ý
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the quarterly period ended March 31, 2018
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or
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from to
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Delaware
(State or other jurisdiction of
incorporation or organization)
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81-0706839
(I.R.S Employer
Identification No.)
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16243 Highway 216
Brookwood, Alabama
(Address of principal executive offices)
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35444
(Zip Code)
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Large accelerated filer
o
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Accelerated filer
o
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Non-accelerated filer
ý
(Do not check if a
smaller reporting company)
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Smaller reporting company
o
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Emerging growth company
o
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Item 1A
.
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||
•
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successful implementation of our business strategies;
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•
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a substantial or extended decline in pricing or demand for met coal;
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•
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global steel demand and the downstream impact on met coal prices;
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•
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inherent difficulties and challenges in the coal mining industry that are beyond our control;
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•
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geologic, equipment, permitting, site access, operational risks and new technologies related to mining;
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•
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impact of weather and natural disasters on demand and production;
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•
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our relationships with, and other conditions affecting, our customers;
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•
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unavailability of, or price increases in, the transportation of our met coal;
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•
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competition and foreign currency fluctuations;
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•
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our ability to comply with covenants in our asset-based revolving credit facility (“ABL Facility”) and indenture governing the Notes (as defined below);
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•
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our substantial indebtedness and debt service requirements;
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•
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significant cost increases and fluctuations, and delay in the delivery of raw materials, mining equipment and purchased components;
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•
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work stoppages, negotiation of labor contracts, employee relations and workforce availability;
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•
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adequate liquidity and the cost, availability and access to capital and financial markets;
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•
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any consequences related to our transfer restrictions under our certificate of incorporation;
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•
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our obligations surrounding reclamation and mine closure;
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•
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inaccuracies in our estimates of our met coal reserves;
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•
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our ability to develop or acquire met coal reserves in an economically feasible manner;
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•
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our expectations regarding our future cash tax rate as well as our ability to effectively utilize our net operating loss carry forwards ("NOLs");
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•
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challenges to our licenses, permits and other authorizations;
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•
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challenges associated with environmental, health and safety laws and regulations;
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•
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regulatory requirements associated with federal, state and local regulatory agencies, and such agencies’ authority to order temporary or permanent closure of our mines;
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•
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climate change concerns and our operations’ impact on the environment;
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•
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failure to obtain or renew surety bonds on acceptable terms, which could affect our ability to secure reclamation and coal lease obligations;
