Le Lézard
Classified in: Mining industry, Oil industry, Business
Subjects: ERN, CCA, ERP

Contura Announces Third Quarter 2019 Results


BRISTOL, Tenn., Nov. 14, 2019 /PRNewswire/ -- Contura Energy, Inc. (NYSE: CTRA), a leading U.S. coal supplier, today reported results for the third quarter ending September 30, 2019.

(PRNewsfoto/Contura Energy, Inc.)

Highlights include:


(millions, except per share)


Three months ended


Sept. 30, 2019(1)

June 30, 2019(1)

Sept. 30, 2018(1)

Net income(2)

$(43.6)

$24.3

$14.0

Net income(2) per diluted share

$(2.29)

$1.25

$1.35

Adjusted EBITDA(3)

$40.0

$140.8

$38.8

Operating cash flow(4)

$20.4

$102.5

$60.7

Capital expenditures

$60.3

$42.8

$18.4

Tons of coal sold

5.8

6.4

3.9

__________________________________

1.

Excludes discontinued operations.

2.

From continuing operations.

3.

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

4.

Includes discontinued operations.

"With global metallurgical coal market conditions deteriorating to a 3-year low and our thermal cost performance coming in weaker than expectations, Contura ended the third quarter with a disappointing Adjusted EBITDA result," said chairman and chief executive officer, David Stetson. "We are keenly focused on cost control and are confident that our 2020 cost performance will be greatly improved over the current year."

Financial Performance

Contura reported a net loss from continuing operations of $43.6 million, or $2.29 per diluted share, for the third quarter 2019. In the second quarter 2019, the company had net income from continuing operations of $24.3 million or $1.25 per diluted share.

Total Adjusted EBITDA was $40.0 million for the third quarter, compared with $140.8 million in the second quarter.

Beginning with the third quarter, the company will report Central Appalachia - Met (CAPP - Met) and Trading & Logistics (T&L) segments as a single reportable segment under the CAPP - Met designation. T&L will no longer be reported as a standalone segment. To conform to the current period reportable segments presentation, the prior periods have been restated to reflect the change in reportable segments.

Coal Revenues(1)


(millions)


Three months ended


Sept. 30, 2019

June 30, 2019

CAPP - Met

$323.0

$426.4

CAPP - Thermal

$70.3

$73.5

NAPP

$67.8

$76.2

__________________________________

1.

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

Coal revenues in the third quarter for CAPP - Met coal were $323.0 million, CAPP - Thermal revenues totaled $70.3 million, and Northern Appalachia (NAPP) coal revenues totaled $67.8 million. Comparatively, in the second quarter 2019, CAPP - Met, including T&L, revenues were $426.4 million, CAPP - Thermal revenues were $73.5 million, and NAPP revenues were $76.2 million.

Tons Sold


(millions)


Three months ended


Sept. 30, 2019

June 30, 2019

CAPP - Met

3.0

3.4

CAPP - Thermal

1.1

1.2

NAPP

1.6

1.7

CAPP - Met tons sold for the third quarter 2019 were 3.0 million tons, compared to 3.4 million tons, including T&L, in the second quarter. CAPP - Thermal tons sold totaled 1.1 million tons in the third quarter, down from 1.2 million tons in the second quarter. Contura sold 1.6 million tons of NAPP coal during the third quarter, a decrease of 0.1 million tons from the second quarter 2019.

Coal Sales Realization(1)


(per ton)


Three months ended


Sept. 30, 2019

June 30, 2019

CAPP - Met

$108.35

$124.34

CAPP - Thermal

$61.46

$61.83

NAPP

$41.33

$43.64

__________________________________

1.

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

The average CAPP - Met coal sales realization for the third quarter 2019 was $108.35 per ton, compared with $124.34 per ton, including T&L, in the second quarter. CAPP - Thermal coal average price was $61.46 per ton in the third quarter, down slightly from $61.83 per ton in the second quarter, while the average NAPP realization in the third quarter was $41.33 per ton, compared with an average price of $43.64 per ton in the second quarter.

Cost of Coal Sales Per Ton(1)


(per ton)


Three months ended


Sept. 30, 2019

June 30, 2019

CAPP - Met

$87.32

$87.13

CAPP - Thermal

$59.17

$51.45

NAPP

$43.87

$30.86

__________________________________

1.

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

Cost of coal sales in CAPP - Met for the quarter averaged $87.32 per ton, up from $87.13 per ton in the second quarter.

