November 6, 2019 - SunCoke Energy, Inc. (NYSE: SXC) today reported results for the third quarter 2019, reflecting the continued strong performance of the Domestic Coke segment and customer challenges facing the Logistics segment.

Highlights

- Third quarter 2019 net loss attributable to SXC was $163.0 million, or $1.81 per share, reflecting the impact of non-cash impairment related charges at Logistics, net of taxes, of $174.8 million, or $1.94 per share. Excluding the non-cash charges, adjusted net income attributable to SXC was $11.8 million, or $0.13 per share.

- Adjusted EBITDA for the quarter was $66.7 million, up $0.7 million versus the prior year period

- Extinguished $50.0 million face value of outstanding 2025 Senior Notes; gross leverage at 3.0x (based on LTM EBITDA)

- Beginning in early August, repurchased approximately 2.1 million shares during the third quarter under the existing share repurchase program

- Board of Directors authorized a new $100 million share repurchase program. Repurchases under the new program may commence following completion of SunCoke's existing repurchase program.

- Lowering full-year 2019 Consolidated Adjusted EBITDA guidance range to $240 million to $250 million reflecting the chapter 11 bankruptcy filing by one of our CMT coal export customers

SunCoke Energy, Inc. (NYSE: SXC) today reported results for the third quarter 2019, reflecting the continued strong performance of the Domestic Coke segment and customer challenges facing the Logistics segment.

"In the third quarter, cokemaking operations performed at a high level and delivered excellent results, partially driven by the success of our oven rebuild program at Indiana Harbor," said Mike Rippey, President and Chief Executive Officer of SunCoke Energy, Inc. "In our Coal Logistics segment, we experienced a meaningful shift in the operating environment as one of the two coal export customer filed for bankruptcy and the other continues to explore potential restructuring alternatives. This development led us to lower our guidance for the full year and record a non-cash impairment charge in the current quarter."

Rippey continued, "Going forward, while we navigate through these difficult market conditions, we remain committed to our logistics business and are continuing to optimize asset performance across our businesses to generate significant value for SunCoke stakeholders in the long term. Despite the challenges in our logistics business, we continue to deliver strong cash flows and are committed to prioritizing capital allocation, as demonstrated by the 2.1 million shares repurchased during the quarter and the new $100 million share repurchase authorization approved by our Board."

THIRD QUARTER CONSOLIDATED RESULTS

Revenues in the third quarter 2019 increased $39.8 million compared to the prior year period, primarily reflecting the pass-through of higher coal prices, partially offset by lower volumes in the Logistics segment.

Adjusted EBITDA in the third quarter 2019 was $66.7 million, a $0.7 million increase from the prior year  period. Improved performance in the Domestic Coke segment and lower Corporate costs were partially offset by lower volumes in the Logistics segment.

Net loss attributable to SXC was $163.0 million, or $1.81 per share, for the third quarter 2019 and included  non-cash impairment related charges of Logistics assets of $247.4 million, a related tax benefit of $68.7 million and a $3.9 million adjustment to our contingent consideration liability at CMT, which was reduced to zero during the quarter.  The collective impact of these impairment related charges on net loss attributable to SXC was $174.8 million, or $1.94 per share.

THIRD QUARTER SEGMENT RESULTS

Domestic Coke
Domestic Coke consists of cokemaking facilities and heat recovery operations at our Jewell, Indiana Harbor, Haverhill, Granite City and Middletown plants.

Revenues increased $51.7 million primarily due to the pass-through of higher coal prices. Revenues also benefited from higher volumes at Indiana Harbor (performance of rebuilt ovens) and Granite City (absence of major outage).

Adjusted EBITDA increased $10.7 million due to an increase in sales volumes and energy production as well as lower outage costs.

Logistics
Logistics consists of the handling and mixing services of coal and other aggregates at our Convent Marine Terminal ("CMT"), Lake Terminal, Kanawha River Terminals ("KRT") and Dismal River Terminal ("DRT").

Revenues and Adjusted EBITDA decreased by $11.8 million and $11.4 million, respectively, driven by lower throughput volumes at the CMT facility. Depressed export pricing and lower demand continued to impact export volumes in the third quarter.

Brazil Coke
Brazil Coke consists of a cokemaking facility in Vitória, Brazil, which we operate for an affiliate of ArcelorMittal.

Revenues and Adjusted EBITDA were $9.6 million and $3.9 million, respectively, during the third quarter 2019, which was slightly lower than revenues and Adjusted EBITDA of $9.7 million and $4.5 million, respectively, during the third quarter 2018, driven by lower sales volumes.

Corporate and Other
Corporate and other Adjusted EBITDA loss, which include costs related to our legacy coal mining business, was $6.6 million during the third quarter 2019, an improvement of $2.0 million compared to third quarter 2018, reflecting lower legal costs and favorable deferred compensation expense.

2019 OUTLOOK

We are updating our 2019 guidance to reflect financial impact at logistics:

• Domestic coke production is expected to be approximately 4.1 million tons

• Domestic coke Adjusted EBITDA/ton is expected to be at the higher end of $53 to $55/ton

• Consolidated Adjusted EBITDA is expected to be between $240 to $250 million

• Adjusted EBITDA attributable to SXC is expected to be between $200 to $206 million

• Capital expenditures are projected to be between $110 to $120 million, including $40 million to $48 million related to our Indiana Harbor oven rebuild project and approximately $6 million related to completing our Granite City gas sharing project

• Cash generated by operations is estimated to be between $150 million and $160 million

• Cash taxes are projected to be between $4 to $8 million

For additional financial figures, click here.