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Ramaco Resources, Inc. (METC) SEC Filing 8-K Material Event for the period ending Thursday, February 24, 2022

Ramaco Resources, Inc.

CIK: 1687187 Ticker: METC

Exhibit 99.1

Ramaco Resources, Inc. Reports Fourth Quarter and Full Year 2021 Financial Results

Company Release – February 24, 2022

Quarterly net income was $18.6 million (EPS of $0.42) and Adjusted EBITDA was $31.6 million for the fourth quarter of 2021. Quarterly net income and Adjusted EBITDA were 76% and 66% higher than our previous respective quarterly records. Net income was $39.8 million (EPS of $0.90) and Adjusted EBITDA was $79.0 million for the full-year 2021. Net income and Adjusted EBITDA were 59% and 43% higher than our previous respective annual records.
As of December 31, 2021, the Company has booked 1.7 million tons of metallurgical coal for 2022 domestic delivery at $196 per short ton FOB mine, excluding carryover tons from 2021. Based on the midpoint of our cost guidance, these domestic sales translate to estimates of over $130 million of net income1 or earnings per share of just under $3.00 and almost $185 million of Adjusted EBITDA1 in 2022.
In addition, since year-end, the Company has sold an additional 0.5 million tons of metallurgical coal primarily to export customers at an average FOB mine price of roughly $270 per short ton, based on today’s indices. These contracts are mostly index-linked, with the majority of shipments to be made in the first quarter of 2022. This brings our total currently booked sales to roughly 2.3 million tons. Based on the midpoint of our cost guidance, both the current domestic and committed export sales booked thus far in 2022 translate to estimates of over $195 million of net income1 or earnings per share of more than $4.40 and $270 million of Adjusted EBITDA1.
Over 1.0 million tons remains open to be sold into export markets currently at near-record pricing. This represents almost 30% of our 2022 production guidance of up to 3.3 million tons at the top end of the range. Our most recent realized pricing on committed sales has been at just under $300 per short ton FOB mine. The cash margin on our most recent coal sales in 2022 is roughly $200 per ton at the midpoint of cost guidance.
As previously announced, the Company’s
Board of Directors (“Board”) authorized an annual base dividend increase to $20 million from $10 million. This will also result in an increase in the regular quarterly dividend to $5.0 million from $2.5 million. Our first quarter dividend will be paid on March 15, 2022, to shareholders of record on March 1, 2022. The Company indicated that at the end of each calendar year it would review the cash dividend level with an expectation to annually increase the base dividend by 8-10%. Additionally, dependent on prevailing circumstances the Company indicated it will also consider a further return of shareholder capital in the form of a share buyback program.
As described in an accompanying release, the Company announced that it has reached an agreement in principle for one of its subsidiaries, Ramaco Development, LLC, to acquire 100% of the equity interests of Ramaco Coal, LLC (“Ramaco Coal”), a private entity owned by affiliates of Yorktown Partners, LLC and certain members of management. The cash purchase price is $65 million with an initial closing payment of $5 million and a deferred two year purchase payment of $60 million, with $20 million plus interest to be paid in quarterly installments in 2022 and $40 million plus interest to be paid in quarterly installments in 2023. Once completed, this acquisition will be immediately accretive to the Company in the form of ongoing royalty savings on a substantial portion of our production.
The Company’s Board of Directors previously approved the Elk Creek Preparation Plant expansion project. As part of this expansion, the Company will open 2 new metallurgical mines at Elk Creek between 2022 and 2023 with the intention of sustainably producing over 2.5 million tons per annum at the Elk Creek Complex by the fourth quarter of 2023. The Company anticipates reaching its goal of achieving 4-4.5 million tons of production for the full-year 2024, including the planned increase in production from the Berwind Complex, which includes the recently acquired Amonate reserves.

1 Mine level, before corporate expenses, using current spot pricing for index-linked export sales.

1


LEXINGTON, KY – (PR NEWSWIRE) – Ramaco Resources, Inc. (NASDAQ: METC) (“Ramaco” or the “Company”) today reported quarterly net income for the three months ended December 31, 2021 of $18.6 million, or $0.42 per diluted share. This was nearly 500% above the net loss of $4.7 million, or $0.11 per diluted share for the three months ended December 31, 2020.

