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NPR(NRP) - 2025 Q2 - Quarterly Report
NPRNPR(US:NRP)2025-08-06 15:39

Part I. Financial Information Item 1. Consolidated Financial Statements The consolidated financial statements present the company's financial position, results of operations, and cash flows Consolidated Balance Sheets A significant reduction in long-term debt drove an increase in partners' capital despite a slight decrease in total assets Consolidated Balance Sheet Summary (in thousands) | Account | June 30, 2025 (Unaudited) | December 31, 2024 | | :--- | :--- | :--- | | Total Assets | $761,966 | $772,907 | | Total Current Assets | $60,721 | $63,874 | | Mineral rights, net | $373,717 | $379,638 | | Equity in unconsolidated investment | $258,498 | $257,355 | | Total Liabilities | $171,521 | $221,799 | | Total Current Liabilities | $27,643 | $31,865 | | Long-term debt, net | $87,112 | $127,876 | | Total Partners' Capital | $590,445 | $551,108 | Consolidated Statements of Comprehensive Income Revenues and net income declined year-over-year for both the second quarter and the first six months of 2025 Statement of Comprehensive Income Highlights (in thousands, except per unit data) | Metric | Q2 2025 | Q2 2024 | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Total revenues and other income | $50,101 | $65,540 | $110,639 | $141,954 | | Income from operations | $36,591 | $50,413 | $79,512 | $110,113 | | Net income | $34,211 | $46,064 | $74,464 | $102,277 | | Net income attributable to common unitholders | $33,527 | $30,336 | $72,975 | $83,318 | | Diluted EPS | $2.52 | $2.29 | $5.49 | $6.17 | Consolidated Statements of Cash Flows Operating cash flow decreased significantly year-over-year, while cash used in financing activities was lower Cash Flow Summary for the Six Months Ended June 30 (in thousands) | Cash Flow Category | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $80,003 | $128,128 | | Net cash provided by investing activities | $2,391 | $6,114 | | Net cash used in financing activities | ($82,494) | ($113,891) | | Net (decrease) increase in cash | ($100) | $20,351 | | Cash and cash equivalents at end of period | $30,344 | $32,340 | Notes to Consolidated Financial Statements The notes detail segment performance, debt structure, major customer concentrations, and accounting policies - The Partnership operates in two segments: Mineral Rights (owning and leasing mineral properties) and Soda Ash (a 49% interest in Sisecam Wyoming)203839 Mineral Rights Segment Revenue by Source - Six Months Ended June 30 (in thousands) | Revenue Source | 2025 | 2024 | | :--- | :--- | :--- | | Coal royalty revenues | $67,041 | $86,503 | | Oil and gas royalty revenues | $4,425 | $5,639 | | Carbon neutral revenues | $885 | $4,361 | | Other revenues | $23,149 | $23,460 | - As of June 30, 2025, total debt at face value was $101.5 million, down from $142.3 million at year-end 2024, and the company was in compliance with all debt covenants5455 - For the first six months of 2025, three customers accounted for 26%, 26%, and 8% of total revenues, respectively, indicating significant customer concentration70 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses lower commodity prices impacting revenue, while maintaining a strong liquidity position and low leverage Executive Overview The company operates through its Mineral Rights and Soda Ash segments, which generated distinct revenue streams - The business is organized into two operating segments: Mineral Rights and Soda Ash8990 Financial Summary by Segment - Six Months Ended June 30, 2025 (in thousands) | Segment | Revenues and other income | Net income (loss) | Adjusted EBITDA | | :--- | :--- | :--- | :--- | | Mineral Rights | $103,503 | $84,899 | $92,652 | | Soda Ash | $7,136 | $7,052 | $7,756 | | Corporate and Financing | $— | ($17,487) | ($12,429) | | Total | $110,639 | $74,464 | $87,979 | Current Results/Market Commentary Weak metallurgical coal and soda ash prices drove revenue declines, with muted pricing expected to persist - Generated $81.4 million of free cash flow during the first six months of 2025 and ended the quarter with a leverage ratio of 0.5x94 - Metallurgical and thermal coal prices remained weak, and management expects muted pricing for the remainder of 2025 due to stagnant global steel demand and high domestic thermal coal inventories97 - The soda ash market is significantly oversupplied, leading to a weak pricing environment that is expected to continue, resulting in lower distributions from Sisecam Wyoming100 Results of Operations Total revenues and Adjusted EBITDA decreased significantly in Q2 and the first half of 2025 compared to the prior year Revenue by Segment (in thousands) | Operating Segment | Q2 2025 | Q2 2024 | % Change | H1 2025 | H1 2024 | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Mineral Rights | $47,575 | $61,895 | (23)% | $103,503 | $132,859 | (22)% | | Soda Ash | $2,526 | $3,645 | (31)% | $7,136 | $9,095 | (22)% | | Total | $50,101 | $65,540 | (24)% | $110,639 | $141,954 | (22)% | - The decrease in Q2 coal royalty revenues was primarily due to lower metallurgical coal sales prices and volumes, with metallurgical coal representing approximately 70% of coal royalty revenues in the quarter103 Adjusted EBITDA Reconciliation - Six Months Ended June 30 (in thousands) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Net income | $74,464 | $102,277 | | Adjustments | $13,515 | $28,513 | | Adjusted EBITDA | $87,979 | $130,790 | Liquidity and Capital Resources The Partnership maintained strong liquidity and a low leverage ratio despite a year-over-year decrease in operating cash flow - Total liquidity as of June 30, 2025 was $157.5 million, consisting of $30.3 million in cash and $127.1 million in available borrowing capacity119 Leverage Ratio Calculation as of June 30, 2025 (in thousands) | Metric | Amount | | :--- | :--- | | Last 12 Months Adjusted EBITDA | $192,655 | | Debt at June 30, 2025 | $101,547 | | Leverage Ratio | 0.5x | - Cash flows from operating activities decreased by $48.1 million in the first six months of 2025 compared to the same period in 2024, falling from $128.1 million to $80.0 million120 Item 3. Quantitative and Qualitative Disclosures About Market Risk The company faces significant market risks from volatile commodity prices and variable interest rates - The business is substantially dependent on prevailing commodity prices for coal and soda ash, which have been historically volatile and can significantly impact financial results129131 - The company is exposed to interest rate risk on its Opco Credit Facility; with $72.9 million outstanding, a 1% rate increase would result in an approximate $0.7 million increase in annual interest expense132 Item 4. Controls and Procedures Management concluded that the company's disclosure controls and procedures were effective as of the reporting period end - Based on an evaluation, the CEO and CFO concluded that the company's disclosure controls and procedures are effective133 - No material changes in internal control over financial reporting occurred during the first six months of 2025134 Part II. Other Information Item 1. Legal Proceedings Ongoing legal proceedings are not expected to have a material effect on the company's financial condition or operations - The company states that ongoing legal proceedings from the ordinary course of business are not expected to have a material impact135 Item 1A. Risk Factors There were no material changes to the risk factors previously disclosed in the 2024 Annual Report on Form 10-K - No material changes from the risk factors disclosed in the 2024 Form 10-K were reported136 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds No unregistered sales of equity securities were reported for the period - No unregistered sales of equity securities were reported137 Item 6. Exhibits This section lists the exhibits filed with the report, including CEO/CFO certifications and XBRL data files - The report includes standard exhibits such as Sarbanes-Oxley certifications and Inline XBRL documents141