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•
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costs associated with our pension and benefits, including post-retirement benefits;
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•
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costs associated with our workers’ compensation benefits;
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•
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litigation, including claims not yet asserted;
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•
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our ability to continue paying our quarterly dividend or pay any special dividend;
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•
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our ability to repurchase shares of common stock pursuant to the stock repurchase program; and
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•
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terrorist attacks or security threats, including cybersecurity threats;
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For the three months ended
March 31, |
||||||
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2018
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|
2017
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||||
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(Unaudited)
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||||||
Revenues:
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|
||||
Sales
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$
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412,879
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$
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241,056
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Other revenues
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8,909
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|
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12,908
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||
Total revenues
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421,788
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253,964
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||
Costs and expenses:
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|
|
|
||||
Cost of sales (exclusive of items shown separately below)
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190,676
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106,144
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Cost of other revenues (exclusive of items shown separately below)
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7,784
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8,179
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|
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Depreciation and depletion
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24,552
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14,582
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|
||
Selling, general and administrative
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8,234
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|
|
5,170
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|
||
Transaction and other expenses
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3,288
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|
|
9,036
|
|
||
Total costs and expenses
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234,534
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|
|
143,111
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|
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Operating income
|
187,254
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|
|
110,853
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|
||
Interest expense, net
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(8,560
|
)
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|
(608
|
)
|
||
Income before income taxes
|
178,694
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|
110,245
|
|
||
Income tax expense
|
—
|
|
|
1,937
|
|
||
Net income
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$
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178,694
|
|
|
$
|
108,308
|
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Basic and diluted net income per share:
|
|
|
|
||||
Net income per share—basic and diluted
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$
|
3.36
|
|
|
$
|
2.06
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Weighted average number of shares outstanding—basic
|
53,149
|
|
|
52,681
|
|
||
Weighted average number of shares outstanding—diluted
|
53,152
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|
|
52,681
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|
||
Dividends per share:
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$
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0.05
|
|
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$
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3.56
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March 31, 2018 (Unaudited)
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December 31, 2017
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||||
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||||
ASSETS
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|
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Current assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
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$
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322,024
|
|
|
$
|
35,470
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Short-term investments
