Ramaco Resources(METCB) - 2025 Q2 - Quarterly Results

Second Quarter 2025 Highlights Ramaco reported a net loss of $14.0 million and Adjusted EBITDA of $9.0 million in Q2 2025, achieving record production despite market weakness and revising full-year guidance Q2 2025 Key Financial Metrics | Metric | Value | | :--- | :--- | | Net Loss | $(14.0) million | | Diluted EPS (Class A) | $(0.29) | | Adjusted EBITDA | $9.0 million | | Non-GAAP Cash Cost per Ton | $103 | - Achieved a quarterly production record for the second consecutive quarter, producing approximately 1.0 million tons[6] - Full-year 2025 production and sales guidance is now anticipated to be at the low end of the ranges (3.9–4.3 million tons and 4.1–4.5 million tons, respectively), reflecting the temporary idling of the Rockhouse Eagle mine[6] - Increased 2025 SG&A guidance from $36 - $40 million to $39 - $43 million to support the accelerated development of the Brook Mine rare earth operation[7] - As of June 30, 2025, total sales commitments for the year reached 3.9 million tons, representing over 95% of the midpoint of 2025 production guidance. This includes 2.9 million tons at a combined average fixed price of $133 per ton[6] Management Commentary Management discusses the strategic shift to a dual-platform model, balancing metallurgical coal challenges with accelerated rare earth development and government support Rare Earths and Critical Minerals Business Ramaco is accelerating its Brook Mine rare earth project, with mining commencing and commercial production targeted for 2027, supported by a PEA showing a $1.197 billion NPV8 and 38% IRR - The company is evolving into a dual-platform company, combining its metallurgical coal operations with the development of the Brook Mine rare earth project to support U.S. strategic supply chain goals[9][11] Brook Mine Preliminary Economic Assessment (PEA) Summary | Metric | Value | | :--- | :--- | | NPV (8% discount rate, pre-tax) | $1.197 billion | | NPV (10% discount rate, pre-tax) | $898 million | | IRR (Internal Rate of Return) | 38% | | Initial Capital Cost Estimate | $473 million | - The commercial timeline for the rare earth operation has been accelerated, with initial commercial production now anticipated in 2027, a year earlier than previously planned[11] - The deposit is described as "massive" with an estimated 1.7 million tons of Total Rare Earth Oxide (TREO) from exploring only one-third of the site. It contains unique heavy REEs and critical minerals not currently produced in commercially feasible deposits in the U.S.[16] Metallurgical Coal Business and Market Outlook The metallurgical coal business faces macroeconomic headwinds and weak pricing, leading to reduced guidance, but shows signs of potential recovery in H2 2025 with rebounding Chinese coking coal prices - The metallurgical coal industry has been negatively affected by macroeconomic headwinds and weak pricing in export spot markets, prompting the company to reduce guidance[18][19] - Encouraging market signs have emerged, with Chinese domestic coking coal prices rebounding approximately 38% in July 2025, suggesting a potential for a firmer pricing environment in the second half of the year[20] - Despite current market weakness, Ramaco remains operationally prepared to grow its production profile from 4 million tons to approximately 7 million tons once market clarity improves[23] Corporate Strategy and Government Initiatives Ramaco's strategy focuses on becoming a dual critical minerals producer (coal and rare earths), supported by government initiatives like the 45X tax credit for metallurgical coal - The company is coordinating with the White House's National Energy Dominance Council, Dept. of Interior, Dept. of Defense, and National Security Council to fast-track the REE and critical minerals development[17] - Metallurgical coal has been declared a critical