# Ramaco Resources, Inc.: Form 10-Q for the period ended Jun 30, 2024

- Company: [Ramaco Resources, Inc.](/companies/metc.md) (CIK 1687187)
- Form: 10-Q
- Filed: 2024-08-08
- Accepted by EDGAR: Aug 8, 2024, 16:06 ET
- Period: 2024-06-30
- Accession: 0001558370-24-011591
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1687187/000155837024011591/metc-20240630x10q.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1687187/000155837024011591/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2024-06-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2024-04-01 to 2024-06-30 | $155.3m | us-gaap:RevenueFromContractWithCustomerIncludingAssessedTax |
| Revenue | 6 months, 2024-01-01 to 2024-06-30 | $328.0m | us-gaap:RevenueFromContractWithCustomerIncludingAssessedTax |
| Cost of revenue | 3 months, 2024-04-01 to 2024-06-30 | $122.8m | us-gaap:CostOfGoodsAndServicesSold |
| Cost of revenue | 6 months, 2024-01-01 to 2024-06-30 | $262.5m | us-gaap:CostOfGoodsAndServicesSold |
| Selling, general and administrative | 3 months, 2024-04-01 to 2024-06-30 | $10.9m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Selling, general and administrative | 6 months, 2024-01-01 to 2024-06-30 | $25.0m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Operating income | 3 months, 2024-04-01 to 2024-06-30 | $5.4m | us-gaap:OperatingIncomeLoss |
| Operating income | 6 months, 2024-01-01 to 2024-06-30 | $8.7m | us-gaap:OperatingIncomeLoss |
| Income tax | 3 months, 2024-04-01 to 2024-06-30 | $915.0k | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 6 months, 2024-01-01 to 2024-06-30 | $1.5m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2024-04-01 to 2024-06-30 | $5.5m | us-gaap:NetIncomeLoss |
| Net income | 6 months, 2024-01-01 to 2024-06-30 | $7.6m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2024-04-01 to 2024-06-30 | $0.08 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 6 months, 2024-01-01 to 2024-06-30 | $0.08 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2024-04-01 to 2024-06-30 | $0.08 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 6 months, 2024-01-01 to 2024-06-30 | $0.08 | us-gaap:EarningsPerShareBasic |
| Operating cash flow | 6 months, 2024-01-01 to 2024-06-30 | $59.6m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Dividends paid | 6 months, 2024-01-01 to 2024-06-30 | $16.5m | us-gaap:PaymentsOfDividendsCommonStock |
| Cash and equivalents | at 2024-06-30 | $27.6m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2024-06-30 | $160.6m | us-gaap:AssetsCurrent |
| Total assets | at 2024-06-30 | $659.2m | us-gaap:Assets |
| Current liabilities | at 2024-06-30 | $120.8m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2024-06-30 | $293.1m | us-gaap:Liabilities |
| Long-term debt | at 2024-06-30 | $42.2m | us-gaap:LongTermDebtNoncurrent |
| Current portion of debt | at 2024-06-30 | $7.2m | us-gaap:LongTermDebtCurrent |
| Shareholders' equity | at 2024-06-30 | $366.1m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 35,035 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 and southwestern Virginia. Our development portfolio primarily includes the following properties: Elk Creek, Berwind, Knox Creek, and Maben. We believe 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 customer base, North American blast furnace steel mills and coke plants, as well as international metallurgical coal consumers. We also control mineral deposits near Sheridan, Wyoming as part of the Company’s initiatives regarding the potential recovery of rare earth elements and critical minerals as well as the potential commercialization of coal-to-carbon-based products and materials.

Our primary source of revenue is the sale of metallurgical coal. We are a pure-play metallurgical coal company with 59 million reserve tons and 1,119 million measured and indicated resource tons of high-quality metallurgical coal. Our plan is to continue development of our existing properties and grow annual production over the next few years to approximately seven million clean tons of metallurgical coal, subject to market conditions, permitting and additional capital deployment in the medium-term. We may make acquisitions of reserves or infrastructure that continue our focus on advantaged geology and lower costs.

The overall outlook of the metallurgical coal business is dependent on a variety of factors such as pricing, regulatory uncertainties, and global economic conditions. Coal consumption and production in the U.S. is driven by several market dynamics and trends including the U.S. and global economies, the U.S. dollar’s strength relative to other currencies and accelerating production cuts. In addition, blast furnace steelmaking is more prevalent outside the U.S. compared to domestic steel production, which creates demand for exports of metallurgical coal.