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|
17,501
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17,501
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||
Trade accounts receivable
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152,325
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|
|
117,746
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Other receivables
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12,942
|
|
|
14,482
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||
Inventories, net
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51,282
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|
|
54,294
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|
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Prepaid expenses
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19,023
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29,376
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Total current assets
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575,097
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268,869
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Mineral interests, net
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127,254
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130,004
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Property, plant and equipment, net
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|
540,151
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|
|
536,745
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|
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Income tax receivable
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39,255
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39,255
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Other long-term assets
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19,853
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|
|
18,442
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||
Total assets
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$
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1,301,610
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|
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$
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993,315
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LIABILITIES AND STOCKHOLDERS’ EQUITY
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|
|
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|
||||
Current liabilities:
|
|
|
|
|
||||
Accounts payable
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$
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30,996
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|
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$
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28,076
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Accrued expenses
|
|
69,332
|
|
|
66,704
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|
||
Other current liabilities
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16,712
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|
|
10,475
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|
||
Current portion of long-term debt
|
|
2,995
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|
|
2,965
|
|
||
Total current liabilities
|
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120,035
|
|
|
108,220
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|
||
Long-term debt
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465,545
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|
|
342,948
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|
||
Asset retirement obligations
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97,127
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|
96,096
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|
||
Other long-term liabilities
|
|
33,993
|
|
|
33,028
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|
||
Total liabilities
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|
716,700
|
|
|
580,292
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|
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Commitments and contingencies (Note 8)
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|
||||
Stockholders’ Equity:
|
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|
|
|
||||
Common stock, $0.01 par value per share (Authorized -140,000,000 shares, issued and outstanding - 53,284,470 and 53,284,470, respectively)
|
|
534
|
|
|
534
|
|
||
Preferred stock, $0.01 par value per share (10,000,000 shares authorized, no shares issued and outstanding)
|
|
—
|
|
|
—
|
|
||
Additional paid in capital
|
|
325,871
|
|
|
329,993
|
|
||
Retained earnings
|
|
258,505
|
|
|
82,496
|
|
||
Total stockholders’ equity
|
|
584,910
|
|
|
413,023
|
|
||
Total liabilities and stockholders’ equity
|
|
$
|
1,301,610
|
|
|
$
|
993,315
|
|
|
Common Stock
|
|
Preferred Stock
|
|
Additional Paid in Capital
|
|
Retained Earnings
|
|
Total
Stockholders’
Equity
|
||||||||||
Balance at December 31, 2017
|
$
|
534
|
|
|
$
|
—
|
|
|
$
|
329,993
|
|
|
$
|
82,496
|
|
|
$
|
413,023
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
178,694
|
|
|
178,694
|
|
|||||
Dividends paid ($0.05 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,685
|
)
|
|
(2,685
|
)
|
|||||
Stock compensation
|
—
|
|
|
—
|
|
|
198
|
|
|
—
|
|
|
198
|
|
|||||
Common Shares issued
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Other
|
—
|
|
|
—
|
|
|
(4,320
|
)
|
|
—
|
|
|
(4,320
|
)
|
|||||
Balance at March 31, 2018 (Unaudited)
|
$
|
534
|
|
|
$
|
—
|
|
|
$
|
325,871
|
|
|
$
|
258,505
|
|
|
$
|
584,910
|
|
|
For the three months ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