mineral, and the "One Big Beautiful Bill Act" adds it to the list of minerals eligible for the section 45X Advanced Manufacturing Tax Credit, which is expected to positively impact Adjusted EBITDA and Net Income from 2026[24][25] - The company is rapidly transitioning into the only major U.S. operator of two forms of critical minerals—rare earths and metallurgical coal—with significant long-term growth prospects[29] Financial and Operational Performance Ramaco achieved record Q2 2025 production of 999,000 tons but faced lower pricing and reduced cash margins, while maintaining strong liquidity post-debt refinancing Key Financial and Operational Metrics | Metric | Q2 2025 | Q2 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Total Tons Sold (thousands) | 1,079 | 915 | +18% | | Revenue ($ millions) | $153.0 | $155.3 | -2% | | Net (Loss) Income ($ millions) | $(14.0) | $5.5 | -362% | | Adjusted EBITDA ($ millions) | $9.0 | $28.8 | -69% | | Non-GAAP Revenue ($/Ton) | $123 | $143 | -14% | | Non-GAAP Cash Cost ($/Ton) | $103 | $108 | -5% | | Non-GAAP Cash Margin ($/Ton) | $20 | $35 | -43% | Q2 2025 Performance Analysis Q2 2025 saw record production but reduced cash margins year-over-year due to lower pricing, and sequentially, higher cash costs impacted profitability - Year-over-Year: Quarterly production increased 11% to a record 999,000 tons. However, average pricing fell 14% to $123 per ton, while cash costs decreased 5% to $103 per ton, resulting in cash margins of $20 per ton (down from $35)[34][35][36] - Sequential Quarter: Production increased 1% from Q1 2025. Realized pricing was up 1% to $123 per ton. Cash costs increased 5% to $103 per ton, causing cash margins to decrease to $20 per ton from $24 per ton in Q1[37][38][39][40] Balance Sheet and Liquidity As of June 30, 2025, liquidity was $87.3 million, increasing to $105 million post-July debt refinancing, with Q2 capital expenditures at $15.1 million and expected to decline - As of June 30, 2025, liquidity was $87.3 million ($28.1 million cash + $65.7 million revolver availability), up 22% YoY[41] - Post-quarter end, the company refinanced debt, increasing liquidity to roughly $105 million as of July 31, 2025[42] - Q2 2025 capital expenditures were $15.1 million, down 25% sequentially and 29% YoY. Capex is expected to decline in H2 2025[43] 2025 Outlook and Guidance Ramaco updated its full-year 2025 guidance, projecting production and sales at the low end of ranges, with increased SG&A for rare earth development and significant sales commitments secured Full-Year 2025 Guidance Full-year 2025 guidance anticipates production and sales at the low end of ranges, with cash costs between $96 and $102 per ton, and SG&A increased to $39-$43 million Full-Year 2025 Guidance | Metric | 2025 Guidance | 2024 Actual | | :--- | :--- | :--- | | Company Production (million tons) | 3.9 - 4.3 (f) | 3.671 | | Sales (million tons) | 4.1 - 4.5 (f) | 3.989 | | Cash Costs Per Ton Sold ($/Ton) | $96 - $102 | $105 | | Capital Expenditures ($ millions) | $55 - $65 | $68.842 | | SG&A Expense ($ millions) | $39 - $43 | $31.820 | | Effective Tax Rate (%) | 25 - 30 | 25 | (f) Low end of the range Committed Sales Volume As of June 30, 2025, Ramaco committed 3.9 million tons for the year, including 2.9 million tons at a fixed average price of $133 per ton Committed 2025 Sales Volume (as of June 30, 2025) | Customer/Pricing Type | Volume (million tons) | Average Price ($/ton) | | :--- | :--- | :--- | | North America, fixed priced | 1.6 | $152 | | Seaborne, fixed priced | 1.3 | $109 | | Total, fixed priced | 2.9 | $133 | | Index priced | 1.0 | N/A | | Total committed tons | 3.9 | N/A | Consolidated Financial Statements (Unaudited) This section presents the unaudited consolidated financial statements for Q2 and H1 2025, including Statements of Operations, Balance Sheets, and Cash Flows Statements of Operations The