May 8, 2023 - Alpha Metallurgical Resources, Inc. (NYSE: AMR), a leading U.S. supplier of metallurgical products for the steel industry, today reported financial results for the first quarter ending March 31, 2023.
"Coming off an exceptional and record-setting year in 2022, we set high expectations for Alpha in 2023, and our first quarter performance is a solid foundation on which we can continue building throughout the rest of the year," said Andy Eidson, Alpha's chief executive officer. "In addition to strong operational performance across the portfolio, we are progressing well on our capital investment projects. We also continue to execute on our share repurchase program, working through the current authorization in place; with approximately $200 million spent on buybacks year to date, we have now cumulatively spent approximately $715 million on repurchases, with another roughly $485 million in remaining authorization available to spend."
The company's annual meeting of stockholders was held on May 3, 2023. Shareholders re-elected all members of Alpha's board of directors who stood for re-election. The complete voting results from our annual meeting will be filed on Form 8-K with the Securities and Exchange Commission.
Alpha reported net income of $270.8 million, or $17.01 per diluted share, for the first quarter 2023. In the fourth quarter of 2022, the company had net income of $220.7 million, or $13.37 per diluted share.
For the first quarter, total Adjusted EBITDA was $354.4 million, compared to $247.9 million in the fourth quarter 2022.
First quarter net realized pricing for the Met segment was $208.93 per ton and net realization in the All Other category was $109.36.
The table below provides a breakdown of our Met segment coal sold in the first quarter by pricing mechanism.
Cost of Coal Sales
Alpha's Met segment cost of coal sales improved to an average of $110.56 per ton in the first quarter, compared to $112.97 per ton in the fourth quarter of 2022. Cost of coal sales for the All Other category decreased to $74.69 per ton in the first quarter, down from a cost of $80.76 per ton in the fourth quarter 2022.
Liquidity and Capital Resources
Cash provided by operating activities in the first quarter decreased to $177.4 million as compared to $185.0 million in the fourth quarter 2022. The first quarter operating cash flows were negatively impacted by an increase of $133.8 million of working capital. The primary drivers were higher accounts receivable and inventory balances with a partially offsetting reduction in short-term deposits. Capital expenditures for the first quarter 2023 were $74.2 million compared to $61.0 million for the fourth quarter of 2022.
As of March 31, 2023, the company had total liquidity of $315.6 million, including cash and cash equivalents of $222.5 million and $93.1 million of unused availability under the ABL. The future available capacity under the ABL is subject to inventory and accounts receivable collateral requirements and the maintenance of certain financial ratios. As of March 31, 2023, the company had no borrowings and $61.9 million in letters of credit outstanding under the ABL. Total long-term debt, including the current portion of long-term debt as of March 31, 2023, was $11.9 million and consists primarily of equipment financing obligations.
On May 3, 2023, Alpha's board of directors declared a quarterly cash dividend payment of $0.50 per share, increased from the prior quarter's dividend of $0.44 per share, which will become payable on July 5, 2023 for holders of record as of June 15, 2023.
Any decision to pay future cash dividends will be made by the board and depend on Alpha's future earnings and financial condition and other relevant factors.
Share Repurchase Program
As previously announced, Alpha's board of directors authorized a share repurchase program allowing for the expenditure of up to $1.2 billion for the repurchase of the company's common stock. As of May 4, 2023, the company has acquired approximately 4.8 million shares of common stock at a cost of approximately $715 million. The number of common stock shares outstanding as of May 4, 2023 was 14,452,474, not including the potentially dilutive effect of unexercised warrant shares or unvested equity awards.
The timing and amount of share repurchases will continue to be determined by the company's management based on its evaluation of market conditions, the trading price of the stock, applicable legal requirements, compliance with the provisions of the company's debt agreements, and other factors.
2023 Guidance Adjustment and Performance Update
Alpha is reducing tax rate guidance for the full year 2023. The new tax rate guidance range for the year is 12% to 17%, down from the prior range of 15% to 20%.
As of April 27, 2023, Alpha has committed and priced approximately 51% of its metallurgical coal within the Met segment at an average price of $203.86 per ton and 75% of thermal coal in the Met segment at an average expected price of $108.77 per ton. In the All Other category the company is 100% committed and priced at an average price of $88.74 per ton.
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