# Ramaco Resources, Inc.: Form 10-Q for the period ended Sep 30, 2022

- Company: [Ramaco Resources, Inc.](/companies/metc.md) (CIK 1687187)
- Form: 10-Q
- Filed: 2022-11-09
- Accepted by EDGAR: Nov 9, 2022, 16:12 ET
- Period: 2022-09-30
- Accession: 0001558370-22-017155
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1687187/000155837022017155/metc-20220930x10q.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1687187/000155837022017155/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2022-09-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2022-07-01 to 2022-09-30 | $136.9m | us-gaap:RevenueFromContractWithCustomerIncludingAssessedTax |
| Revenue | 9 months, 2022-01-01 to 2022-09-30 | $430.5m | us-gaap:RevenueFromContractWithCustomerIncludingAssessedTax |
| Cost of revenue | 3 months, 2022-07-01 to 2022-09-30 | $79.6m | us-gaap:CostOfGoodsAndServicesSold |
| Cost of revenue | 9 months, 2022-01-01 to 2022-09-30 | $237.5m | us-gaap:CostOfGoodsAndServicesSold |
| Selling, general and administrative | 3 months, 2022-07-01 to 2022-09-30 | $8.7m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Selling, general and administrative | 9 months, 2022-01-01 to 2022-09-30 | $29.3m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Operating income | 3 months, 2022-07-01 to 2022-09-30 | $36.7m | us-gaap:OperatingIncomeLoss |
| Operating income | 9 months, 2022-01-01 to 2022-09-30 | $132.3m | us-gaap:OperatingIncomeLoss |
| Income tax | 3 months, 2022-07-01 to 2022-09-30 | $6.6m | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 9 months, 2022-01-01 to 2022-09-30 | $27.1m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2022-07-01 to 2022-09-30 | $26.9m | us-gaap:NetIncomeLoss |
| Net income | 9 months, 2022-01-01 to 2022-09-30 | $101.7m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2022-07-01 to 2022-09-30 | $0.60 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 9 months, 2022-01-01 to 2022-09-30 | $2.27 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2022-07-01 to 2022-09-30 | $0.61 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 9 months, 2022-01-01 to 2022-09-30 | $2.30 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2022-07-01 to 2022-09-30 | 44,543 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 9 months, 2022-01-01 to 2022-09-30 | 44,747 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 9 months, 2022-01-01 to 2022-09-30 | $158.8m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 9 months, 2022-01-01 to 2022-09-30 | $91.4m | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Cash and equivalents | at 2022-09-30 | $46.6m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2022-09-30 | $142.0m | us-gaap:AssetsCurrent |
| Total assets | at 2022-09-30 | $562.1m | us-gaap:Assets |
| Current liabilities | at 2022-09-30 | $150.4m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2022-09-30 | $263.5m | us-gaap:Liabilities |
| Long-term debt | at 2022-09-30 | $16.8m | us-gaap:LongTermDebtNoncurrent |
| Current portion of debt | at 2022-09-30 | $30.8m | us-gaap:LongTermDebtCurrent |
| Shareholders' equity | at 2022-09-30 | $298.7m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 28,432 characters.

*The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in our Annual Report, as well as the financial statements and related notes appearing elsewhere in this Quarterly Report. The following discussion contains forward-looking statements that reflect our future plans, estimates, beliefs and expected performance. The forward-looking statements are dependent upon events, risks and uncertainties that may be outside our control. We caution you that our actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to such differences are discussed elsewhere in this Quarterly Report, particularly in the “Cautionary Note Regarding Forward-Looking Statements” and in our Annual Report and in this Quarterly Report under the heading “Item 1A. Risk Factors,” all of which are difficult to predict. In light of these risks, uncertainties and assumptions, the forward-looking events discussed may not occur. We do not undertake any obligation to publicly update any forward-looking statements except as otherwise required by applicable law.*

### Overview

We are an operator and developer of high-quality, low-cost metallurgical coal in southern West Virginia, southwestern Virginia, and southwestern Pennsylvania. Our executive offices are located in Lexington, Kentucky, with operational offices in Charleston, West Virginia and Sheridan, Wyoming. We are a pure play metallurgical coal company with 39 million reserve tons and 769 million of measured and indicated resource tons of high-quality metallurgical coal. We believe our advantaged reserve geology provides us with higher productivities and industry leading lower cash costs.