The Company’s adjusted earnings before interest, taxes, depreciation, amortization, and equity-based compensation (“Adjusted EBITDA”) for the three months ended December 31, 2021 was $31.6 million, almost 2,350% higher than the $1.4 million loss of Adjusted EBITDA for the three months ended December 31, 2020. (See “Reconciliation of Non-GAAP Measure” below.)

Key operational and financial metrics are presented below:

Key Metrics

4Q21

3Q21

Change

4Q20

Change

2021

2020

Change

Total Tons Sold ('000)

535

644

(17)%

541

(1)%

2,286

1,749

31%

Revenue ($mm)

$

87.5

$

76.4

15%

$

51.1

71%

$

283.4

$

168.9

68%

Cost of Sales ($mm)

$

51.6

$

54.8

(6)%

$

48.7

6%

$

195.4

$

145.5

34%

Pricing of Company Produced ($/Ton)

$

143

$

105

36%

$

80

79%

$

108

$

85

27%

Cash Cost of Sales - Company Produced ($/Ton)

$

77

$

71

8%

$

76

1%

$

70

$

72

(3)%

Cash Margins on Company Produced ($/Ton)

$

66

$

34

94%

$

4

1550%

$

38

$

13

193%

Net Income (loss) ($mm)

$

18.6

$

7.0

165%

$

(4.7)

493%

$

39.8

$

(4.9)

910%

Diluted Earnings (loss) per Share

$

0.42

$

0.16

164%

$

(0.11)

476%

$

0.90

$

(0.12)

879%

Adjusted EBITDA ($mm)

$

31.6

$

17.8

78%

$

(1.4)

2344%

$

79.0

$

18.5

328%

Capex ($mm)

$

11.8

(1)

$

9.1

30%

$

4.2

179%

$

29.5

(1)

$

24.8

19%

(1) Excludes Amonate acquisition of $30.1 million.

Fourth Quarter 2021 Summary

In the following paragraphs, all references to “quarterly” periods or to “the quarter” refer to the fourth quarter of 2021, unless specified otherwise.

Year over Year Quarterly Comparison

Overall production in the quarter was 519,000 tons, up 33% from the same period of 2020. Elk Creek alone produced 410,000 tons. Overall total sales were 531,000 tons, down slightly from 541,000 tons in the fourth quarter of 2020.

Cash margins on Company produced coal were $66 per ton during the quarter, up 1,550% from the same period of 2020. Pricing of Company produced coal sold was $143 per ton during the quarter, which was 79% higher compared to the fourth quarter of 2020. Company produced annual and quarterly cash mine costs were $70 per ton and $77 per ton, respectively. Quarterly cash mine costs per ton were only 1% higher than for the same period of 2020, despite higher sales-related costs, as well as inflationary pressure on overall costs.

Sequential Quarter Comparison

Total sales volume of 531,000 tons for the quarter was down 18% from the third quarter of 2021. Over 75,000 tons of contracted coal was not delivered in December 2021 due largely to third party rail transportation bottlenecks and was carried over into January 2022. This carryover negatively impacted quarterly Adjusted EBITDA by almost $7 million, which has now been booked in the first quarter of 2022.

Cash margins on Company produced coal nearly doubled to $66 per ton during the quarter from $34 per ton in the third quarter of 2021, due to higher revenue per ton sold. Cash mine costs on Company produced coal were $77 per ton during the quarter compared to $71 per ton in the third quarter of 2021. Higher cash mine costs were due largely to higher sales-related costs, resultant from higher revenue per ton. Specifically, the 8% sequential increase in cash mine costs during the quarter was more than offset by 36% higher revenue per ton during the quarter relative to the third quarter of 2021.

2


Additional Financial Results

As of December 31, 2021, the Company had liquidity of $61.0 million, consisting of $21.9 million of cash on hand plus $39.1 million of availability under its revolving credit facility. Year-end cash was reduced by the payment of the approximately $30 million for the Amonate acquisition.

Quarterly capital expenditures totaled $11.8 million (excluding the Amonate acquisition), an increase of 30% versus $9.1 million for the third quarter of 2021, principally due to the continued development of the Berwind complex.

The Company’s effective quarterly tax rate was 14%. For the full-year 2021, we recognized an income tax expense of $4.6 million, as compared with income tax benefit of $3.5 million in 2020. Income tax expense for 2021 includes a $2.3 million benefit associated with changes in state income tax regulations for Virginia and West Virginia and a $194,000 benefit for stock-based compensation. Excluding these discrete items, our effective tax rate was 16% for 2021, compared to 20% for 2020. Cash taxes paid for full-year 2021 were less than $10,000.

