | Adjusted EBITDA | 43.6 | 63.5 | (19.9) | - Revenues decreased primarily due to timing/mix of contract and spot coke sales, lower volumes and pricing at Granite City, and lower transloading volumes at CMT[6] - Net income attributable to SXC decreased due to factors mentioned above, plus transaction costs[7] Segment Performance Analysis This section analyzes the performance of Domestic Coke, Logistics, Brazil Coke, and Corporate and Other segments, highlighting declines in Domestic Coke and Logistics, and consistent results in Brazil Coke Domestic Coke Segment The Domestic Coke segment experienced a $31.2 million decrease in revenues to $410.4 million and a $17.4 million decrease in Adjusted EBITDA to $40.5 million in Q2 2025, primarily due to unfavorable sales mix and lower volumes at Granite City Domestic Coke Segment Performance (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | Increase (decrease) | | :-------------------------- | :------ | :------ | :------------------ | | Revenues ($M) | 410.4 | 441.6 | (31.2) | | Adjusted EBITDA ($M) | 40.5 | 57.9 | (17.4) | | Sales volumes (thousands of tons) | 943 | 973 | (30) | | Adjusted EBITDA per ton | $42.95 | $59.51 | $(16.56) | - Revenues and Adjusted EBITDA decreased primarily due to the timing/mix of contract and spot coke sales volumes coupled with lower volumes and pricing due to contract extension economics at Granite City[11][12] Logistics Segment The Logistics segment's revenues decreased by $5.1 million to $15.1 million, and Adjusted EBITDA decreased by $4.5 million to $7.7 million in Q2 2025, driven by lower transloading volumes at CMT Logistics Segment Performance (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | Increase (decrease) | | :-------------------------- | :------ | :------ | :------------------ | | Revenues ($M) | 15.1 | 20.2 | (5.1) | | Adjusted EBITDA ($M) | 7.7 | 12.2 | (4.5) | | Tons handled (thousands of tons) | 4,746 | 5,982 | (1,236) | - Decreases in revenues and Adjusted EBITDA were primarily driven by lower transloading volumes at CMT due to challenging market conditions[15] Brazil Coke Segment The Brazil Coke segment reported revenues of $8.6 million and Adjusted EBITDA of $2.6 million in Q2 2025, remaining reasonably consistent with the prior year period Brazil Coke Segment Performance (Q2 2025 vs Q2 2024) | Metric | Q2 2025 ($M) | Q2 2024 ($M) | | :---------------- | :----------- | :----------- | | Revenues | 8.6 | 9.1 | | Adjusted EBITDA | 2.6 | 2.5 | Corporate and Other Corporate and Other expenses decreased to $7.2 million in Q2 2025 from $9.1 million in Q2 2024, primarily due to lower legacy black lung expenses - Corporate and Other expense was $7.2 million in Q2 2025, compared to $9.1 million in Q2 2024, primarily due to lower legacy black lung expenses resulting from the DOL exemption[17] Full-Year 2025 Outlook SunCoke reaffirmed its full-year 2025 Consolidated Adjusted EBITDA guidance, with revised projections reflecting the impact of new legislation and acquisition-related transaction costs Full-Year 2025 Guidance | Metric | Low ($M) | High ($M) | | :-------------------------------- | :------- | :-------- | | Consolidated Net Income | 40 | 59 | | Consolidated Adjusted EBITDA | 210 | 225 | | Capital expenditures | ~60 | ~60 | | Operating cash flow | 165 | 180 | | Cash taxes | 5 | 9 | | Domestic Coke total production (million tons) | ~4.0 | ~4.0 | - The 2025 revised guidance reflects the estimated impact of the "One Big Beautiful Bill Act" on cash taxes and the impact of transaction costs related to the acquisition of Phoenix Global on Consolidated Net Income[18] Company Information This section provides an overview of SunCoke Energy's core business as a coke supplier and logistics provider, along with its investor relations and communication practices About SunCoke Energy, Inc. SunCoke Energy, Inc. (NYSE: SXC) is a leading supplier of high-quality coke to domestic and international steelmaking and foundry customers, primarily under long-term, take-or-pay contracts, utilizing innovative heat-recovery technology and operating a logistics business - SunCoke Energy, Inc. supplies high-quality coke to domestic and international customers for blast furnace steel production and foundry casted iron, with most sales under long-term, take-or-pay contracts[20] - The company's process uses innovative heat-recovery technology for steam or electrical power generation[20] - Its logistics business provides export and domestic material handling services with a collective capacity to mix and transload over 40 million tons of material annually[20] Investor Relations & Communications SunCoke communicates material information to investors through various public channels, and investors are encouraged to monitor these for important updates - SunCoke routinely announces material information via press releases, SEC filings, public conference calls, webcasts, sustainability reports, and its website[21] - Investors are encouraged to monitor and review information posted on the company's website, in addition to other communication channels[21] Financial Statements This section presents the Consolidated Statements of Income, Balance Sheets, and Cash Flows, detailing the company's financial performance and position for the reported periods Consolidated Statements of Income The Consolidated Statements of Income provide detailed revenue, cost, and profit figures for the three and six months ended June 30, 2025, and 2024, showing a significant decline in net income and earnings per share attributable to SXC in 2025 compared to 2024 Consolidated Statements of Income (Q2 & YTD 2025 vs 2024) | Metric | Three Months Ended June 30, 2025 ($M) | Three Months Ended June 30, 2024 ($M) | Six Months Ended June 30, 2025 ($M) | Six Months Ended June 30, 2024 ($M) | | :------------------------------------ | :------------------------------------ | :------------------------------------ | :---------------------------------- | :---------------------------------- | | Revenues | 434.1 | 470.9 | 870.1 | 959.3 | | Operating income | 9.8 | 34.7 | 40.0 | 69.2 | | Net income | 3.5 | 23.3 | 22.9 | 44.4 | | Net income attributable to SunCoke Energy, Inc. | 1.9 | 21.5 | 19.2 | 41.5 | | Diluted EPS | $0.02 | $0.25 | $0.22 | $0.49 | Consolidated Balance Sheets The Consolidated Balance Sheets present the company's financial position as of June 30, 2025, and December 31, 2024, detailing assets, liabilities, and equity, with slight decreases in total assets and liabilities Consolidated Balance Sheets (June 30, 2025 vs Dec 31, 2024) | Metric | June 30, 2025 ($M) | December 31, 2024 ($M) | | :-------------------------- | :----------------- | :--------------------- | | Total current assets | 484.0 | 474.6 | | Total assets | 1,641.4 | 1,668.2 | | Total current liabilities | 185.1 | 205.8 | | Total liabilities | 934.4 | 957.2 | | Total equity | 707.0 | 711.0 | Consolidated Statements of Cash Flows The Consolidated Statements of Cash Flows outline the cash generated from or used in operating, investing, and financing activities for the six months ended June 30, 2025, and 2024, showing a significant increase in net cash from operating activities Consolidated Statements of Cash Flows (YTD 2025 vs 2024) | Metric | Six Months Ended June 30, 2025 ($M) | Six Months Ended June 30, 2024 ($M) | | :------------------------------------ | :---------------------------------- | :---------------------------------- | | Net cash provided by operating activities | 43.3 | 0.7 | | Net cash used in investing activities | (17.2) | (33.4) | | Net cash used in financing activities | (29.5) | (25.5) | | Net decrease in cash and cash equivalents | (3.4) | (58.2) | | Cash and cash equivalents at end of period | 186.2 | 81.9 | - Net cash provided by operating activities increased significantly to $43.3 million for the six months ended June 30, 2025, compared to $0.7 million in the prior year period[34] Non-GAAP Measures and Reconciliations This section defines non-GAAP financial measures, specifically Adjusted EBITDA, and provides detailed reconciliations from net income for both historical performance and future guidance Definition of Non-GAAP Measures This section defines Adjusted EBITDA as earnings before interest, taxes, depreciation, and amortization, adjusted for impairments, restructuring costs, gains/losses on debt extinguishment, and transaction costs, clarifying its supplemental nature and limitations - Adjusted EBITDA represents earnings before interest, taxes, depreciation and amortization, adjusted for impairments, restructuring costs, gains or losses on extinguishment of debt, and/or transaction costs[28] - Non-GAAP financial measures should not be considered as alternatives to U.S. GAAP measures and have important limitations as analytical tools[22] Reconciliation of Net Income to Consolidated Adjusted EBITDA (Historical) The reconciliation table details the adjustments made to convert GAAP Net Income to Consolidated Adjusted EBITDA for the three and six months ended June 30, 2025, and 2024, highlighting the impact of depreciation, interest, income tax, and transaction costs Reconciliation of Net Income to Consolidated Adjusted EBITDA (Q2 & YTD 2025 vs 2024) | Metric | Three Months Ended June 30, 2025 ($M) | Three Months Ended June 30, 2024 ($M) | Six Months Ended June 30, 2025 ($M) | Six Months Ended June 30, 2024 ($M) | | :-------------------------- | :------------------------------------ | :------------------------------------ | :---------------------------------- | :---------------------------------- | | Net income | 3.5 | 23.3 | 22.9 | 44.4 | | Add: Depreciation and amortization expense | 28.6 | 28.7 | 57.4 | 62.0 | | Add: Interest expense, net | 5.4 | 5.8 | 10.6 | 12.1 | | Add: Income tax expense | 0.9 | 5.6 | 6.5 | 12.7 | | Add: Transaction costs | 5.2 | 0.1 | 6.0 | 0.2 | | Adjusted EBITDA | 43.6 | 63.5 | 103.4 | 131.4 | Reconciliation of Estimated 2025 Net Income to Estimated 2025 Consolidated Adjusted EBITDA (Guidance) This reconciliation provides the estimated adjustments to convert the projected 2025 Net Income range ($40 million - $59 million) to the reaffirmed 2025 Consolidated Adjusted EBITDA guidance range ($210 million - $225 million), including estimated depreciation, interest, income tax, and transaction costs Reconciliation of Estimated 2025 Net Income to Estimated 2025 Consolidated Adjusted EBITDA | Metric | Low ($M) | High ($M) | | :-------------------------------- | :------- | :-------- | | Net income | 40 | 59 | | Add: Depreciation and amortization expense | 121 | 117 | | Add: Interest expense, net | 26 | 24 | | Add: Income tax expense | 11 | 15 | | Add: Transaction costs | 12 | 10 | | Adjusted EBITDA | 210 | 225 | Legal & Disclaimers This section provides a disclaimer regarding forward-looking statements, emphasizing their inherent uncertainties and the company's policy on updates Forward-Looking Statements This section contains a comprehensive disclaimer regarding forward-looking statements, emphasizing that they represent current beliefs about future events, are inherently uncertain, and involve significant known and unknown risks - Forward-looking statements represent only current beliefs regarding future events, many of which are inherently uncertain and involve significant known and unknown risks and uncertainties[25] - Investors should not place undue reliance on these statements, which speak only as of the date of the press release[27] - SunCoke does not intend, and expressly disclaims any obligation, to update or alter its forward-looking statements after the date of the press release except as required by applicable law[27]