Global metallurgical coal markets have softened in 2024 due to constrained economic growth in some regions of the world and continued conflict overseas. The global steel market has experienced slower growth, especially in China, despite modest strength in certain places such as India. The lack of demand in China’s traditional real estate and infrastructure sectors has led to lower use of steel in Chinese domestic markets and elevated levels of Chinese steel exports, which have negatively affected pricing in the Company’s traditional markets, including the U.S. and Europe, due to its impact on domestic steel producers. Longer term, the Company believes that limited global investment in new coking coal production capacity and an eventual return to economic growth will support coking coal markets overall.

During the first six months of 2024, we sold 1.8 million tons of coal and recognized $328.0 million of revenue. Of this amount, 33% of our revenue was from sales into North American markets, including Canada, and 67% of our revenue was from sales into export markets. During the same period of 2023, we sold 1.5 million tons of coal and recognized $303.8 million of revenue, of which 31% was from sales into North American markets, including Canada, and 69% was from sales into export markets. Sales into export markets, which often include index-based pricing, generally have greater exposure to variability in pricing. The Company’s exports have not been affected by the catastrophic bridge collapse in Baltimore that occurred earlier in 2024, nor does the Company anticipate at this time any future effects, since all of the Company’s export throughput and shipments occur at other U.S. East Coast ports.

As of June 30, 2024, the Company had outstanding performance obligations of approximately 1.0 million tons for contracts with fixed sales prices averaging $165 per ton, excluding freight, as well as 2.4 million tons for contracts with index-based pricing mechanisms. The Company expects to satisfy approximately 62% of these commitments in the second half of 2024. Refer to Note 8 of Part I, Item 1 for additional information.

The Company continues to assess its potential rare earth and critical minerals deposit in Wyoming and is making progress in terms of initial mine development and related chemical, metallurgical, and mineralogy testing. Analysis performed to date indicates elevated levels of rare earth elements along with significant concentrations of critical minerals Gallium and Germanium. The Company expects to complete its techno economic analysis of the overall commercial aspects of the opportunity later this year and anticipates constructing a demonstration processing facility in 2025. Our rare earth elements exploration target is currently in an exploration stage and does not represent, and should not be construed to be, a mineral resource or mineral reserve as such terms are used in subpart 1300 of Regulation S-K. The Company also continues its work to advance new carbon product technologies with the goal of commercializing products that use coal in both an improved economic and environmental manner.

### Results of Operations

*(In thousands, except per share amounts)*

| ​ ​ ​ | ​ ​ ​ | ​ ​ Three months ended June 30, 2024 ​ ​ | ​ ​ | ​ ​ 2023 ​ ​ | ​ ​ ​ | ​ ​ Six months ended June 30, 2024 ​ ​ | ​ ​ | ​ ​ 2023 ​ ​ | ​ ​ ​ |
| --- | --- | ---: | --- | --- | --- | --- | --- | --- | --- |
| Revenue | ​ | $155,315 | ​ | $137,469 | ​ | $327,991 | ​ | $303,829 | ​ |
| ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ |
| Costs and expenses | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ |
| Cost of sales (exclusive of items shown separately below) | ​ | 122,770 |  | ​ 99,199 |  | ​ 262,483 |  | ​ 209,748 |  |
| Asset retirement obligations accretion | ​ | ​ 354 |  | ​ 349 |  | ​ 709 |  | ​ 700 |  |
| Depreciation, depletion, and amortization | ​ | 15,879 | ​ | ​ 13,556 | ​ | ​ 31,098 | ​ | ​ 25,407 | ​ |
| Selling, general and administrative expenses | ​ | 10,897 | ​ | ​ 14,319 | ​ | ​ 25,012 | ​ | ​ 26,061 | ​ |
| Total costs and expenses | ​ | 149,900 | ​ | ​ 127,423 | ​ | ​ 319,302 | ​ | ​ 261,916 | ​ |
| ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ |
| Operating income | ​ | 5,415 |  | ​ 10,046 |  | ​ 8,689 |  | ​ 41,913 |  |
| ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ |
| Other income (expense), net | ​ | 2,522 | ​ | ​ 2,495 | ​ | ​ 3,151 | ​ | ​ 3,742 | ​ |
| Interest expense, net | ​ | (1,481) | ​ | ​ (2,518) | ​ | ​ (2,812) | ​ | ​ (4,826) | ​ |
| Income before tax | ​ | ​ 6,456 | ​ | ​ 10,023 | ​ | ​ 9,028 | ​ | ​ 40,829 | ​ |
| ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ |
| Income tax expense | ​ | 915 |  | ​ 2,467 |  | ​ 1,455 |  | ​ 8,016 |  |
| ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ |
| Net income | ​ | $5,541 | ​ | $7,556 | ​ | $7,573 | ​ | $32,813 | ​ |
| ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ |
| Earnings per common share | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ |
| Basic - Single class (through 6/20/2023) | ​ | $— | ​ | $0.14 | ​ | $— | ​ | $0.71 | ​ |
| Basic - Class A | ​ | $0.08 | ​ | $0.03 | ​ | $0.08 | ​ | $0.03 | ​ |
| Total | ​ | $0.08 | ​ | $0.17 | ​ | $0.08 | ​ | $0.74 | ​ |
| ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ |
| Basic - Class B | ​ | $0.18 | ​ | $— | ​ | $0.42 | ​ | $— | ​ |
| ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ |
| Diluted - Single class (through 6/20/23) | ​ | $— | ​ | $0.14 | ​ | $— | ​ | $0.70 | ​ |
| Diluted - Class A | ​ | $0.08 | ​ | $0.03 | ​ | $0.08 | ​ | $0.03 | ​ |
| Total | ​ | $0.08 | ​ | $0.17 | ​ | $0.08 | ​ | $0.73 | ​ |
| ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ |
| Diluted - Class B | ​ | $0.18 | ​ | $— | ​ | $0.41 | ​ | $— | ​ |
| ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ |
| Adjusted EBITDA | ​ | $28,798 | ​ | $30,014 | ​ | $52,978 | ​ | $78,267 | ​ |

