Item 5. Market for Registrant’s Common Equity
Item 5. Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Market Information
Our common stock began trading on the NYSE under the symbol “HCC” on April 13, 2017. Before then, there was no public market for our common stock.
Capital Allocation
On May 17, 2017, the Board adopted a policy (the “Capital Allocation Policy”) of paying a quarterly cash dividend of $0.05 per share. The Capital Allocation Policy states the following: In addition to the regular quarterly dividend and to the extent that the Company generates excess cash that is beyond the then current requirements of the business, the Board may consider returning all or a portion of such excess cash to stockholders through a special dividend or implementation of a stock repurchase program. Any future dividends or stock repurchases will be at the discretion of the Board and subject to consideration of a number of factors, including business and market conditions, future financial performance and other strategic investment opportunities. We will also seek to optimize our capital structure to improve returns to stockholders while allowing flexibility for us to pursue very selective strategic growth opportunities that can provide compelling stockholder returns. Our ability to pay dividends on our common stock is limited by covenants in the ABL Facility and the indenture governing the Notes and may be further restricted by the terms of any future debt or preferred securities. See “Part I, Item 1A. Risk Factors—Risks Related to the Ownership of our Common Stock—Any declaration and payment of future dividends to holders of our common stock may be limited by restrictive covenants of our ABL Facility and the indenture governing the Notes, and will be at the sole discretion of the Board and will also depend on many factors” and “Part II, Item 7. Management’s Discussion and Analysis of Financial Conditions and Results of Operation—Liquidity and Capital Resources—ABL Facility” and “—Senior Secured Notes.”
Holders
As of February 22, 2021, we had approximately 422 holders of record of our common stock.
Equity Compensation Plans
The following table sets forth certain information relating to our equity compensation plans as of December 31, 2020:
Number of Securities to be Issued upon Exercise of Outstanding Options, Warrants, and Rights Weighted Average Exercise Price of Outstanding Options, Warrants, and Rights (1)
Number of Securities Remaining Available for Future Issuance
Equity compensation plans approved by security holders:
2017 Equity Incentive Plan 812,396 (2)
$ — 4,977,874
2016 Equity Incentive Plan 43,580 (3)
$ — — (4)
(1) The weighted-average exercise price does not take into account restricted stock units or phantom units, which do not have an exercise price.
(2) The number of securities to be issued under our 2017 Equity Incentive Plan represents 799,240 unvested restricted stock units and 13,157 shares of common stock issuable upon settlement of vested restricted stock unit awards.
(3) The number of securities to be issued under our 2016 Equity Incentive Plan represents 43,580 shares of common stock issuable upon settlement of a vested phantom unit award.
(4) While our 2016 Equity Incentive Plan remains in effect with respect to awards granted prior to the effectiveness of our 2017 Equity Incentive Plan, no further awards will be granted under the 2016 Equity Plan.
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Stock Repurchases
There were no share repurchases of our common stock made during the quarter ended December 31, 2020.
Stock Performance Graph
The performance graph and the information contained in this section is not “soliciting material”, is being “furnished” not “filed” with the SEC and is not to be incorporated by reference into any of our filings under the Securities Act or the Exchange Act whether made before or after the date hereof and irrespective of any general incorporation language contained in such filing.
The following graph shows a comparison from April 13, 2017 (the date our common stock commenced trading on the NYSE) through December 31, 2020 of the cumulative total return for our common stock, the Russell 3000 Stock Index and a peer group comprised of Arch Resources, Inc. and Peabody Energy Corp ("Custom Composite Index"). The Custom Composite Index reflects publicly listed U.S. companies within the coal industry of similar size and product type. The graph assumes that $100 was invested on April 13, 2017 in our common stock and each index and that all dividends were reinvested.
Note that historical stock price performance is not necessarily indicative of future stock price performance.
Item 6. Selected Historical Financial Data
The following tables set forth our selected historical financial data as of and for each of the periods indicated. The selected consolidated historical financial data as of December 31, 2020 and 2019, for the years ended December 31, 2020, December 31, 2019, and December 31, 2018 is derived from the audited consolidated financial statements of the Successor included elsewhere in this Annual Report. The selected consolidated historical financial data as of December 31, 2018 and 2017, for the year ended December 31, 2017 and for the nine months ended December 31, 2016 is derived from the audited consolidated financial statements of the Successor included in our Annual Report on Form 10-K for the year ended December 31, 2018 (the “2018 Annual Report”) and the selected combined historical financial data for the three months ended March 31, 2016 is derived from the audited combined historical financial statements of our Predecessor included in the 2018 Annual Report. The term “Successor” refers to (1) Warrior Met Coal, LLC and its subsidiaries for periods beginning as of April 1, 2016 and ending immediately before the completion of our corporate conversion and (2) Warrior Met Coal, Inc. and its subsidiaries for periods beginning with the completion of our corporate conversion and thereafter. The term “Predecessor” refers to the assets acquired and liabilities assumed by Warrior Met Coal, LLC from Walter Energy in the Asset Acquisition on March 31, 2016. The Predecessor periods included in the 2018 Annual Report begin as of January 1, 2016 and end as of March 31, 2016
You should read this selected consolidated and combined historical financial data together with “Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the financial statements and related notes thereto included elsewhere in this Annual Report or the 2018 Annual Report, as applicable. Our historical results are not necessarily indicative of our future results of operations, financial position and cash flows.