The following summarizes key sales, production and financial metrics for the periods noted:

Three months ended

Year ended December 31, 

December 31, 

September 30,

December 31, 

In thousands, except per ton amounts

    

2021

    

2021

    

2020

2021

    

2020

Sales Volume

 

  

 

  

 

  

  

 

  

Company

 

531

 

637

 

515

2,239

 

1,723

Purchased

 

3

 

7

 

26

47

 

26

Total

 

535

 

644

 

541

2,286

 

1,749

Company Production

 

  

 

  

 

  

  

 

  

Elk Creek Mining Complex

 

410

 

510

 

376

1,981

 

1,548

Berwind Mining Complex (includes Knox Creek)

 

109

 

43

 

15

243

 

147

Total

 

519

 

553

 

391

2,224

 

1,695

Company Produced Financial Metrics (a)

 

  

 

  

 

  

  

 

  

Average revenue per ton

$

143

$

105

$

80

$

108

$

85

Average cash costs of coal sold

77

71

76

70

72

Average cash margin per ton

$

66

$

34

$

4

$

38

$

13

Elk Creek Financial Metrics (a)

 

  

 

  

 

  

 

  

 

  

Average revenue per ton

$

126

$

103

$

79

$

103

$

84

Average cash costs of coal sold

78

67

76

66

70

Average cash margin per ton

$

48

$

36

$

3

$

37

$

14

Purchased Coal Financial Metrics (a)

 

  

 

  

 

  

 

  

 

  

Average revenue per ton

$

294

$

138

$

62

$

116

$

62

Average cash costs of coal sold

126

97

62

88

62

Average cash margin per ton

$

168

$

41

$

$

28

$

Capital Expenditures (b)

$

11,825

$

9,092

$

4,238

$

29,466

$

24,753


(a)Excludes transportation.
(b)Excludes Amonate purchase price.

3


Outlook and Comment

Randall Atkins, Ramaco Resources’ Chairman and Chief Executive Officer commented, “2021 was a remarkable year for us on many fronts. The year began with the remnants of a post COVID-19 hangover and the hope for a more promising year than 2020…a very low bar indeed. 2021 somewhat surprised us by ending with the strongest performance we have had since we became public. That dramatic growth spurt in the second half of the year has now propelled us into an entirely different dimension as a Company.

In terms of metrics, in 2021 we generated almost 910% more net income and 328% more Adjusted EBITDA than in our previous year. This is particularly impressive considering that by the fall of 2020 roughly 66% of our 2021 tons had already been locked in at lower priced sales contracts to North American steel mills. We managed to continue to keep our cash mine costs low in 2021, averaging roughly $70 per ton mine costs, which we believe to be among the industry’s lowest levels. This was despite headwinds from both increasing sales related costs and general inflationary trends. Importantly, 2021 was also our safest year on record.

Looking ahead, we are now focused on the dual goals of being the only major coal producer to be in the midst of doubling our met coal production by 2024, while at the same time returning substantial capital back to our shareholders. For good measure, we intend to pay for our production increase from internally generated cash flow.

For the full-year 2022, at the midpoint of guidance we are guiding to 3.2 million tons of production. We hope to produce at least 5% more than this projected level. The upper end of our range is a 50% production increase from our 2021 level of 2.2 million tons produced. Importantly, as of today we have locked in roughly 2.3 million tons of total sales for 2022 delivery at an average of $206 per short ton2 FOB mine. This is about 70% of our 2022 production book.

About 1.7 million tons of new non-carryforward business will go to North American steel mills, priced at about $196 per ton FOB mine. The balance of about 500 thousand tons of newly committed primarily export business is at an average price of over $270 per ton FOB mine2. Our most recent booked business has come in at just under $300 per short ton FOB mine with cash margins estimated at roughly $200 per ton.

Over half of our newly booked export business will be delivered in the first quarter of this year. The balance of roughly 1 million unsold tons will be sold throughout the rest of the year. The markets remain strong with current levels for export index-based pricing at $380 per metric ton FOB port for high-vol A coal. Almost all of our high-vol coals have recently been regarded and priced as high-vol A coal. Looking ahead, we see continued strength in the 2022 metallurgical coal markets based on basic demand-supply dynamics and the muted supply response both globally and in the United States. The forward curve has indeed moved higher even this week.