|
(Unaudited)
|
||||||
OPERATING ACTIVITIES
|
|
|
|
||||
Net income
|
$
|
178,694
|
|
|
$
|
108,308
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and depletion
|
24,552
|
|
|
14,582
|
|
||
Stock based compensation expense
|
198
|
|
|
—
|
|
||
Amortization of debt issuance costs and debt discount/premium, net
|
638
|
|
|
462
|
|
||
Accretion of asset retirement obligations
|
1,155
|
|
|
995
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Trade accounts receivable
|
(34,579
|
)
|
|
(30,284
|
)
|
||
Other receivables
|
1,540
|
|
|
(242
|
)
|
||
Inventories
|
1,784
|
|
|
(28,592
|
)
|
||
Prepaid expenses
|
10,353
|
|
|
(2,167
|
)
|
||
Accounts payable
|
2,931
|
|
|
10,237
|
|
||
Accrued expenses and other current liabilities
|
8,948
|
|
|
(7,055
|
)
|
||
Other
|
(2,476
|
)
|
|
(691
|
)
|
||
Net cash provided by operating activities
|
193,738
|
|
|
65,553
|
|
||
INVESTING ACTIVITIES
|
|
|
|
||||
Purchase of property, plant and equipment
|
(22,542
|
)
|
|
(11,378
|
)
|
||
Net cash used in investing activities
|
(22,542
|
)
|
|
(11,378
|
)
|
||
FINANCING ACTIVITIES
|
|
|
|
||||
Dividends paid
|
(2,685
|
)
|
|
(190,000
|
)
|
||
Proceeds from issuance of debt
|
126,875
|
|
|
—
|
|
||
Retirements of debt
|
(765
|
)
|
|
(765
|
)
|
||
Debt issuance costs paid
|
(3,713
|
)
|
|
—
|
|
||
Other
|
(4,320
|
)
|
|
—
|
|
||
Net cash provided by (used in) financing activities
|
115,392
|
|
|
(190,765
|
)
|
||
Net increase (decrease) in cash and cash equivalents and restricted cash
|
286,588
|
|
|
(136,590
|
)
|
||
Cash and cash equivalents and restricted cash at beginning of period
|
36,264
|
|
|
152,656
|
|
||
Cash and cash equivalents and restricted cash at end of period
|
$
|
322,852
|
|
|
$
|
16,066
|
|
|
March 31, 2018
|
|
December 31, 2017
|
||||
Cash and cash equivalents
|
$
|
322,024
|
|
|
$
|
35,470
|
|
Restricted cash included in other long-term assets
|
828
|
|
|
794
|
|
||
Total cash and cash equivalents and restricted cash included in the Statements of Cash Flows
|
$
|
322,852
|
|
|
$
|
36,264
|
|
|
March 31, 2018
|
|
December 31, 2017
|
||||
Coal
|
$
|
28,723
|
|
|
$
|
32,422
|
|
Raw materials, parts, supplies and other, net
|
22,559
|
|
|
21,872
|
|
||
Total inventories, net
|
$
|
51,282
|
|
|
$
|
54,294
|
|
|
|
March 31, 2018
|
|
December 31, 2017
|
|
Weighted Average Interest Rate at December 31, 2017
|
|
Final Maturity
|
||||
Senior secured notes
|
|
$
|
475,000
|
|
|
$
|
350,000
|
|
|
8%
|
|
2024
|
Promissory note
|
|
2,995
|
|
|
3,725
|
|
|
4%
|
|
2019
|
||
Debt discount/premium, net
|
|
(9,455
|
)
|
|
(7,812
|
)
|
|
|
|
|
||
Total debt
|
|
468,540
|
|
|
345,913
|
|
|
|
|
|
||
Less: current debt
|
|
(2,995
|
)
|
|
(2,965
|
)
|
|
|
|
|
||
Total long-term debt
|
|
$
|
465,545
|
|
|
$
|
342,948
|
|
|
|
|
|
|
For the three months ended
March 31, |
|
||||||
|
2018
|
|
2017
|
|
||||
Numerator:
|
|
|
|
|
||||
Net income
|
$
|
178,694
|
|
|
$
|
108,308
|
|
|
Denominator:
|
|
|
|
|
||||
Weighted-average shares used to compute net income per share—basic
|
53,149
|
|
|
52,681
|
|
|
||
Dilutive restrictive stock awards
|
3
|
|
|
—
|
|
|
||
Weighted-average shares used to compute net income per share—diluted
|
53,152
|
|
|
52,681
|
|
|
||
Net income per share—basic and diluted
|
$
|
3.36
|
|
|
$
|
2.06
|
|
|
|
|
Fair Value Measurements as of March 31, 2018 Using:
|
||||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
||||||||
Natural gas swap contracts
|
|
$
|
—
|
|
|
$
|
1,255
|
|
|
$
|
—
|
|
|
$
|
1,255
|
|
|
|
Fair Value Measurements as of December 31, 2017 Using:
|
||||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
||||||||
Natural gas swap contracts
|
|
$
|
—
|
|
|
$
|
1,644
|
|
|
$
|
—
|
|
|
$
|
1,644
|
|
|
For the three months ended
March 31, |
|||||
|
2018
|
|
2017
|
|||
Capital Expenditures
|
|
|
|
|||
Mining
|
21,096
|
|
|
$
|
10,777
|
|
All other
|
1,446
|
|
|
601
|
|
|
Total capital expenditures
|
22,542
|
|
|
$
|
11,378
|
|
|
For the three months ended
March 31, |
||||||
|
2018
|
|
2017
|
||||
Segment Adjusted EBITDA
|
$
|
222,203
|
|
|
$
|
134,912
|
|
Other revenues
|
8,909
|
|
|
12,908
|
|
||
Cost of other revenues
|
(7,784
|
)
|
|
(8,179
|
)
|
||
Depreciation and depletion
|
(24,552
|
)
|
|
(14,582
|
)
|
||
Selling, general and administrative
|
(8,234
|
)
|
|
(5,170
|
)
|
||
Transaction and other expenses
|
(3,288
|
)
|
|
(9,036
|
)
|
||
Interest expense, net
|
(8,560
|
)
|
|
(608
|
)
|
||
Income tax expense
|
—
|
|
|
(1,937
|
)
|
||
Net income
|
$
|
178,694
|
|
|
$
|
108,308
|
|
|
For the three months ended
March 31, |
||||||
|
2018
|
|
2017
|
||||
(in thousands)
|
|
||||||
Segment Adjusted EBITDA
|
$
|
222,203
|
|
|
$
|
134,912
|
|
Metric tons sold
|
1,920
|
|
|
1,022
|
|
||
Metric tons produced
|
1,904
|
|
|
1,464
|
|
||
Gross price realization
(1)
|
99
|
%
|
|
84
|
%
|
||
Average selling price per metric ton
|
$
|
215.04
|
|
|
$
|
235.87
|
|
Cash cost of sales per metric ton
|
$
|
98.98
|
|
|
$
|
103.34
|
|
Adjusted EBITDA
|
$
|
216,447
|
|
|
$
|
135,466
|
|
•
|
our operating performance as compared to the operating performance of other companies in the coal industry, without regard to financing methods, historical cost basis or capital structure;
|
•
|
the ability of our assets to generate sufficient cash flow to pay dividends;
|
•
|
our ability to incur and service debt and fund capital expenditures; and
|
•
|
the viability of acquisitions and other capital expenditure projects and the returns on investment of various investment opportunities.
|
•
|
our operating performance as compared to the operating performance of other companies in the coal industry, without regard to financing methods, historical cost basis or capital structure; and
|
•
|
the viability of acquisitions and other capital expenditure projects and the returns on investment of various investment opportunities.