NAPP costs of $43.87 per ton increased due to lower production volume, primarily associated with the previously-announced longwall move and employee vacations. In the second quarter 2019, NAPP cost of coal sales averaged $30.86 per ton. CAPP - Thermal cost of coal sales was $59.17 per ton in the third quarter, up from $51.45 per ton in the second quarter due to lower production at the Empire Mine, which was mined out, and Republic Mine, where the production was adjusted due to soft thermal coal sales. In addition, a $3 million environmental settlement was incurred during the quarter, contributing approximately $3.00 per ton to the CAPP - Thermal variance.

Adjusted Cost of Produced Coal Sold Per Ton(1)


(per ton)


Three months ended


Sept. 30, 2019

June 30, 2019

CAPP - Met

$83.10

$82.11

CAPP - Thermal

$59.13

$51.34

NAPP

$43.87

$30.86

__________________________________

1.

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

The CAPP - Met adjusted cost of produced coal sold was $83.10 per ton for the third quarter compared with $82.11 per ton in the second quarter 2019. On the thermal side, the CAPP - Thermal adjusted cost of coal produced per ton in the third quarter was $59.13 per ton, up from $51.34 in the second quarter, while NAPP costs were $43.87 per ton compared with $30.86 per ton in the second quarter.

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


(millions)


Three months ended


Sept. 30, 2019

June 30, 2019

SG&A

$17.4

$14.8

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

$(2.2)

$1.1

Non-GAAP SG&A(1)

$15.2

$15.9




DD&A

$60.8

$62.8

__________________________________

1.

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

SG&A expenses for the third quarter 2019 were $17.4 million compared with $14.8 million in the second quarter. The third quarter 2019 SG&A was $15.2 million, excluding non-cash stock compensation expense of $2.2 million. DD&A was $60.8 million during the third quarter 2019 compared with $62.8 million in the second quarter 2019.

Liquidity and Capital Resources

Cash provided by operating activities for the third quarter 2019, including discontinued operations, was $20.4 million, and capital expenditures for the third quarter were $60.3 million, including approximately $16.5 million associated with the Pax and Lowell metallurgical mine transactions. Working capital was essentially unchanged from the second quarter. In the prior period, the cash provided by operating activities was $102.5 million and capital expenditures were $42.8 million.

At the end of September 2019, Contura had $152.6 million in unrestricted cash, a decrease of $97.0 million in the third quarter, and $290.7 million in restricted cash, deposits and investments. Total long-term debt, including the current portion of long-term debt as of September 30, 2019, was approximately $592.8 million. At the end of the third quarter, the company had total liquidity of $354.1 million, including cash and cash equivalents of $152.6 million, unrestricted investments of $25.1 million and $176.4 million of unused commitments available under the Asset-Based Revolving Credit Facility. As of September 30, 2019, the company had no borrowings and $48.6 million in letters of credit outstanding under the Asset-Based Revolving Credit Facility.

Share Repurchase Plan Update

After adopting a $250 million capital return program in the second quarter, the company's board authorized a $100 million stock repurchase plan on August 29, 2019. As of September 30, 2019, Contura had repurchased approximately 1.03 million shares for an aggregate consideration of $32.5 million, or $31.54 per share. Subsequent to the quarter end, the company has suspended future repurchase activities due to continued softness in the metallurgical coal markets and accelerated cash outflows associated with the PRB transaction.

Closed transaction with Eagle Specialty Materials related to PRB

On October 18, 2019 the company announced the closing of its previously-announced transaction with Eagle Specialty Materials (ESM) related to the Powder River Basin. In connection with the closing of the transaction, the surety bonding previously posted by Contura's subsidiary, Contura Coal West, LLC (Contura Coal West), in the amount of $238 million has been replaced with substitute surety bonds arranged by ESM. Neither Contura nor Contura Coal West will have any liability in respect of those substitute surety bonds.

As part of the agreement between Contura and ESM, Contura paid to ESM cash consideration of $81.3 million and has agreed to pay an additional $8.7 million into an escrow account to be released to ESM when Contura is satisfied that certain federal royalty claims have been released. Furthermore, Contura has paid $13.5 million to Campbell County, Wyoming for ad valorem back taxes.

2019 and 2020 Full-Year Guidance

The company is adjusting its total 2019 coal shipments guidance to a range of 23.2 million to 24.6 million tons, from the previously announced range of 23.9 million to 25.6 million tons. CAPP - Met coal guidance is reduced to a range of 12.4 million to 13.0 million tons, from 12.8 million to 13.7 million tons, due to softer market conditions, especially in Europe and South America. NAPP shipments are now expected to be between 6.5 million and 6.9 million tons in 2019, down from 6.8 million to 7.2 million tons. The guidance range for CAPP - Thermal shipments remains unchanged at 4.3 million to 4.7 million tons.