As we sit today, the realized pricing for our overall booked business in 2022 has increased by almost $100 per ton over 20212. Based on the midpoint of our cost guidance, these committed sales currently translate to over $195 million of net income, or more than $4.40 of earnings per share and $270 million of Adjusted EBITDA3. In the short space of time since year-end, we have already created over 4 times the net income and 3 times the Adjusted EBITDA generated for the entire year of 2021.

In 2022, our mine costs are projected to increase, primarily due to higher sales related costs. We estimate to be up roughly $15 per ton above our $70 per ton level in 2021. Frankly, this is a bit of a ‘high class problem’ since that effectively means our average realized sales price has substantially increased. Even with an increase, our base level operating mine costs continue to remain some of the lowest in the industry. With the announced pending acquisition of the Ramaco Coal reserves where we mine, we expect to recognize immediate accretion from both avoided royalty payments and further cost reduction as we move ahead.

In short, we are frankly expecting the strongest year of financial and operational performance since we started. We hope to generate a record amount of earnings and a substantial amount of free cash flow. Since we have no meaningful

2 Using current spot pricing for index-linked export sales.

3 Mine level, before corporate expenses, using current spot pricing for index-linked export sales.

4


amount of net debt, we intend to deploy that free cash flow by giving increasing amounts of capital back to our shareholders.

There are always debates about the best means to do that. For now, as announced last week we have decided to double the previously announced size of our regular annual base cash dividend to $20 million. Yesterday, this gives us roughly a 3.0% yield on our stock. We expect our next review of the dividend level will be later in the year. As we progress, we hope to annually increase the regular cash dividend by 8-10% per year. Dependent on circumstances and our cash buildup, we may also consider a further return of capital to shareholders in the form of a share buyback program.

Finally, 2021 was a very exceptional year for everyone. I would like to thank all those that contributed, from our hard-working employees and directors, to our loyal shareholders. 2022 has already substantially topped even that and hopes to be remarkably transformational for all our stakeholders. As we look ahead for the year, we see substantial increases in production, generation of record free cash flow and cash buildup, increasing cash return to shareholders, and of course achieving record level of employment in the communities that we proudly serve.”

2022 Guidance

(In thousands, except per ton amounts and percentages)

    

2022 Guidance

    

2021

Company Production

 

  

    

  

Elk Creek Mining Complex

 

2,000 - 2,100

 

1,981

Berwind Mining Complex

 

700 - 800

 

181

Knox Creek Mining Complex (a)

300 - 400

62

Total

 

3,000 - 3,300

 

2,224

Sales Mix (b)

 

  

 

  

Metallurgical

 

2,900 - 3,150

 

2,197

Steam

 

100 - 150

 

89

Total

 

3,000 - 3,300

 

2,286

Cost Per Ton

 

 

  

Company Produced

$

82 - 90

$

70

Other

Capital Expenditures (c)

$

65,000 - 85,000

$

29,466

Selling, general and administrative expense (d)

$

21,000 - 24,000

$

16,369

Depreciation and amortization expense

$

32,000 - 35,000

$

26,205

Interest expense, net

$

4,000 - 5,000

$

2,556

Effective tax rate (e)

15 - 25%

16%

(a)Includes Big Creek.
(b)2022 guidance includes a small amount purchased coal.
(c)Excludes purchase price of Amonate in 2021.
(d)Excludes stock-based compensation.
(e)Normalized, to exclude discreet items.

5


Committed 2022 Sales Volume as of December 31, 2021(a)

(In millions, except per ton amounts)

    

Volume

    

Average Price

North America, fixed priced

 

1.8

$

187

Seaborne, fixed priced

 

0.0

$

256

Total, fixed priced

 

1.8

$

188

Indexed priced

 

0.1

  

Total committed tons

 

1.9


(a)Amounts as of December 31, 2021, and includes a small amount of both purchased coal and thermal coal. Totals may not add due to rounding.

About Ramaco Resources, Inc.

Ramaco Resources, Inc. is an operator and developer of high-quality, low-cost metallurgical coal in southern West Virginia, southwestern Virginia and southwestern Pennsylvania. Its executive offices are in Lexington, Kentucky, with operational offices in Charleston, West Virginia. The Company currently has seven active mines within two mining complexes.

