Alpha Announces Fourth Quarter 2020 Results

BRISTOL, Tenn., March 15, 2021 /PRNewswire/ -- Alpha Metallurgical Resources, Inc. (NYSE: AMR), a leading U.S. supplier of metallurgical products for the steel industry, today reported results for the fourth quarter ending December 31, 2020.

(PRNewsfoto/Alpha Metallurgical Resources, Inc.)


(millions, except per share)


Three months ended


Dec. 31, 2020

Sept. 30, 2020

Dec. 31, 2019

Net loss(2)

$(55.1)

$(68.5)

$(210.2)

Net loss(2) per diluted share

$(3.00)

$(3.74)

$(11.55)

Adjusted EBITDA(1)

$7.4

$12.4

$22.1

Operating cash flow(3)

$56.2

$(5.9)

$(5.7)

Capital expenditures(3)

$35.1

$27.8

$48.2

Tons of coal sold(2)

3.7

4.0

4.2







1. These are non-GAAP financial measures. A reconciliation of Net Income to Adjusted EBITDA is included in tables accompanying the financial schedules.

2. From continuing operations.

3. Includes discontinued operations.

"Despite the numerous challenges of the last year, we are proud of our accomplishments including significant operating cost reductions, refreshed board composition, and our rebranding to Alpha Metallurgical Resources, which reflects our strategic shift and focus on metallurgical coal," said chairman and chief executive officer, David Stetson. "We remain confident that in 2021 we can take advantage of improved market conditions and met coal prices as expected global infrastructure spending and stimulus actions come to fruition."

Financial Performance

Alpha reported a net loss from continuing operations of $55.1 million, or $3.00 per diluted share, for the fourth quarter 2020. In the third quarter 2020, the company had a net loss from continuing operations of $68.5 million or $3.74 diluted share.

Total Adjusted EBITDA was $7.4 million for the fourth quarter, compared with $12.4 million in the third quarter, primarily due to lower coal revenues and higher Met costs per ton.

Coal Revenues


(millions)


Three months ended


Dec. 31, 2020

Sept. 30, 2020

Met

$289.8

$295.4

CAPP - Thermal

$33.6

$39.8

Met (excl. f&h)(1)

$241.5

$245.6

CAPP - Thermal (excl. f&h)(1)

$32.1

$36.8



Tons Sold

(millions)


Three months ended


Dec. 31, 2020

Sept. 30, 2020

Met

3.2

3.3

CAPP - Thermal

0.5

0.6






1. Represents Non-GAAP coal revenues which is defined and reconciled under "Non-GAAP Financial Measures" and "Results of Operations."

 

The slight Met revenue decline in the fourth quarter was driven by reduced volume relative to the third quarter. The CAPP - Thermal revenues also decreased due to lower volumes.

Coal Sales Realization(1)


(per ton)


Three months ended


Dec. 31, 2020

Sept. 30, 2020

Met

$75.24

$73.79

CAPP - Thermal

$59.81

$57.86






1. Represents Non-GAAP coal sales realization which is defined and reconciled under "Non-GAAP Financial Measures" and "Results of Operations."

 

Global metallurgical coal prices were mixed, with Australian prices declining while Atlantic prices showed modest improvement, resulting in our average Met coal sales realization increase of two percent against the prior quarter to $75.24 per ton. The CAPP - Thermal segment also saw slightly higher realization in the fourth quarter.

Cost of Coal Sales


(in millions, except per ton data)


Three months ended


Dec. 31, 2020

Sept. 30, 2020

Cost of Coal Sales

$301.8

$309.7

Cost of Coal Sales (excl. f&h/idle)(1)

$245.9

$250.7




(per ton)

Met(1)

$69.25

$66.51

CAPP - Thermal(1)

$44.15

$45.98






1. Represents Non-GAAP cost of coal sales per ton which is defined and reconciled under "Non-GAAP Financial Measures" and "Results of Operations."

 

In the fourth quarter, the company reported another sub-$70 per ton cost performance in the Met segment, with costs averaging $69.25 per ton, down from $82.28 in the year-ago quarter. The third quarter 2020 cost of coal sales was a record low of $66.51 per ton. Fewer mines, combined with higher production per mine and reduced labor force, were instrumental in driving the cost of coal sales per ton lower in 2020.

The CAPP - Thermal segment also continued its impressive cost of coal sales performance, with fourth quarter cost of $44.15 per ton as compared to $45.98 for the prior quarter.

Selling, general and administrative (SG&A) and depreciation, depletion and amortization (DD&A) expenses


(millions)


Three months ended


Dec. 31, 2020

Sept. 30, 2020

SG&A

$15.3

$14.5

Less: non-cash stock compensation and one-time expenses

$(0.8)

$(1.0)

Non-GAAP SG&A(1)

$14.5

$13.5




DD&A

$(4.0)

$49.2






1. Represents Non-GAAP SG&A which is defined under "Non-GAAP Financial Measures."

Alpha's fourth quarter 2020 SG&A expenses were $14.5 million, excluding non-cash stock compensation expense and one-time expenses of $0.8 million, compared with $13.5 million in the prior quarter. 

Liquidity and Capital Resources

"In the fourth quarter, our teams continued their exceptional focus on cost performance with another quarter of sub-$70 met costs, and a full year average met cost of $70.19," said Andy Eidson, Alpha's president and chief financial officer. "While the year as a whole was challenging, both in terms of pricing and pandemic uncertainty, Alpha made progress on a number of our stated strategic goals. Divesting the Cumberland Mine has not only hastened our transition to a pure metallurgical producer, but has also meaningfully reduced our bonding and collateral requirements."

