Warrior Met Coal Q3 revenue climbs to $508M
Blue Creek construction is complete, while total liquidity stood at $577.6 million on September 30, 2026.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Rhea-AI Filing Summary
Warrior Met Coal, Inc. (HCC) reported third-quarter 2026 revenue of $507.9 million, compared with $328.6 million a year earlier, and net income of $49.3 million, versus $36.6 million. For the first nine months, revenue was $1,476.2 million and net income was $209.1 million, versus $926.1 million and $34.0 million, respectively. Steelmaking coal sales were 3.166 million metric tons at an average net selling price of $158.25 per metric ton; production was 2.770 million metric tons. The company attributed higher sales primarily to greater volume, largely from Blue Creek, and a higher average price.
Blue Creek construction was completed in the first quarter of 2026, after longwall operations began in October 2025, eight months ahead of schedule. Total project spending was $1,028.1 million, including approximately $71.3 million in 2026, and the company expects no material additional project capital expenditures. Nine-month operating cash flow was $286.5 million, compared with $153.2 million. At September 30, 2026, liquidity was $577.6 million: $437.1 million in cash and cash equivalents and $140.5 million available under the ABL facility. The collective bargaining agreement with the union representing certain hourly employees expired April 1, 2021, and negotiations continue.
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Moderate pointThird-quarter revenue was $507.9 million, versus $328.6 million in 2025.
- Moderate pointNine-month net income was $209.1 million, versus $34.0 million in 2025.
- Moderate pointNine-month operating cash flow was $286.5 million, versus $153.2 million.
Negative
- None.
Filing Explained
As of September 30, 2026, Warrior reported $9.2 million in short-term and $24.8 million in long-term federal coal lease obligations.
Warrior Met Coal reports that subsidiaries secured two federal coal leases, with mining-plan approvals received on
A proposed rule published on
Key Figures
Key Terms
Segment Adjusted EBITDA financial
Cash cost of sales financial
45X Credit regulatory
longwall operations technical
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
How much revenue and net income did HCC report for Q3 2026?
What was HCC’s liquidity at September 30, 2026?
How much did HCC spend on the Blue Creek project?
How much 45X Credit benefit did HCC recognize?
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For the quarterly period ended |
or
For the transition period from _____________ to _____________ |
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Securities registered pursuant to Section 12(b) of the Exchange Act:
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
Number of shares of common stock outstanding as of November 2, 2026:
TABLE OF CONTENTS
Forward-Looking Statements |
1 |
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Part I. Financial Information |
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Item 1. |
Financial Statements |
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Condensed Statements of Operations for the three and nine months ended September 30, 2026 (Unaudited) and September 30, 2025 (Unaudited) |
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Condensed Balance Sheets as of September 30, 2026 (Unaudited) and December 31, 2025 |
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Condensed Statements of Cash Flows for the nine months ended September 30, 2026 (Unaudited) and September 30, 2025 (Unaudited) |
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Condensed Statements of Changes in Stockholders' Equity for the three and nine months ended September 30, 2026 (Unaudited) and September 30, 2025 (Unaudited) |
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Notes to Condensed Financial Statements |
7 |
Item 2. |
Management's Discussion and Analysis of Financial Condition and Results of Operations |
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Item 3. |
Quantitative and Qualitative Disclosures About Market Risk |
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Item 4. |
Controls and Procedures |
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Part II. Other Information |
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Item 1. |
Legal Proceedings |
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Item 1A. |
Risk Factors |
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Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds |
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Item 3. |
Defaults on Senior Securities |
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Item 4. |
Mine Safety Disclosures |
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Item 5. |
Other Information |
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Item 6. |
Exhibits |
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Signatures |
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FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q (this "Form 10-Q" or "this report") includes statements of our expectations, intentions, plans and beliefs that constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and are intended to come within the safe harbor protection provided by those sections. These statements, which involve risks and uncertainties, relate to analyses and other information that are based on forecasts of future results and estimates of amounts not yet determinable and may also relate to our future prospects, developments and business strategies, including any potential changes to our production and sales volumes as a result of our negotiations with the labor union representing certain of our hourly employees. We have used the words “anticipate,” “approximately,” “assume,” “believe,” “could,” “contemplate,” “continue,” “estimate,” “expect,” “target,” “future,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should” and similar terms and phrases, including in references to assumptions, in this report to identify forward-looking statements. These forward-looking statements are made based on expectations and beliefs concerning future events affecting us and are subject to uncertainties and factors relating to our operations and business environment, all of which are difficult to predict and many of which are beyond our control, that could cause our actual results to differ materially from those matters expressed in or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to:
1
These forward-looking statements involve a number of risks and uncertainties that could cause actual results to differ materially from those suggested by the forward-looking statements. Forward-looking statements should, therefore, be considered in light of various factors, including those set forth under “Part II, Item 1A. Risk Factors,” “Part I, Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this Form 10-Q, and those set forth from time to time in our other filings with the Securities and Exchange Commission (the “SEC”). These documents are available through our website at www.warriormetcoal.com or through the SEC's Electronic Data Gathering and Analysis Retrieval system at http://www.sec.gov. In light of such risks and uncertainties, we caution you not to place undue reliance on these forward-looking statements.
When considering forward-looking statements made by us in this Form 10-Q, or elsewhere, such statements speak only as of the date on which we make them. New risks and uncertainties arise from time to time, and it is impossible for us to predict these events or how they may affect us. We have no duty to, and do not intend to, update or revise the forward-looking statements in this Form 10-Q after the date of this Form 10-Q, except as may be required by law. In light of these risks and uncertainties, you should keep in mind that any forward-looking statement made in this Form 10-Q or elsewhere might not occur.
2
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
WARRIOR MET COAL, INC.
CONDENSED STATEMENTS OF OPERATIONS
(in thousands, except per-share amounts)
(Unaudited)
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For the three months ended September 30, |
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For the nine months ended September 30, |
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2026 |
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2025 |
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2026 |
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2025 |
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Revenues: |
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Sales |
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Other revenues |
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Total revenues |
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Costs and expenses: |
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Cost of sales (exclusive of items shown separately below) |
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Cost of other revenues (exclusive of items shown separately below) |
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Depreciation and depletion |
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Selling, general and administrative |
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Total costs and expenses |
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Operating income |
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Interest expense |
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Interest income |
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Income before income tax (benefit) expense |
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Income tax (benefit) expense |
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Net income |
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$ |
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Basic and diluted net income per share: |
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Net income per share—basic |
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Net income per share—diluted |
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Weighted average number of shares outstanding—basic |
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Weighted average number of shares outstanding—diluted |
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Dividends per share: |
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The accompanying notes are an integral part of these condensed financial statements.
3
WARRIOR MET COAL, INC.
CONDENSED BALANCE SHEETS
(in thousands, except share and per-share data)
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September 30, 2026 |
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December 31, 2025 |
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(Unaudited) |
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ASSETS |
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Cash and cash equivalents |
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Trade accounts receivable |
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Inventories, net |
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Income tax receivable |
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Prepaid expenses and other receivables |
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Total current assets |
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Restricted cash |
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Mineral interests, net |
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Property, plant and equipment, net |
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Deferred income taxes |
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Other long-term assets |
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Total assets |
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$ |
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$ |
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
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Accounts payable |
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Accrued expenses |
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Asset retirement obligations |
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Short-term financing lease liabilities |
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Federal coal lease obligations |
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Other current liabilities |
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Total current liabilities |
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Long-term debt |
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Asset retirement obligations |
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Black lung obligations |
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Long-term financing lease liabilities |
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Deferred income taxes |
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Federal coal lease obligations |
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Total liabilities |
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Stockholders’ Equity: |
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Common stock, $ |
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Preferred stock, $ |
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Treasury stock, at cost ( |
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Additional paid in capital |
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Retained earnings |
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Total stockholders’ equity |
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Total liabilities and stockholders’ equity |
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$ |
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$ |
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The accompanying notes are an integral part of these condensed financial statements.