News and additional information about Ramaco Resources, including filings with the Securities and Exchange Commission, are available at http://www.ramacoresources.com. For more information, contact investor relations at (859) 244-7455.

Earnings Conference Call

Ramaco Resources will hold its quarterly conference call and webcast at 10:00 AM Eastern Time (ET) on Thursday, February 24, 2022. An accompanying slide deck will be available at https://www.ramacoresources.com/investors-center/events-calendar/ immediately before the conference call.

The conference call can be accessed by calling (800) 708-4539 domestically or (847) 619-6396 internationally. The Conference ID is 50283535. The webcast for this release will be accessible by visiting https://edge.media-server.com/mmc/p/exznfot3.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

Certain statements contained in this news release constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent Ramaco Resources’ expectations or beliefs concerning guidance, future events, anticipated revenue, future demand and production levels,

macroeconomic trends, the development of ongoing projects, costs and expectations regarding operating results, and it is possible that the results described in this news release will not be achieved. These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of Ramaco Resources’ control, which could cause actual results to differ materially from the results discussed in the forward-looking statements. These factors include, without limitation, risks related to the impact of the COVID-19 global pandemic, unexpected delays in our current mine development activities, failure of our sales commitment counterparties to perform, increased government regulation of coal in the United States or internationally, the further decline of demand for coal in export markets and underperformance of the railroads, the anticipated completion of the Acquisition and the timing thereof, the expected benefits of the Acquisition to the Company’s shareholders, and the anticipated benefits and impacts of the Acquisition. Any forward-looking statement speaks only as of the date on which it is made, and, except as required by law, Ramaco Resources does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. New factors emerge from time to time, and it is not possible for Ramaco Resources to predict all such factors. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements found in Ramaco Resources’ filings with the Securities and Exchange Commission (“SEC”), including its Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. The risk factors and other factors noted in Ramaco Resources’ SEC filings could cause its actual results to differ materially from those contained in any forward-looking statement.

6


Ramaco Resources, Inc.
Unaudited Consolidated Statements of Operations

Three months ended December 31, 

Year ended December 31, 

In thousands, except per share amounts

    

2021

    

2020

    

2021

    

2020

Revenue

 

$

87,506

 

$

51,146

 

$

283,394

 

$

168,915

Costs and expenses

Cost of sales (exclusive of items shown separately below)

 

51,645

 

48,746

 

195,412

 

145,503

Asset retirement obligations accretion

 

154

 

143

 

615

 

570

Depreciation and amortization

 

7,345

 

5,310

 

26,205

 

20,912

Selling, general and administrative

 

5,862

 

5,301

 

21,629

 

21,023

Total costs and expenses

 

65,006

 

59,500

 

243,861

 

188,008

Operating income (loss)

 

22,500

 

(8,354)

 

39,533

 

(19,093)

Other income

 

272

 

470

 

7,429

 

11,926

Interest expense, net

 

(1,137)

 

(309)

 

(2,556)

 

(1,224)

Income before tax

 

21,635

 

(8,193)

 

44,406

 

(8,391)

Income tax expense (benefit)

 

2,997

 

(3,447)

 

4,647

 

(3,484)

Net income (loss)

$

18,638

$

(4,746)

$

39,759

$

(4,907)

Earnings (loss) per common share

Basic earnings (loss) per share

$

0.42

$

(0.11)

$

0.90

$

(0.12)

Diluted earnings (loss) per share

$

0.42

$

(0.11)

$

0.90

$

(0.12)

Basic weighted average shares outstanding

 

44,109

 

42,717

 

43,964

 

42,460

Diluted weighted average shares outstanding

 

44,674

 

42,717

 

44,257

 

42,460

7


Ramaco Resources, Inc.

Consolidated Balance Sheets

In thousands, except per-share amounts

    

December 31, 2021

    

December 31, 2020

Assets

 

  

 

  

Current assets

 

  

 

  

Cash and cash equivalents

$

21,891

$

5,300

Accounts receivable

 

44,453

 

20,299

Inventories

 

15,791

 

11,947

Prepaid expenses and other

 

4,626

 

4,953

Total current assets

 

86,761

 

42,499

Property, plant and equipment, net

 

227,077

 

180,531

Financing lease right-of-use assets, net

 

9,128

 

Advanced coal royalties

 

5,576

 

4,784

Other

 

491

 

809

Total Assets

$

329,033

$

228,623

Liabilities and Stockholders' Equity

 

  