Net income and Adjusted EBITDA for the three months and six months ended June 30, 2024 were impacted by the softening of global metallurgical coal markets. Margins on coal sales declined compared to the same periods in 2023 driven by the decrease in metallurgical coal price indices, which was due to a variety of macroeconomic factors including the continued Chinese oversupply of steel into a muted and slowing global economic environment.

Coal sales information is summarized as follows:

*(In thousands)*

| ​ ​ ​ | ​ ​ ​ ​ | ​ ​ Three months ended June 30, 2024 ​ ​ | ​ ​ | ​ ​ 2023 ​ ​ | ​ ​ ​ | ​ ​ Increase (Decrease) ​ ​ | ​ ​ ​ | ​ ​ Six months ended June 30, 2024 ​ ​ | ​ ​ | ​ ​ 2023 ​ ​ | ​ ​ ​ | ​ ​ Increase (Decrease) ​ ​ | ​ ​ ​ |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Revenue | ​ | $155,315 | ​ | $137,469 | ​ | $17,846 | ​ | $327,991 | ​ | $303,829 | ​ | $24,162 | ​ |
| Tons sold | ​ | ​ 915 | ​ | ​ 715 | ​ | ​ 200 | ​ | ​ 1,843 | ​ | ​ 1,472 | ​ | ​ 371 | ​ |
| Total revenue per ton sold (GAAP basis) | ​ | $170 | ​ | $192 | ​ | $(22) | ​ | $178 | ​ | $206 | ​ | $(28) | ​ |
| ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ |
| Cost of sales | ​ | $122,770 | ​ | $99,199 | ​ | $23,571 | ​ | $262,483 | ​ | $209,748 | ​ | $52,735 | ​ |
| Tons sold | ​ | ​ 915 | ​ | ​ 715 | ​ | ​ 200 | ​ | ​ 1,843 | ​ | ​ 1,472 | ​ | ​ 371 | ​ |
| Total cost of sales per ton sold (GAAP basis) | ​ | $134 | ​ | $139 | ​ | $(5) | ​ | $142 | ​ | $143 | ​ | $(1) | ​ |
| ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ |
| Refer to Non-GAAP Financial Measures for supplemental calculations of revenue per ton sold (FOB mine) and cash cost per ton sold (FOB mine) | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ |

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.