As of October 28, 2019, 96 percent of the midpoint of anticipated 2019 CAPP - Met shipments were committed and priced at an average expected per-ton realization of $117.65, with an additional 4 percent committed and priced based on various indices. Based on the midpoint of guidance, 100 percent of anticipated 2019 NAPP coal shipments were committed and priced at an average expected per-ton realization of $43.13. The CAPP - Thermal segment is 100 percent committed at the midpoint of expected shipments at an average price of $58.26 per ton.

Contura is increasing its guidance for 2019 CAPP - Met cost of coal sales per ton to $87.00 to $90.00, as CAPP - Met now includes the T&L segment, which typically has higher costs than our captive mines. Slightly more than $1.00 per ton of the cost increase is related to merging our former CAPP - Met and T&L segments into one CAPP - Met segment. Separate from our prior standalone T&L segment, previously announced 2019 guidance for the CAPP - Met segment was $83.00 to $87.00 per ton. CAPP - Thermal costs are estimated to be $55.00 and $59.00 per ton, up from $52.00 to $57.00. NAPP costs are now expected to be in the range of $36.00 to $38.00 per ton compared with $34.00 to $37.00 previously. Costs related to the company's idle operations are expected to be within a range of $16 million and $20 million for the full-year 2019.

Contura's 2019 SG&A guidance remains at a range of $60 million to $65 million, excluding non-recurring items and stock compensation. Capital expenditure guidance is unchanged in the range of $170 million to $190 million. Depreciation, depletion and amortization for 2019 is expected to be between $245 million and $255 million and 2019 cash interest expense to be between $45 million and $49 million.

For 2020, the company expects its CAPP - Met shipments to increase from 2019 to a range of 12.7 million tons to 13.3 million tons, while CAPP - Thermal volume is being reduced to 3.4 million tons to 4.0 million tons. NAPP is also expected to be lower in 2020 with a guidance range of 6.0 million ton to 6.8 million tons as we prepare to move into a new district in 2021 with longer panels and fewer longwall moves, which we expect to increase our productivity and efficiency starting in 2022.

For 2020, Contura has committed and priced approximately 32% of CAPP - Met at an average expected price of $102.88 per ton, while we are 92% committed and priced at an average price of $55.90 per ton for CAPP - Thermal and 97% committed and priced for NAPP at an average price of $43.42 per ton.

As we continue to implement our cost containment processes, the company expects to see a meaningful decline in 2020 CAPP - Met cost of coal sales per ton to a range of $76.00 to $81.00. CAPP - Thermal is expected to be in the range of $56.00 to $60.00 per ton and NAPP in the range of $34.00 to $38.00 per ton.

For 2020, the company expects its SG&A to be in the range of $60 million to $65 million, excluding non-recurring items and stock compensation. Our 2020 capital expenditures are estimated in the range of $175 million to $195 million; depreciation, depletion and amortization to be between $230 million and $260 million; and cash interest expense in the range of $48 million and $52 million.


2019 Guidance

2020 Guidance

in millions of tons

Low

High

Low

High

CAPP - Metallurgical

12.4


13.0


12.7


13.3


CAPP - Thermal

4.3


4.7


3.4


4.0


NAPP

6.5


6.9


6.0


6.8


Total Shipments

23.2


24.6


22.1


24.1







Committed/Priced1,2,3

Committed

Average Price

Committed

Average Price

CAPP4 - Metallurgical

96

%

$117.65


32

%

$102.88


CAPP - Thermal

100

%

$58.26


92

%

$55.90


NAPP

100

%

$43.13


97

%

$43.42







Committed/Unpriced1,3

Committed


Committed


CAPP4 - Metallurgical

4

%


15

%


CAPP - Thermal

?

%


1

%


NAPP

?

%


3

%







Costs per ton

Low

High

Low

High

CAPP - Metallurgical

$87


$90


$76


$81


CAPP - Thermal

$55


$59


$56


$60


NAPP

$36


$38


$34


$38







In millions (except taxes)

Low

High

Low

High

SG&A4

$60


$65


$60


$65


Idle Operations Expense

$16


$20


$14


$18


Cash Interest Expense

$45


$49


$48


$52


DD&A

$245


$255


$230


$260


Capital Expenditures

$170


$190


$175


$195


Tax Rate

?

%

5

%

?

%

5

%


Notes: 

1.

Based on committed and priced coal shipments as of October 28, 2019. Committed percentage based on the midpoint of shipment guidance range.

2.

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

3.

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

4.

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

Conference Call

The company plans to hold a conference call regarding its third quarter 2019 results on November 14, 2019, at 10:00 a.m. EST. The conference call will be available live on the investor section of the company's website at http://investors.conturaenergy.com/investors. Analysts who would like to participate in the conference call should dial 877-791-0213 (domestic toll-free) or 647-689-5651 (international) approximately 10 minutes prior to the start of the call.

