Ramaco Resources(METC) - 2025 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION Item 1. Financial Statements The company reports a net loss of $14.0 million for Q2 and $23.4 million for H1 2025, a reversal from prior-year income Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Current Assets | $154,910 | $167,634 | | Total Assets | $674,646 | $674,686 | | Total Current Liabilities | $113,787 | $122,428 | | Total Liabilities | $327,207 | $311,880 | | Total Stockholders' Equity | $347,439 | $362,806 | Condensed Consolidated Statements of Operations Highlights (in thousands) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Revenue | $152,959 | $155,315 | $287,615 | $327,991 | | Operating (Loss) Income | $(13,844) | $5,415 | $(25,866) | $8,689 | | Net (Loss) Income | $(13,974) | $5,541 | $(23,431) | $7,573 | Earnings Per Share (EPS) | EPS Type | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Basic - Class A | $(0.29) | $0.08 | $(0.48) | $0.08 | | Basic - Class B | $(0.12) | $0.18 | $(0.31) | $0.42 | - Net cash from operating activities for the six months ended June 30, 2025, was $21.8 million, a significant decrease from $59.6 million in the same period of 2024[24] - In July 2025, the Board of Directors decided to suspend the Class A stock dividend, which had been paid in Class B shares for the previous three quarters[68] - As a subsequent event, on July 31, 2025, the company completed a public offering of $57.0 million in 8.25% Senior Unsecured Notes due 2030[102][103] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Weaker performance is attributed to soft coal markets, with revenue falling 12% despite a 10% sales volume increase - Global metallurgical coal markets softened in 2024 and 2025 due to constrained economic growth and slower steel market growth, leading to reduced prices for metallurgical coal[110] - The company expects full-year 2025 production to be between 3.9 and 4.3 million tons, with the ability to adjust based on market conditions[117] - The company is advancing its rare earth elements project in Wyoming, with a preliminary assessment demonstrating commercial viability[118] Key Operational Metrics (Six months ended June 30) | Metric | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | Tons Sold (in thousands) | 2,024 | 1,843 | +10% | | Total Revenue per Ton Sold | $142 | $178 | -20% | | Total Cost of Sales per Ton Sold | $123 | $142 | -13% | Results of Operations Revenue decreased 12% in H1 2025 due to a 20% drop in revenue per ton, resulting in a net loss of $23.4 million Financial Performance Comparison (Six months ended June 30, in thousands) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Revenue | $287,615 | $327,991 | | Cost of Sales | $248,314 | $262,483 | | Operating (Loss) Income | $(25,866) | $8,689 | | Net (Loss) Income | $(23,431) | $7,573 | | Adjusted EBITDA | $18,794 | $52,978 | - The decrease in cost of sales per ton for H1 2025 was driven by mine closures and reduced trucking costs[137] - Selling, general, and administrative (SG&A) expenses increased by $4.8 million in H1 2025 compared to H1 2024, primarily due to higher professional service expenses[139] Liquidity and Capital Resources The company maintains liquidity with $28.1 million in cash and $59.2 million available under its expanded credit facility - As of June 30, 2025, the company had $28.1 million of cash and cash equivalents and $59.2 million of remaining availability under its Revolving Credit Facility[146] - In May 2024, the company amended its credit facility, increasing the revolving commitment to $200 million and extending the maturity to May 2029[145] - Capital expenditures totaled $35.5 million in the first six months of 2025, a decrease from $40.1 million in the same period of 2024[116][147] Non-GAAP Financial Measures Adjusted EBITDA for H1 2025 was $18.8 million, down from $53.0 million, reflecting lower market prices and improved cost controls Reconciliation of Net (Loss) Income to Adjusted EBITDA (in thousands) | | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Net (Loss) Income | $(23,431) | $7,573 | | Depreciation, depletion, and amortization | 34,580 | 31,098 | | Interest expense, net | 5,048 | 2,812 | | Income tax (benefit) expense | (6,320) | 1,455 | | Stock-based compensation | 8,113 | 9,285 | | Other adjustments | 804 | 755 | | Adjusted EBITDA | $18,794 | $52,978 | Non-GAAP Per Ton Metrics (Six months ended June 30) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Revenue per Ton Sold (FOB Mine) | $123 | $149 | | Cash Cost per Ton Sold (FOB Mine) | $101 | $113 | Item 3. Quantitative and Qualitative Disclosures about Market Risk The company reports no material changes to its market risk disclosures since its last Annual Report - The company states that disclosures about market risk are included in Item 7A of its Annual Report and there have been no material changes[166] Item 4. Controls and Procedures Management concluded disclosure controls were ineffective due to a material weakness in financial reporting, with a remediation plan underway - Management concluded that disclosure controls and procedures were not effective as of the end of the period covered by the report due to a previously identified material weakness[167] - The material weakness relates to an insufficiency of appropriately qualified and trained professionals to perform certain control activities[169] - Remediation efforts during Q2 2025 included hiring multiple qualified accounting personnel and continuing to engage external professional services firms[171] PART II. OTHER INFORMATION Item 1. Legal Proceedings The company is involved in routine litigation but does not expect any material adverse financial impact - The company is involved in routine litigation but does not expect any material adverse effect from pending cases[178] Item 1A. Risk Factors New risks are identified related to the rare earth minerals initiative, including price volatility and competitive pressures - A new risk factor highlights that growth prospects could be adversely affected by fluctuations in the demand for and prices of rare earth and critical minerals[181] - The company faces risks from the dominant position of Chinese producers in the rare earth market, who may engage in predatory pricing or other anti-competitive tactics[185][186] - Consolidation within the rare earth industry may result in increased competition and pricing pressure, which could negatively impact growth prospects[187] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds The company reports no unregistered sales of equity securities during the period - None reported[188] Item 3. Defaults Upon Senior Securities The company reports no defaults upon its senior securities during the period - None reported[188] Item 4. Mine Safety Disclosures Information regarding mine safety violations is provided in Exhibit 95.1 of the report - Information concerning mine safety violations is included in Exhibit 95.1 to this Quarterly Report[188] Item 5. Other Information No directors or executive officers adopted or terminated Rule 10b5-1 trading arrangements during the quarter - No directors or executive officers adopted or terminated a Rule 10b5-1 trading arrangement during the reporting period[189] Item 6. Exhibits This section lists all filed exhibits, including Sarbanes-Oxley certifications and mine safety disclosures - The report includes required certifications from the CEO and CFO, Mine Safety Disclosures, and Inline XBRL documents[192]