 

  

Liabilities

 

  

 

  

Current liabilities

 

  

 

  

Accounts payable

$

15,346

$

11,742

Accrued expenses

 

19,410

 

11,591

Asset retirement obligations

 

489

 

46

Current portion of long-term debt

 

7,674

 

4,872

Current portion of financing lease obligations

3,461

 

Other current liabilities

 

280

 

862

Total current liabilities

 

46,660

 

29,113

Asset retirement obligations

 

22,060

 

15,110

Long-term debt, net

 

3,339

 

12,578

Long-term financing lease obligations, net

4,599

 

Senior notes, net

32,363

 

Deferred tax liability, net

 

6,406

 

1,762

Other long-term liabilities

 

2,532

 

965

Total liabilities

 

117,959

 

59,528

Commitments and contingencies

 

 

Stockholders' Equity

 

  

 

  

Preferred stock, $0.01 par value

 

 

Common stock, $0.01 par value

 

441

 

427

Additional paid-in capital

 

163,566

 

158,859

Retained earnings

 

47,067

 

9,809

Total stockholders' equity

 

211,074

 

169,095

Total Liabilities and Stockholders' Equity

$

329,033

$

228,623

8


Ramaco Resources, Inc.

Unaudited Statement of Cash Flows

Years ended December 31, 

In thousands

2021

    

2020

Cash flows from operating activities

  

 

  

Net income (loss)

$

39,759

$

(4,907)

Adjustments to reconcile net income (loss) to net cash from operating activities:

Accretion of asset retirement obligations

 

615

 

570

Depreciation and amortization

 

26,205

 

20,912

Amortization of debt issuance costs

 

214

 

58

Stock-based compensation

 

5,260

 

4,140

Other income - employee retention tax credit

(5,407)

Other income - PPP Loan

(8,444)

Deferred income taxes

 

4,644

 

(3,503)

Changes in operating assets and liabilities:

Accounts receivable

 

(24,154)

 

(1,043)

Prepaid expenses and other current assets

 

5,519

 

986

Inventories

 

(3,844)

 

3,314

Other assets and liabilities

 

1,124

 

(1,270)

Accounts payable

 

(1,820)

 

2,753

Accrued expenses

 

5,225

 

(254)

Net cash from operating activities

 

53,340

 

13,312

Cash flow from investing activities:

Purchases of property, plant and equipment

 

(29,466)

 

(24,753)

Acquisition of Amonate assets

(30,147)

Net cash from investing activities

(59,613)

(24,753)

Cash flows from financing activities

Proceeds from PPP Loan

8,444

Proceeds from borrowings

 

54,368

 

50,043

Payments of debt issuance cost

(2,356)

Repayment of borrowings

(26,300)

(45,598)

Repayments of financed insurance payable

(862)

(1,382)

Repayments of financing leased equipment

(1,942)

Restricted stock surrendered for withholding taxes payable

(539)

(221)

Net cash from financing activities

 

22,369

 

11,286

Net change in cash and cash equivalents and restricted cash

 

16,096

 

(155)

Cash and cash equivalents and restricted cash, beginning of period

 

6,710

 

6,865

Cash and cash equivalents and restricted cash, end of period

$

22,806

$

6,710

9


Reconciliation of Non-GAAP Measure

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, equity-based compensation, depreciation and amortization expenses and any transaction related costs. Its most comparable GAAP measure is net income. A reconciliation of net income to Adjusted EBITDA is included below. Adjusted EBITDA is not intended to serve as an alternative to U.S. GAAP measures of performance and may not be comparable to similarly-titled measures presented by other companies.

Three months ended December 31, 

Year ended December 31, 

(In thousands)

    

2021

    

2020

    

2021

    

2020

Reconciliation of Net Income (Loss) to Adjusted EBITDA

 

  

 

  

  

 

  

Net income (loss)

$

18,638

$

(4,746)

$

39,759

$

(4,907)

Depreciation and amortization

 

7,345

 

5,310

 

26,205

 

20,912

Interest expense, net

 

1,137

 

309

 

2,556

 

1,224

Income tax expense (benefit)

 

2,997

 

(3,447)

 

4,647

 

(3,484)

EBITDA

 

30,117

 

(2,574)

 

73,167

 

13,745

Stock-based compensation

 

1,342

 

1,021

 

5,260

 

4,140

Accretion of asset retirement obligations

 

154

 