Our development portfolio primarily includes four properties: Elk Creek, Berwind, Knox Creek and RAM Mine. Each of these properties possesses geologic and logistical advantages that make our coal among the lowest delivered-cost U.S. metallurgical coal to our domestic target customer base, North American blast furnace steel mills and coke plants, as well as international metallurgical and thermal coal consumers. In addition, the Company completed acquisitions of Ramaco Coal and Maben Coal in the second and third quarters of 2022, respectively. With the Ramaco Coal acquisition, we control coal deposits in Wyoming along with facilities that house research and development activities. With the Maben Coal acquisition, the Company has obtained control of additional coal deposits in West Virginia.

During the first nine months of 2022, we sold 1.8 million tons of coal. Of this, 54% was sold in North American markets, including Canada, and 46% was sold in export markets, principally to Europe, South America, Asia and Africa. During the same period of 2021, 54% of our sales were sold in North American markets, with the remaining 46% being sold into the export markets.

At September 30, 2022, we had outstanding performance obligations for the remainder of 2022 of approximately 0.5 million tons for contracts with fixed sales prices averaging $197/ton and 0.3 million tons for contracts with index-based pricing mechanisms. Additionally, we had outstanding performance obligations for 2023 of approximately 1.4 million tons for contracts with fixed sales prices averaging $198/ton and 0.1 million tons for contracts with index-based pricing mechanisms.

COVID-19 continues to impact countries across the world, and the duration and severity of the effects are currently unknown. We continue to actively monitor the situation and may take further actions altering our business operations that we determine are in the best interests of our employees, customers, suppliers, and stakeholders, or as required by federal, state, or local authorities.

Regarding the military conflict involving Russia and Ukraine, resulting sanctions and future market or supply disruptions in the region, are impossible to predict, but could be significant and may have a severe adverse effect on the region. Globally, various governments have banned imports from Russia including commodities such as oil, natural gas and coal. These events have caused volatility in the commodity markets. This volatility, including market expectations of potential changes in coal prices and inflationary pressures on steel products, may have a significant effect on market prices and overall demand for our coal and the cost of supplies and equipment. We are closely monitoring the potential effects on the market.

We have no meaningful direct financial exposure to Russia and Ukraine; however, the European Union ban on Russian coal has put upward pressure on international thermal coal prices. In addition, fear of economic contraction may affect future demand for coking coal. Recently, values of certain indices for high quality thermal coal have exceeded values of coking coal indices. If these conditions persist, available coking coal may be directed into thermal markets.

### Recent Developments

On July 10, 2022, we experienced a material methane ignition at our Berwind mining complex. The cause of the ignition is presently unknown. We, in conjunction with the appropriate state and federal regulatory authorities, have been conducting a full investigation into the incident, which is still ongoing. The mine was idle at the time of the incident, and there were no personnel in the mine nor any injuries or fatalities. Due to regulatory oversight related to safety conditions, the Company has not yet inspected the area of the mine where the ignition event occurred. Accordingly, we have not yet estimated the damages incurred or determined a remediation and restart plan. As a result, no entries have been recorded for a potential loss relating to this matter. Production from the Berwind Complex is expected to be impacted for an indeterminant period of time. We will provide additional information regarding plans for both the rehabilitation and restarting of the mine as it becomes available.