ABOUT CONTURA ENERGY

Contura Energy (NYSE: CTRA) is a Tennessee-based coal supplier with affiliate mining operations across major coal basins in Pennsylvania, Virginia and West Virginia. With customers across the globe, high-quality reserves and significant port capacity, Contura Energy reliably supplies both metallurgical coal to produce steel and thermal coal to generate power. For more information, visit www.conturaenergy.com.

FORWARD-LOOKING STATEMENTS

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

INVESTOR CONTACT
investorrelations@conturaenergy.com

Alex Rotonen, CFA
423.573.0396

MEDIA CONTACT
corporatecommunications@conturaenergy.com

Emily O'Quinn
423.573.0369

FINANCIAL TABLES FOLLOW

Non-GAAP Financial Measures

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

Management uses non-GAAP financial measures to supplement GAAP results to provide a more complete understanding of the factors and trends affecting the business than GAAP results alone. The definition of these non-GAAP measures may be changed periodically by management to adjust for significant items important to an understanding of operating trends. Because not all companies use identical calculations, the presentations of these measures may not be comparable to other similarly titled measures of other companies and can differ significantly from company to company depending on long-term strategic decisions regarding capital structure, the tax jurisdictions in which companies operate, and capital investments.

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

 

CONTURA ENERGY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

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



Three Months Ended September 30,


Nine Months Ended September 30,


2019


2018


2019


2018

Revenues:








Coal revenues

$

523,987



$

443,005



$

1,784,775



$

1,446,538


Other revenues

1,877



4,866



6,409



12,583


Total revenues

525,864



447,871



1,791,184



1,459,121


Costs and expenses:








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

467,658



397,241



1,480,098



1,199,289


Depreciation, depletion and amortization

60,842



11,141



184,927



33,951


Accretion on asset retirement obligations

6,846



1,489



19,925



5,545


Amortization of acquired intangibles, net

2,314



1,158



(4,712)



12,468


Asset impairment

32



?



5,858



?


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

17,387



12,382



53,121



43,490


Merger related costs

68



1,181



1,055



5,064


Total other operating (income) loss:








Mark-to-market adjustment for acquisition-related
obligations

(3,238)



?



(288)



?


Other expenses (income)

166



(569)



(7,319)



(17,075)


Total costs and expenses

552,075



424,023



1,732,665



1,282,732


(Loss) income from operations

(26,211)



23,848



58,519



176,389


Other income (expense):








Interest expense

(18,847)



(8,554)



(50,079)



(26,538)


Interest income

1,763



507



5,584



829


Loss on modification and extinguishment of debt

?



?



(26,459)



?


Equity loss in affiliates

(1,845)



(1,624)



(4,804)



(2,857)


Miscellaneous loss, net

(1,523)



(154)



(2,912)



(737)


Total other expense, net

(20,452)



(9,825)



(78,670)



(29,303)


(Loss) income from continuing operations before
income taxes

(46,663)



14,023



(20,151)



147,086


Income tax benefit (expense)

3,102



(12)



8,880



(133)


Net (loss) income from continuing operations

(43,561)



14,011



(11,271)



146,953


Discontinued operations:








Loss from discontinued operations before income taxes

(11,516)



(2,117)



(176,973)



(4,330)


Income tax (expense) benefit from discontinued
operations

(13,455)



?



12,866



?


Loss from discontinued operations

(24,971)



(2,117)



(164,107)



(4,330)


Net (loss) income

$

(68,532)



$

11,894



$

(175,378)



$

142,623










Basic (loss) income per common share:








(Loss) income from continuing operations

$

(2.29)



$

1.45



$

(0.59)



$

15.30


Loss from discontinued operations

(1.31)



(0.22)



(8.63)



(0.45)


Net (loss) income

$

(3.60)



$

1.23



$

(9.22)



$

14.85










Diluted (loss) income per common share








(Loss) income from continuing operations

$

(2.29)



$

1.35



$

(0.59)



$

14.23


Loss from discontinued operations

(1.31)



(0.20)



(8.63)



(0.42)


Net (loss) income

$

(3.60)



$

1.15



$

(9.22)



$

13.81










Weighted average shares - basic

19,025,462



9,633,164



19,014,974



9,602,860


Weighted average shares - diluted

19,025,462



10,384,513



19,014,974



10,328,031


 

 

CONTURA ENERGY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

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



September 30, 2019


December 31, 2018

Assets




Current assets:




Cash and cash equivalents

$

152,638



$

233,599


Trade accounts receivable, net of allowance for doubtful accounts of $0 as of September
30, 2019 and December 31, 2018