4
WARRIOR MET COAL, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
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For the nine months ended September 30, |
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2026 |
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2025 |
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OPERATING ACTIVITIES |
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Net income |
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$ |
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$ |
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Adjustments to reconcile net income to net cash provided by operating activities: |
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Depreciation and depletion |
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Deferred income tax expense (benefit) |
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( |
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Stock based compensation expense |
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Amortization of debt issuance costs and debt discount |
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Accretion of asset retirement obligations |
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Mark-to-market gain on gas hedges |
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( |
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Changes in operating assets and liabilities: |
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Trade accounts receivable |
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Inventories, net |
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( |
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Prepaid expenses and other receivables |
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( |
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Accounts payable |
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Accrued expenses and other current liabilities |
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Other |
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Net cash provided by operating activities |
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INVESTING ACTIVITIES |
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Purchase of property, plant and equipment |
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Deferred mine development costs |
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Acquisition of leased mineral rights |
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— |
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Proceeds from sale of short-term investments |
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Proceeds from sale of property, plant and equipment |
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Net cash used in investing activities |
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( |
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( |
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FINANCING ACTIVITIES |
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Dividends paid |
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( |
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Proceeds from equipment financing |
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Principal repayments of finance lease obligations |
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( |
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( |
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Payments for taxes related to net share settlement of equity awards |
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( |
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( |
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Net cash used in financing activities |
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( |
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( |
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Net increase (decrease) in cash, cash equivalents and restricted cash |
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( |
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Cash, cash equivalents and restricted cash at beginning of period |
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Cash, cash equivalents and restricted cash at end of period |
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$ |
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$ |
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Cash and cash equivalents at beginning of period |
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$ |
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$ |
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Restricted cash at beginning of period |
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Cash, cash equivalents and restricted cash at beginning of period |
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$ |
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$ |
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Cash and cash equivalents at end of period |
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$ |
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$ |
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Restricted cash at end of period |
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Cash, cash equivalents and restricted cash at end of period |
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$ |
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$ |
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The accompanying notes are an integral part of these condensed financial statements.
5
WARRIOR MET COAL, INC.
CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(in thousands)
(Unaudited)
|
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For the three months ended September 30, |
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For the nine months ended September 30, |
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2026 |
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2025 |
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2026 |
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2025 |
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Common Stock |
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Balance, beginning of period |
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$ |
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$ |
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$ |
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$ |
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Issuance of shares |
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Balance, end of period |
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Preferred Stock |
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Balance, beginning of period |
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Balance, end of period |
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Treasury Stock |
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Balance, beginning of period |
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( |
) |
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( |
) |
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( |
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( |
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Balance, end of period |
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( |
) |
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( |
) |
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( |
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( |
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Additional Paid in Capital |
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Balance, beginning of period |
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Stock based compensation expense |
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Tax withholdings on vested equity awards |
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( |
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Balance, end of period |
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Retained Earnings |
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Balance, beginning of period |
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Net income (loss) |
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Dividends declared |
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( |
) |
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( |
) |
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( |
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( |
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Balance, end of period |
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Total Stockholders' Equity |
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$ |
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$ |
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$ |
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$ |
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The accompanying notes are an integral part of these condensed financial statements.
6
WARRIOR MET COAL, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
NINE MONTHS ENDED SEPTEMBER 30, 2026 (UNAUDITED)
Note 1. Business and Basis of Presentation
Description of the Business
Warrior Met Coal, Inc. (the "Company") is a U.S.-based, environmentally and socially minded supplier to the global steel industry. The Company is dedicated entirely to mining non-thermal steelmaking coal used as a critical component of steel production by metal manufacturers in Europe, South America and Asia. The Company is a large-scale, low-cost producer and exporter of premium quality steelmaking coal, also known as hard-coking coal ("HCC"), operating highly efficient longwall operations in its underground mines based in Alabama. The HCC that the Company produces from the Blue Creek coal seam contains very low sulfur and has strong coking properties. The Company also generates ancillary revenues from the sale of natural gas extracted as a byproduct from the underground coal mines and royalty revenues from leased properties.
Basis of Presentation
Collective Bargaining Agreement
The Company's Collective Bargaining Agreement ("CBA") with the labor union representing certain of the Company's hourly employees expired on April 1, 2021. The Company continues to engage in good faith efforts with the labor union to reach an agreement on a new contract.
Note 2. Summary of Significant Accounting Policies
The Company's significant accounting policies are consistent with those disclosed in Note 2 to its audited financial statements included in the 2025 Annual Report.
Use of Estimates
The Company prepares its financial statements in conformity with GAAP, which requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the periods presented. Due to the inherent uncertainty involved in making estimates, actual results could differ from those estimates.
Cash, Cash Equivalents and Restricted Cash
Cash and cash equivalents include short-term deposits and highly liquid investments that have original maturities of three months or less when purchased and are stated at cost, which approximates fair value. Restricted cash consists of cash that the Company is contractually obligated to maintain in a money market account as collateral for workers' compensation claims. Restricted cash is classified as noncurrent based on the nature of the restriction.
Instruments with maturities greater than three months, but less than twelve months, are included in short-term investments.
7
WARRIOR MET COAL, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
NINE MONTHS ENDED SEPTEMBER 30, 2026 (UNAUDITED)
As of September 30, 2026 and December 31, 2025, short-term investments consisted of $
Revenue Recognition
Revenue is recognized when performance obligations under the terms of a contract with the Company's customers are satisfied; for all contracts this occurs when control of the promised goods have been transferred to the Company's customers and risk of loss passes to such customer. For coal shipments to domestic customers via rail or truck, control is typically transferred when the railcar or truck is loaded. For coal shipments to international customers via ocean vessel, control is typically transferred when the vessel is loaded at the Port of Mobile in Alabama. Occasionally, the Company will sell coal stockpiles at the barge loadout or port upon which control, title and risk of loss transfers when stockpiles are segregated. For all steelmaking coal sales under average pricing contracts where pricing is not finalized when revenue is recognized, revenue is recorded based on estimated consideration to be received at the date of the sale. For natural gas sales, control is transferred when the gas has been transferred to the pipeline. Revenue is disaggregated between coal sales within the Company's mining segment and natural gas sales included in all other revenues, as disclosed in Note 12.
The Company's coal and gas sales generally include up to 45-day payment terms following the transfer of control of the goods to the customer unless secured by a letter of credit which could include up to 90-day payment terms. The Company typically does not include extended payment terms in its contracts with customers.
Trade Accounts Receivable and Allowance for Credit Losses
Trade accounts receivable are stated at cost. Trade accounts receivable represent customer obligations that are derived from revenue recognized from contracts with customers. Credit is extended based on an evaluation of the individual customer's financial condition. The Company maintains trade credit insurance on the majority of its customers and the geographic regions of coal shipments to these customers. In some instances, the Company requires letters of credit, cash collateral or prepayments from its customers on or before shipment to mitigate the risk of loss. These efforts have consistently resulted in the Company recognizing no historical credit losses. The Company also has never had to have a claim against its trade credit insurance policy.
In order to estimate the allowance for credit losses on trade accounts receivable, the Company utilizes an aging approach in which potential impairment is calculated based on how long a receivable has been outstanding (e.g., current, 1-31 days, 31-60 days, etc.). The Company calculates an expected credit loss rate based on the Company’s historical credit loss rate, the risk characteristics of its customers, and the current steelmaking coal and steel market environments. As of September 30, 2026 and December 31, 2025, the estimated allowance for credit losses was immaterial and did not have a material impact on the Company's financial statements.