### Results of Operations

*(In thousands)*

| ​ ​ ​ | ​ ​ ​ | ​ ​ Three months ended September 30, 2022 ​ ​ | ​ ​ | ​ ​ 2021 ​ ​ | ​ ​ ​ | ​ ​ Nine months ended September 30, 2022 ​ ​ | ​ ​ | ​ ​ 2021 ​ ​ | ​ ​ ​ |
| --- | --- | ---: | --- | --- | --- | --- | --- | --- | --- |
| Revenue | ​ | $136,925 | ​ | $76,377 | ​ | $430,461 | ​ | $195,889 | ​ |
| ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ |
| Costs and expenses | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ |
| Cost of sales (exclusive of items shown separately below) | ​ | 79,634 |  | ​ 54,808 |  | ​ 237,530 |  | ​ 143,768 |  |
| Asset retirement obligations accretion | ​ | ​ 495 |  | ​ 156 |  | ​ 1,485 |  | ​ 461 |  |
| Depreciation and amortization | ​ | 11,435 | ​ | ​ 6,751 | ​ | ​ 29,898 | ​ | ​ 18,861 | ​ |
| Selling, general and administrative | ​ | 8,672 | ​ | ​ 5,895 | ​ | ​ 29,282 | ​ | ​ 15,767 | ​ |
| Total costs and expenses | ​ | 100,236 | ​ | ​ 67,610 | ​ | ​ 298,195 | ​ | ​ 178,857 | ​ |
| ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ |
| Operating income | ​ | 36,689 |  | ​ 8,767 |  | ​ 132,266 |  | ​ 17,032 |  |
| ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ |
| Other income (expense), net | ​ | (933) | ​ | ​ 789 | ​ | ​ 1,781 | ​ | ​ 7,156 | ​ |
| Interest expense, net | ​ | (2,255) | ​ | ​ (933) | ​ | ​ (5,323) | ​ | ​ (1,418) | ​ |
| Income before tax | ​ | ​ 33,501 | ​ | ​ 8,623 | ​ | ​ 128,724 | ​ | ​ 22,770 | ​ |
| ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ |
| Income tax expense | ​ | 6,596 |  | ​ 1,588 |  | ​ 27,068 |  | ​ 1,650 |  |
| ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ |
| Net income | ​ | $26,905 | ​ | $7,035 | ​ | $101,656 | ​ | $21,120 | ​ |
| ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ |
| Earnings per common share | **​** | ​ ​ | ​ | ​ ​ | **​** | ​ ​ | ​ | ​ ​ | ​ |
| Basic | ​ | $0.61 | ​ | $0.16 | ​ | $2.30 | ​ | $0.48 | ​ |
| Diluted | ​ | $0.60 | ​ | $0.16 | ​ | $2.27 | ​ | $0.48 | ​ |
| ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ |
| Adjusted EBITDA | ​ | $50,705 | ​ | $17,805 | ​ | $172,622 | ​ | $47,429 | ​ |

During the three and nine months ended September 30, 2022, our net income and Adjusted EBITDA were significantly higher compared to the same periods in 2021. Sales pricing was higher by 92% and 121%, respectively, during the three and nine months ended September 30, 2022 than the same periods during 2021, which was primarily due to the global rebound of metallurgical demand from the previous effects of COVID-19. Other income for the nine months ended September 30, 2022 included $2.1 million related to the sale of mineral rights. In the nine months ended September 30, 2021, we recognized a total of $5.4 million in other income for the CARES Act Employee Retention Tax Credit.

#### Three Months Ended September 30, 2022 Compared to Three Months Ended September 30, 2021

*Revenue*. Our revenue includes sales of Company produced coal and coal purchased from third parties. We include amounts billed by us for transportation to our customers within revenue and transportation costs incurred within cost of sales. Revenue per ton sold (FOB mine) and cash cost per ton sold (FOB mine) each exclude the impact of transportation billings and costs.

Coal sales information is summarized as follows:

*(In thousands)*

| ​ ​ Company Produced | ​ ​ | ​ ​ Three months ended September 30, 2022 ​ | ​ | ​ ​ 2021 ​ | ​ | ​ ​ Increase (Decrease) ​ |
| --- | --- | ---: | --- | ---: | --- | ---: |
| Coal sales revenue | ​ | $135,416 | ​ | $75,207 | ​ | $60,209 |
| Tons sold | ​ | 602 | ​ | 637 | ​ | (35) |
| Purchased from Third Parties | ​ |  | ​ |  | ​ |  |
| Coal sales revenue | ​ | $1,509 | ​ | $1,170 | ​ | $339 |
| Tons sold | ​ | 7 | ​ | 7 | ​ | (0) |

Coal sales revenue in the third quarter of 2022 was $136.9 million, 79% higher than in the third quarter of 2021 primarily due to increased revenue per tons sold (FOB Mine) in the third quarter of 2022. Revenue per ton sold (FOB mine) increased 92% from $105/ton in the third quarter of 2021 to $202/ton in the third quarter of 2022. We sold 608 thousand tons of coal in the third quarter of 2022, a 6% decrease over the same period in 2021 due to rail-related constraints. We benefited from improved domestic fixed and export spot/index pricing for metallurgical coal in 2022. Additionally, favorable conditions in the steel and metallurgical markets contributed to an increase demand for metallurgical coal and stronger pricing.