Cash provided by operating activities for the fourth quarter 2020 was $56.2 million, which includes the receipt of $66.1 million in accelerated alternative minimum tax (AMT) credit monetization refund, and capital expenditures for the fourth quarter were $35.1 million. In the prior period, the cash used in operating activities was $5.9 million and capital expenditures were $27.8 million

As of December 31, 2020, Alpha had $139.2 million in unrestricted cash and $157.4 million in restricted cash, deposits and investments. Total long-term debt, including the current portion of long-term debt as of December 31, 2020, was $582.5 million, down approximately $15 million from the prior quarter. At the end of the fourth quarter, the company had total liquidity of $139.2 million, including cash and cash equivalents of $139.2 million and no remaining unused availability under the Asset-Based Revolving Credit Facility (ABL). The future available capacity under the ABL is subject to inventory and accounts receivable collateral requirements and the maintenance of certain financial ratios. As of December 31, 2020, the company had $3.4 million in borrowings and $123.1 million in letters of credit outstanding under the ABL. In January 2021, subsequent to the quarter close, the company posted $25.0 million in collateral to remain in compliance due to fluctuations in the borrowing base, a portion of which was then used to repay $3.4 million in borrowings under the ABL.

Operational and Strategic Update

As part of the ongoing strategic shift towards becoming a pure-play met company, Alpha closed a transaction to divest the Cumberland Mine and related assets on December 10, 2020. The previously announced transaction transferred the associated coal reserves, mining permits and operations, infrastructure and equipment to Iron Senergy LLC, releasing Alpha from all reclamation obligations, totaling $169 million in undiscounted future cash flows. After the Cumberland divestiture, the company operates only one remaining thermal mine, which is expected to cease operation by the end of 2022.

As a result of this renewed focus on supplying metallurgical products to the steel industry, the company also rebranded and changed its name to Alpha Metallurgical Resources, Inc., effective February 1, 2021. The company's common stock began trading on the New York Stock Exchange under a new symbol, AMR, shortly thereafter.

In addition, Alpha continued to enhance its board of directors by adding Michael Quillen, the founder of Alpha Natural Resources and an industry veteran, as lead independent director in November 2020. Subsequent to the quarter end, Alpha appointed three new directors to the board. Effective February 1, Kenneth Courtis, Elizabeth Fessenden and Daniel Smith joined the board as independent directors. 

2021 Full-Year Guidance

In connection with the company's strategic shift toward a pure-play metallurgical business, the reporting segments in the following guidance table have been reconfigured. The CAPP - Thermal reporting segment has been eliminated and is now included in the All Other segment. The prior CAPP - Met segment is now called the Met segment.

The company reiterates its previously issued 2021 operating guidance with coal shipments guidance range of 14.8 million tons to 16.2 million tons, with Met segment volume expected to be between 13.5 million to 14.5 million tons with pure metallurgical coal shipments of 12.5 million to 13.0 million tons and incidental thermal shipments in this segment of 1.0 million to 1.5 million tons. Our All Other segment volume is anticipated to be between 1.3 million tons to 1.7 million tons.

For 2021, Alpha has committed and priced approximately 53% of its metallurgical coal within the Met segment at an average price of $85.47 per ton and 86% of thermal coal in the Met segment at an average expected price of $50.80 per ton. In the All Other segment the company is 100% committed and priced at an average price of $57.57 per ton.

The company expects our strong cost performance to continue in 2021 with Met segment cost of coal sales per ton anticipated at a range of $68.00 to $74.00 and our All Other segment is expected to be in the range of $45.00 to $49.00 per ton.

For 2021, the company expects its SG&A to be in the range of $44 million to $49 million, excluding non-recurring items and stock compensation. Our overall 2021 capital expenditures guidance is in a range of $75 million to $95 million, near the maintenance capital level. Depreciation, depletion and amortization is expected to be between $125 million and $145 million and cash interest expense in the range of $51 million and $55 million.


2021 Guidance

in millions of tons

Low

High

Metallurgical

12.5


13.0


Thermal

1.0


1.5


Met Segment

13.5


14.5


All Other

1.3


1.7


Total Shipments

14.8


16.2





Committed/Priced1,2,3

Committed

Average Price

Metallurgical

53

%

$85.47


Thermal

86

%

$50.80


Met Segment

56

%

$80.68


All Other

100

%

$57.57





Committed/Unpriced1,3

Committed


Metallurgical

32

%


Thermal

8

%


Met Segment

30

%


All Other

%





Costs per ton4

Low

High

Met Segment

$68.00


$74.00


All Other

$45.00


$49.00





In millions (except taxes)

Low

High

SG&A5

$44


$49


Idle Operations Expense

$24


$30


Cash Interest Expense

$51


$55


DD&A

$125


$145


Capital Expenditures

$75


$95


Tax Rate

%

5

%

 

Notes:   


1.

Based on committed and priced coal shipments as of March 11, 2021. Committed percentage based on the midpoint of shipment guidance range.

2.

Actual average per-ton realizations on committed and priced tons recognized in future periods may vary based on actual freight expense in future periods relative to assumed freight expense embedded in projected average per-ton realizations.

3.

Includes estimates of future coal shipments based upon contract terms and anticipated delivery schedules. Actual coal shipments may vary from these estimates.

4.

Note: The Company is unable to present a quantitative reconciliation of its forward-looking non-GAAP cost of coal sales per ton sold financial measures to the most directly comparable GAAP measures without unreasonable efforts due to the inherent difficulty in forecasting and quantifying with reasonable accuracy significant items required for the reconciliation. The most directly comparable GAAP measure, GAAP cost of sales, is not accessible without unreasonable efforts on a forward- looking basis. The reconciling items include freight and handling costs, which are a component of GAAP cost of sales. Management is unable to predict without unreasonable efforts freight and handling costs due to uncertainty as to the end market and FOB point for uncommitted sales volumes and the final shipping point for export shipments. These amounts have historically varied and may continue to vary significantly from quarter to quarter and material changes to these items could have a significant effect on our future GAAP results.

5.

Excludes expenses related to non-cash stock compensation and non-recurring business development expenses.

 

Conference Call

The company plans to hold a conference call regarding its fourth quarter 2020 results on March 15, 2021, at 10:00 a.m. Eastern time. The conference call will be available live on the investor section of the company's website at https://investors.alphametresources.com/investors. Analysts who would like to participate in the conference call should dial 866-270-1533 (domestic toll-free) or 412-317-0797 (international) approximately 15 minutes prior to the start of the call.