Note 3. Inventories, net
Inventories, net are summarized as follows (in thousands):
|
|
September 30, 2026 |
|
|
December 31, 2025 |
|
||
Coal |
|
$ |
|
|
$ |
|
||
Raw materials, parts, supplies and other, net |
|
|
|
|
|
|
||
Total inventories, net |
|
$ |
|
|
$ |
|
||
8
WARRIOR MET COAL, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
NINE MONTHS ENDED SEPTEMBER 30, 2026 (UNAUDITED)
Note 4. Income Taxes
For the three and nine months ended September 30, 2026 and 2025, the Company estimated its annual effective tax rate and applied this effective tax rate to its year-to-date pretax income at the end of the interim reporting period. The tax effect of unusual or infrequently occurring items, including the effects of changes in tax laws or rates and changes in judgment about the realizability of deferred tax assets, are reported in the interim period in which they occur. For the three and nine months ended September 30, 2026, the Company had an income tax benefit of $
On July 4, 2025, the One, Big, Beautiful Bill Act ("OBBBA") was enacted into law and includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act. The changes include, among other things, an update to FDII to Foreign-Derived Deduction Eligible Income ("FDDEI"), which provides for, among other things, a permanent deduction of
Note 5. Debt
The Company's debt consisted of the following (in thousands):
|
|
September 30, 2026 |
|
|
December 31, 2025 |
|
|
Weighted |
|
|
Final |
|||
Senior Secured Notes |
|
$ |
|
|
$ |
|
|
|
% |
|
||||
ABL Borrowings |
|
|
|
|
|
|
|
Varies(1) |
|
|
(2) |
|||
Debt discount |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
Total debt |
|
|
|
|
|
|
|
|
|
|
|
|||
Less: current debt |
|
|
|
|
|
|
|
|
|
|
|
|||
Total long-term debt |
|
$ |
|
|
$ |
|
|
|
|
|
|
|||
Senior Secured Notes
On December 6, 2021, the Company issued $
9
WARRIOR MET COAL, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
NINE MONTHS ENDED SEPTEMBER 30, 2026 (UNAUDITED)
Amended ABL Facility
On August 28, 2025, Warrior Met Coal, Inc. (the “Company”) entered into that certain First Amendment to Second Amended and Restated Asset-Based Revolving Credit Agreement (the “Amendment”), by and among the Company and certain of its subsidiaries, as borrowers, the guarantors party thereto, the lenders party thereto and Citibank, N.A. as administrative agent, which amended the Company's existing Second Amended and Restated Asset-Based Revolving Credit Agreement (the “credit facility”, and the credit facility as amended by the Amendment, the “Amended ABL Facility”).
As of September 30, 2026,
Note 6. Leases
The Company enters into rental agreements for certain mining equipment that are for periods of 12 months or less, some of which include options to extend the leases. Leases that are for periods of 12 months or less are not recorded on the balance sheet. The Company recognizes lease expense on these agreements on a straight-line basis over the lease term. Additionally, the Company has certain finance leases for mining equipment that expire over various contractual periods. These leases have remaining lease terms of to
Supplemental balance sheet information related to leases was as follows (in thousands):
|
|
September 30, 2026 |
|
|
December 31, 2025 |
|
||
(1) |
|
$ |
|
|
$ |
|
||
Finance lease liabilities |
|
|
|
|
|
|
||
Current |
|
|
|
|
|
|
||
Noncurrent |
|
|
|
|
|
|
||
Total finance lease liabilities |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
Weighted average remaining lease term - finance leases (in months) |
|
|
|
|
|
|
||
Weighted average discount rate - finance leases(2) |
|
|
% |
|
|
% |
||
The components of lease expense were as follows (in thousands):
|
|
For the three months ended September 30, |
|
|
For the nine months ended September 30, |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Operating lease cost(1): |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Finance lease cost: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Amortization of leased assets |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest on lease liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net lease cost |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
10
WARRIOR MET COAL, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
NINE MONTHS ENDED SEPTEMBER 30, 2026 (UNAUDITED)
Maturities of lease liabilities for the Company's finance leases as of September 30, 2026 were as follows (in thousands):
|
|
Finance Leases(1) |
|
|
2026 |
|
|
|
|
2027 |
|
|
|
|
2028 |
|
|
|
|
2029 |
|
|
|
|
2030 |
|
|
|
|
Thereafter |
|
|
|
|
Total |
|
|
|
|
Less: amount representing interest |
|
|
( |
) |
Present value of lease liabilities |
|
$ |
|
|
Supplemental cash flow information related to the Company's leases was as follows (in thousands):
|
|
For the nine months ended September 30, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Cash paid (received) for amounts included in the measurement of lease liabilities: |
|
|
|
|
|
|
||
Operating cash flows from finance leases |
|
$ |
|
|
$ |
|
||
Financing cash flows from finance leases |
|
$ |
|
|
$ |
( |
) |
|
Non-cash right-of-use assets obtained in exchange for lease obligations: |
|
|
|
|
|
|
||
Finance leases |
|
$ |
|
|
$ |
|
||
Note 7. Net Income per Share
Basic and diluted net income per share was calculated as follows (in thousands, except per share data):
|
|
For the three months ended September 30, |
|
|
For the nine months ended September 30, |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Numerator: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Denominator: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted-average shares used to compute net income per share—basic |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Dilutive restrictive stock awards |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted-average shares used to compute net income per share—diluted |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income per share—basic |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Net income per share—diluted |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
11
WARRIOR MET COAL, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
NINE MONTHS ENDED SEPTEMBER 30, 2026 (UNAUDITED)
Note 8. Commitments and Contingencies
Environmental Matters
The Company is subject to a wide variety of laws and regulations concerning the protection of the environment, both with respect to the construction and operation of its plants, mines and other facilities and with respect to remediating environmental conditions that may exist at its own and other properties.
The Company believes it is in compliance with federal, state and local environmental laws and regulations. The Company accrues for environmental expenses resulting from existing conditions that relate to past operations when the costs are probable and can be reasonably estimated. As of September 30, 2026 and December 31, 2025, there were no accruals for environmental matters other than asset retirement obligations for mine reclamation.
Miscellaneous Litigation
From time to time, the Company is party to lawsuits arising in the ordinary course of business. The Company records costs relating to these matters when a loss is probable and the amount can be reasonably estimated. The effect of the outcome of these matters on the Company’s future results of operations cannot be predicted with certainty as any such effect depends on future results of operations and the amount and timing of the resolution of such matters. As of September 30, 2026 and December 31, 2025, there were no items accrued for miscellaneous litigation.