*Cost of sales.* Our cost of sales totaled $79.6 million for the three months ended September 30, 2022 as compared with $54.8 million for the same period in 2021 due to higher sales-related costs directly associated with higher revenue per ton sold in 2022 and inflationary pressures on overall costs. The cash cost per ton sold (FOB mine) for the third quarter of 2022 was $99/ton, compared with $72/ton in the third quarter of 2021.

*Asset retirement obligation accretion.* Asset retirement obligation accretion was $0.5 million for the three-month period ended September 30, 2022 and $0.2 million for the three-month period ended September 30, 2021.

*Depreciation and amortization.* Depreciation and amortization expense was $11.4 million and $6.8 million for the three-month periods ended September 30, 2022 and September 30, 2021, respectively, primarily due to additional mining equipment placed in service in recent periods over the past year.

*Selling, general and administrative.* Selling, general and administrative expenses were $8.7 million for the three months ended September 30, 2022 and $5.9 million for the three months ended September 30, 2021 primarily due to higher stock compensation, incentives and professional services in 2022, related to the Company’s production growth profile.

*Other income (expense), net.* Other expense, net was $1.0 million for the three months ended September 30, 2022. For the three months ended September 30, 2021, other income, net was $0.8 million.

*Interest expense, net.* Interest expense, net was approximately $2.3 million during the three months ended September 30, 2022. Interest expense, net was approximately $0.9 million in the three months ended September 30,

2021\. Interest expense, net was higher compared to 2021 primarily due to debt incurred in the acquisition of Ramaco Coal in the second quarter of 2022.

*Income tax expense.* The effective tax rate for the three months ended September 30, 2022 and 2021 was 20% and 21%, respectively. The primary difference from the federal statutory rate of 21% is related to state taxes, permanent differences for non-deductible expenses and the difference in depletion expense between GAAP and federal income tax purposes.

#### Nine Months Ended September 30, 2022 Compared to Nine Months Ended September 30, 2021

*Revenue*. Coal sales information is summarized as follows:

*(In thousands)*

| ​ ​ Company Produced | ​ ​ | ​ ​ Nine months ended September 30, 2022 ​ | ​ | ​ ​ 2021 ​ | ​ | ​ ​ Increase (Decrease) ​ |
| --- | --- | ---: | --- | ---: | --- | ---: |
| Coal sales revenue | ​ | $424,058 | ​ | $190,211 | ​ | $233,847 |
| Tons sold | ​ | 1,753 | ​ | 1,707 | ​ | 46 |
| Purchased from Third Parties | ​ |  | ​ |  | ​ |  |
| Coal sales revenue | ​ | $6,403 | ​ | $5,678 | ​ | $725 |
| Tons sold | ​ | 22 | ​ | 44 | ​ | (22) |

Coal sales revenue in the nine months ended September 30, 2022 was $430.5 million, 120% higher than in the same period in 2021 principally due to revenue per ton sold (FOB mine) increasing 121% from $98/ton in the nine months ended September 30, 2021 to $217/ton in the same period in 2022. We sold 1.8 million tons of coal in the nine-month period ended September 30, 2022, which was in line with the same period in 2021.

*Cost of sales.* Our cost of sales totaled $237.5 million for the nine months ended September 30, 2022 as compared with $143.8 million for the same period in 2021 due to higher tons sold, higher sales-related costs directly associated with higher revenue per ton sold in 2022 and inflationary pressures on overall costs. The cash cost per ton sold (FOB mine) for the first nine months of 2022 was $106, compared with $68 in the same period in 2021.

*Asset retirement obligation accretion.* Asset retirement obligation accretion was $1.5 million for the nine months ended September 30, 2022 and $0.5 million for the nine months ended September 30, 2021. The higher level of accretion in 2022 was driven primarily by asset retirement obligations assumed as part of the acquisition of Amonate assets in December 2021.

*Depreciation and amortization.* Depreciation and amortization expense was $29.9 million and $18.9 million for the nine-month periods ended September 30, 2022 and September 30, 2021, respectively, principally due to higher production volumes in the first nine months of 2022 and depreciation on capital equipment placed in service.