About Alpha Metallurgical Resources

Alpha Metallurgical Resources (NYSE: AMR) is a Tennessee-based mining company with operations across Virginia and West Virginia. With customers across the globe, high-quality reserves and significant port capacity, Alpha reliably supplies metallurgical products to the steel industry. For more information, visit www.AlphaMetResources.com.  

Forward-Looking Statements

This news release includes forward-looking statements. These forward-looking statements are based on Alpha's expectations and beliefs concerning future events and involve risks and uncertainties that may cause actual results to differ materially from current expectations. These factors are difficult to predict accurately and may be beyond Alpha's control. Forward-looking statements in this news release or elsewhere speak only as of the date made. New uncertainties and risks arise from time to time, and it is impossible for Alpha to predict these events or how they may affect Alpha. Except as required by law, Alpha has no duty to, and does not intend to, update or revise the forward-looking statements in this news release or elsewhere after the date this release is issued. In light of these risks and uncertainties, investors should keep in mind that results, events or developments discussed in any forward-looking statement made in this news release may not occur. 

Investor Contact
InvestorRelations@AlphaMetResources.com 

Alex Rotonen, CFA
423.956.6882

Media Contact
CorporateCommunications@AlphaMetResources.com 

Emily O'Quinn
423.573.0369

FINANCIAL TABLES FOLLOW

Non-GAAP Financial Measures

The discussion below contains "non-GAAP financial measures." These are financial measures which either exclude or include amounts that are not excluded or included in the most directly comparable measures calculated and presented in accordance with generally accepted accounting principles in the United States ("U.S. GAAP" or "GAAP"). Specifically, we make use of the non-GAAP financial measures "Adjusted EBITDA," "non-GAAP coal revenues," "non-GAAP cost of coal sales," and "Adjusted cost of produced coal sold." We use Adjusted EBITDA to measure the operating performance of our segments and allocate resources to the segments. Adjusted EBITDA does not purport to be an alternative to net income (loss) as a measure of operating performance. We use non-GAAP coal revenues to present coal revenues generated, excluding freight and handling fulfillment revenues. Non-GAAP coal sales realization per ton for our operations is calculated as non-GAAP coal revenues divided by tons sold. We use non-GAAP cost of coal sales to adjust cost of coal sales to remove freight and handling costs, depreciation, depletion and amortization - production (excluding the depreciation, depletion and amortization related to selling, general and administrative functions), accretion on asset retirement obligations, amortization of acquired intangibles, net, idled and closed mine costs and coal inventory acquisition accounting impacts. Non-GAAP cost of coal sales per ton for our operations is calculated as non-GAAP cost of coal sales divided by tons sold. Non-GAAP coal margin per ton for our coal operations is calculated as non-GAAP coal sales realization per ton for our coal operations less non-GAAP cost of coal sales per ton for our coal operations. We also use Adjusted cost of produced coal sold to distinguish the cost of captive produced coal from the effects of purchased coal. The presentation of these measures should not be considered in isolation, or as a substitute for analysis of our results as reported under GAAP.

Management uses non-GAAP financial measures to supplement GAAP results to provide a more complete understanding of the factors and trends affecting the business than GAAP results alone. The definition of these non-GAAP measures may be changed periodically by management to adjust for significant items important to an understanding of operating trends and to adjust for items that may not reflect the trend of future results by excluding transactions that are not indicative of our core operating performance. Furthermore, analogous measures are used by industry analysts to evaluate the Company's operating performance. Because not all companies use identical calculations, the presentations of these measures may not be comparable to other similarly titled measures of other companies and can differ significantly from company to company depending on long-term strategic decisions regarding capital structure, the tax jurisdictions in which companies operate, and capital investments.

Included below are reconciliations of non-GAAP financial measures to GAAP financial measures.

 

ALPHA METALLURGICAL RESOURCES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Amounts in thousands, except share and per share data)




Three Months Ended December 31,


Year Ended December 31,


2020


2019


2020


2019

Revenues:








Coal revenues

$

323,360



$

431,457



$

1,413,124



$

1,995,934


Other revenues

491



1,381



3,063



5,346


Total revenues

323,851



432,838



1,416,187



2,001,280


Costs and expenses:








Cost of coal sales (exclusive of items shown separately below)

301,831



387,000



1,281,011



1,667,768


Depreciation, depletion and amortization

(4,036)



50,221



139,885



215,757


Accretion on asset retirement obligations

6,559



6,990



26,504



23,865


Amortization of acquired intangibles, net

4,748



3,137



9,214



(3,189)


Selling, general and administrative expenses (exclusive of depreciation, depletion and amortization shown separately above)

15,346



25,832



57,356



78,953


Merger-related costs



35





1,090


Asset impairment and restructuring

29,897



60,466



83,878



66,324


Goodwill impairment



124,353





124,353


Total other operating income:








Mark-to-market adjustment for acquisition-related obligations

4,676



(3,276)



(8,750)



(3,564)


Other (income) expense

(200)



7,518



(2,223)



(974)


Total costs and expenses

358,821



662,276



1,586,875



2,170,383


Loss from operations

(34,970)



(229,438)



(170,688)



(169,103)


Other (expense) income:








Interest expense

(18,290)



(17,444)



(74,528)



(67,521)


Interest income

153



1,701



7,027



7,247


Loss on modification and extinguishment of debt







(26,459)


Equity loss in affiliates

(388)



(2,070)



(3,473)



(6,874)


Miscellaneous loss, net

(1,519)



(7,393)



(1,972)



(10,195)


Total other expense, net

(20,044)



(25,206)



(72,946)



(103,802)


Loss from continuing operations before income taxes

(55,014)



(254,644)



(243,634)



(272,905)


Income tax (expense) benefit

(36)



44,407



2,164



53,287


Net loss from continuing operations

(55,050)



(210,237)



(241,470)



(219,618)


Discontinued operations:








(Loss) income from discontinued operations before income taxes

(45,103)



73,678



(205,429)



(105,185)


Income tax (expense) benefit from discontinued operations



(4,382)