143

 

615

 

570

Adjusted EBITDA

$

31,613

$

(1,410)

$

79,042

$

18,455

Non-GAAP revenue and cash cost per ton

Non-GAAP revenue per ton (FOB mine) is calculated as coal sales revenue less transportation costs, divided by tons sold. Non-GAAP cash cost per ton sold is calculated as cash cost of coal sales less transportation costs, divided by tons sold. We believe revenue per ton (FOB mine) and cash cost per ton provides useful information to investors as these enable investors to compare revenue per ton and cash cost per ton for the Company against similar measures made by other publicly-traded coal companies and more effectively monitor changes in coal prices and costs 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 the Company’s financial condition. Revenue per ton sold (FOB mine) and cash cost per ton are not measures of financial performance in accordance with U.S. GAAP and therefore should not be considered as an alternative to revenue and cost of sales under U.S. GAAP. The tables below show how we calculate non-GAAP revenue and cash cost per ton:

10


Non-GAAP revenue per ton

Three months ended December 31, 2021

Three months ended December 31, 2020

    

Company

    

Purchased

    

    

Company

    

Purchased

    

(In thousands, except per ton amounts)

Produced

Coal

Total

Produced

Coal

Total

 

  

 

  

 

  

 

  

 

  

 

  

Revenue

$

86,515

$

991

$

87,506

$

48,719

$

2,427

$

51,146

Less: Adjustments to reconcile to Non-GAAP revenue (FOB mine)

 

  

 

  

 

  

 

Transportation costs

 

(10,299)

 

(45)

 

(10,344)

 

(7,389)

 

(811)

 

(8,200)

Non-GAAP revenue (FOB mine)

$

76,216

$

946

$

77,162

$

41,330

$

1,616

$

42,946

Tons sold

 

531

 

3

 

535

 

515

 

26

 

541

Revenue per ton sold (FOB mine)

$

143

$

294

$

144

$

80

$

62

$

79

Three months ended September 30, 2021

    

Company

    

Purchased

    

(In thousands, except per ton amounts)

Produced

Coal

Total

 

  

 

  

 

  

Revenue

$

75,207

$

1,170

$

76,377

Less: Adjustments to reconcile to Non-GAAP revenue (FOB mine)

 

  

 

  

 

  

Transportation costs

 

(8,549)

 

(209)

 

(8,758)

Non-GAAP revenue (FOB mine)

$

66,658

$

961

$

67,619

Tons sold

 

637

 

7

 

644

Revenue per ton sold (FOB mine)

$

105

$

138

$

105

Year ended December 31, 2021

Year ended December 31, 2020

    

Company

    

Purchased

    

    

Company

    

Purchased

    

(In thousands, except per ton amounts)

 

Produced

 

Coal

Total

 

Produced

 

Coal

Total

Revenue

$

276,725

$

6,669

$

283,394

$

166,488

$

2,427

$

168,915

Less: Adjustments to reconcile to Non-GAAP revenue (FOB mine)

Transportation costs

 

(33,922)

 

(1,225)

 

(35,147)

 

(20,000)

 

(811)

 

(20,811)

Non-GAAP revenue (FOB mine)

$

242,803

$

5,444

$

248,247

$

146,488

$

1,616

$

148,104

Tons sold

 

2,239

 

47

 

2,286

 

1,723

 

26

 

1,749

Revenue per ton sold (FOB mine)

$

108

$

116

$

109

$

85

$

62

$

85

11


Non-GAAP cash cost per ton

Three months ended December 31, 2021

Three months ended December 31, 2020

    

Company

    

Purchased

    

    

Company

    

Purchased

    

(In thousands, except per ton amounts)

Produced

Coal

Total

Produced

Coal

Total

 

  

 

  

 

  

 

  

 

  

 

  

Cost of sales

$

51,194

$

451

$

51,645

$

46,307

$

2,439

$

48,746

Less: Adjustments to reconcile to Non-GAAP cash cost of sales

 

  

 

  

 

  

 

Transportation costs

 

(10,308)

 

(46)

 

(10,354)

 

(7,347)

 

(823)

 

(8,170)

Non-GAAP cash cost of sales

$

40,886

$

405

$

41,291

$

38,960

$

1,616

$

40,576

Tons sold

 

531

 

3

 

535

 

515

 

26

 

541

Cash cost per ton sold

$

77

$

126

$

77

$

76

$

62

$

75

Three months ended September 30, 2021

    