*Selling, general and administrative.* Selling, general and administrative expenses were $29.3 million for the nine months ended September 30, 2022 and $15.8 million for the nine months ended September 30, 2021 primarily due to higher stock compensation, incentives and professional services in 2022, related to the Company’s production growth profile.

*Other income (expense), net.* Other income, net was $1.8 million for the nine months ended September 30, 2022 due to a gain of $2.1 million on the sale of mineral rights. For the nine months ended September 30, 2021, other income, net was $7.2 million principally due to the recognition of $5.4 million for the CARES Act Employee Retention Tax Credit.

*Interest expense, net.* Interest expense, net was approximately $5.3 million in the nine-month period ended September 30, 2022 and $1.4 million for the same period in 2021. Interest expense, net was higher from the prior period primarily due to the issuance of the Senior Notes in July 2021 as well as debt incurred in the acquisition of Ramaco Coal in the second quarter of 2022.

*Income tax expense.* The effective tax rate for the nine months ended September 30, 2022 and 2021, excluding discrete items, was 21.9% and 13% respectively. During the nine months ended September 30, 2021, we recognized a tax benefit of $1.6 million for legislative changes in West Virginia and Virginia. We also reported discrete items related to stock-based compensation in the 2022 and 2021 periods. The primary difference from the federal statutory rate of 21% is related to state taxes, permanent differences for non-deductible expenses and the difference in depletion expense between U.S. GAAP and federal income tax purposes.

### Liquidity and Capital Resources

At September 30, 2022, we had $46.6 million of cash and cash equivalents and $22.6 million available under our existing credit agreements for future borrowings.

#### Significant sources and uses of cash during the first nine months of 2022

Sources of cash:

- Cash flows from operating activities were $158.8 million. This included the negative impact of an increase in inventories of $24.2 million, primarily due to rail-related constraints, offset by an increase in accrued expenses of $26.1 million, principally due to accrued purchases, income taxes and payroll and related items.
- We borrowed approximately $17.0 million for management of our normal operating cash position.

Uses of cash:

- Capital expenditures were $91.4 million, which were primarily for growth projects at the Berwind and Elk Creek mining complexes, excluding the acquisition of the Ramaco Coal and Maben Coal assets.
- We made repayments of $21.1 million primarily for the Ramaco Coal acquisition note, equipment financing, and management of our normal operating cash position.
- We paid dividends of $15.0 million.
- We paid $11.7 million for the acquisition of Ramaco Coal, including transaction costs. Refer to Note 12 of Part I, Item 1 for additional information.
- We paid $10.7 million for the acquisition of Maben Coal, including transaction costs. Refer to Note 12 of Part I, Item 1 for additional information.

At September 30, 2022, we also had $1.3 million of restricted cash, classified in other current assets in the condensed consolidated balance sheet, for potential future workers’ compensation claims.

#### Future sources and uses of cash

Our primary use of cash includes capital expenditures for mine development, ongoing operating expenses and deferred cash payments in connection with the Ramaco Coal and Maben Coal acquisitions. We expect to fund our capital and liquidity requirements with cash on hand, anticipated cash flows from operations and borrowings discussed in more detail below. We believe that current cash on hand, cash flow from operations and available liquidity under our existing credit agreements will be sufficient to meet our capital expenditure and operating plans.

Additional factors that could adversely impact our future liquidity and ability to carry out our capital expenditure program include:

- Timely delivery of our product by rail and other transportation carriers;
- Late payments of accounts receivable by our customers;
- Cost overruns in our purchases of equipment needed to complete our mine development plans;
- Delays in completion of development of our various mines, processing plants and refuse disposal facilities, which would reduce the coal we would have available to sell and our cash flow from operations; and
- Adverse changes in the metallurgical coal markets that would reduce the expected cash flow from operations.

If future cash flows are insufficient to meet our liquidity needs or capital requirements, we may reduce our expected level of capital expenditures and/or fund a portion of our capital expenditures through the issuance of debt or equity securities, the entry into debt arrangements or from other sources, such as asset sales.

#### Indebtedness

Refer to Note 4 of Part I, Item 1 for information regarding the Company’s indebtedness. During October 2022, the Company repaid its $17.0 million borrowing under the Revolving Credit Facility. No other material changes occurred to the Company’s indebtedness after September 30, 2022.