8,484


(Loss) income from discontinued operations

(45,103)



69,296



(205,429)



(96,701)


Net loss

$

(100,153)



$

(140,941)



$

(446,899)



$

(316,319)










Basic loss per common share:








Loss from continuing operations

$

(3.00)



$

(11.55)



$

(13.20)



$

(11.68)


(Loss) income from discontinued operations

(2.47)



3.80



(11.22)



(5.14)


Net loss

$

(5.47)



$

(7.75)



$

(24.42)



$

(16.82)










Diluted loss per common share:








Loss from continuing operations

$

(3.00)



$

(11.55)



$

(13.20)



$

(11.68)


(Loss) income from discontinued operations

(2.47)



3.80



(11.22)



(5.14)


Net loss

$

(5.47)



$

(7.75)



$

(24.42)



$

(16.82)










Weighted average shares - basic

18,322,236



18,195,651



18,298,362



18,808,460


Weighted average shares - diluted

18,322,236



18,195,651



18,298,362



18,808,460


 

ALPHA METALLURGICAL RESOURCES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Amounts in thousands, except share and per share data)



December 31, 2020


December 31, 2019

Assets




Current assets:




Cash and cash equivalents

$

139,227



$

212,803


Trade accounts receivable, net of allowance for doubtful accounts of $293 and $0 as of December 31, 2020 and 2019

145,670



224,173


Inventories, net

108,051



150,888


Prepaid expenses and other current assets

106,252



77,723


Current assets - discontinued operations

10,935



45,892


Total current assets

510,135



711,479


Property, plant, and equipment, net of accumulated depreciation and amortization of $382,423 and $256,378 as of December 31, 2020 and 2019

363,620



436,398


Owned and leased mineral rights, net of accumulated depletion and amortization of $35,143 and $27,548 as of December 31, 2020 and 2019

463,250



523,012


Other acquired intangibles, net of accumulated amortization of $25,700 and $26,806 as of December 31, 2020 and 2019

88,196



124,246


Long-term restricted cash

96,033



122,524


Deferred income taxes



33,065


Other non-current assets

149,382



189,475


Non-current assets - discontinued operations

9,473



162,624


Total assets

$

1,680,089



$

2,302,823


Liabilities and Stockholders' Equity




Current liabilities:




Current portion of long-term debt

$

28,830



$

28,476


Trade accounts payable

58,413



82,725


Acquisition-related obligations - current

19,099



33,639


Accrued expenses and other current liabilities

140,406



139,479


Current liabilities - discontinued operations

12,306



30,833


Total current liabilities

259,054



315,152


Long-term debt

553,697



564,458


Acquisition-related obligations - long-term

20,768



46,259


Workers' compensation and black lung obligations

230,081



228,850


Pension obligations

218,671



204,086


Asset retirement obligations

140,074



164,406


Deferred income taxes

480



422


Other non-current liabilities

28,072



26,822


Non-current liabilities - discontinued operations

29,090



56,246


Total liabilities

1,479,987



1,606,701


Commitments and Contingencies




Stockholders' Equity




Preferred stock - par value $0.01, 5.0 million shares authorized, none issued




Common stock - par value $0.01, 50.0 million shares authorized, 20.6 million issued and 18.3 million outstanding at December 31, 2020 and 20.5 million issued and 18.2 million outstanding at December 31, 2019

206



205


Additional paid-in capital

779,424



775,707


Accumulated other comprehensive loss

(111,985)



(58,616)


Treasury stock, at cost: 2.3 million shares at December 31, 2020 and 2019

(107,014)



(107,984)


(Accumulated deficit) retained earnings

(360,529)



86,810


Total stockholders' equity

200,102



696,122


Total liabilities and stockholders' equity

$

1,680,089



$

2,302,823


 

ALPHA METALLURGICAL RESOURCES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands)



Year Ended December 31,


2020


2019

Operating activities:




Net loss

$

(446,899)



$

(316,319)


Adjustments to reconcile net loss to net cash provided by operating activities:




Depreciation, depletion and amortization

151,455



315,162


Amortization of acquired intangibles, net

10,075



(88)


Accretion of acquisition-related obligations discount

3,342



5,522


Amortization of debt issuance costs and accretion of debt discount

14,772



14,070


Mark-to-market adjustment for acquisition-related obligations

(8,750)



(3,564)


Loss on sale of business

36,113




(Gain) loss on disposal of assets

(2,401)



8,142


Gain on assets acquired in an exchange transaction



(9,083)


Accretion on asset retirement obligations

30,658



33,759


Employee benefit plans, net

14,439



20,846


Deferred income taxes

33,123



(12,098)


Goodwill impairment



124,353


Asset impairment and restructuring

256,518



83,485


Loss on modification and extinguishment of debt



26,459


Stock-based compensation

4,896



12,397


Equity in loss of affiliates

3,473



6,874


Other, net

(5,972)



(5,204)


Changes in operating assets and liabilities




Trade accounts receivable, net

91,190



47,424


Inventories, net

48,689



(40,694)


Prepaid expenses and other current assets

28,152



56,671


Deposits

(17,926)



15,170


Other non-current assets

(6,753)



(24,460)


Trade accounts payable

(28,620)



(28,148)


Accrued expenses and other current liabilities

15,428



(25,495)


Acquisition-related obligations

(32,560)



(28,128)


Asset retirement obligations

(19,375)



(111,616)


Other non-current liabilities

(43,831)



(33,557)


Net cash provided by operating activities

129,236



131,880


Investing activities:




Capital expenditures

(153,990)



(192,411)


Proceeds on disposal of assets

4,023



2,780


Cash paid on sale of business

(52,192)




Capital contributions to equity affiliates

(3,443)



(10,051)


Purchase of investment securities

(21,129)



(92,855)


Maturity of investment securities

16,685



100,250


Other, net

77



535


Net cash used in investing activities

(209,969)



(191,752)


Financing activities:




Proceeds from borrowings on debt

57,500



544,946


Principal repayments of debt

(59,768)



(552,809)


Principal repayments of financing lease obligations

(3,176)



(3,654)