Other Commitments and Contingencies
The Company is party to various transportation and throughput agreements with rail and barge transportation providers and the Alabama State Port Authority. These agreements contain annual minimum tonnage guarantees with respect to coal transported from the mine sites to the Port of Mobile in Alabama, the unloading of rail cars or barges, and the loading of vessels. If the Company does not meet its minimum throughput obligations, which are based on annual minimum amounts, it is required to pay the transportation providers or the Alabama State Port Authority a contractually specified amount per metric ton for the difference between the actual throughput and the minimum throughput requirement. At September 30, 2026 and December 31, 2025, the Company had
Royalty Obligations
A substantial amount of the coal that the Company mines is produced from mineral reserves leased from third-party landowners. These leases convey mining rights to the Company in exchange for royalties to be paid to the landowner as either a fixed amount per ton or as a percentage of the sales price. Although coal leases have varying renewal terms and conditions, they generally last for the economic life of the reserves. Coal royalty expenses were $
Note 9. Stockholders' Equity
Common Shares
The Company is authorized to issue up to
Stock Repurchase Program
On March 26, 2019, the Board approved the Company's second stock repurchase program (the “New Stock Repurchase Program”) that authorizes repurchases of up to an aggregate of $
Under the New Stock Repurchase Program, the Company may repurchase shares of its common stock from time to time, in amounts, at prices and at such times as the Company deems appropriate, subject to market and industry conditions, share price, regulatory
12
WARRIOR MET COAL, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
NINE MONTHS ENDED SEPTEMBER 30, 2026 (UNAUDITED)
requirements and other considerations as determined from time to time by the Company. The Company’s repurchases may be executed using open market purchases or privately negotiated transactions in accordance with applicable securities laws and regulations, including Rule 10b-18 of the Exchange Act, and repurchases may be executed pursuant to Rule 10b5-1 under the Exchange Act. Repurchases will be subject to limitations in the Amended ABL Facility and the Indenture. The Company intends to fund repurchases under the New Stock Repurchase Program from cash on hand and/or other sources of liquidity. Any future repurchases of shares of the Company's common stock will be subject to the 1% excise tax under the Inflation Reduction Act.
As of September 30, 2026 and December 31, 2025, the Company has repurchased
Dividends
The Company has declared the following dividends on common shares as of the filing date of this Form 10-Q:
Dividend per Share |
|
|
Dividend Type |
|
Declaration Date |
|
Record Date |
|
Payable Date |
|
$ |
|
|
Quarterly |
|
|
|
||||
$ |
|
|
Quarterly |
|
|
|
||||
$ |
|
|
Quarterly |
|
|
|
||||
$ |
|
|
Quarterly |
|
|
|
||||
$ |
|
|
Quarterly |
|
|
|
||||
$ |
|
|
Quarterly |
|
|
|
||||
$ |
|
|
Quarterly |
|
|
|
||||
$ |
|
|
Quarterly |
|
|
|
||||
$ |
|
|
Special |
|
|
|
||||
Preferred Shares
The Company is authorized to issue up to
Note 10. Derivative Instruments
The Company enters into natural gas swap contracts from time to time to hedge the exposure to variability in expected future cash flows associated with the fluctuations in the price of natural gas related to the Company’s forecasted sales. As of September 30, 2026 and December 31, 2025, the Company had
Note 11. Fair Value of Financial Instruments
During the nine months ended September 30, 2026, there were no transfers between Level 1, Level 2 and Level 3. The Company uses quoted dealer prices for similar contracts in active over-the-counter markets for determining fair value of Level 2 liabilities. There were no changes to the valuation techniques used to measure liability fair values on a recurring basis during the nine months ended September 30, 2026.
The following methods and assumptions were used to estimate the fair value of financial instruments for which the fair value option was not elected:
Cash, cash equivalents and restricted cash, short-term investments, receivables and trade accounts payable — The carrying amounts reported in the Condensed Balance Sheets approximate fair value due to the short-term nature of these assets and liabilities.
13
WARRIOR MET COAL, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
NINE MONTHS ENDED SEPTEMBER 30, 2026 (UNAUDITED)
Debt — The Company's outstanding debt is carried at cost. As of September 30, 2026 and December 31, 2025, there were
Note 12. Segment Information
The Company generates revenue primarily through the production of steelmaking coal for sale to the steel industry. The Company also generates ancillary revenues from the sale of natural gas extracted as a byproduct from the underground coal mines and royalty revenues from leased properties.
The Company has
The Company does not allocate all of its assets, or its depreciation and depletion expense, selling, general and administrative expenses, transaction costs, interest income (expense), and income tax expense (benefit) by segment.
The following tables include reconciliations of segment information to consolidated amounts (in thousands):
|
|
For the three months ended September 30, |
|
|
For the nine months ended September 30, |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Mining |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
All other |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total revenues |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Segment profit |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Revenue |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Cash cost of sales(1) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other segment items(2) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Segment profit |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Transportation and royalties |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Mining |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
All other |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total transportation and royalties |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Mining |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
All other |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total assets |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Depreciation and depletion |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Mining |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
All other |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total depreciation and depletion |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Capital Expenditures |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Mining |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
All other |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total capital expenditures |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
14
WARRIOR MET COAL, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
NINE MONTHS ENDED SEPTEMBER 30, 2026 (UNAUDITED)
For the three and nine months ended September 30, 2026 and 2025, the Company's Mining segment had revenues comprising greater than 10% from the following customers:
|
|
For the three months ended September 30, |
|
|
For the nine months ended September 30, |
|
||||||||||
Customers(1) |
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Customer A |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Customer B |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Customer C |
|
|
|
|
|
|
|
|
|
|
|
|
||||
The Company evaluates the performance of its segment based on Segment Adjusted EBITDA, which is defined as net income adjusted for other revenues; cost of other revenues; depreciation and depletion expense; selling, general and administrative expenses; interest income, net; income tax benefit (expense) and certain transactions or adjustments that the CODM does not consider for the purposes of making decisions to allocate resources among segments or assessing segment performance. Segment Adjusted EBITDA should not be considered as an alternative to cost of sales under GAAP and may not be comparable to other similarly titled measures used by other companies.
|
|
For the three months ended September 30, |
|
|
For the nine months ended September 30, |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Segment Adjusted EBITDA |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Other revenues |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cost of other revenues |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Depreciation and depletion |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Selling, general and administrative |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Interest (expense) income, net |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
||
Income tax (expense) benefit |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
Net income (loss) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
15
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis provides a narrative of our results of operations and financial condition for the three and nine months ended September 30, 2026 and September 30, 2025. You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and related notes appearing in this Form 10-Q and the audited financial statements for the year ended December 31, 2025 included in our Annual Report on Form 10-K for the year ended December 31, 2025 (the "2025 Annual Report"). Some of the information contained in this discussion and analysis or set forth elsewhere in this Form 10-Q, including information with respect to our plans and strategy for our business and related financing, includes forward-looking statements that involve risks and uncertainties. As a result of many factors, our actual results could differ materially from the results described in, or implied by, the forward-looking statements contained in the following discussion and analysis. Please see “Forward-Looking Statements.”
Overview
We are a U.S.-based, environmentally and socially minded supplier to the global steel industry headquartered in Brookwood, Alabama. We are dedicated entirely to mining non-thermal steelmaking coal used as a critical component of steel production by metal manufacturers in Europe, South America and Asia. We are a large-scale, low-cost producer and exporter of premium quality steelmaking coal, also known as hard coking coal (“HCC”), operating highly-efficient longwall operations in our underground mines based in Alabama, Mine No. 4, Mine No. 7 and Blue Creek. We commenced longwall operations at our transformational Blue Creek mine based in Alabama eight months ahead of schedule in October 2025.
As of December 31, 2025, based on a reserve report prepared by Marshall Miller & Associates, Inc. ("Marshall Miller"), our three operating underground mines had approximately 179.3 million metric tons of recoverable reserves and our Blue Creek mine contained 54.0 million metric tons of recoverable resources. As a result of our high-quality coal, our Mine No. 7 steelmaking coal realized price has historically been in line with, or at a slight discount to, the Platts Premium Low Volatility ("LV") Free-On-Board Australian Index (the "S&P Platts Index"). Our Mine No. 4 and Blue Creek steelmaking coals are High Volatility A ("HVA") quality coal that typically trades at a discount to the price of coal from Mine No. 7. We primarily target the East Coast High Vol A index for sales of our Mine No. 4 and Blue Creek coals that are destined for the Atlantic Basin, whereas we target a variety of indices, including Platts Premium Low Vol and Platts Low Vol HCC for sales destined to the Pacific Basins. Our Blue Creek coal is also primarily sold into Asia and is sold on a cost and freight ("CFR") basis. Our steelmaking coal, mined from the Southern Appalachian portion of the Blue Creek coal seam, is characterized by low-to-high volatile matter, low sulfur, high fluidity, and high strength. These qualities make our coal ideally suited as a coking coal for the manufacture of steel.
