Ramaco Resources(METCB) - 2024 Q1 - Quarterly Results

Ramaco Resources First Quarter 2024 Results First Quarter 2024 Highlights The company reported a significant drop in net income and Adjusted EBITDA, maintained guidance, and expanded its credit facility Q1 2024 Key Financial Highlights vs. Q4 2023 | Metric (in millions) | Q1 2024 | Q4 2023 | | :--- | :--- | :--- | | Adjusted EBITDA | $24.2 | $58.5 | | Net Income | $2.0 | $30.0 | | Class A EPS | $0.00 | $0.60 | - First-quarter results were negatively impacted by lower index pricing and higher mine costs due to challenging geology and labor constraints at Elk Creek[5] - The Board declared a quarterly cash dividend of $0.2376 per share for Class B shares and $0.1375 per share for Class A common stock, both payable on June 15, 2024[5] - The company increased its revolving credit facility from $125 million to $200 million, with an extended five-year term and an accordion feature to potentially increase it to $275 million[5] Management Commentary and Outlook Management acknowledged weak Q1 results but expressed confidence in significant improvement throughout 2024 - The company aims to exit 2024 at a sales and production rate of almost 5 million tons per annum and reduce cash mine costs to at or below $100 per ton[9] - Four main growth initiatives are on track to add approximately 900,000 tons of annualized production by the end of 2024, with anticipated combined costs of $90-95 per ton for the new mines[5][6] - Met coal prices fell by about $55 per ton (20%) during Q1 2024 but have recently stabilized due to renewed Asian buying and closures of some high-cost U.S. mines[10][11] - Progress continues on the Brook Mine rare earth project, with a revised technical report doubling the estimated rare earth tonnage and concentration from the initial 2023 report[13][14] Financial and Operational Performance This section details Q1 2024 performance, highlighting changes in production, sales, costs, and liquidity Key Metrics Summary Q1 2024 saw decreased sales volume and significantly lower net income and cash margins compared to prior periods Key Metrics Comparison | Key Metrics | 1Q24 | 4Q23 | Chg. | 1Q23 | Chg. | | :--- | :--- | :--- | :--- | :--- | :--- | | Total Tons Sold ('000) | 929 | 988 | (6)% | 757 | 23% | | Revenue ($mm) | $172.7 | $202.7 | (15)% | $166.4 | 4% | | Non-GAAP Cash Margins ($/Ton) | $37 | $68 | (46)% | $79 | (53)% | | Net Income ($mm) | $2.0 | $30.0 | (93)% | $25.3 | (92)% | | Diluted EPS - Class A | $(0.00) | $0.60 | (100)% | $0.57 | (100)% | | Adjusted EBITDA ($mm) | $24.2 | $58.5 | (59)% | $48.3 | (50)% | Quarterly Performance Analysis Performance declined year-over-year and quarter-over-quarter due to lower prices and higher costs - Year-over-Year (Q1 2024 vs Q1 2023), production was up 1% to 844,000 tons, but a lower realized price ($155/ton, down 18%) and higher cash mine costs ($118/ton, up 8%) caused cash margins to fall to $37/ton[20][21] - Quarter-over-Quarter (Q1 2024 vs Q4 2023), production rose 13% to 844,000 tons, but sales volume fell 6%, realized price dropped 11% to $155/ton, and cash costs increased to $118/ton[22][23] Balance Sheet and Liquidity The company reported increased total liquidity of $95.8 million and record accounts receivable - Total liquidity was $95.8 million as of March 31, 2024, comprised of $30.5 million in cash and $65.3 million available under the revolving credit facility[24] - Accounts receivable hit a record quarter-end level of $103.5 million, a significant increase from $71.1 million in Q1 2023[25] - Q1 2024 capital expenditures totaled $18.7 million, down from $23.5 million in the same period of 2023[25] 2024 Financial Guidance and Sales Commitments The company maintained its full-year 2024 guidance and has committed 4.2 million tons for sale Full-Year 2024 Guidance | Metric | 2024 Guidance | 2023 Actual | | :--- | :--- | :--- | | Company Production (tons) | 4,000k - 4,400k | 3,174k | | Sales (tons) | 4,200k - 4,600k | 3,455k | | Cash Costs Per Ton Sold | $105 - $111 | $110 | | Capital Expenditures | $53.0M - $63.0M | $82.9M | Committed 2024 Sales Volume (as of April 30, 2024) | Category | Volume (million tons) | Average Price | | :--- | :--- | :--- | | North America, fixed priced | 1.4 | $167 | | Seaborne, fixed priced | 0.7 | $150 | | Total, fixed priced | 2.1 | $162 | | Index priced | 2.0 | N/A | | Total committed tons | 4.2 | N/A | Consolidated Financial Statements (Unaudited) This section presents the unaudited consolidated statements of operations, balance sheets, and cash flows Statements of Operations The company reported Q1 2024 revenue of $172.7 million and net income of $2.0 million Unaudited Consolidated Statements of Operations (in thousands) | | Three months ended March 31, | | :--- | :--- | :--- | | | 2024 | 2023 | | Revenue | $172,676 | $166,360 | | Total costs and expenses | $169,401 | $134,493 | | Operating income | $3,275 | $31,867 | | Net income | $2,032 | $25,257 | Balance Sheets Total assets were $674.0 million and total stockholders' equity was $372.3 million as of March 31, 2024 Unaudited Consolidated Balance Sheets (in thousands) | | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $30,503 | $41,962 | | Total current assets | $182,608 | $189,739 | | Total Assets | $674,011 | $665,836 | | Liabilities and Stockholders' Equity | | | | Total current liabilities | $148,467 | $169,986 | | Total liabilities | $301,743 | $296,231 | | Total stockholders' equity | $372,268 | $369,605 | | Total Liabilities and Stockholders' Equity | $674,011 | $665,836 | Statement of Cash Flows Net cash from operations was $25.2 million, while investing and financing activities used cash Unaudited Statement of Cash Flows (in thousands) | | Three months ended March 31, | | :--- | :--- | :--- | | | 2024 | 2023 | | Net cash from operating activities | $25,188 | $21,362 | | Net cash used for investing activities | $(18,665) | $(22,364) | | Net cash used financing activities | $(17,982) | $2,005 | | Net change in cash and cash equivalents | $(11,459) | $1,003 | Reconciliation of Non-GAAP Measures This section reconciles non-GAAP measures like Adjusted EBITDA and cash cost per ton to their GAAP counterparts Reconciliation of Net Income to Adjusted EBITDA (in thousands) | | Q1 2024 | Q4 2023 | Q1 2023 | | :--- | :--- | :--- | :--- | | Net income | $2,032 | $30,038 | $25,257 | | Adjustments | $22,148 | $28,413 | $22,996 | | Adjusted EBITDA | $24,180 | $58,451 | $48,253 | Non-GAAP Revenue and Cash Cost Per Ton (FOB Mine) | (per ton) | Q1 2024 | Q4 2023 | Q1 2023 | | :--- | :--- | :--- | :--- | | Revenue per ton sold (FOB mine) | $155 | $175 | $188 | | Cash cost per ton sold (FOB mine) | $118 | $107 | $109 |