Debt issuance costs



(6,689)


Common stock repurchases and related expenses

(209)



(37,622)


Principal repayments of notes payable

(16,723)



(14,818)


Other, net



952


Net cash used in financing activities

(22,376)



(69,694)


Net decrease in cash and cash equivalents and restricted cash

(103,109)



(129,566)


Cash and cash equivalents and restricted cash at beginning of period

347,680



477,246


Cash and cash equivalents and restricted cash at end of period

$

244,571



$

347,680






Supplemental cash flow information:




Cash paid for interest

$

49,294



$

51,877


Cash paid for income taxes

$

5



$

3,039


Cash received for income tax refunds

$

68,801



$

72,236


Supplemental disclosure of noncash investing and financing activities:




Financing leases and capital financing - equipment

$

4,411



$

5,324


Accrued capital expenditures

$

7,493



$

4,110


 

The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the Consolidated Balance Sheets that sum to the total of the same such amounts shown in the Consolidated Statements of Cash Flows.


As of December 31,


2020


2019

Cash and cash equivalents

$

139,227



$

212,793


Short-term restricted cash (included in Prepaid expenses and other current assets)

9,311



12,363


Long-term restricted cash

96,033



122,524


Total cash and cash equivalents and restricted cash shown in the Consolidated Statements of Cash Flows

$

244,571



$

347,680


 

ALPHA METALLURGICAL RESOURCES, INC. AND SUBSIDIARIES

ADJUSTED EBITDA RECONCILIATION

(Amounts in thousands)



Three Months Ended


Year Ended December 31,


September 30, 2020


December 31, 2020


December 31, 2019


2020


2019

Net loss from continuing operations

$

(68,487)



$

(55,050)



$

(210,237)



$

(241,470)



$

(219,618)


Interest expense

18,746



18,290



17,444



74,528



67,521


Interest income

(376)



(153)



(1,701)



(7,027)



(7,247)


Income tax (benefit) expense

(45)



36



(44,407)



(2,164)



(53,287)


Depreciation, depletion and amortization

49,236



(4,036)



50,221



139,885



215,757


Merger-related costs





35





1,090


Non-cash stock compensation expense

1,078



696



4,885



4,897



12,348


Mark-to-market adjustment - acquisition-related obligations

3,624



4,676



(3,276)



(8,750)



(3,564)


Accretion on asset retirement obligations

6,736



6,559



6,990



26,504



23,865


Loss on modification and extinguishment of debt









26,459


Asset impairment and restructuring (1)

(226)



29,897



60,466



83,878



66,324


Goodwill impairment (2)





124,353





124,353


Cost impact of coal inventory fair value adjustment (3)









8,209


Gain on assets acquired in an exchange transaction (4)









(9,083)


Management restructuring costs (5)





7,720



941



7,720


Loss on partial settlement of benefit obligations



1,735



6,446



2,966



6,446


Amortization of acquired intangibles, net

2,074



4,748



3,137



9,214



(3,189)


Adjusted EBITDA

$

12,360



$

7,398



$

22,076



$

83,402



$

264,104



(1) Asset impairment and restructuring for the year ended December 31, 2020 includes long-lived asset impairments of $80,954 related to asset groups recorded within the Met and CAPP - Thermal reporting segments and restructuring expense of $2,924 recorded in CAPP - Thermal and All Other reporting segments. Asset impairment for the year ended December 31, 2019 includes a long-lived asset impairment of $60,169 related to asset groups recorded within the Met and CAPP - Thermal reporting segments and an asset impairment of $6,155 primarily related to the write-off of prepaid purchased coal as a result of Blackjewel's Chapter 11 bankruptcy filing on July 1, 2019.

(2) The goodwill impairment testing as of December 31, 2019 resulted in a goodwill impairment of $124,353 to write down the full carrying value of goodwill.

(3) The cost impact of the coal inventory fair value adjustment as a result of the Merger was completed during the three months ended June 30, 2019.

(4) During the year ended December 31, 2019, the Company entered into an exchange transaction which primarily included the release of the PRB overriding royalty interest owed to the Company in exchange for met coal reserves which resulted in a gain of $9,083.

(5) Management restructuring costs are related to severance expense associated with senior management changes during the three months ended March 31, 2020 and the year ended December 31, 2019.


 

ALPHA METALLURGICAL RESOURCES, INC. AND SUBSIDIARIES

RESULTS OF OPERATIONS



Three Months Ended September 30, 2020

(In thousands, except for per ton data)

Met


CAPP - Thermal


All Other


Consolidated

Coal revenues

$

295,376



$

39,813



$



$

335,189


Less: Freight and handling fulfillment revenues

(49,742)



(3,015)





(52,757)


Non-GAAP Coal revenues

$

245,634



$

36,798



$



$

282,432


Tons sold

3,329



636





3,965


Non-GAAP Coal sales realization per ton

$

73.79



$

57.86



$



$

71.23










Cost of coal sales (exclusive of items shown separately below)

$

276,248



$

33,999



$

(553)



$

309,694


Depreciation, depletion and amortization - production (1)

41,177



7,313



410



48,900


Accretion on asset retirement obligations

3,800



2,406



530



6,736


Amortization of acquired intangibles, net

2,535



(486)



25



2,074


Total Cost of coal sales

$

323,760



$

43,232



$

412



$

367,404


Less: Freight and handling costs

(49,742)



(3,015)





(52,757)


Less:  Depreciation, depletion and amortization - production (1)

(41,177)



(7,313)



(410)



(48,900)


Less: Accretion on asset retirement obligations

(3,800)



(2,406)



(530)



(6,736)


Less: Amortization of acquired intangibles, net

(2,535)



486



(25)



(2,074)


Less: Idled and closed mine costs

(5,091)



(1,742)



546



(6,287)


Non-GAAP Cost of coal sales

$

221,415



$

29,242



$

(7)



$

250,650


Tons sold

3,329



636





3,965


Non-GAAP Cost of coal sales per ton

$

66.51



$

45.98



$



$

63.22



(1) Depreciation, depletion and amortization - production excludes the depreciation, depletion and amortization related to selling, general and administrative functions.