We sell substantially all of our steelmaking coal production to global steel producers. Steelmaking coal, which is converted to coke, is a critical input in the steel production process. Steelmaking coal is both consumed domestically in the countries where it is produced and exported by several of the largest producing countries, such as China, Australia, the United States, Canada and Russia. Therefore, demand for our coal will be highly correlated to conditions in the global steelmaking industry. The steelmaking industry’s demand for steelmaking coal is affected by a number of factors, including the cyclical nature of that industry’s business, technological developments in the steelmaking process and the availability of substitutes for steel such as aluminum, composites and plastics. A significant reduction in the demand for steel products would reduce the demand for steelmaking coal, which would have a material adverse effect upon our business. Similarly, if alternative ingredients are used in substitution for steelmaking coal in the integrated steel mill process, the demand for steelmaking coal could materially decrease, which could also materially adversely affect demand for our steelmaking coal.
Completion of Blue Creek Development
We commenced longwall operations at the Blue Creek mine in October 2025, eight months ahead of schedule and on budget. The ahead-of-schedule start of Blue Creek's longwall is already positively impacting our production profile, cost structure, and earnings potential.
In the first quarter of 2026, we completed the Blue Creek construction project. We invested approximately $71.3 million in the current year, bringing total project spending to $1,028.1 million. Final project costs were fully in line with our capital guidance, and no material additional project capital expenditures are expected. With construction complete, Blue Creek is positioned to continue driving higher production, lower costs, and improved cash flow generation as the operation advances through its ramp-up and optimization phase.
16
Finalization of Federal Coal Lease Acquisition
On November 25, 2025, Warrior Met Coal BC, LLC (“Warrior BC”), a wholly-owned subsidiary of the Company, entered into Federal Coal Lease ALES-056519 at Mine No. 1 (the “Mine No. 1 Lease”) and Warrior Met Coal Mining, LLC (“Warrior Mining”, and together with Warrior BC, the “Companies”), a wholly-owned subsidiary of the Company, entered into Federal Coal Lease ALES-055797 at Mine No. 4 (the “Mine No. 4 Lease”, and, together with the Mine No. 1 Lease, the “Leases”), each with the United States of America through the Bureau of Land Management (the “BLM”) of the United States Department of the Interior.
The Mine No. 1 Lease covers approximately 8,346 acres and the Mine No. 4 Lease covers approximately 5,704 acres. The BLM estimates the Mine No. 1 Lease tract contains approximately 32.9 million metric tons of recoverable coal reserves, and the Mine No. 4 Lease tract contains approximately 15.3 million metric tons of recoverable coal reserves. Subject to the terms and conditions thereof, the Leases provide the Companies with the exclusive right to drill for, mine, extract, remove or otherwise process and dispose of the coal deposits in, upon, or under the lands described therein. Each Lease has a minimum term of 20 years and for so long thereafter as coal is produced in commercial quantities from the leased lands, subject to readjustment of lease terms at the end of the twentieth lease year and each 10-year period thereafter. Pursuant to each Lease, each Company is required to pay customary production royalties of 7% of the value of the coal produced and per acre annual rental payments to the BLM.
Warrior BC bid approximately $32 million for the Mine No. 1 Lease and has submitted a payment for approximately $6.4 million, which is the first of five equal payments. Warrior Mining bid approximately $15 million for the Mine No. 4 Lease and has submitted a payment for approximately $3.0 million, which is the first of five equal payments. Successive installments are due each year on the anniversary of the Leases for the next four years. These future installments were recorded at a discount using our credit-adjusted risk-free rate and are presented in the Condensed Balance Sheets as short and long-term federal coal lease obligations. As of September 30, 2026, the short-term and long-term obligations were $9.2 million and $24.8 million, respectively. As of December 31, 2025, the short-term and long-term obligations were $8.8 million and $23.7 million, respectively.
On January 13, 2026, the U.S. Department of the Interior issued mining plan approval documents for each Lease, thereby authorizing coal development and mining operations on parts of each Lease within the area of mining plan approval.
Recent Developments
During the third quarter of 2026, global steelmaking coal market conditions remained supported by ongoing supply disruptions in China, although market sentiment softened toward quarter-end as expectations increased for a gradual recovery in Chinese domestic production. Premium low-volatility ("Premium LV") metallurgical ("met") coal prices strengthened during the quarter as Chinese buyers increased seaborne purchases ahead of the peak steel consumption season and continued safety-related mine inspections constrained domestic coking coal supply. Premium LV FOB prices averaged approximately $278.57 per metric ton during the third quarter of 2026, compared to $238.27 per metric ton during the second quarter of 2026 and $179.28 per metric ton during the third quarter of 2025. September prices reached a quarterly high as Chinese supply constraints and pre-holiday restocking activity supported seaborne demand; however, prices moderated late in the quarter amid weakening steel margins and anticipation of additional mine restarts and higher Mongolian exports.
Steelmaking coal demand in China remained the primary driver of seaborne market conditions during the third quarter of 2026. Chinese coking coal mine utilization rates remained near 70%, a six-year seasonal low, despite government measures aimed at increasing production, with approximately 50 mines still suspended as of late September and mine inventories recovering only modestly from historically low levels. These supply constraints supported elevated import demand even as Chinese steel profitability weakened and hot metal production declined modestly during the quarter. Market participants increasingly expect domestic supply conditions to improve during the fourth quarter of 2026 as mine restart approvals progress and Mongolian coal exports recover from earlier logistical and fuel supply disruptions. In India, steel demand remained resilient and domestic steel prices strengthened following the monsoon season, although buyers continued to resist elevated seaborne coking coal prices. Demand in Europe and other Atlantic Basin markets remained relatively stable, supported by blast furnace steel production and ongoing raw material requirements despite broader economic and steel market uncertainties.
The United States government continued to pursue a range of trade and tariff measures affecting international commerce, with certain countries implementing responsive actions. Ongoing trade and tariff uncertainty continued to contribute to volatility in global steel and steelmaking coal markets. The implementation of additional tariffs or other trade measures by the United States, or retaliatory actions by other countries, could adversely affect economic activity, operating costs, demand for steelmaking coal, supply chains, and pricing conditions. At this time, the ultimate impact of tariffs and related trade actions on the Company’s financial condition, results of operations, or cash flows cannot be reasonably estimated. The Company continues to monitor trade developments and assess potential impacts on its business.
17
On July 4, 2025, the One, Big, Beautiful Bill Act ("OBBBA") was enacted into law and includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. The changes include, among other things, an update to IRC Section 250 Deduction: FDII to Foreign-Derived Deduction Eligible Income ("FDDEI"), which provides for, among other things, a permanent deduction of 33.34% of FDDEI, which reduces the statutory tax rate to 14% of such income. The OBBBA also classified met coal as a critical mineral eligible for the advanced manufacturing production tax credit under Section 45X (the "45X Credit") of the Internal Revenue Code. The 45X Credit for met coal provides for a credit of 2.5% of eligible production costs through 2029. Section 50202 of the OBBBA also temporarily decreases the royalty rate for coal leases on federal lands to not more than 7% through 2034. We recognized a benefit from the 45X Credit of $10.8 million and $28.9 million for the three and nine months ended September 30, 2026, which is reflected as a reduction to cost of sales in the Condensed Statements of Operations and a corresponding income tax receivable in the Condensed Balance Sheets.