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Successor Predecessor
For the years ended December 31, For the nine months ended December 31, For the three months ended March 31,
2020 2019 2018 2017 2016 2016
Statements of Operations Data : (in thousands except per share data)
Revenues:
Sales $ 761,871 $ 1,235,998 $ 1,342,683 $ 1,124,645 $ 276,560 $ 65,154
Other revenues 20,867 32,311 35,324 44,447 21,074 6,229
Total revenues 782,738 1,268,309 1,378,007 1,169,092 297,634 71,383
Costs and expenses:
Cost of sales (exclusive of items shown separately below) 625,170 720,745 716,645 592,530 244,723 72,297
Cost of other revenues (exclusive of items shown separately below) 33,736 29,828 10,172 28,422 19,367 4,698
Depreciation and depletion 118,092 97,330 97,209 75,413 47,413 28,958
Selling, general and administrative 32,879 37,014 36,626 36,453 20,507 9,008
Other postretirement benefits — — — — — 6,160
Restructuring costs — — — — — 3,418
Transaction and other costs — — 9,068 12,873 13,568 —
Total costs and expenses 809,877 884,917 869,720 745,691 345,578 124,539
Operating (loss) income (27,139) 383,392 508,287 423,401 (47,944) (53,156)
Interest expense, net (32,310) (29,335) (37,314) (6,947) (1,711) (16,562)
Loss on early extinguishment of debt — (9,756) — — — 7,920
Other income 3,544 22,815 — — — —
(Loss) income before income taxes (55,905) 367,116 470,973 416,454 (49,655) (61,798)
Income tax (benefit) expense (1)
(20,144) 65,417 (225,814) (38,592) 18 18
Net (loss) income $ (35,761) $ 301,699 $ 696,787 $ 455,046 $ (49,637) $ (61,816)
Basic and diluted net (loss) income per share:
Net (loss) income per share—basic $ (0.70) $ 5.87 $ 13.19 $ 8.62
Net (loss) income per share—diluted $ (0.70) $ 5.86 $ 13.17 $ 8.62
Weighted average number of shares outstanding—basic 51,168 51,363 52,812 52.8
Weighted average number of shares outstanding— diluted 51,168 51,493 52,918 52.806
Dividends per share (2) :
$ 0.20 $ 4.61 $ 6.73 $ 14.92
Statements of Cash Flow Data:
Cash provided by (used in):
Operating activities $ 112,626 $ 532,814 $ 559,396 $ 434.512 $ (9,187) $ (40,698)
Investing activities $ (108,189) $ (134,213) $ (107,629) $ (92.625) $ (30,884) $ (5,422)
Financing activities $ 14,096 $ (411,623) $ (281,626) $ (458.279) $ 192,727 $ (6,240)
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(1) The income tax benefit recorded for the year ended December 31, 2018 is primarily due to the NOL valuation allowance release (see Note 7 to our consolidated financial statements included elsewhere in this Annual Report).
(2) The dividends per share paid for the year ended December 31, 2017 reflect two special cash dividends that were paid in the aggregate amount of $790.0 million.
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Successor Predecessor
December 31, 2020 December 31,
2019 December 31, 2018 December 31, 2017 December 31, 2016
(in thousands)
Balance Sheet Data:
Cash and cash equivalents $ 211,916 $ 193,383 $ 205,577 $ 35,470 $ 150,045
Working capital (1)
$ 297,165 $ 315,094 $ 345,497 $ 163,614 $ 228,986
Mineral interests, net $ 100,855 $ 110,130 $ 120,427 $ 130,004 $ 143,231
Property, plant and equipment, net $ 637,108 $ 606,200 $ 540,315 $ 536,745 $ 496,959
Total assets $ 1,393,936 $ 1,344,264 $ 1,395,040 $ 993,315 $ 947,631
Long-term debt $ 379,908 $ 339,189 $ 468,231 $ 342,948 $ 3,725
Total liabilities $ 668,695 $ 578,682 $ 682,428 $ 580,292 $ 194,664
Total stockholders’ equity $ 725,241 $ 765,582 $ 712,612 $ 413,023 $ 752,967
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(1) Working capital consists of current assets less current liabilities, excluding current portion of long-term debt.
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