### Critical Accounting Estimates

A discussion of our critical accounting policies is included in the Annual Report. There were no material changes to our critical accounting policies during the nine months ended September 30, 2022.

### Off-Balance Sheet Arrangements

At September 30, 2022, we had no material off-balance sheet arrangements.

### Non-GAAP Financial Measures

*Adjusted EBITDA -* Adjusted EBITDA is used as a supplemental non-GAAP financial measure by management and external users of our financial statements, such as industry analysts, investors, lenders and rating agencies. We believe Adjusted EBITDA is useful because it allows us to more effectively evaluate our operating performance.

We define Adjusted EBITDA as net income plus net interest expense, stock-based compensation, depreciation and amortization expenses, income taxes, certain non-operating expenses (charitable contributions), and accretion of asset retirement obligations. A reconciliation of net income to Adjusted EBITDA is included below. Adjusted EBITDA is not intended to serve as an alternative to GAAP measures of performance and may not be comparable to similarly-titled measures presented by other companies.

*(In thousands)*

| ​ ​ Reconciliation of Net Income to Adjusted EBITDA | ​ ​ | ​ ​ Three months ended September 30, 2022 ​ | ​ | ​ ​ 2021 ​ | ​ ​ ​ | ​ ​ Nine months ended September 30, 2022 ​ | ​ | ​ ​ 2021 ​ | ​ ​ |
| --- | --- | ---: | --- | ---: | --- | ---: | --- | ---: | --- |
| Net income | ​ | $26,905 | ​ | $7,035 | ​ | $101,656 | ​ | $21,120 | ​ |
| Depreciation and amortization | ​ | 11,435 | ​ | 6,751 | ​ | 29,898 | ​ | 18,861 | ​ |
| Interest expense, net | ​ | 2,255 | ​ | 933 | ​ | 5,323 | ​ | 1,418 | ​ |
| Income tax expense (benefit) | ​ | 6,596 | ​ | 1,588 | ​ | 27,068 | ​ | 1,650 | ​ |
| EBITDA | ​ | 47,191 | ​ | 16,307 | ​ | 163,945 | ​ | 43,049 | ​ |
| Stock-based compensation | ​ | 2,019 | ​ | 1,342 | ​ | 6,192 | ​ | 3,919 | ​ |
| Other non-operating expenses | ​ | ​ 1,000 | ​ | ​ — | ​ | ​ 1,000 | ​ | ​ — | ​ |
| Accretion of asset retirement obligation | ​ | 495 | ​ | 156 | ​ | 1,485 | ​ | 461 | ​ |
| Adjusted EBITDA | ​ | $50,705 | ​ | $17,805 | ​ | $172,622 | ​ | $47,429 | ​ |

*Non-GAAP revenue per ton -* Non-GAAP revenue per ton (FOB mine) is calculated as coal sales revenue less transportation costs, divided by tons sold. We believe revenue per ton (FOB mine) provides useful information to investors as it enables investors to compare revenue per ton we generate against similar measures made by other publicly-traded coal companies and more effectively monitor changes in coal prices from period to period excluding the impact of transportation costs which are beyond our control. The adjustments made to arrive at these measures are significant in understanding and assessing our financial performance. Revenue per ton sold (FOB mine) is not a measure of financial performance in accordance with GAAP and therefore should not be considered as an alternative to revenue under GAAP.