Company

    

Purchased

    

(In thousands, except per ton amounts)

Produced

Coal

Total

 

  

 

  

 

  

Cost of sales

$

53,928

$

880

$

54,808

Less: Adjustments to reconcile to Non-GAAP cash cost of sales

 

  

 

  

 

  

Transportation costs

 

(8,548)

 

(210)

 

(8,758)

Non-GAAP cash cost of sales

$

45,380

$

670

$

46,050

Tons sold

 

637

 

7

 

644

Cash cost per ton sold

$

71

$

97

$

72

Year ended December 31, 2021

Year ended December 31, 2020

    

Company

    

Purchased

    

    

Company

    

Purchased

    

(In thousands, except per ton amounts)

 

Produced

 

Coal

Total

 

Produced

 

Coal

Total

Cost of sales

$

190,056

$

5,356

$

195,412

$

143,064

$

2,439

$

145,503

Less: Adjustments to reconcile to Non-GAAP cash cost of sales

Transportation costs

 

(33,934)

 

(1,225)

 

(35,159)

 

(19,684)

 

(823)

 

(20,507)

Non-GAAP cash cost of sales

$

156,122

$

4,131

$

160,253

$

123,380

$

1,616

$

124,996

Tons sold

 

2,239

 

47

 

2,286

 

1,723

 

26

 

1,749

Cash cost per ton sold

$

70

$

88

$

70

$

72

$

62

$

71

We do not provide reconciliations of our outlook for cash cost per ton to cost of sales in reliance on the unreasonable

efforts exception provided for under Item 10(e)(1)(i)(B) of Regulation S-K. We are unable, without unreasonable efforts, to forecast certain items required to develop the meaningful comparable GAAP cost of sales. These items typically include non-cash asset retirement obligation accretion expenses, mine idling expenses and other non-recurring indirect mining expenses that are difficult to predict in advance in order to include a GAAP estimate.

# # #

12


0001687187false0001687187metc:SeniorNotedDue2026Member2022-02-242022-02-2400016871872022-02-242022-02-24

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 24, 2022

RAMACO RESOURCES, INC.

(Exact name of Registrant as specified in its Charter)

Delaware

001-38003

38-4018838

(State or other jurisdiction of

(Commission

(IRS Employer

incorporation)

File No.)

Identification No.)

250 West Main Street, Suite 1800

Lexington, Kentucky 40507

(Address of principal executive offices)

Registrant’s Telephone Number, including area code: (859) 244-7455

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

    

Trading Symbol(s)

    

Name of each exchange on which registered

Common Stock, $0.01 par value

METC

NASDAQ Global Select Market

9.00% Senior Notes due 2026

METCL

NASDAQ Global Select Market

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2.):

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company  

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  

Item 2.02.Results of Operations and Financial Condition.

On February 24, 2022, Ramaco Resources, Inc. (the “Company”) issued a press release reporting its financial and operating results for the fourth quarter and full year 2021 (the “Earnings Release”). A copy of the Earnings Release is attached hereto as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.

None of the information furnished in this Item 2.02 will be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section, nor will it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended.

Item 7.01.Regulation FD Disclosure.

The information set forth in Item 2.02 above and in Exhibit 99.1 to this Current Report on Form 8-K is incorporated herein by reference.

None of the information furnished in this Item 7.01 will be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor will it be incorporated by reference into any registration statement filed by the Company under the Securities Act of 1933, as amended.

Item 9.01.Financial Statements and Exhibits.

(d) Exhibits.

Exhibit
Number

    

Exhibit Description

99.1

Earnings Release issued on February 24, 2022

104

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

RAMACO RESOURCES, INC.

By: 

/s/ Randall W. Atkins

Name: 

Randall W. Atkins

Title: 

Chief Executive Officer

Date:February 24, 2022

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Ramaco Resources, Inc. provided additional information to their SEC Filing as exhibits

Ticker: METC
CIK: 1687187
Form Type: 8-K Corporate News
Accession Number: 0001558370-22-001826
Submitted to the SEC: Thu Feb 24 2022 7:00:37 AM EST
Accepted by the SEC: Thu Feb 24 2022
Period: Thursday, February 24, 2022
Industry: Bituminous Coal And Lignite Mining
Events:
  1. Earnings Release
  2. Financial Exhibit
  3. Regulated Disclosure

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