259,931



292,617


Inventories, net

172,591



121,965


Prepaid expenses and other current assets

181,903



158,945


Current assets - discontinued operations

3,401



22,475


Total current assets

770,464



829,601


Property, plant, and equipment, net of accumulated depreciation and amortization of
$274,704 and $106,766 as of September 30, 2019 and December 31, 2018

614,624



699,990


Owned and leased mineral rights, net of accumulated depletion and amortization of
$23,877 and $11,390 as of September 30, 2019 and December 31, 2018

572,620



528,232


Goodwill

124,353



95,624


Other acquired intangibles, net of accumulated amortization of $39,820 and $20,267 as
of September 30, 2019 and December 31, 2018

138,725



154,584


Long-term restricted cash

209,041



227,173


Deferred income taxes

50,516



27,179


Other non-current assets

189,545



183,675


Total assets

$

2,669,888



$

2,746,058


Liabilities and Stockholders' Equity




Current liabilities:




Current portion of long-term debt

$

28,982



$

42,743


Acquisition-related obligations - current

33,165



27,334


Trade accounts payable

98,607



114,568


Accrued expenses and other current liabilities

148,984



148,699


Current liabilities - discontinued operations

20,439



21,892


Total current liabilities

330,177



355,236


Long-term debt

563,846



545,269


Acquisition-related obligations - long-term

51,853



72,996


Workers' compensation and black lung obligations

260,070



249,294


Pension obligations

176,389



180,802


Asset retirement obligations

223,156



203,694


Deferred income taxes

8,300



15,118


Other non-current liabilities

35,161



52,415


Non-current liabilities - discontinued operations

151,998



94


Total liabilities

1,800,950



1,674,918


Commitments and Contingencies




Stockholders' Equity




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

?



?


Common stock - par value $0.01, 50.0 million shares authorized, 20.5 million issued and
18.2 million outstanding at September 30, 2019 and 20.2 million issued and 19.1 million
outstanding at December 31, 2018

205



202


Additional paid-in capital

770,822



761,301


Accumulated other comprehensive loss

(22,140)



(23,130)


Treasury stock, at cost: 2.3 million shares at September 30, 2019 and 1.1 million shares
at December 31, 2018

(107,700)



(70,362)


Retained earnings

227,751



403,129


Total stockholders' equity

868,938



1,071,140


Total liabilities and stockholders' equity

$

2,669,888



$

2,746,058


 

 

CONTURA ENERGY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(Amounts in thousands)



Nine Months Ended September 30,


2019


2018

Operating activities:




Net (loss) income

$

(175,378)



$

142,623


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




Depreciation, depletion and amortization

330,840



33,951


Amortization of acquired intangibles, net

(4,712)



12,468


Accretion of acquisition-related obligations discount

4,367



4,165


Amortization of debt issuance costs and accretion of debt discount

10,446



2,264


Mark-to-market adjustment for acquisition-related obligations

(288)



?


Loss (gain) on disposal of assets

1,462



(17,103)


Gain on assets acquired in an exchange transaction

(9,083)



?


Loss on modification and extinguishment of debt

26,459



?


Asset impairment

23,020



?


Accretion on asset retirement obligations

24,906



5,545


Employee benefit plans, net

14,513



6,551


Deferred income taxes

(22,021)



?


Stock-based compensation

7,512



9,472


Equity loss in affiliates

4,804



2,857


Other, net

351



610


Changes in operating assets and liabilities

(99,620)



(27,087)


Net cash provided by operating activities

137,578



176,316


Investing activities:




Capital expenditures

(144,183)



(56,722)


Payments on disposal of assets

?



(10,250)


Proceeds on disposal of assets

1,170



647


Purchases of investment securities

(65,193)



?


Maturity of investment securities

50,775



?


Capital contributions to equity affiliates

(7,600)



(3,759)


Other, net

(2,548)



(1,455)


Net cash used in investing activities

(167,579)



(71,539)


Financing activities:




Proceeds from borrowings on debt

544,946



?