*(In thousands, except per ton amounts)*

| ​ ​ ​ ​ | ​ ​ ​ ​ | ​ ​ Three months ended September 30, 2022 Company Produced ​ ​ | ​ ​ ​ | ​ ​ Purchased Coal ​ ​ | ​ ​ ​ | ​ ​ ​ ​ Total ​ ​ | ​ ​ ​ ​ | ​ ​ Three months ended September 30, 2021 Company Produced ​ ​ | ​ ​ ​ | ​ ​ Purchased Coal ​ ​ | ​ ​ ​ | ​ ​ ​ ​ Total ​ ​ |
| --- | --- | ---: | --- | ---: | --- | ---: | --- | ---: | --- | ---: | --- | ---: |
| Revenue | ​ | $135,416 | ​ | $1,509 | ​ | $136,925 | ​ | $75,207 | ​ | $1,170 | ​ | $76,377 |
| Less: Adjustments to reconcile to Non-GAAP revenue (FOB mine) | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ |
| Transportation costs | ​ | (14,158) | ​ | — | ​ | (14,158) | ​ | (8,549) | ​ | (209) | ​ | (8,758) |
| Non-GAAP revenue (FOB mine) | ​ | $121,258 | ​ | $1,509 | ​ | $122,767 | ​ | $66,658 | ​ | $961 | ​ | $67,619 |
| Tons sold | ​ | 602 | ​ | 7 | ​ | 608 | ​ | 637 | ​ | 7 | ​ | 644 |
| Revenue per ton sold (FOB mine) | ​ | $202 | ​ | $231 | ​ | $202 | ​ | $105 | ​ | $138 | ​ | $105 |

*(In thousands, except per ton amounts)*

| ​ ​ ​ ​ | ​ ​ ​ | ​ ​ Nine months ended September 30, 2022 Company Produced ​ ​ | ​ ​ | ​ ​ Purchased Coal ​ ​ | ​ ​ ​ | ​ ​ ​ ​ Total ​ ​ | ​ ​ ​ | ​ ​ Nine months ended September 30, 2021 Company Produced ​ ​ | ​ ​ | ​ ​ Purchased Coal ​ ​ | ​ ​ ​ | ​ ​ ​ ​ Total ​ ​ |
| --- | --- | ---: | --- | ---: | --- | ---: | --- | ---: | --- | ---: | --- | ---: |
| Revenue | ​ | $424,058 | ​ | $6,403 | ​ | $430,461 | ​ | $190,211 | ​ | $5,678 | ​ | $195,889 |
| Less: Adjustments to reconcile to Non-GAAP revenue (FOB mine) | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ |
| Transportation costs | ​ | (44,749) | ​ | (239) | ​ | (44,988) | ​ | (23,624) | ​ | (1,180) | ​ | (24,804) |
| Non-GAAP revenue (FOB mine) | ​ | $379,309 | ​ | $6,164 | ​ | $385,473 | ​ | $166,587 | ​ | $4,498 | ​ | $171,085 |
| Tons sold | ​ | 1,753 | ​ | 22 | ​ | 1,775 | ​ | 1,707 | ​ | 44 | ​ | 1,751 |
| Revenue per ton sold (FOB mine) | ​ | $216 | ​ | $279 | ​ | $217 | ​ | $98 | ​ | $103 | ​ | $98 |

*Non-GAAP cash cost per ton sold -* Non-GAAP cash cost per ton sold is calculated as cash cost of sales less transportation costs and idle mine costs, divided by tons sold. We believe cash cost per ton sold provides useful information to investors as it enables investors to compare our cash cost per ton against similar measures made by other publicly-traded coal companies and more effectively monitor changes in coal cost from period to period excluding the impact of transportation costs which are beyond our control. The adjustments made to arrive at these measures are significant in understanding and assessing our financial performance. Cash cost per ton sold is not a measure of financial performance in accordance with GAAP and therefore should not be considered as an alternative to cost of sales under GAAP.

*(In thousands, except per ton amounts)*

| ​ ​ ​ ​ | ​ ​ ​ ​ | ​ ​ Three months ended September 30, 2022 Company Produced ​ ​ | ​ ​ ​ | ​ ​ Purchased Coal ​ ​ | ​ ​ ​ | ​ ​ ​ ​ Total ​ ​ | ​ ​ ​ ​ | ​ ​ Three months ended September 30, 2021 Company Produced ​ ​ | ​ ​ ​ | ​ ​ Purchased Coal ​ ​ | ​ ​ ​ | ​ ​ ​ ​ Total ​ ​ |
| --- | --- | ---: | --- | ---: | --- | ---: | --- | ---: | --- | ---: | --- | ---: |
| Cost of sales | ​ | $78,818 | ​ | $816 | ​ | $79,634 | ​ | $53,928 | ​ | $880 | ​ | $54,808 |
| Less: Adjustments to reconcile to Non-GAAP cash cost of sales | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ |
| Transportation costs | ​ | (14,156) | ​ | — | ​ | (14,156) | ​ | (8,548) | ​ | (210) | ​ | (8,758) |
| Idle mine costs | ​ | (5,037) | ​ | ​ — | ​ | ​ (5,037) | ​ | ​ — | ​ | ​ — | ​ | ​ — |
| Non-GAAP cash cost of sales | ​ | $59,625 | ​ | $816 | ​ | $60,441 | ​ | $45,380 | ​ | $670 | ​ | $46,050 |
| Tons sold | ​ | 602 | ​ | 7 | ​ | 608 | ​ | 637 | ​ | 7 | ​ | 644 |
| Cash cost per ton sold | ​ | $99 | ​ | $125 | ​ | $99 | ​ | $71 | ​ | $97 | ​ | $72 |