 


Three Months Ended September 30, 2020

(In thousands, except for per ton data)

Met


CAPP - Thermal


All Other


Consolidated

Coal revenues

$

295,376



$

39,813



$



$

335,189


Less: Total Cost of coal sales (per table above)

(323,760)



(43,232)



(412)



(367,404)


GAAP Coal margin

$

(28,384)



$

(3,419)



$

(412)



$

(32,215)


Tons sold

3,329



636





3,965


GAAP Coal margin per ton

$

(8.53)



$

(5.38)



$



$

(8.12)










GAAP Coal margin

$

(28,384)



$

(3,419)



$

(412)



$

(32,215)


Add: Depreciation, depletion and amortization - production (1)

41,177



7,313



410



48,900


Add: Accretion on asset retirement obligations

3,800



2,406



530



6,736


Add: Amortization of acquired intangibles, net

2,535



(486)



25



2,074


Add: Idled and closed mine costs

5,091



1,742



(546)



6,287


Non-GAAP Coal margin

$

24,219



$

7,556



$

7



$

31,782


Tons sold

3,329



636





3,965


Non-GAAP Coal margin per ton

$

7.28



$

11.88



$



$

8.02



(1) Depreciation, depletion and amortization - production excludes the depreciation, depletion and amortization related to selling, general and administrative functions.

 


Three Months Ended December 31, 2020

(In thousands, except for per ton data)

Met


CAPP - Thermal


All Other


Consolidated

Coal revenues

$

289,756



$

33,604



$



$

323,360


Less: Freight and handling fulfillment revenues

(48,251)



(1,548)





(49,799)


Non-GAAP Coal revenues

$

241,505



$

32,056



$



$

273,561


Tons sold

3,210



536





3,746


Non-GAAP Coal sales realization per ton

$

75.24



$

59.81



$



$

73.03










Cost of coal sales (exclusive of items shown separately below)

$

273,984



$

28,754



$

(907)



$

301,831


Depreciation, depletion and amortization - production (1)

2,381



1,031



(7,680)



(4,268)


Accretion on asset retirement obligations

3,328



2,259



972



6,559


Amortization of acquired intangibles, net

5,014



(291)



25



4,748


Total Cost of coal sales

$

284,707



$

31,753



$

(7,590)



$

308,870


Less: Freight and handling costs

(48,251)



(1,548)





(49,799)


Less:  Depreciation, depletion and amortization - production (1)

(2,381)



(1,031)



7,680



4,268


Less: Accretion on asset retirement obligations

(3,328)



(2,259)



(972)



(6,559)


Less: Amortization of acquired intangibles, net

(5,014)



291



(25)



(4,748)


Less: Idled and closed mine costs

(3,445)



(3,543)



845



(6,143)


Non-GAAP Cost of coal sales

$

222,288



$

23,663



$

(62)



$

245,889


Tons sold

3,210



536





3,746


Non-GAAP Cost of coal sales per ton

$

69.25



$

44.15



$



$

65.64



(1) Depreciation, depletion and amortization - production excludes the depreciation, depletion and amortization related to selling, general and administrative functions.

 


Three Months Ended December 31, 2020

(In thousands, except for per ton data)

Met


CAPP - Thermal


All Other


Consolidated

Coal revenues

$

289,756



$

33,604



$



$

323,360


Less: Total Cost of coal sales (per table above)

(284,707)



(31,753)



7,590



(308,870)


GAAP Coal margin

$

5,049



$

1,851



$

7,590



$

14,490


Tons sold

3,210



536





3,746


GAAP Coal margin per ton

$

1.57



$

3.45



$



$

3.87










GAAP Coal margin

$

5,049



$

1,851



$

7,590



$

14,490


Add: Depreciation, depletion and amortization - production (1)

2,381



1,031



(7,680)



(4,268)


Add: Accretion on asset retirement obligations

3,328



2,259



972



6,559


Add: Amortization of acquired intangibles, net

5,014



(291)



25



4,748


Add: Idled and closed mine costs

3,445



3,543



(845)



6,143


Non-GAAP Coal margin

$

19,217



$

8,393



$

62



$

27,672


Tons sold

3,210



536





3,746


Non-GAAP Coal margin per ton

$

5.99



$

15.66



$



$

7.39



(1) Depreciation, depletion and amortization - production excludes the depreciation, depletion and amortization related to selling, general and administrative functions.

 


Three Months Ended December 31, 2019

(In thousands, except for per ton data)

Met


CAPP - Thermal


All Other


Consolidated

Coal revenues

$

370,200



$

60,576



$

681



$

431,457


Less: Freight and handling fulfillment revenues

(59,320)



(10,450)





(69,770)


Non-GAAP Coal revenues

$

310,880



$

50,126



$

681



$

361,687


Tons sold

3,273



893



8



4,174


Non-GAAP Coal sales realization per ton

$

94.98



$

56.13



$

85.13



$

86.65










Cost of coal sales (exclusive of items shown separately below)

$

331,395



$

55,653



$

(48)



$

387,000


Depreciation, depletion and amortization - production (1)

39,122



12,897



(2,165)



49,854


Accretion on asset retirement obligations

2,613



3,528



849



6,990


Amortization of acquired intangibles, net

4,574



(1,437)





3,137


Total Cost of coal sales

$

377,704



$

70,641



$

(1,364)



$

446,981


Less: Freight and handling costs

(59,320)



(10,450)





(69,770)


Less:  Depreciation, depletion and amortization - production (1)

(39,122)



(12,897)



2,165



(49,854)


Less: Accretion on asset retirement obligations

(2,613)



(3,528)



(849)



(6,990)


Less: Amortization of acquired intangibles, net

(4,574)



1,437





(3,137)


Less: Idled and closed mine costs

(2,757)



(1,260)



713



(3,304)


Non-GAAP Cost of coal sales

$

269,318



$

43,943



$

665



$

313,926


Tons sold

3,273



893



8



4,174


Non-GAAP Cost of coal sales per ton

$

82.28



$

49.21



$

83.13



$

75.21



(1) Depreciation, depletion and amortization - production excludes the depreciation, depletion and amortization related to selling, general and administrative functions.