#### Three Months Ended June 30, 2024 Compared to Three Months Ended June 30, 2023

*Revenue.* Coal sales revenue for the three months ended June 30, 2024 was $155.3 million, approximately 13% higher than the same period in 2023 driven by the 28% increase in tons sold offset partially by the negative impact of pricing. The increase in tons sold occurred primarily in export markets, with export volumes increasing by 39% and North America volumes increasing by 10%, and was aided by the Company’s increased capacity for production achieved during late 2023. Revenue per ton sold decreased 11% from $192 per ton for the three months ended June 30, 2023 to $170 per ton for the three months ended June 30, 2024 and was driven by the variability in index-based pricing for export sales. Revenue per ton sold (FOB mine), a non-GAAP measure which excludes transportation revenues and demurrage, decreased 13% from $165 per ton for the three months ended June 30, 2023 to $143 per ton for the three months ended June 30, 2024. The decrease in the Company’s revenue per ton sold measures was due to the decrease in U.S. and worldwide metallurgical coal price indices as indices continued to fall in the second quarter of 2024 due to the macroeconomic conditions discussed above. We expect metallurgical coal prices to remain volatile in the near term.

There are no revenues from rare earth and critical minerals at this time.

*Cost of sales.* Our cost of coal sales for the three months ended June 30, 2024 was $122.8 million, approximately 24% higher than the same period in 2023 driven by the increase in tons sold discussed above. Cost of sales per ton sold decreased 4% from $139 per ton for the three months ended June 30, 2023 to $134 per ton for the three months ended June 30, 2024. Cash cost per ton sold *(FOB mine)*, a non-GAAP measure which excludes transportation costs, alternative mineral development costs, and idle mine costs, decreased 2% from $110 per ton for the three months ended June 30, 2023 to $108 per ton for the three months ended June 30, 2024. Mine costs for the second quarter of 2024 benefited from efficiencies gained from increased production versus the same period in 2023.

*Depreciation, depletion, and amortization.* Depreciation, depletion, and amortization expense totaled $15.9 million and $13.6 million for the three months ended June 30, 2024 and June 30, 2023, respectively. The increase year-to-year occurred across all asset types and was driven by the Company’s initiative to grow production.

*Selling, general, and administrative.* Selling, general, and administrative (“SG&A”) expenses were $10.9 million and $14.3 million for the three months ended June 30, 2024 and June 30, 2023, respectively. The $3.4 million decrease in 2024 was primarily due to the $3.1 million benefit accrued for the probable recovery of attorney fees related to the silo failure litigation developments, as discussed in Note 7 of Part I, Item 1, which is not indicative of future SG&A expenses.

*Other income (expense), net.* Other income, net was $2.6 million for the three months ended June 30, 2024, which was primarily related to $2.2 million recovery of previously incurred demurrage and other transportation-related matters. Other income, net was $2.5 million for the same period in 2023, which was primarily due to $1.9 million of insurance proceeds received in excess of the Berwind ignition recovery asset accrued in 2022. These activities are not indicative of future results.

*Interest expense, net.* Interest expense, net was $1.5 million for the three months ended June 30, 2024 compared to $2.5 million for the same period in 2023. The decrease in 2024 was largely due to the repayment in full of related-party debt in 2023 associated with the financing of the acquisition of Ramaco Coal from Yorktown Partners. Interest expense related to this financing was $0.6 million in the second quarter of 2023.

*Income tax expense.* The effective tax rate for the three months ended June 30, 2024 and June 30, 2023 was 26.3% and 24.6%, respectively, excluding the $0.8 million favorable impact of discrete items. The primary differences from the federal statutory rate of 21% are related to state taxes, non-deductible expenses, the foreign-derived intangible income deduction, and depletion expense for income tax purposes.

*Earnings per share.* Refer to Note 10 of Part I, Item 1 for information regarding earnings per share calculations for Class A and Class B common stock.

#### Six Months Ended June 30, 2024 Compared to Six Months Ended June 30, 2023

*Revenue.* Coal sales revenue for the six months ended June 30, 2024 was $328.0 million, approximately 8% higher than the same period in 2023 driven by the 25% increase in tons sold offset partially by the negative impact of pricing. The increase in tons sold occurred in both North America and export markets, with North America volumes increasing by 27% and export volumes increasing by 24%, and was aided by the Company’s increased capacity for production achieved during late 2023. Revenue per ton sold decreased 14% from $206 per ton for the six months ended June 30, 2023 to $178 per ton for the six months ended June 30, 2024 and was driven by the variability in index-based pricing for export sales. Revenue per ton sold (FOB mine), a non-GAAP measure which excludes transportation revenues and demurrage, decreased 15% from $176 per ton for the six months ended June 30, 2023 to $149 per ton for the six months ended June 30, 2024. U.S. coal price indices have fallen by roughly 25% on a year-to-date basis driven by the macroeconomic conditions discussed earlier. We expect metallurgical coal prices to remain volatile in the near term.

There are no revenues from rare earth and critical minerals at this time.