*(In thousands, except per ton amounts)*

| ​ ​ ​ ​ | ​ ​ ​ | ​ ​ Nine months ended September 30, 2022 Company Produced ​ ​ | ​ ​ | ​ ​ Purchased Coal ​ ​ | ​ ​ ​ | ​ ​ ​ ​ Total ​ ​ | ​ ​ ​ | ​ ​ Nine months ended September 30, 2021 Company Produced ​ ​ | ​ ​ | ​ ​ Purchased Coal ​ ​ | ​ ​ ​ | ​ ​ ​ ​ Total ​ ​ |
| --- | --- | ---: | --- | ---: | --- | ---: | --- | ---: | --- | ---: | --- | ---: |
| Cost of sales | ​ | $232,536 | ​ | $4,994 | ​ | $237,530 | ​ | $138,863 | ​ | $4,905 | ​ | $143,768 |
| Less: Adjustments to reconcile to Non-GAAP cash cost of sales | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ |
| Transportation costs | ​ | (44,749) | ​ | (239) | ​ | (44,988) | ​ | (23,625) | ​ | (1,179) | ​ | (24,804) |
| Idle mine costs | ​ | (5,037) | ​ | ​ — | ​ | ​ (5,037) | ​ | ​ — | ​ | ​ — | ​ | ​ — |
| Non-GAAP cash cost of sales | ​ | $182,750 | ​ | $4,755 | ​ | $187,505 | ​ | $115,238 | ​ | $3,726 | ​ | $118,964 |
| Tons sold | ​ | 1,753 | ​ | 22 | ​ | 1,775 | ​ | 1,707 | ​ | 44 | ​ | 1,751 |
| Cash cost per ton sold | ​ | $104 | ​ | $215 | ​ | $106 | ​ | $67 | ​ | $85 | ​ | $68 |

## Market risk

As filed, 167 characters.

Quantitative and qualitative disclosures about market risk are included in Item 7A, “Quantitative and Qualitative Disclosures about Market Risk,” of our Annual Report.

## Controls and procedures

As filed, 2,740 characters.

### Disclosure Controls and Procedures

As required by Rule 13a-15(b) of the Exchange Act, we have evaluated, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this quarterly report. Our disclosure controls and procedures are designed to provide reasonable assurance that the information required to be disclosed by us in reports that we file under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure, and is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC. Based upon that evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this quarterly report, at the reasonable assurance level.

### Changes in Internal Control over Financial Reporting

There were no significant changes in our system of internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) during the quarter ended September 30, 2022, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

### Inherent Limitations on Effectiveness of Disclosure Controls and Procedures

We regularly review our system of internal control over financial reporting and make changes to our processes and systems to improve controls and increase efficiency, while ensuring that we maintain an effective internal control environment. Changes may include such activities as implementing new, more efficient systems, consolidating activities, and migrating processes.

Our senior members of management do not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

## Risk factors

As filed, 817 characters.

In addition to the other information set forth in this Quarterly Report, you should carefully consider the risk factors and other cautionary statements described under the heading “Item 1A. Risk Factors” included in our Annual Report and the risk factors and other cautionary statements contained in our other SEC filings, which could materially affect our business, financial condition, cash flows or future results of operations.

Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition or future results. There have been no material changes in our risk factors from those described in our Annual Report and our Form 10-Q for the quarter ended June 30, 2022, filed with the SEC on August 9, 2022.

Filed Nov 9, 2022.
Source: SEC EDGAR, the filing index for accession 0001558370-22-017155. Last ingested by Listed: Oct 24, 2026, 15:07 ET. No prices; not investment advice.