Principal repayments of debt

(551,405)



(6,323)


Principal repayments of notes payable

(14,054)



(3,094)


Principal repayments of financing lease obligations

(2,960)



(221)


Debt issuance costs

(6,104)



(466)


Common stock repurchases and related expenses

(35,485)



(4,839)


Other, net

952



70


Net cash used in financing activities

(64,110)



(14,873)


Net (decrease) increase in cash and cash equivalents and restricted cash

(94,111)



89,904


Cash and cash equivalents and restricted cash at beginning of period

477,246



193,960


Cash and cash equivalents and restricted cash at end of period

$

383,135



$

283,864


 

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


As of September 30,


2019


2018

Cash and cash equivalents

$

152,638



$

238,129


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

21,456



8,853


Long-term restricted cash

209,041



36,882


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

$

383,135



$

283,864


 

 

CONTURA ENERGY, INC. AND SUBSIDIARIES

ADJUSTED EBITDA RECONCILIATION

(Amounts in thousands)



Three Months Ended


Nine Months Ended


June 30,
2019


September 30,
2019


September 30,
2018


September 30,
2019


September 30,
2018

Net income (loss) from continuing operations

$

24,300



$

(43,561)



$

14,011



$

(11,271)



$

146,953


Interest expense

16,077



18,847



8,554



50,079



26,538


Interest income

(1,885)



(1,763)



(507)



(5,584)



(829)


Income tax (benefit) expense

(1,000)



(3,102)



12



(8,880)



133


Depreciation, depletion and amortization

62,814



60,842



11,141



184,927



33,951


Merger related costs

156



68



1,181



1,055



5,064


Management restructuring costs (1)

?



?



?



?



2,659


Non-cash stock compensation expense

(546)



2,738



1,885



7,463



8,240


Mark-to-market adjustment - acquisition-related obligations

1,014



(3,238)



?



(288)



?


Gain on settlement of acquisition-related obligations

?



?



(118)



?



(410)


Gain on sale of disposal group (2)

?



?



?



?



(16,386)


Accretion on asset retirement obligations

6,847



6,846



1,489



19,925



5,545


Loss on modification and extinguishment of debt

26,459



?



?



26,459



?


Asset impairment (3)

5,826



32



?



5,858



?


Cost impact of coal inventory fair value adjustment (4)

1,033



?



?



8,209



?


Gain on assets acquired in an exchange transaction (5)

?



?



?



(9,083)



?


Amortization of acquired intangibles, net

(343)



2,314



1,158



(4,712)



12,468


Adjusted EBITDA

$

140,752



$

40,023



$

38,806



$

264,157



$

223,926



(1) Management restructuring costs are related to severance expense associated with senior management changes in the nine months ended September 30, 2018.

(2) During the nine months ended September 30, 2018, the Company recorded a gain on disposal of assets of $16,386 to the Company's CAPP - Met segment within other expenses (income) in the Condensed Consolidated Statements of Operations.

(3)  Asset impairment primarily related to the write-off of prepaid purchased coal from Blackjewel as result of Blackjewel's Chapter 11 bankruptcy filing on July 1, 2019.

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

(5) During the nine months ended September 30, 2019, the Company entered into an exchange transaction which primarily included the release of the PRB overriding royalty interest owed to the Company in exchange for met coal reserves which resulted in a gain of $9,083.

 

 


CONTURA ENERGY, INC. AND SUBSIDIARIES

RESULTS OF OPERATIONS





Three Months Ended June 30, 2019


(In thousands, except for per ton data)

CAPP - Met


CAPP -
Thermal


NAPP


All Other


Consolidated


Coal revenues

$

494,093



$

81,701



$

78,034



$

?



$

653,828



Less: freight and handling
fulfillment revenues

(67,728)



(8,190)



(1,794)



?



(77,712)



Non-GAAP coal revenues

$

426,365



$

73,511



$

76,240



$

?



$

576,116



Tons sold

3,429



1,189



1,747



?



6,365



Coal sales realization per ton (1)

$

124.34



$

61.83



$

43.64



$

?



$

90.51














Cost of coal sales

$

369,703



$

69,932



$

56,433



$

678



$

496,746



Less: freight and handling costs

(67,728)



(8,190)



(1,794)



?



(77,712)



Less: idled and closed mine costs

(2,166)



(567)



(733)



(678)



(4,144)



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

(1,033)



?



?



?



(1,033)



Non-GAAP cost of coal sales

$

298,776



$

61,175



$

53,906



$

?



$

413,857



Tons sold

3,429



1,189



1,747



?



6,365



Cost of coal sales per ton (3)

$

87.13



$

51.45



$

30.86



$

?



$

65.02



Coal margin per ton (4)

$

37.21



$

10.38



$

12.78



$

?



$

25.49




(1)

Coal sales realization per ton for our operations is calculated as non-GAAP coal revenues divided by tons sold.

(2)

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

(3)

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

(4)

Coal margin per ton for our coal operations is calculated as coal sales realization per ton for our coal operations less cost of coal sales per ton for our coal operations.










Three Months Ended September 30, 2019


(In thousands, except for per ton data)

CAPP - Met


CAPP -
Thermal


NAPP


All Other


Consolidated


Coal revenues

$

373,078



$

80,174



$

70,735



$

?