*Cost of sales.* Our cost of coal sales totaled $262.5 million for the six months ended June 30, 2024 compared to $209.7 million for the same period in 2023. The 25% increase was driven by the increase in tons sold, as discussed directly above. Cost of sales per ton sold decreased 1% from $143 per ton for the six months ended June 30, 2023 to $142 per ton for the six months ended June 30, 2024. Cash cost per ton sold *(FOB mine)*, a non-GAAP measure which excludes transportation costs, alternative mineral development costs, and idle mine costs, increased 3% from $110 per ton for the six months ended June 30, 2023 to $113 per ton for the six months ended June 30, 2024. Mine costs for 2024 were impacted negatively by challenging geology and labor constraints in the first quarter of 2024 but improved during the second quarter of 2024 as discussed previously.

*Depreciation, depletion, and amortization.* Depreciation, depletion, and amortization expense totaled $31.1 million and $25.4 million for the six months ended June 30, 2024 and June 30, 2023, respectively. The increase year-to-year occurred across all asset types and was driven by the Company’s initiative to grow production.

*Selling, general, and administrative.* Selling, general, and administrative (“SG&A”) expenses were $25.0 million and $26.1 million for the six months ended June 30, 2024 and June 30, 2023, respectively. The decrease in 2024 is due to the $3.1 million benefit accrued for the probable recovery of attorney fees related to the silo failure litigation developments, as discussed in Note 7 of Part I, Item 1, which is not indicative of future SG&A expenses.

*Other income (expense), net.* Other income, net was $3.2 million and $3.7 million for the six months ended June 30, 2024 and 2023, respectively. These amounts are related mostly to the recovery in 2024 of previously incurred demurrage and other transportation-related matters and insurance proceeds received in 2023 for the Berwind ignition event as previously discussed in the analysis of second quarter results above.

*Interest expense, net.* Interest expense, net was $2.8 million for the six months ended June 30, 2024 compared to $4.8 million for the same period in 2023. The decrease in 2024 was largely due to the repayment in full of related-party debt in 2023 associated with the financing of the acquisition of Ramaco Coal from Yorktown Partners. Interest expense related to this financing totaled $1.3 million in the first half of 2023.

*Income tax expense.* The effective tax rate for the six months ended June 30, 2024 and June 30, 2023 was 24.5% and 19.6%, respectively, excluding the $0.8 million favorable impact of discrete items. The primary differences from the federal statutory rate of 21% are related to state taxes, non-deductible expenses, the foreign-derived intangible income deduction, and depletion expense for income tax purposes.

*Earnings per share.* Refer to Note 10 of Part I, Item 1 for information regarding earnings per share calculations for Class A and Class B common stock.

### Liquidity and Capital Resources

The metallurgical coal markets are volatile in nature; therefore, the Company prioritizes managing its financial position and liquidity, while managing costs and capital expenditures and returning value to its shareholders.

On May 3, 2024, the Company entered into the First Amendment Agreement to the Second Amended and Restated Credit and Security Agreement in order to, among other things, extend the maturity date and increase the size of its existing Revolving Credit Facility. The amended facility has a maturity date of May 3, 2029, and provides an initial aggregate revolving commitment of $200 million as well as an accordion feature to increase the size by an additional $75 million subject to certain terms and conditions, including the lenders’ consent. The amended facility provides the Company with additional flexibility to pursue further growth in production while meeting normal operating requirements. The terms of the amended facility also require the Company to maintain certain covenants, including fixed charge coverage ratio and compensating balance requirements. Borrowings under the amended facility may not exceed the borrowing base as determined under the amended formula included in the agreement.

At June 30, 2024, we had $27.6 million of cash and cash equivalents and $43.7 million available under our Revolving Credit Facility for future borrowings. Cash and cash equivalents include $7.5 million of compensating balances held in dedicated accounts to assure future credit availability under the revolver. The Company’s total current assets were $160.6 million and were in excess of total current liabilities by $39.9 million as of the balance sheet date.

#### Significant sources and uses of cash during the first six months of 2024

Sources of cash:

- Cash flows provided by operating activities were $59.6 million during the first six months of 2024, which were driven primarily by net earnings adjusted for non-cash expenses related to depreciation, depletion, and amortization as well as stock-based compensation.

Uses of cash:

- Capital expenditures totaled $40.1 million, including expenditures related to the preparation plant and expansion of our Maben complex. Capital expenditures for the Maben preparation plant totaled $7.3 million, including approximately $3 million for the initial purchase of the plant. We anticipate the

preparation plant at Maben to be fully operational before year-end 2024, which should reduce trucking costs at the complex. The Company anticipates capital expenditures to decline in the second half of 2024 as growth capital expenditures associated with our Ram 3 surface/highwall and Stonecoal Alma mines have already occurred.

