Arch Resources(ARCH) - 2021 Q3 - Quarterly Report

Part I FINANCIAL INFORMATION This section presents Arch Resources' unaudited financial statements, notes, and management's discussion and analysis Item 1. Financial Statements Arch Resources' unaudited financial statements and notes show a significant net income turnaround for Q3 and 9M 2021 Condensed Consolidated Statements of Operations This section details the company's revenues, income, net income, and EPS for Q3 and 9M ended September 30 Three Months Ended September 30, 2021 vs. 2020 (in thousands) | Metric | 2021 | 2020 | Change (2021 vs 2020) | | :---------------------------------- | :--------- | :--------- | :-------------------- | | Revenues | $594,412 | $382,261 | +$212,151 | | Income (loss) from operations | $95,398 | $(187,680) | +$283,078 | | Net income (loss) | $89,143 | $(191,467) | +$280,610 | | Basic earnings (loss) per share | $5.83 | $(12.64) | +$18.47 | | Diluted earnings (loss) per share | $4.92 | $(12.64) | +$17.56 | Nine Months Ended September 30, 2021 vs. 2020 (in thousands) | Metric | 2021 | 2020 | Change (2021 vs 2020) | | :---------------------------------- | :--------- | :--------- | :-------------------- | | Revenues | $1,402,345 | $1,107,014 | +$295,331 | | Income (loss) from operations | $128,266 | $(256,857) | +$385,123 | | Net income (loss) | $110,967 | $(266,090) | +$377,057 | | Basic earnings (loss) per share | $7.26 | $(17.57) | +$24.83 | | Diluted earnings (loss) per share | $6.49 | $(17.57) | +$24.06 | - Asset impairment and restructuring costs were $0 for both three and nine months ended September 30, 2021, a significant decrease from $163,106 thousand and $176,371 thousand respectively in 2020[9] Condensed Consolidated Statements of Comprehensive Income (Loss) This section presents total comprehensive income (loss) for Q3 and 9M ended September 30 Total Comprehensive Income (Loss) (in thousands) | Period | 2021 | 2020 | | :---------------------------------- | :--------- | :--------- | | Three Months Ended September 30 | $91,766 | $(187,082) | | Nine Months Ended September 30 | $119,511 | $(280,548) | Condensed Consolidated Balance Sheets This section provides a snapshot of the company's assets, liabilities, and equity at September 30, 2021 and December 31, 2020 Balance Sheet Highlights (in thousands) | Metric | Sep 30, 2021 (Unaudited) | Dec 31, 2020 | | :---------------------------------- | :----------------------- | :------------------ | | Total current assets | $648,639 | $588,140 | | Property, plant and equipment, net | $1,135,399 | $1,007,303 | | Total assets | $1,930,949 | $1,722,472 | | Total current liabilities | $438,880 | $290,096 | | Long-term debt | $416,446 | $477,215 | | Total liabilities | $1,516,306 | $1,438,911 | | Total stockholders' equity | $414,643 | $283,561 | - Trade accounts receivable increased from $110,869 thousand at December 31, 2020, to $226,206 thousand at September 30, 2021[16] - Current maturities of debt significantly increased from $31,097 thousand to $138,587 thousand[16] Condensed Consolidated Statements of Cash Flows This section summarizes cash flows from operating, investing, and financing activities for the nine months ended September 30 Cash Flow Summary (Nine Months Ended September 30, in thousands) | Activity | 2021 | 2020 | | :---------------------------------- | :--------- | :--------- | | Cash provided by operating activities | $91,582 | $55,914 | | Cash used in investing activities | $(132,834) | $(111,945) | | Cash provided by financing activities | $38,615 | $73,585 | | (Decrease) increase in cash and cash equivalents, including restricted cash | $(2,637) | $17,554 | - Capital expenditures increased to $212,046 thousand in 2021 from $205,661 thousand in 2020[19] - Net income (loss) improved from $(266,090) thousand in 2020 to $110,967 thousand in 2021, contributing to operating cash flow[19] Condensed Consolidated Statements of Stockholders' Equity This section outlines changes in stockholders' equity, including comprehensive income, paid-in capital, and retained earnings Total Stockholders' Equity (in thousands) | Date | Amount | | :---------------------------------- | :--------- | | January 1, 2021 | $283,561 | | September 30, 2021 | $414,643 | - Total comprehensive income (loss) for the nine months ended September 30, 2021, was $119,511 thousand, compared to $(280,548) thousand for the same period in 2020[11][21] - Paid-in capital increased from $767,484 thousand to $779,013 thousand, and retained earnings increased from $378,906 thousand to $489,914 thousand from January 1, 2021, to September 30, 2021[21] Notes to Condensed Consolidated Financial Statements This section provides detailed explanations and disclosures supporting the condensed consolidated financial statements 1. Basis of Presentation This note describes the company's primary business and the accounting principles used for interim financial reporting - The Company's primary business is the production of metallurgical and thermal coal from underground and surface mines in West Virginia, Wyoming, and Colorado[28] - Financial statements are unaudited and prepared in accordance with U.S. GAAP for interim financial reporting[29] 2. Accounting Policies This note details the adoption of new accounting standards and the evaluation of potential impacts from upcoming pronouncements - Adopted ASU 2019-12, 'Income Taxes,' with minimal impact[31] - Evaluating ASU 2020-06, 'Accounting for Convertible Instruments,' effective for fiscal years beginning after December 15, 2021, for potential impact[32][34] 3. Joint Venture with Peabody Energy This note outlines expenses related to the proposed joint venture with Peabody Energy, which were incurred only in 2020 - No expenses related to the proposed joint venture with Peabody Energy were incurred in 2021[35] - In 2020, expenses were $4.4 million (three months) and $15.9 million (nine months) before termination[35] 4. Gain on Property Insurance Recovery Related to Mountain Laurel Longwall This note details the property insurance recovery gain recorded in 2020, with no related amounts in 2021 - A gain of $23.5 million was recorded in the nine months ended September 30, 2020, for property insurance recovery[36] - No amounts related to this recovery were incurred in 2