 


Three Months Ended December 31, 2019

(In thousands, except for per ton data)

Met


CAPP - Thermal


All Other


Consolidated

Coal revenues

$

370,200



$

60,576



$

681



$

431,457


Less: Total Cost of coal sales (per table above)

(377,704)



(70,641)



1,364



(446,981)


GAAP Coal margin

$

(7,504)



$

(10,065)



$

2,045



$

(15,524)


Tons sold

3,273



893



8



4,174


GAAP Coal margin per ton

$

(2.29)



$

(11.27)



$

255.63



$

(3.72)










GAAP Coal margin

$

(7,504)



$

(10,065)



$

2,045



$

(15,524)


Add: Depreciation, depletion and amortization - production (1)

39,122



12,897



(2,165)



49,854


Add: Accretion on asset retirement obligations

2,613



3,528



849



6,990


Add: Amortization of acquired intangibles, net

4,574



(1,437)





3,137


Add: Idled and closed mine costs

2,757



1,260



(713)



3,304


Non-GAAP Coal margin

$

41,562



$

6,183



$

16



$

47,761


Tons sold

3,273



893



8



4,174


Non-GAAP Coal margin per ton

$

12.70



$

6.92



$

2.00



$

11.44



(1) Depreciation, depletion and amortization - production excludes the depreciation, depletion and amortization related to selling, general and administrative functions.

 


Year Ended December 31, 2020

(In thousands, except for per ton data)

Met


CAPP - Thermal


All Other


Consolidated

Coal revenues

$

1,263,855



$

148,880



$

389



$

1,413,124


Less: Freight and handling fulfillment revenues

(206,509)



(12,940)





(219,449)


Non-GAAP Coal revenues

$

1,057,346



$

135,940



$

389



$

1,193,675


Tons sold

13,070



2,437



6



15,513


Non-GAAP Coal sales realization per ton

$

80.90



$

55.78



$

64.83



$

76.95










Cost of coal sales (exclusive of items shown separately below)

$

1,140,556



$

136,944



$

3,511



$

1,281,011


Depreciation, depletion and amortization - production (1)

124,060



20,453



(5,885)



138,628


Accretion on asset retirement obligations

14,214



9,285



3,005



26,504


Amortization of acquired intangibles, net

12,889



(3,775)



100



9,214


Total Cost of coal sales

$

1,291,719



$

162,907



$

731



$

1,455,357


Less: Freight and handling costs

(206,509)



(12,940)





(219,449)


Less:  Depreciation, depletion and amortization - production (1)

(124,060)



(20,453)



5,885



(138,628)


Less: Accretion on asset retirement obligations

(14,214)



(9,285)



(3,005)



(26,504)


Less: Amortization of acquired intangibles, net

(12,889)



3,775



(100)



(9,214)


Less: Idled and closed mine costs

(16,640)



(8,973)



(3,267)



(28,880)


Non-GAAP Cost of coal sales

$

917,407



$

115,031



$

244



$

1,032,682


Tons sold

13,070



2,437



6



15,513


Non-GAAP Cost of coal sales per ton

$

70.19



$

47.20



$

40.67



$

66.57



(1) Depreciation, depletion and amortization - production excludes the depreciation, depletion and amortization related to selling, general and administrative functions.

 


Year Ended December 31, 2020

(In thousands, except for per ton data)

Met


CAPP - Thermal


All Other


Consolidated

Coal revenues

$

1,263,855



$

148,880



$

389



$

1,413,124


Less: Total Cost of coal sales (per table above)

(1,291,719)



(162,907)



(731)



(1,455,357)


GAAP Coal margin

$

(27,864)



$

(14,027)



$

(342)



$

(42,233)


Tons sold

13,070



2,437



6



15,513


GAAP Coal margin per ton

$

(2.13)



$

(5.76)



$

(57.00)



$

(2.72)










GAAP Coal margin

$

(27,864)



$

(14,027)



$

(342)



$

(42,233)


Add: Depreciation, depletion and amortization - production (1)

124,060



20,453



(5,885)



138,628


Add: Accretion on asset retirement obligations

14,214



9,285



3,005



26,504


Add: Amortization of acquired intangibles, net

12,889



(3,775)



100



9,214


Add: Idled and closed mine costs

16,640



8,973



3,267



28,880


Non-GAAP Coal margin

$

139,939



$

20,909



$

145



$

160,993


Tons sold

13,070



2,437



6



15,513


Non-GAAP Coal margin per ton

$

10.71



$

8.58



$

24.17



$

10.38



(1) Depreciation, depletion and amortization - production excludes the depreciation, depletion and amortization related to selling, general and administrative functions.

 


Year Ended December 31, 2019

(In thousands, except for per ton data)

Met


CAPP - Thermal


All Other


Consolidated

Coal revenues

$

1,709,863



$

285,390



$

681



$

1,995,934


Less: Freight and handling fulfillment revenues

(242,049)



(34,133)





(276,182)


Non-GAAP Coal revenues

$

1,467,814



$

251,257



$

681



$

1,719,752


Tons sold

12,926



4,218



8



17,152


Non-GAAP Coal sales realization per ton

$

113.56



$

59.57



$

85.13



$

100.27










Cost of coal sales (exclusive of items shown separately below)

$

1,389,619



$

274,320



$

3,829



$

1,667,768


Depreciation, depletion and amortization - production (1)

152,835



57,483



4,025



214,343


Accretion on asset retirement obligations

9,599



10,929



3,337



23,865


Amortization of acquired intangibles, net

10,389



(13,578)





(3,189)


Total Cost of coal sales

$

1,562,442



$

329,154



$

11,191



$

1,902,787


Less: Freight and handling costs

(242,049)



(34,133)





(276,182)


Less:  Depreciation, depletion and amortization - production (1)

(152,835)



(57,483)



(4,025)



(214,343)


Less: Accretion on asset retirement obligations

(9,599)



(10,929)



(3,337)



(23,865)


Less: Amortization of acquired intangibles, net

(10,389)



13,578





3,189


Less: Idled and closed mine costs

(8,699)



(2,702)



(3,164)



(14,565)


Less: Cost impact of coal inventory fair value adjustment (2)

(4,751)



(3,458)





(8,209)


Non-GAAP Cost of coal sales

$

1,134,120



$

234,027



$

665



$

1,368,812


Tons sold

12,926



4,218



8



17,152


Non-GAAP Cost of coal sales per ton

$

87.74



$

55.48



$

83.13



$

79.80



(1) Depreciation, depletion and amortization - production excludes the depreciation, depletion and amortization related to selling, general and administrative functions.