Collective Bargaining Agreement
The Company's Collective Bargaining Agreement ("CBA") with the labor union representing certain of the Company's hourly employees expired on April 1, 2021. The Company continues to engage in good faith efforts with the labor union to reach an agreement on a new contract.
How We Evaluate Our Operations
We have one reportable segment identified as Mining which consists of Mine No. 4, Mine No. 7 and the Blue Creek mine. We determined that our natural gas and royalty businesses did not meet the criteria in ASC 280, Segment Reporting, to be considered as a reportable segment. Therefore, we have included their results in an "all other" category as a reconciling item to consolidated amounts.
Our management uses a variety of financial and operating metrics to analyze our performance. These metrics are significant factors in assessing our operating results and profitability and include: (i) Segment Adjusted EBITDA (as defined below), a non-GAAP financial measure; (ii) sales volumes and average net selling price, which drive coal sales revenue; (iii) cash cost of sales, a non-GAAP financial measure; and (iv) Adjusted EBITDA, a non-GAAP financial measure. The following table presents supplementary data on a historical basis for each of the periods indicated.
|
|
For the three months ended September 30, |
|
|
For the nine months ended September 30, |
|
||||||||||
(in thousands) |
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Segment Adjusted EBITDA |
|
$ |
132,515 |
|
|
$ |
80,444 |
|
|
$ |
454,114 |
|
|
$ |
191,721 |
|
Metric tons sold |
|
|
3,166 |
|
|
|
2,137 |
|
|
|
9,204 |
|
|
|
6,120 |
|
Metric tons produced |
|
|
2,770 |
|
|
|
2,040 |
|
|
|
8,979 |
|
|
|
6,179 |
|
Average net selling price per metric ton |
|
$ |
158.25 |
|
|
$ |
149.73 |
|
|
$ |
157.88 |
|
|
$ |
147.61 |
|
Cash cost of sales per metric ton |
|
$ |
115.73 |
|
|
$ |
111.00 |
|
|
$ |
107.91 |
|
|
$ |
115.32 |
|
Cost of production % |
|
|
63 |
% |
|
|
67 |
% |
|
|
61 |
% |
|
|
67 |
% |
Transportation and royalties % |
|
|
37 |
% |
|
|
33 |
% |
|
|
39 |
% |
|
|
33 |
% |
Adjusted EBITDA |
|
$ |
124,027 |
|
|
$ |
70,641 |
|
|
$ |
424,285 |
|
|
$ |
163,697 |
|
Segment Adjusted EBITDA
We define Segment Adjusted EBITDA as net income adjusted for other revenues, cost of other revenues, depreciation and depletion, selling, general and administrative expenses, interest expense (income), income tax benefit (expense) and certain transactions or adjustments that the Chief Executive Officer, our Chief Operating Decision Maker, does not consider for the purposes of making decisions to allocate resources among segments or assessing segment performance. Segment Adjusted EBITDA is used as a supplemental financial measure by management and by external users of our consolidated financial statements, such as investors, industry analysts, lenders and ratings agencies, to assess:
18
Sales Volumes and Average Net Selling Price
We evaluate our operations based on the volume of coal we can safely produce and sell in compliance with regulatory standards, and the prices we receive for our steelmaking coal. Our sales volume and sales prices are largely dependent upon the terms of our annual steelmaking coal sales contracts, for which prices generally are set on daily index averages on a quarterly basis. The volume of steelmaking coal we sell is also a function of the pricing environment in the international steelmaking coal markets and the amounts of Low Vol and High Vol A coal that we sell. We evaluate the price we receive for our steelmaking coal based on our average net selling price per metric ton.
Our average net selling price per metric ton represents our coal net sales revenue divided by total metric tons of coal sold. In addition, our average net selling price per metric ton is net of demurrage and quality specification adjustments. We normally compete on a delivered basis when negotiating contract and spot transactions with our global customers. However, depending on market dynamics and other circumstances, the burden of ocean freight may be borne entirely by the supplier, shared between both partners, or assumed entirely by the customer. In the instance when we are responsible for the freight, the freight costs will reduce our net sales revenues and impact our net selling price realizations.
Cash Cost of Sales
We evaluate our cash cost of sales on a cost per metric ton basis. Cash cost of sales is based on reported cost of sales and includes items such as freight, royalties, manpower, fuel and other similar production and sales cost items, and may be adjusted for other items that, pursuant to accounting principles generally accepted in the United States ("GAAP"), are classified in the Condensed Statements of Operations as costs other than cost of sales, but relate directly to the costs incurred to produce steelmaking coal and sell it free-on-board at the Port of Mobile in Alabama. Our cash cost of sales per metric ton is calculated as cash cost of sales divided by the metric tons sold. Cash cost of sales is used as a supplemental financial measure by management and by external users of our consolidated financial statements, such as investors, industry analysts, lenders and ratings agencies, to assess:
We believe that this non-GAAP financial measure provides additional insight into our operating performance, and reflects how management analyzes our operating performance and compares that performance against other companies on a consistent basis for purposes of business decision making by excluding the impact of certain items that management does not believe are indicative of our core operating performance. We believe that cash cost of sales presents a useful measure of our controllable costs and our operational results by including all costs incurred to produce steelmaking coal and sell it free-on-board at the Port of Mobile in Alabama. Period-to-period comparisons of cash cost of sales are intended to help management identify and assess additional trends potentially impacting our Company that may not be shown solely by period-to-period comparisons of cost of sales. Cash cost of sales should not be considered an alternative to cost of sales or any other measure of financial performance or liquidity presented in accordance with GAAP. Cash cost of sales excludes some, but not all, items that affect cost of sales, and our presentation may vary from the presentations of other companies. As a result, cash cost of sales as presented below may not be comparable to similarly titled measures of other companies.
The following table presents a reconciliation of cash cost of sales to total cost of sales, the most directly comparable GAAP financial measure, on a historical basis for each of the periods indicated.
|
|
For the three months ended September 30, |
|
|
For the nine months ended September 30, |
|
||||||||||
(in thousands) |
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Cost of sales (exclusive of depreciation and depletion) |
|
$ |
368,514 |
|
|
$ |
239,525 |
|
|
$ |
998,978 |
|
|
$ |
711,672 |
|
Asset retirement obligation accretion |
|
|
(807 |
) |
|
|
(965 |
) |
|
|
(2,419 |
) |
|
|
(2,896 |
) |
Stock compensation expense |
|
|
(1,310 |
) |
|
|
(1,344 |
) |
|
|
(3,360 |
) |
|
|
(3,028 |
) |
Cash cost of sales |
|
$ |
366,397 |
|
|
$ |
237,216 |
|
|
$ |
993,199 |
|
|
$ |
705,748 |
|
19
Adjusted EBITDA
We define Adjusted EBITDA as net income before net interest expense (income), income tax expense (benefit), depreciation and depletion, non-cash asset retirement obligation accretion, non-cash stock compensation expense, other non-cash accretion and non-cash mark-to-market gain on gas hedges. Adjusted EBITDA is used as a supplemental financial measure by management and by external users of our consolidated financial statements, such as investors, industry analysts, lenders and ratings agencies, to assess:
We believe that the presentation of Adjusted EBITDA in this report provides information useful to investors in assessing our financial condition and results of operations. The GAAP measure most directly comparable to Adjusted EBITDA is net income. Adjusted EBITDA should not be considered an alternative to net income or any other measure of financial performance or liquidity presented in accordance with GAAP. Adjustments exclude some, but not all, items that affect net income and our presentation of Adjusted EBITDA may vary from that presented by other companies.