- Cash outflows for financing activities totaled $34.0 million, which included:
- net repayments of $15.6 million on our existing debt, finance leases, and insurance financing and
- dividend payments of $16.5 million, which includes $12.2 million for Class A common stock and $4.2 million for Class B common stock.

The Class B common stock dividends were calculated based on 20% of the previous quarter’s CORE royalty and infrastructure fees as shown below. Refer to Note 6 of Part I, Item 1 for additional information regarding dividends.

*(In thousands)*

| ​ ​ ​ Royalties | ​ ​ ​ ​ ​ | ​ ​ Three months ended June 30, 2024 ​ ​ ​ ​ | ​ ​ Three months ended March 31, 2024 ​ ​ ​ ​ | ​ ​ ​ ​ ​ | ​ ​ Three months ended December 31, 2023 ​ ​ ​ ​ | ​ ​ ​ |
| --- | --- | --- | --- | --- | --- | --- |
| Ramaco Coal | ​ | $2,433 | $2,730 | ​ | $3,276 | **​** |
| Amonate Assets | ​ | ​ 1,099 | ​ 1,312 | ​ | ​ 722 | **​** |
| Other | ​ | ​ 13 | ​ 12 | ​ | ​ 14 | **​** |
| Total Royalties | ​ | $3,545 | $4,054 | ​ | $4,012 | **​** |
| ​ | ​ | ​ ​ | ​ ​ | ​ | ​ ​ | **​** |
| **Infrastructure Fees** | **​** | ​ ​ | ​ ​ | ​ | ​ ​ | **​** |
| Preparation Plants (Processing at $5.00/ton) | ​ | $4,314 | $4,475 | ​ | $4,432 | **​** |
| Rail Load-outs (Loading at $2.50/ton) | ​ | ​ 1,933 | ​ 1,954 | ​ | ​ 2,198 | **​** |
| Total Infrastructure Fees (at $7.50/ton) | ​ | $6,247 | $6,429 | ​ | $6,630 | **​** |
| ​ | ​ | ​ ​ | ​ ​ | ​ | ​ ​ | **​** |
| **CORE Royalty and Infrastructure Fees** | **​** | $9,792 | $10,483 | ​ | $10,642 | **​** |
| ​ | ​ | ​ ​ | ​ ​ | ​ | ​ ​ | **​** |
| **Total Cash Available for Dividend for Class B Common Stock** | **​** | $9,792 | $10,483 | ​ | $10,642 | **​** |
| ​ | ​ | ​ ​ | ​ ​ | ​ | ​ ​ | **​** |
| **20% of Cash Available for Dividend for Class B Common Stock** | **​** | $1,958 | $2,097 | ​ | $2,128 | ​ |

On August 7, 2024, the Company announced that its Board of Directors declared cash dividends of $0.1375 per share of Class A common stock and $0.2246 per share of Class B common stock during the third quarter of 2024. The Class B dividend was calculated based on 20% of CORE royalty and infrastructure fees for the second quarter of 2024. Both dividends are payable on September 13, 2024 to shareholders of record on August 30, 2024. The Company anticipates declaring similar cash dividends on a quarterly basis in future periods; however, future declarations of dividends are subject to Board of Directors’ approval and may be adjusted as business needs or market conditions change.

#### 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 Maben Coal acquisition. We expect to fund our capital and liquidity requirements for the next twelve months and the reasonably foreseeable future with cash on hand, borrowings under our revolving credit facility, and projected cash flows from operations. Factors that could adversely impact our future liquidity and ability to carry out our capital expenditure program include the following:

- 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 were to become insufficient to meet our liquidity needs or capital requirements, due to changes in macroeconomic conditions or otherwise, we may reduce our expected level of capital expenditures for new mine production and/or fund a portion of our capital expenditures through the issuance of debt or equity securities, new debt arrangements, or from other sources such as asset sales.

On September 1, 2023, the Company filed a shelf registration statement to sell any combination of Class A common stock, Class B common stock, preferred stock, depositary shares, debt securities, warrants, and rights at an aggregate initial offering price of up to $400.0 million. However, the Company has no specific plans to raise capital at this time and no securities may be sold until a prospectus supplement describing the method and terms of any future offering is delivered.