(2) The cost impact of the coal inventory fair value adjustment as a result of the Merger was completed during the three months ended June 30, 2019.

 


Year Ended December 31, 2019

(In thousands, except for per ton data)

Met


CAPP - Thermal


All Other


Consolidated

Coal revenues

$

1,709,863



$

285,390



$

681



$

1,995,934


Less: Total Cost of coal sales (per table above)

(1,562,442)



(329,154)



(11,191)



(1,902,787)


GAAP Coal margin

$

147,421



$

(43,764)



$

(10,510)



$

93,147


Tons sold

12,926



4,218



8



17,152


GAAP Coal margin per ton

$

11.40



$

(10.38)



$

(1,313.75)



$

5.43










GAAP Coal margin

$

147,421



$

(43,764)



$

(10,510)



$

93,147


Add: Depreciation, depletion and amortization - production (1)

152,835



57,483



4,025



214,343


Add: Accretion on asset retirement obligations

9,599



10,929



3,337



23,865


Add: Amortization of acquired intangibles, net

10,389



(13,578)





(3,189)


Add: Idled and closed mine costs

8,699



2,702



3,164



14,565


Add: Cost impact of coal inventory fair value adjustment (2)

4,751



3,458





8,209


Non-GAAP Coal margin

$

333,694



$

17,230



$

16



$

350,940


Tons sold

12,926



4,218



8



17,152


Non-GAAP Coal margin per ton

$

25.82



$

4.08



$

2.00



$

20.46



(1) Depreciation, depletion and amortization - production excludes the depreciation, depletion and amortization related to selling, general and administrative functions.

(2) The cost impact of the coal inventory fair value adjustment as a result of the Merger was completed during the three months ended June 30, 2019.

 


Three Months Ended September 30, 2020

(In thousands, except for per ton data)

Met


CAPP - Thermal


All Other


Consolidated

Non-GAAP Cost of coal sales

$

221,415



$

29,242



$

(7)



$

250,650


Less: cost of purchased coal sold

(12,511)



70





(12,441)


Adjusted cost of produced coal sold

$

208,904



$

29,312



$

(7)



$

238,209


Produced tons sold

3,142



636





3,778


Adjusted cost of produced coal sold per ton (1)

$

66.49



$

46.09



$



$

63.05



(1) Cost of produced coal sold per ton for our operations is calculated as non-GAAP cost of produced coal sold divided by produced tons sold.

 


Three Months Ended December 31,  2020

(In thousands, except for per ton data)

Met


CAPP - Thermal


All Other


Consolidated

Non-GAAP Cost of coal sales

$

222,288



$

23,663



$

(62)



$

245,889


Less: cost of purchased coal sold

(19,993)



(93)





(20,086)


Adjusted cost of produced coal sold

$

202,295



$

23,570



$

(62)



$

225,803


Produced tons sold

2,939



535





3,474


Adjusted cost of produced coal sold per ton (1)

$

68.83



$

44.06



$



$

65.00



(1) Cost of produced coal sold per ton for our operations is calculated as non-GAAP cost of produced coal sold divided by produced tons sold.

 


Three Months Ended December 31,  2019

(In thousands, except for per ton data)

Met


CAPP - Thermal


All Other


Consolidated

Non-GAAP Cost of coal sales

$

269,318



$

43,943



$

665



$

313,926


Less: cost of purchased coal sold

(43,091)



(598)





(43,689)


Adjusted cost of produced coal sold

$

226,227



$

43,345



$

665



$

270,237


Produced tons sold

2,779



876



8



3,663


Adjusted cost of produced coal sold per ton (1)

$

81.41



$

49.48



$

83.13



$

73.77



(1) Cost of produced coal sold per ton for our operations is calculated as non-GAAP cost of produced coal sold divided by produced tons sold.

 


Year Ended December 31, 2020

(In thousands, except for per ton data)

Met


CAPP - Thermal


All Other


Consolidated

Non-GAAP Cost of coal sales

$

917,407



$

115,031



$

244



$

1,032,682


Less: cost of purchased coal sold

(85,769)



(925)





(86,694)


Adjusted cost of produced coal sold

$

831,638



$

114,106



$

244



$

945,988


Produced tons sold

11,941



2,423



6



14,370


Adjusted cost of produced coal sold per ton (1)

$

69.65



$

47.09



$

40.67



$

65.83



(1) Cost of produced coal sold per ton for our operations is calculated as non-GAAP cost of produced coal sold divided by produced tons sold.

 


Year Ended December 31, 2019

(In thousands, except for per ton data)

Met


CAPP - Thermal


All Other


Consolidated

Non-GAAP Cost of coal sales

$

1,134,120



$

234,027



$

665



$

1,368,812


Less: cost of purchased coal sold

(237,681)



(6,976)





(244,657)


Adjusted cost of produced coal sold

$

896,439



$

227,051



$

665



$

1,124,155


Produced tons sold

10,727



4,091



8



14,826


Adjusted cost of produced coal sold per ton (1)

$

83.57



$

55.50



$

83.13



$

75.82



(1) Cost of produced coal sold per ton for our operations is calculated as non-GAAP cost of produced coal sold divided by produced tons sold.

 

Cision View original content to download multimedia:http://www.prnewswire.com/news-releases/alpha-announces-fourth-quarter-2020-results-301246810.html

SOURCE Alpha Metallurgical Resources, Inc.

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