$

523,987



Less: freight and handling fulfillment revenues

(50,100)



(9,869)



(2,961)



?



(62,930)



Non-GAAP coal revenues

$

322,978



$

70,305



$

67,774



$

?



$

461,057



Tons sold

2,981



1,144



1,640



?



5,765



Coal sales realization per ton (1)

$

108.35



$

61.46



$

41.33



$

?



$

79.98














Cost of coal sales

$

312,369



$

78,022



$

75,571



$

1,696



$

467,658



Less: freight and handling costs

(50,100)



(9,869)



(2,961)



?



(62,930)



Less: idled and closed mine costs

(1,956)



(458)



(659)



(1,696)



(4,769)



Non-GAAP cost of coal sales

$

260,313



$

67,695



$

71,951



$

?



$

399,959



Tons sold

2,981



1,144



1,640



?



5,765



Cost of coal sales per ton (2)

$

87.32



$

59.17



$

43.87



$

?



$

69.38



Coal margin per ton (3)

$

21.03



$

2.29



$

(2.54)



$

?



$

10.60




(1)

Coal sales realization per ton for our operations is calculated as non-GAAP coal revenues divided by tons sold.

(2)

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

(3)

Coal margin per ton for our coal operations is calculated as coal sales realization per ton for our coal operations less cost of coal sales per ton for our coal operations.









Three Months Ended September 30, 2018


(In thousands, except for per ton data)

CAPP - Met


CAPP -
Thermal


NAPP


All Other


Consolidated


Coal revenues

$

375,936



$

?



$

67,069



$

?



$

443,005



Less: freight and handling fulfillment revenues

(77,434)



?



(8,006)



?



(85,440)



Non-GAAP coal revenues

$

298,502



$

?



$

59,063



$

?



$

357,565



Tons sold

2,563



?



1,316



?



3,879



Coal sales realization per ton (1)

$

116.47



$

?



$

44.88



$

?



$

92.18














Cost of coal sales

$

329,155



$

?



$

68,086



$

?



$

397,241



Less: freight and handling costs

(77,434)



?



(8,006)



?



(85,440)



Less: idled and closed mine costs

(707)



?



(1,030)



?



(1,737)



Non-GAAP cost of coal sales

$

251,014



$

?



$

59,050



$

?



$

310,064



Tons sold

2,563



?



1,316



?



3,879



Cost of coal sales per ton (2)

$

97.94



$

?



$

44.87



$

?



$

79.93



Coal margin per ton (3)

$

18.53



$

?



$

0.01



$

?



$

12.25




(1)

Coal sales realization per ton for our operations is calculated as non-GAAP coal revenues divided by tons sold.

(2)

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

(3)

Coal margin per ton for our coal operations is calculated as coal sales realization per ton for our coal operations less cost of coal sales per ton for our coal operations.









Nine Months Ended September 30, 2019


(In thousands, except for per ton data)

CAPP - Met


CAPP -
Thermal


NAPP


All Other


Consolidated


Coal revenues

$

1,339,663



$

224,814



$

220,298



$

?



$

1,784,775



Less: freight and handling fulfillment revenues

(182,729)



(23,683)



(5,430)



?



(211,842)



Non-GAAP coal revenues

$

1,156,934



$

201,131



$

214,868



$

?



$

1,572,933



Tons sold

9,653



3,325



5,039



?



18,017



Coal sales realization per ton (1)

$

119.85



$

60.49



$

42.64



$

?



$

87.30














Cost of coal sales

$

1,057,988



$

218,667



$

199,566



$

3,877



$

1,480,098



Less: freight and handling costs

(182,729)



(23,683)



(5,430)



?



(211,842)



Less: idled and closed mine costs

(5,942)



(1,442)



(2,222)



(3,877)



(13,483)



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

(4,751)



(3,458)



?



?



(8,209)



Non-GAAP cost of coal sales

$

864,566



$

190,084



$

191,914



$

?



$

1,246,564



Tons sold

9,653



3,325



5,039



?



18,017



Cost of coal sales per ton (3)

$

89.56



$

57.17



$

38.09



$

?



$

69.19



Coal margin per ton (4)

$

30.29



$

3.32



$

4.55



$

?



$

18.11




(1)

Coal sales realization per ton for our operations is calculated as non-GAAP coal revenues divided by tons sold.

(2)

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

(3)

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

(4)

Coal margin per ton for our coal operations is calculated as coal sales realization per ton for our coal operations less cost of coal sales per ton for our coal operations.









Nine Months Ended September 30, 2018


(In thousands, except for per ton data)

CAPP - Met


CAPP -
Thermal


NAPP


All Other


Consolidated


Coal revenues

$

1,235,772



$

?