Refer to Note 4 of Part I, Item 1 for information regarding the Company’s Revolving Credit Facility and indebtedness.

### Critical Accounting Estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the amounts of revenue and expenses reported for the period then ended. A discussion of our critical accounting policies and estimates is included in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies and Estimates” of the Annual Report. There were no material changes to our critical accounting policies during the first six months of 2024.

### Off-Balance Sheet Arrangements

A discussion of off-balance sheet arrangements is included under the heading “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Off-Balance Sheet Arrangements” in the Annual Report. There were no material changes during the first six months of 2024.

### 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 expense; depreciation, depletion, and amortization expenses; income taxes; accretion of asset retirement obligations; and, when applicable, certain non-operating expenses (e.g., income tax penalties and charitable contributions). A reconciliation of net income to Adjusted EBITDA is included below. Adjusted EBITDA is not intended to serve as a substitute to U.S. 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 June 30, 2024 ​ | ​ | ​ ​ 2023 ​ | ​ ​ ​ | ​ ​ Six months ended June 30, 2024 ​ | ​ | ​ ​ 2023 ​ |
| --- | --- | ---: | --- | ---: | --- | ---: | --- | ---: |
| Net income | ​ | $5,541 | ​ | $7,556 | ​ | $7,573 | ​ | $32,813 |
| Depreciation, depletion, and amortization | ​ | 15,879 | ​ | 13,556 | ​ | 31,098 | ​ | 25,407 |
| Interest expense, net | ​ | 1,481 | ​ | 2,518 | ​ | 2,812 | ​ | 4,826 |
| Income tax expense | ​ | 915 | ​ | 2,467 | ​ | 1,455 | ​ | 8,016 |
| EBITDA | ​ | 23,816 | ​ | 26,097 | ​ | 42,938 | ​ | 71,062 |
| Stock-based compensation | ​ | 4,583 | ​ | 3,568 | ​ | 9,285 | ​ | 6,505 |
| Other | ​ | ​ 45 | ​ | ​ — | ​ | ​ 46 | ​ | ​ — |
| Accretion of asset retirement obligation | ​ | 354 | ​ | 349 | ​ | 709 | ​ | 700 |
| Adjusted EBITDA | ​ | $28,798 | ​ | $30,014 | ​ | $52,978 | ​ | $78,267 |

*Non-GAAP revenue per ton sold-* Non-GAAP revenue per ton sold (FOB mine) is calculated as coal sales revenue less transportation revenues and demurrage, divided by tons sold. We believe revenue per ton sold (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 U.S. GAAP and, therefore, should not be considered as a substitute to revenue under U.S. GAAP.

*(In thousands)*

| ​ ​ ​ | ​ ​ ​ ​ | ​ ​ Three months ended June 30, 2024 ​ ​ | ​ ​ | ​ ​ 2023 ​ ​ | ​ ​ ​ | ​ ​ Increase (Decrease) ​ ​ | ​ ​ ​ | ​ ​ Six months ended June 30, 2024 ​ ​ | ​ ​ | ​ ​ 2023 ​ ​ | ​ ​ ​ | ​ ​ Increase (Decrease) ​ ​ | ​ ​ ​ |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Revenue | ​ | $155,315 | ​ | $137,469 | ​ | $17,846 | ​ | $327,991 | ​ | $303,829 | ​ | $24,162 | ​ |
| Less: Adjustments to reconcile to Non-GAAP revenue (FOB mine) | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ |
| Transportation | ​ | ​ (24,218) | ​ | ​ (19,731) | ​ | ​ (4,487) | ​ | ​ (52,503) | ​ | ​ (44,177) | ​ | ​ (8,326) | ​ |
| Non-GAAP revenue (FOB mine) | ​ | $131,097 | ​ | $117,738 | ​ | $13,359 | ​ | $275,488 | ​ | $259,652 | ​ | $15,836 | ​ |
| Tons sold | ​ | ​ 915 | ​ | ​ 715 | ​ | ​ 200 | ​ | ​ 1,843 | ​ | ​ 1,472 | ​ | ​ 371 | ​ |
| Non-GAAP revenue per ton sold (FOB mine) | ​ | $143 | ​ | $165 | ​ | $(22) | ​ | $149 | ​ | $176 | ​ | $(27) | ​ |
| ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ |
| Refer to coal sales information for revenue per ton sold (GAAP basis) calculations | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ |

*Non-GAAP cash cost per ton sold -* Non-GAAP cash cost per ton sold (FOB mine) is calculated as cash cost of sales less transportation costs, alternative mineral development 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, and alternative mineral costs, which are more developmentally focused at the present time. The adjustments made to arrive at these measures are significant in understanding and assessing our financial performance. Cash cost per ton sold (FOB mine) is not a measure of financial performance in accordance with U.S. GAAP and, therefore, should not be considered as a substitute to cost of sales under U.S. GAAP.

