NPR(NRP) - 2025 Q2 - Quarterly Results

Natural Resource Partners L.P. Q2 2025 Earnings Release Financial & Operational Highlights The company generated $46.3 million in free cash flow, declared a $0.75 per unit distribution, and reduced remaining debt to $102 million Q2 2025 Key Financial Metrics | Metric | For the Three Months Ended June 30, 2025 | Last Twelve Months Ended June 30, 2025 | | :--- | :--- | :--- | | Net income | $34.2 million | $155.8 million | | Operating cash flow | $45.6 million | $200.4 million | | Free cash flow | $46.3 million | $203.1 million | - NRP declared a second quarter 2025 cash distribution of $0.75 per common unit, consistent with the first quarter's distribution[3][4] - The company continues to make progress towards its goal of paying off all remaining debt, which now stands at $102 million[3] Segment Performance Segment performance was mixed, with declines in Mineral Rights and Soda Ash offset by improvements in the Corporate and Financing segment Mineral Rights The Mineral Rights segment's net income decreased by $13.0 million year-over-year due to lower metallurgical coal sales prices and volumes - Net income, operating cash flow, and free cash flow decreased by $13.0 million, $10.7 million, and $10.6 million respectively, compared to the prior year period[5] - The market outlook is weak, with expectations of muted pricing for both metallurgical and thermal coal for the remainder of 2025[6] - No significant developments occurred regarding carbon neutral revenue activities, though NRP believes its asset footprint provides future opportunities with minimal capital investment[7] Soda Ash The Soda Ash segment's net income declined by $1.1 million due to lower sales prices amid a significantly oversupplied global market - Net income decreased by $1.1 million year-over-year due to lower sales prices; operating and free cash flow each decreased by $2.7 million[8] - The market is significantly oversupplied due to increased global capacity and weakening demand from construction, automotive, and solar panel sectors[9] - NRP expects distributions from Sisecam Wyoming to remain below historical norms for the foreseeable future[9] Corporate and Financing This segment's net income improved by $2.3 million year-over-year, driven by lower interest expenses from debt reduction efforts - Net income, operating cash flow, and free cash flow each increased by $2.3 million compared to Q2 2024, mainly due to lower interest expense[10] Liquidity and Leverage | Metric | Value as of June 30, 2025 | | :--- | :--- | | Available Liquidity | $157.5 million | | Cash and cash equivalents | $30.3 million | | Revolver Capacity | $127.1 million | | Consolidated Leverage Ratio | 0.5x | Financial Statements Consolidated statements show year-over-year decreases in revenues and net income, driven by weaker commodity markets Consolidated Statements of Comprehensive Income Q2 2025 total revenues were $50.1 million and net income was $34.2 million, both down from the prior-year period Q2 2025 vs. Q2 2024 Income Statement Highlights (in thousands) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Total revenues and other income | $50,101 | $65,540 | | Income from operations | $36,591 | $50,413 | | Net income | $34,211 | $46,064 | | Diluted net income per common unit | $2.52 | $2.29 | Consolidated Statements of Cash Flows Net cash from operating activities was $45.6 million, while financing activities used $47.6 million for debt repayments and distributions Q2 2025 vs. Q2 2024 Cash Flow Highlights (in thousands) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $45,579 | $56,629 | | Net cash provided by investing activities | $1,444 | $5,302 | | Net cash used in financing activities | $(47,555) | $(40,581) | Consolidated Balance Sheets The balance sheet reflects total assets of $762.0 million and a significant reduction in net long-term debt to $87.1 million Balance Sheet Highlights (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total current assets | $60,721 | $63,874 | | Total assets | $761,966 | $772,907 | | Total current liabilities | $27,643 | $31,865 | | Long-term debt, net | $87,112 | $127,876 | | Total liabilities | $171,521 | $221,799 | | Total partners' capital | $590,445 | $551,108 | Segment Financial Results & Operating Statistics The Mineral Rights segment's Q2 net income fell to $39.7 million, impacted by lower coal sales volumes and royalty revenues per ton Segment Net Income (Loss) for Q2 (in thousands) | Segment | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Mineral Rights | $39,691 | $52,729 | | Soda Ash | $2,502 | $3,619 | | Corporate and Financing | $(7,982) | $(10,284) | Mineral Rights Operating Statistics for Q2 | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Total coal sales volumes (thousand tons) | 6,114 | 6,638 | | Combined average coal royalty revenue per ton | $5.17 | $5.98 | Non-GAAP Financial Measures & Reconciliations The company reports non-GAAP measures showing $203.1 million in LTM Free Cash Flow and an improved leverage ratio of 0.5x Definitions of Non-GAAP Measures NRP defines non-GAAP measures like Adjusted EBITDA, DCF, FCF, and Leverage Ratio to provide additional financial insight - Adjusted EBITDA is used to assess the financial performance of assets without regard to financing methods, capital structure, or historical cost basis[19] - Distributable Cash Flow (DCF) and Free Cash Flow (FCF) are supplemental liquidity measures used to assess the ability to make cash distributions and repay debt[20][21] - Leverage Ratio (Debt / LTM Adjusted EBITDA) is used to evaluate and monitor indebtedness relative to the ability to service that debt[22] Reconciliation Tables Reconciliations show LTM Adjusted EBITDA of $192.7 million and an improved leverage ratio of 0.5x, down from 0.7x a year prior LTM Adjusted EBITDA and Leverage Ratio (as of June 30) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | LTM Adjusted EBITDA | $192.7 million | $289.7 million | | Debt | $101.5 million | $210.7 million | | Leverage Ratio | 0.5x | 0.7x | LTM Free Cash Flow (as of June 30, 2025) | Metric | Amount | | :--- | :--- | | LTM Net cash provided by operating activities | $200.4 million | | LTM Free cash flow | $203.1 million |