|
|
For the three months ended
March 31, |
||||||
|
2018
|
|
2017
|
||||
(in thousands)
|
|
||||||
Cost of sales
|
$
|
190,676
|
|
|
$
|
106,144
|
|
Asset retirement obligation accretion
|
(560
|
)
|
|
(481
|
)
|
||
Stock compensation expense
|
(67
|
)
|
|
—
|
|
||
Cash cost of sales
|
$
|
190,049
|
|
|
$
|
105,663
|
|
•
|
our operating performance as compared to the operating performance of other companies in the coal industry, without regard to financing methods, historical cost basis or capital structure; and
|
•
|
the viability of acquisitions and other capital expenditure projects and the returns on investment of various investment opportunities.
|
|
For the three months ended
March 31, |
||||||
|
2018
|
|
2017
|
||||
Net income
|
$
|
178,694
|
|
|
$
|
108,308
|
|
Interest expense, net
|
8,560
|
|
|
608
|
|
||
Income tax expense
|
—
|
|
|
1,937
|
|
||
Depreciation and depletion
|
24,552
|
|
|
14,582
|
|
||
Asset retirement obligation accretion
(1)
|
1,155
|
|
|
995
|
|
||
Stock compensation expense
(2)
|
198
|
|
|
—
|
|
||
Transaction and other expenses
(3)
|
3,288
|
|
|
9,036
|
|
||
Adjusted EBITDA
|
$
|
216,447
|
|
|
$
|
135,466
|
|
(1)
|
Represents non-cash accretion expense associated with our asset retirement obligations.
|
(2)
|
Represents non-cash stock compensation expense associated with equity awards.
|
(3)
|
Represents non-recurring costs incurred by the Company in connection with the New Notes offering and our IPO (See Notes 1 and 5 to the condensed financial statements).
|
|
For the three months ended
March 31, |
|||||
(in thousands)
|
2018
|
|
2017
|
|||
Revenues:
|
|
|
|
|||
Sales
|
$
|
412,879
|
|
|
241,056
|
|
Other revenues
|
8,909
|
|
|
12,908
|
|
|
Total revenues
|
421,788
|
|
|
253,964
|
|
|
Costs and expenses:
|
|
|
|
|||
Cost of sales (exclusive of items shown separately below)
|
190,676
|
|
|
106,144
|
|
|
Cost of other revenues (exclusive of items shown separately below)
|
7,784
|
|
|
8,179
|
|
|
Depreciation and depletion
|
24,552
|
|
|
14,582
|
|
|
Selling, general and administrative
|
8,234
|
|
|
5,170
|
|
|
Transaction and other expenses
|
3,288
|
|
|
9,036
|
|
|
Total costs and expenses
|
234,534
|
|
|
143,111
|
|
|
Operating income
|
187,254
|
|
|
110,853
|
|
|
Interest expense, net
|
(8,560
|
)
|
|
(608
|
)
|
|
Income before income taxes
|
178,694
|
|
|
110,245
|
|
|
Income tax expense
|
—
|
|
|
1,937
|
|
|
Net income
|
$
|
178,694
|
|
|
108,308
|
|
|
For the three months ended
March 31, |
||||||
|
2018
|
|
2017
|
||||
Met Coal (metric tons in thousands)
|
|
|
|
||||
Metric tons sold
|
1,920
|
|
|
1,022
|
|
||
Metric tons produced
|
1,904
|
|
|
1,464
|
|
||
Gross price realization
(1)
|
99
|
%
|
|
84
|
%
|
||
Average selling price per metric ton
|
$
|
215.04
|
|
|
$
|
235.87
|
|
Cash cost of sales per metric ton
|
$
|
98.98
|
|
|
$
|
103.34
|
|
|
For the three months ended
March 31, |
||||||
|
2018
|
|
2017
|
||||
Net cash provided by operating activities
|
$
|
193,738
|
|
|
$
|
65,553
|
|
Net cash used in investing activities
|
(22,542
|
)
|
|
(11,378
|
)
|
||
Net cash provided by (used in) financing activities
|
115,392
|
|
|
(190,765
|
)
|
||
Net increase (decrease) in cash and cash equivalents and restricted cash
|
$
|
286,588
|
|
|
$
|
(136,590
|
)
|
Exhibit
Number
|
|
Description
|
|
|
|
3.1
|
|
|
|
|
|
3.2
|
|
|
|
|
|
4.1
|
|
|
|
|
|
4.2
|
|
|
|
|
|
10.1*†
|
|
|
|
|
|
10.2*†
|
|
|
|
|
|
31.1*
|
|
|
|
|
|
31.2*
|
|
|
|
|
|
32.1**
|
|
|
|
|
|
95*
|
|
|
|
|
|
101*
|
|
XBRL (Extensible Business Reporting Language) - The following materials from Warrior Met Coal, Inc.'s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2018, formatted in XBRL (eXtensible Business Reporting Language): (i) the Condensed Balance Sheets, (ii) the Condensed Statements of Operations, (iii) the Condensed Statements of Changes in Stockholders' Equity, (v) the Condensed Statements of Cash Flows, and (vi) Notes to Condensed Financial Statements.