*(In thousands)*

| ​ ​ ​ | ​ ​ ​ ​ | ​ ​ Three months ended June 30, 2024 ​ ​ | ​ ​ | ​ ​ 2023 ​ ​ | ​ ​ ​ | ​ ​ Increase (Decrease) ​ ​ | ​ ​ ​ | ​ ​ Six months ended June 30, 2024 ​ ​ | ​ ​ | ​ ​ 2023 ​ ​ | ​ ​ ​ | ​ ​ Increase (Decrease) ​ ​ | ​ ​ ​ |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Cost of Sales: | ​ | $122,770 | ​ | $99,199 | ​ | $23,571 | ​ | $262,483 | ​ | $209,748 | ​ | $52,735 | ​ |
| Less: Adjustments to reconcile to Non-GAAP cash cost of sales | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ |
| Transportation costs | ​ | ​ (22,872) | ​ | ​ (19,732) | ​ | ​ (3,140) | ​ | ​ (51,748) | ​ | ​ (44,213) | ​ | ​ (7,535) | ​ |
| Alternative mineral development costs | ​ | ​ (1,124) | ​ | ​ (570) | ​ | ​ (554) | ​ | ​ (2,255) | ​ | ​ (1,546) | ​ | ​ (709) | ​ |
| Idle mine costs | ​ | ​ (305) | ​ | ​ - | ​ | ​ (305) | ​ | ​ (543) | ​ | ​ (2,559) | ​ | ​ 2,016 | ​ |
| Non-GAAP cash cost of sales | ​ | $98,469 | ​ | $78,897 | ​ | $19,572 | ​ | $207,937 | ​ | $161,430 | ​ | $46,507 | ​ |
| Tons sold | ​ | ​ 915 | ​ | ​ 715 | ​ | ​ 200 | ​ | ​ 1,843 | ​ | ​ 1,472 | ​ | ​ 371 | ​ |
| Non-GAAP cash cost per ton sold (FOB mine) | ​ | $108 | ​ | $110 | ​ | $(2) | ​ | $113 | ​ | $110 | ​ | $3 | ​ |
| ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ |
| Refer to coal sales information for cost per ton sold (GAAP basis) calculations | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ |

## Market risk

As filed, 138 characters.

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, 4,591 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 chief executive officer, who serves as our principal executive officer, and chief financial officer, who serves as our 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 disclosures, and is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC. However, based on that evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were not effective at the reasonable assurance level as of the end of the period covered by this quarterly report as a result of the material weakness in internal control over financial reporting previously identified as described below.

### Previously Reported Material Weakness

We previously identified a material weakness and concluded that our internal control over financial reporting was ineffective as of December 31, 2023. Based on that evaluation, management identified a material weakness related to a pervasive lack of sufficient documentation of accounting policies, procedures, and controls. This lack of sufficient documentation does not allow management to effectively assess its relevant risks and key controls to properly test for design and operating effectiveness. A material weakness is a control deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.

### Remediation Plan

We have begun developing a plan of remediation to address this material weakness, which will include assessing, redesigning, and implementing modifications of our internal controls. We will not be able to fully remediate this material weakness until these steps have been completed and subsequent validation and testing of these internal controls have demonstrated their operating effectiveness over a sustained period of financial reporting cycles. Once the remediation plan is fully developed, we will be implementing process, control, and documentation improvements to address the above material weakness that include, but are not limited to, designing and implementing specific management review procedures to ensure completeness and accuracy of key financial and non-financial data utilized in our business; and implementing improved policies, procedures, and control activities over key financial data to ensure accuracy and completeness of this data as used in the aforementioned management review procedures.

### Changes in Internal Control over Financial Reporting

We are currently developing a plan of remediation to address the material weakness, as described above. Except as otherwise described herein, there were no changes in our system of internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) during the period covered by this quarterly report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

### Inherent Limitations on Effectiveness of Controls and Procedures

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, 729 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.

Filed Aug 8, 2024.
Source: SEC EDGAR, the filing index for accession 0001558370-24-011591. Last ingested by Listed: Nov 3, 2026, 20:51 ET. No prices; not investment advice.