$

210,766



$

?



$

1,446,538



Less: freight and handling fulfillment revenues

(232,199)



?



(19,537)



?



(251,736)



Non-GAAP coal revenues

$

1,003,573



$

?



$

191,229



$

?



$

1,194,802



Tons sold

7,779



?



4,302



?



12,081



Coal sales realization per ton (1)

$

129.01



$

?



$

44.45



$

?



$

98.90














Cost of coal sales

$

1,002,438



$

?



$

196,851



$

?



$

1,199,289



Less: freight and handling costs

(232,199)



?



(19,537)



?



(251,736)



Less: idled and closed mine costs

(2,786)



?



(2,740)



?



(5,526)



Non-GAAP cost of coal sales

$

767,453



$

?



$

174,574



$

?



$

942,027



Tons sold

7,779



?



4,302



?



12,081



Cost of coal sales per ton (2)

$

98.66



$

?



$

40.58



$

?



$

77.98



Coal margin per ton (3)

$

30.35



$

?



$

3.87



$

?



$

20.92




(1)

Coal sales realization per ton for our operations is calculated as non-GAAP coal revenues divided by tons sold.

(2)

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

(3)

Coal margin per ton for our coal operations is calculated as coal sales realization per ton for our coal operations less cost of coal sales per ton for our coal operations.









Three Months Ended June 30, 2019


(In thousands, except for per ton data)

CAPP - Met


CAPP -
Thermal


NAPP


All Other


Consolidated


Non-GAAP cost of coal sales

$

298,776



$

61,175



$

53,906



$

(208)



$

413,649



Less: cost of purchased coal sold

(67,320)



(2,443)



?



?



(69,763)



Adjusted cost of produced coal sold

$

231,456



$

58,732



$

53,906



$

(208)



$

343,886



Produced tons sold

2,819



1,144



1,747



?



5,710



Adjusted cost of produced coal sold per ton (1)

$

82.11



$

51.34



$

30.86



$

?



$

60.23




(1)

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









Three Months Ended September 30, 2019


(In thousands, except for per ton data)

CAPP - Met


CAPP -
Thermal


NAPP


All Other


Consolidated


Non-GAAP cost of coal sales

$

260,313



$

67,695



$

71,951



$

?



$

399,959



Less: cost of purchased coal sold

(47,731)



(1,050)



?



?



(48,781)



Adjusted cost of produced coal sold

$

212,582



$

66,645



$

71,951



$

?



$

351,178



Produced tons sold

2,558



1,127



1,640



?



5,325



Adjusted cost of produced coal sold per ton (1)

$

83.10



$

59.13



$

43.87



$

?



$

65.95




(1)

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









Three Months Ended September 30, 2018


(In thousands, except for per ton data)

CAPP - Met


CAPP -
Thermal


NAPP


All Other


Consolidated


Non-GAAP cost of coal sales

$

251,014



$

?



$

59,050



$

?



$

310,064



Less: cost of purchased coal sold

(180,450)



?



?



?



(180,450)



Adjusted cost of produced coal sold

$

70,564



$

?



$

59,050



$

?



$

129,614



Produced tons sold

859



?



1,316



?



2,175



Adjusted cost of produced coal sold per ton (1)

$

82.15



$

?



$

44.87



$

?



$

59.59




(1)

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









Nine Months Ended September 30, 2019


(In thousands, except for per ton data)

CAPP - Met


CAPP -
Thermal


NAPP


All Other


Consolidated


Non-GAAP cost of coal sales

$

864,566



$

190,084



$

191,914



$

?



$

1,246,564



Less: cost of purchased coal sold

(194,590)



(6,378)



?



?



(200,968)



Adjusted cost of produced coal sold

$

669,976



$

183,706



$

191,914



$

?



$

1,045,596



Produced tons sold

7,948



3,215



5,039



?



16,202



Adjusted cost of produced coal sold per ton (1)

$

84.29



$

57.14



$

38.09



$

?



$

64.53




(1)

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









Nine Months Ended September 30, 2018


(In thousands, except for per ton data)

CAPP - Met


CAPP -
Thermal


NAPP


All Other


Consolidated


Non-GAAP cost of coal sales

$

767,453



$

?



$

174,574



$

?



$

942,027



Less: cost of purchased coal sold

(550,508)



?



?



?



(550,508)



Adjusted cost of produced coal sold

$

216,945



$

?



$

174,574



$

?



$

391,519



Produced tons sold

2,841



?



4,302



?



7,143



Adjusted cost of produced coal sold per ton (1)

$

76.36



$

?



$

40.58



$

?



$

54.81




(1)

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

 

SOURCE Contura Energy, Inc.


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