Statements of Operations show a Q2 2025 net loss of $14.0 million and a H1 2025 net loss of $23.4 million, driven by lower revenues and higher costs Consolidated Statements of Operations Highlights (in thousands) | In thousands | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Revenue | $152,959 | $155,315 | $287,615 | $327,991 | | Total costs and expenses | $166,803 | $149,900 | $313,481 | $319,302 | | Operating (loss) income | $(13,844) | $5,415 | $(25,866) | $8,689 | | Net (loss) income | $(13,974) | $5,541 | $(23,431) | $7,573 | | Diluted EPS - Class A | $(0.29) | $0.08 | $(0.48) | $0.08 | Balance Sheets The Balance Sheet shows total assets of $674.6 million as of June 30, 2025, with increased liabilities due to a $25.0 million revolver draw and decreased equity Consolidated Balance Sheets Highlights (in thousands) | In thousands | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $28,130 | $33,009 | | Total current assets | $154,910 | $167,634 | | Total Assets | $674,646 | $674,686 | | Liabilities and Stockholders' Equity | | | | Total current liabilities | $113,787 | $122,428 | | Long-term borrowing on revolving credit facility | $25,000 | $— | | Total liabilities | $327,207 | $311,880 | | Total stockholders' equity | $347,439 | $362,806 | | Total Liabilities and Stockholders' Equity | $674,646 | $674,686 | Statement of Cash Flows For H1 2025, net cash from operating activities was $21.8 million, with $36.4 million used in investing and $9.7 million provided by financing, resulting in a $4.9 million net cash decrease Statement of Cash Flows Highlights (Six months ended June 30, in thousands) | In thousands | 2025 | 2024 | | :--- | :--- | :--- | | Net cash from operating activities | $21,779 | $59,602 | | Net cash used for investing activities | $(36,355) | $(39,983) | | Net Provided by (used) for financing activities | $9,697 | $(34,010) | | Net change in cash and cash equivalents | $(4,879) | $(14,391) | | Cash and cash equivalents, end of period | $28,944 | $28,390 | Reconciliation of Non-GAAP Measures This section reconciles non-GAAP measures like Adjusted EBITDA, non-GAAP revenue per ton, and non-GAAP cash cost per ton to provide clearer operational insights Adjusted EBITDA Reconciliation Adjusted EBITDA for Q2 2025 was $9.0 million, a decrease from Q2 2024, reconciled from a net loss of $14.0 million by adjusting for non-cash and non-operating items Reconciliation of Net (Loss) Income to Adjusted EBITDA (in thousands) | In thousands | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Net (loss) income | $(13,974) | $(9,457) | $5,541 | | Depreciation, depletion, and amortization | $17,038 | $17,542 | $15,879 | | Interest expense, net | $2,818 | $2,230 | $1,481 | | Income tax (benefit) expense | $(2,030) | $(4,290) | $915 | | Stock-based compensation & other | $5,153 | $3,763 | $4,983 | | Adjusted EBITDA | $9,005 | $9,788 | $28,799 | Non-GAAP Revenue and Cash Cost Per Ton Q2 2025 non-GAAP revenue per ton was $123 and cash cost per ton was $103, yielding a $20 cash margin, derived by adjusting GAAP figures for mine-level profitability Non-GAAP Revenue Per Ton Reconciliation (Q2 2025, in thousands) | Metric | Value | | :--- | :--- | | Revenue (GAAP) ($ thousands) | $152,959 | | Less: Transportation ($ thousands) | $20,608 | | Non-GAAP revenue (FOB mine) ($ thousands) | $132,351 | | Tons sold (thousands) | 1,079 | | Non-GAAP revenue per ton sold ($/ton) | $123 | Non-GAAP Cash Cost Per Ton Reconciliation (Q2 2025, in thousands) | Metric | Value | | :--- | :--- | | Cost of sales (GAAP) ($ thousands) | $134,182 | | Less: Transportation costs ($ thousands) | $20,673 | | Less: Alternative mineral development costs ($ thousands) | $1,918 | | Less: Idle and other costs ($ thousands) | $686 | | Non-GAAP cash cost of sales ($ thousands) | $110,905 | | Tons sold (thousands) | 1,079 | | Non-GAAP cash cost per ton sold ($/ton) | $103