|
|
*
|
Filed herewith.
|
**
|
Furnished herewith.
|
†
|
Management contract, compensatory plan or arrangement.
|
|
Warrior Met Coal, Inc.
|
||
|
|
|
|
|
By:
|
|
/s/ Dale W. Boyles
|
|
|
|
Dale W. Boyles
|
|
|
|
Chief Financial Officer (on behalf of the registrant and as Principal Financial and Accounting Officer)
|
|
|
|
|
|
|
|
Date: May 2, 2018
|
1.
|
Grant of Restricted Stock Units
.
|
|
WARRIOR MET COAL, INC.
|
|
By: _______________________
|
Name: Walter J. Scheller, III
|
Title: Chief Executive Officer
|
|
PARTICIPANT
|
|
By: _______________________
|
Name: _______________________
|
1.
|
Grant of Restricted Stock Units and Settlement
.
|
|
WARRIOR MET COAL, INC.
|
|
By: _______________________
|
Name: Walter J. Scheller, III
|
Title: Chief Executive Officer
|
|
PARTICIPANT
|
|
By: _______________________
|
Name:
|
1.
|
[ ]
: The target
for each Measurement Period is
for such Measurement Period (the “
Target
”).
% of the shares attributable to such metric will be earned if the Company achieves ___% of the
Target during the Measurement Period (the “
Threshold
”) and ___% of such shares will be earned if the Company achieves the
Target during the Measurement Period.
|
2.
|
[ ]
: The target
for each Measurement Period is
for such Measurement Period (the “
Target
”).
% of the shares attributable to such metric will be earned if the Company achieves ___% of the
Target during the Measurement Period (the “
Threshold
”) and ___% of such shares will be earned if the Company achieves the
Target during the Measurement Period.
|
3.
|
[ ]
: The target
for each Measurement Period is
for such Measurement Period (the “
Target
”).
% of the shares attributable to such metric will be earned if the Company achieves ___% of the
Target during the Measurement Period (the “
Threshold
”) and ___% of such shares will be earned if the Company achieves the
Target during the Measurement Period.
|
4.
|
[ ]
: The target
for each Measurement Period is
for such Measurement Period (the “
Target
”).
% of the shares attributable to such metric will be earned if the Company achieves ___% of the
Target during the Measurement Period (the “
Threshold
”) and ___% of such shares will be earned if the Company achieves the
Target during the Measurement Period.