The following table presents a reconciliation of Adjusted EBITDA to net income, the most directly comparable GAAP financial measure, on a historical basis for each of the periods indicated.
|
|
For the three months ended September 30, |
|
|
For the nine months ended September 30, |
|
||||||||||
(in thousands) |
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Net income |
|
$ |
49,308 |
|
|
$ |
36,598 |
|
|
$ |
209,078 |
|
|
$ |
34,036 |
|
Interest expense (income), net |
|
|
1,919 |
|
|
|
(2,128 |
) |
|
|
5,884 |
|
|
|
(7,508 |
) |
Income tax (benefit) expense |
|
|
(433 |
) |
|
|
(13,746 |
) |
|
|
9,721 |
|
|
|
(15,466 |
) |
Depreciation and depletion |
|
|
68,106 |
|
|
|
43,594 |
|
|
|
178,672 |
|
|
|
132,126 |
|
Asset retirement obligation accretion (1) |
|
|
1,112 |
|
|
|
1,331 |
|
|
|
3,337 |
|
|
|
3,993 |
|
Stock compensation expense (2) |
|
|
3,400 |
|
|
|
5,211 |
|
|
|
15,977 |
|
|
|
15,309 |
|
Other non-cash accretion (3) |
|
|
615 |
|
|
|
491 |
|
|
|
1,616 |
|
|
|
1,502 |
|
Mark-to-market gain on gas hedges (4) |
|
|
- |
|
|
|
(710 |
) |
|
|
- |
|
|
|
(295 |
) |
Adjusted EBITDA |
|
$ |
124,027 |
|
|
$ |
70,641 |
|
|
$ |
424,285 |
|
|
$ |
163,697 |
|
20
Results of Operations
Three Months Ended September 30, 2026 and 2025
The following table summarizes certain unaudited financial information for these periods.
|
|
For the three months ended September 30, |
|
|||||||||||||
($ in thousands) |
|
2026 |
|
|
% of Total |
|
|
2025 |
|
|
% of Total |
|
||||
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Sales |
|
$ |
501,029 |
|
|
|
98.6 |
% |
|
$ |
319,969 |
|
|
|
97.4 |
% |
Other revenues |
|
|
6,899 |
|
|
|
1.4 |
% |
|
|
8,620 |
|
|
|
2.6 |
% |
Total revenues |
|
|
507,928 |
|
|
|
100.0 |
% |
|
|
328,589 |
|
|
|
100.0 |
% |
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cost of sales (exclusive of items shown separately below) |
|
|
368,514 |
|
|
|
72.6 |
% |
|
|
239,525 |
|
|
|
72.9 |
% |
Cost of other revenues (exclusive of items shown separately below) |
|
|
6,801 |
|
|
|
1.3 |
% |
|
|
7,546 |
|
|
|
2.3 |
% |
Depreciation and depletion |
|
|
68,106 |
|
|
|
13.4 |
% |
|
|
43,594 |
|
|
|
13.3 |
% |
Selling, general and administrative |
|
|
13,713 |
|
|
|
2.7 |
% |
|
|
17,200 |
|
|
|
5.2 |
% |
Total costs and expenses |
|
|
457,134 |
|
|
|
90.0 |
% |
|
|
307,865 |
|
|
|
93.7 |
% |
Operating income |
|
|
50,794 |
|
|
|
10.0 |
% |
|
|
20,724 |
|
|
|
6.3 |
% |
Interest expense |
|
|
(4,459 |
) |
|
|
(0.9 |
)% |
|
|
(2,307 |
) |
|
|
(0.7 |
)% |
Interest income |
|
|
2,540 |
|
|
|
0.5 |
% |
|
|
4,435 |
|
|
|
1.3 |
% |
Income before income tax benefit |
|
|
48,875 |
|
|
|
9.6 |
% |
|
|
22,852 |
|
|
|
7.0 |
% |
Income tax benefit |
|
|
(433 |
) |
|
|
(0.1 |
)% |
|
|
(13,746 |
) |
|
|
(4.2 |
)% |
Net income |
|
$ |
49,308 |
|
|
|
9.7 |
% |
|
$ |
36,598 |
|
|
|
11.1 |
% |
Sales and cost of sales components on a per unit basis were as follows:
|
|
For the three months ended September 30, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Met Coal (metric tons in thousands) |
|
|
|
|
|
|
||
Metric tons sold |
|
|
3,166 |
|
|
|
2,137 |
|
Metric tons produced |
|
|
2,770 |
|
|
|
2,040 |
|
Average net selling price per metric ton |
|
$ |
158.25 |
|
|
$ |
149.73 |
|
Cash cost of sales per metric ton |
|
$ |
115.73 |
|
|
$ |
111.00 |
|
Cost of production % |
|
|
63 |
% |
|
|
67 |
% |
Transportation and royalties % |
|
|
37 |
% |
|
|
33 |
% |
We produced 2.8 million metric tons of steelmaking coal for the three months ended September 30, 2026 compared to 2.0 million metric tons for the three months ended September 30, 2025, representing a 35.8% increase. The increased production was primarily driven by an increase in tons produced at the Blue Creek mine.
Sales for the three months ended September 30, 2026 were $501.0 million compared to $320.0 million for the three months ended September 30, 2025. The $181.1 million increase in sales was primarily driven by a $154.1 million increase due to a 48.2% increase in steelmaking coal sales volume primarily due to Blue Creek combined with a $27.0 million increase related to an $8.52 per metric ton increase in the average net selling price per metric ton of our steelmaking coal. The average net selling price of our steelmaking coal increased $8.52 from $149.73 per metric ton in the third quarter of 2025 to $158.25 per metric ton in the third quarter of 2026.
For the three months ended September 30, 2026, our geographic customer sales volume mix was 55% in Asia, 35% in Europe and 10% in South America. For the three months ended September 30, 2025, our geographic customer sales volume mix was 43% in Europe, 38% in Asia, 18% in South America and 1% in the United States. Our geographic customer mix typically varies each period based on the timing of customer orders and shipments.
Other revenues for the three months ended September 30, 2026 were $6.9 million compared to $8.6 million for the three months ended September 30, 2025. Other revenues are comprised of revenue derived from our natural gas operations, gains and losses on our
21
natural gas hedges and earned royalty revenue. The $1.7 million decrease in other revenues was primarily due to the prior year comparable period including a gain on mark-to-market gas hedges of $0.7 million.
Cost of sales was $368.5 million, or 72.6% of total revenues, for the three months ended September 30, 2026, compared to $239.5 million, or 72.9% of total revenues, for the three months ended September 30, 2025. The $129.0 million increase was primarily driven by a $114.2 million increase due to a 1,029 thousand metric ton increase in steelmaking coal sales volume primarily driven by coal sales from the Blue Creek mine and a $15.0 million increase due to a $4.73 per metric ton increase in cash cost of sales per metric ton reflecting lower production volumes at Mine No. 7, which resulted in production costs being absorbed over fewer tons, the effect of higher steelmaking coal prices on Warrior's variable cost structure (including transportation and royalties), and inflationary cost increases. These factors were partially offset by the lower-cost contribution from the Blue Creek mine and a benefit from the Section 45X credit. For the three months ended September 30, 2026, cost of production represented 63% of cost of sales and transportation and royalties accounted for approximately 37% compared to cost of production of 67% and transportation and royalties of 33% for the three months ended September 30, 2025.
Cost of other revenues was $6.8 million, or 1.3% of total revenues, for the three months ended September 30, 2026, compared to $7.6 million, or 2.3% of total revenues for the three months ended September 30, 2025. The decrease was primarily driven by a 9% decrease in gas sales volumes.
Depreciation and depletion expenses were $68.1 million, or 13.4% of total revenues, for the three months ended September 30, 2026, compared to $43.6 million, or 13.3% of total revenues for the three months ended September 30, 2025. The $24.5 million increase in depreciation and depletion is primarily driven by a 48.2% increase in steelmaking coal sales volume as depreciation and depletion is first capitalized into coal inventory and relieved when the tons are sold combined with an increase in additional assets placed into service at Blue Creek.