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Warrior Met Coal, Inc. (the “registrant”);
|
||||||||
|
|
||||||||
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
||||||||
|
|
||||||||
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
||||||||
|
|
||||||||
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
|
||||||||
|
|
||||||||
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
||||||||
|
|
||||||||
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
||||||||
|
|
||||||||
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
||||||||
|
|
||||||||
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
||||||||
|
|
||||||||
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
||||||||
|
|
||||||||
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
||||||||
|
|
||||||||
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
||||||||
|
|||||||||
|
|
|
|
||||||
|
|
|
WARRIOR MET COAL, INC.
|
||||||
Date: May 2, 2018
|
By:
|
|
/s/ Walter J. Scheller, III
|
||||||
|
|
|
Walter J. Scheller, III
|
||||||
|
|
|
Chief Executive Officer
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Warrior Met Coal, Inc. (the “registrant”);
|
||||||||
|
|
||||||||
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
||||||||
|
|
||||||||
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
||||||||
|
|
||||||||
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
|
||||||||
|
|
||||||||
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
||||||||
|
|
||||||||
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
||||||||
|
|
||||||||
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
||||||||
|
|
||||||||
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
||||||||
|
|
||||||||
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
||||||||
|
|
||||||||
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
||||||||
|
|
||||||||
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
||||||||
|
|||||||||
|
|
|
|
||||||
|
|
|
WARRIOR MET COAL, INC.
|
||||||
Date: May 2, 2018
|
By:
|
|
/s/ Dale W. Boyles
|
||||||
|
|
|
Dale W. Boyles
|
||||||
|
|
|
Chief Financial Officer
|
|
|
|
WARRIOR MET COAL, INC.
|
||||
|
|
|
|
||||
Date: May 2, 2018
|
By:
|
|
/s/ Walter J. Scheller, III
|
||||
|
|
|
Walter J. Scheller, III
|
||||
|
|
|
Chief Executive Officer
|
||||
|
|
|
|
||||
Date: May 2, 2018
|
By:
|
|
/s/ Dale W. Boyles
|
||||
|
|
|
Dale W. Boyles
|
||||
|
|
|
Chief Financial Officer
|
||||
|
|
|
|
|
Mining Complex
(1) (3)
|
|
Section 104
S&S Citations
|
|
Section 104(b) Orders
|
|
Section 104(d) Citations and Orders
|
|
Section 110(b)(2) Violations
|
|
Section 107(a) Orders
|
|
Proposed MSHA Assessments
(2)
($ in thousands)
|
|
Fatalities
|
Warrior Met Coal Mining, LLC, No. 4
|
|
26
|
|
—
|
|
—
|
|
—
|
|
—
|
|
55.0
|
|
—
|
Warrior Met Coal Mining, LLC, No. 7
|
|
24
|
|
—
|
|
1
|
|
—
|
|
—
|
|
47.2
|
|
—
|
(1)
|
MSHA assigns an identification number to each coal mine and may or may not assign separate identification numbers to related facilities such as preparation plants. We are providing the information in the table by mining complex rather than MSHA identification number because we believe that this presentation is more useful to investors. For descriptions of each of these mining operations, please refer to the descriptions under “Part 1, Item 1. Business—Description of Our Business” in our Annual Report on Form 10-K for the year ended December 31, 2017. Idle facilities are not included in the table above unless they received a citation, order or assessment by MSHA during the current quarterly reporting period or are subject to pending legal actions.
|
(2)
|
Amounts listed under this heading include proposed assessments received from MSHA in the current quarterly reporting period for alleged violations, regardless of the issuance date of the related citation or order.
|
(3)
|
The table includes references to specific sections of the Mine Act as follows:
|
•
|
Section 104 S&S Citations
include citations for health or safety standards that could significantly and substantially contribute to serious injury if left unabated.
|
•
|
Section 104(b) Orders
represent failures to abate a citation under 104(a) within the period of time prescribed by MSHA and that the period of time prescribed for the abatement should not be further extended. This results in an order of immediate withdrawal from the area of the mine affected by the condition until MSHA determines that the violation has been abated.
|
•
|
Section 104(d) Citations and Orders
are for unwarrantable failure to comply with mandatory health and safety standards where such violation is of such a nature as could significantly or substantially contribute to the cause and effect of a coal or other mine safety or health hazard.
|
•
|
Section 110(b)(2) Violations
are for flagrant violations.
|
•
|
Section 107(a) Orders
are for situations in which MSHA determined an imminent danger existed.
|
Mining Complex Legal Actions
(1)
|
|
Pending as of
March 31, 2018
|
|
Initiated During Q1 2018
|
|
Resolved During Q1 2018
|
|
|
|
|
|
|
|
Warrior Met Coal Mining, LLC, No. 4
|
|
|
|
|
|
|
29 CFR Part 2700, Subpart B
|
|
—
|
|
—
|
|
1
|
29 CFR Part 2700, Subpart C
|
|
9
|
|
6
|
|
1
|
29 CFR Part 2700, Subpart D
|
|
—
|
|
—
|
|
—
|
29 CFR Part 2700, Subpart E
|
|
—
|
|
—
|
|
—
|
29 CFR Part 2700, Subpart F
|
|
—
|
|
—
|
|
—
|
29 CFR Part 2700, Subpart H
|
|
—
|
|
—
|
|
—
|
|
|
|
|
|
|
|
Warrior Met Coal Mining, LLC, No. 7
|
|
|
|
|
|
|
29 CFR Part 2700, Subpart B
|
|
—
|
|
—
|
|
—
|
29 CFR Part 2700, Subpart C
|
|
9
|
|
4
|
|
2
|
29 CFR Part 2700, Subpart D
|
|
—
|
|
—
|
|
—
|
29 CFR Part 2700, Subpart E
|
|
1
|
|
1
|
|
—
|
29 CFR Part 2700, Subpart F
|
|
—
|
|
—
|
|
—
|
29 CFR Part 2700, Subpart H
|
|
—
|
|
—
|
|
—
|
(1)
|
Effective January 27, 2011, SEC adopted amendments to its rules to implement Section 1503 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “final rule”). The final rule modified previous reporting requirements and requires that the total number of legal actions pending before the FMSHRC as of the last day of the time period covered by the report be categorized according to type of proceeding, in accordance with the categories established in the Procedural Rules of FMSHRC. SEC rules require that six different categories of pending legal actions be disclosed. Categories for which there is no pending litigation for the respective mine are not listed in the table. The types of proceedings are listed as follows:
|
•
|
“29 CFR Part 2700, Subpart B”
These legal actions include proceedings initiated under FMSHRC Procedural Rule 29 CFR Part 2700, Subpart B such as contests of citations and orders filed prior to receipt of a proposed penalty assessment from MSHA, contests related to orders for which penalties are not assessed (such as imminent danger orders under Section 107 of the Mine Act), and emergency response plan dispute proceedings.
|
•
|
“29 CFR Part 2700, Subpart C”
These legal actions include proceedings initiated under FMSHRC Procedural Rule 29 CFR Part 2700, Subpart C and are contests of citations and orders after receipt of proposed penalties.
|
•
|
“29 CFR Part 2700, Subpart D”
These legal actions include proceedings initiated under FMSHRC Procedural Rule 29 CFR Part 2700, Subpart D and are complaints for compensation, which are cases under section 111 of the Mine Act.
|
•
|
“29 CFR Part 2700, Subpart E”
These legal actions include proceedings initiated under FMSHRC Procedural Rule 29 CFR Part 2700, Subpart E and are complaints of discharge, discrimination or interference and temporary reinstatement under section 105 of the Mine Act.
|
•
|
“29 CFR Part 2700, Subpart F”
These legal actions include proceedings initiated under FMSHRC Procedural Rule 29 CFR Part 2700, Subpart F such as applications for temporary relief under section 105(b)(2) of the Mine Act from any modification or termination of any
|
•
|
“29 CFR Part 2700, Subpart H”
These legal actions include proceedings initiated under FMSHRC Procedural Rule 29 CFR Part 2700, Subpart H and are appeals of judges’ decisions or orders to FMSHRC, including petitions for discretionary review and review by FMSHRC on its own motion.
|