Selling, general and administrative expenses were $13.7 million, or 2.7% of total revenues, for the three months ended September 30, 2026, compared to $17.2 million, or 5.2% of total revenues, for the three months ended September 30, 2025. The $3.5 million decrease in selling, general and administrative expenses for the period was primarily due to a decrease in employee-related expenses.
Interest expense was $4.5 million, or 0.9% of total revenues, for the three months ended September 30, 2026, compared to interest expense of $2.3 million, or 0.7% of total revenues, for the three months ended September 30, 2025. The $2.2 million increase was due to capitalized interest no longer occurring with the finalization of the Blue Creek project and imputed interest on the federal coal lease obligations.
Interest income was $2.5 million, or 0.5% of total revenues for the three months ended September 30, 2026, compared to $4.4 million, or 1.3% of total revenues for the three months ended September 30, 2025. The $1.9 million decrease was primarily driven by a decrease in invested cash balances.
For the three months ended September 30, 2026, we recognized an income tax benefit of $0.4 million compared to an income tax benefit of $13.7 million for the three months ended September 30, 2025. We estimated our annual effective tax rate and applied this effective tax rate to our year-to-date pretax income at the end of the interim reporting period. The $0.4 million income tax benefit for the three months ended September 30, 2026, was driven by pre-tax income and depletion and Internal Revenue Code ("IRC") Section 250 Deduction: Foreign-Derived Deduction Eligible Income ("FDDEI") deductions. The prior year comparable period income tax benefit was driven by pre-tax income, depletion and FDII deductions.
The OBBBA was enacted on July 4, 2025, and updated the FDII to FDDEI, which provides for, among other things, a permanent deduction of 33.34% of FDDEI, which reduces the statutory tax rate to 14% of such income. The changes took effect for taxable years beginning after December 31, 2025.
22
Nine Months Ended September 30, 2026 and 2025
The following table summarizes certain unaudited financial information for these periods.
|
|
For the nine months ended September 30, |
|
|||||||||||||
($ in thousands) |
|
2026 |
|
|
% of Total |
|
|
2025 |
|
|
% of Total |
|
||||
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Sales |
|
$ |
1,453,092 |
|
|
|
98.4 |
% |
|
$ |
903,393 |
|
|
|
97.6 |
% |
Other revenues |
|
|
23,114 |
|
|
|
1.6 |
% |
|
|
22,662 |
|
|
|
2.4 |
% |
Total revenues |
|
|
1,476,206 |
|
|
|
100.0 |
% |
|
|
926,055 |
|
|
|
100.0 |
% |
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cost of sales (exclusive of items shown separately below) |
|
|
998,978 |
|
|
|
67.7 |
% |
|
|
711,672 |
|
|
|
76.8 |
% |
Cost of other revenues (exclusive of items shown separately below) |
|
|
22,164 |
|
|
|
1.5 |
% |
|
|
23,629 |
|
|
|
2.6 |
% |
Depreciation and depletion |
|
|
178,672 |
|
|
|
12.1 |
% |
|
|
132,126 |
|
|
|
14.3 |
% |
Selling, general and administrative |
|
|
51,709 |
|
|
|
3.5 |
% |
|
|
47,566 |
|
|
|
5.1 |
% |
Total costs and expenses |
|
|
1,251,523 |
|
|
|
84.8 |
% |
|
|
914,993 |
|
|
|
98.8 |
% |
Operating income |
|
|
224,683 |
|
|
|
15.2 |
% |
|
|
11,062 |
|
|
|
1.2 |
% |
Interest expense |
|
|
(13,156 |
) |
|
|
(0.9 |
)% |
|
|
(7,304 |
) |
|
|
(0.8 |
)% |
Interest income |
|
|
7,272 |
|
|
|
0.5 |
% |
|
|
14,812 |
|
|
|
1.6 |
% |
Net income before income tax expense (benefit) |
|
|
218,799 |
|
|
|
14.8 |
% |
|
|
18,570 |
|
|
|
2.0 |
% |
Income tax expense (benefit) |
|
|
9,721 |
|
|
|
0.7 |
% |
|
|
(15,466 |
) |
|
|
(1.7 |
)% |
Net income |
|
$ |
209,078 |
|
|
|
14.2 |
% |
|
$ |
34,036 |
|
|
|
3.7 |
% |
Sales and cost of sales components on a per unit basis were as follows:
|
|
For the nine months ended September 30, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Met Coal (metric tons in thousands) |
|
|
|
|
|
|
||
Metric tons sold |
|
|
9,204 |
|
|
|
6,120 |
|
Metric tons produced |
|
|
8,979 |
|
|
|
6,179 |
|
Average net selling price per metric ton |
|
$ |
157.88 |
|
|
$ |
147.61 |
|
Cash cost of sales per metric ton |
|
$ |
107.91 |
|
|
$ |
115.32 |
|
Cost of production % |
|
|
61 |
% |
|
|
67 |
% |
Transportation and royalties % |
|
|
39 |
% |
|
|
33 |
% |
We produced 9.0 million metric tons of steelmaking coal for the nine months ended September 30, 2026 compared to 6.2 million metric tons for the nine months ended September 30, 2025, representing a 45.3% increase. The increased production was primarily driven by an increase in tons produced at the Blue Creek mine.
Sales for the nine months ended September 30, 2026 were $1,453.1 million compared to $903.4 million for the nine months ended September 30, 2025. The $549.7 million or 60.8% increase in sales was primarily driven by a $455.2 million increase in sales due to a 50.4% or 3,084 thousand metric ton increase in steelmaking coal sales volume and a $94.5 million increase in sales related to a 7.0% or $10.27 per metric ton increase in the average net selling price per metric ton of steelmaking coal.
For the nine months ended September 30, 2026, our geographic customer sales volume mix was 55% in Asia, 32% in Europe, 12% in South America and 1% in the United States. For the nine months ended September 30, 2025, our geographic customer sales volume mix was 44% in Asia, 39% in Europe, 16% in South America and 1% in the United States. Our geographic customer mix typically varies each period based on the timing of customer orders and shipments.
23
Other revenues for the nine months ended September 30, 2026 were $23.1 million compared to $22.7 million for the nine months ended September 30, 2025. Other revenues are comprised of revenue derived from our natural gas operations, gains on sales and disposals of property, plant and equipment and land, changes in the fair value of our natural gas swap contracts, as well as earned royalty revenue. The $0.5 million increase in other revenues was due to an increase in the Southern Louisiana natural gas price average of 17% offset partially by a decrease in sales volume of 5% for the nine months ended September 30, 2026.
Cost of sales (exclusive of items shown separately below) was $999.0 million, or 67.7% of total revenues, for the nine months ended September 30, 2026, compared to $711.7 million, or 76.8% of total revenues for the nine months ended September 30, 2025. The $287.3 million increase was primarily driven by a $355.6 million increase due to a 50.4% or 3,084 thousand metric ton increase in steelmaking coal sales volume offset partially by a $68.2 million decrease due to a $7.41 per metric ton decrease in cash cost of sales per metric ton. The decrease in cash cost of sales per metric ton was due to the sales mix of Blue Creek coal and its inherent lower cost structure, a benefit from the Section 45X Credit of $28.9 million and an increase in tons produced. For the nine months ended September 30, 2026, cost of production represented 61% of cost of sales and transportation and royalties accounted for approximately 39% compared to cost of production of 67% and transportation and royalties of 33% for the nine months ended September 30, 2025.
Cost of other revenues was $22.2 million, or 1.5% of total revenues, for the nine months ended September 30, 2026, compared to $23.6 million, or 2.6% of total revenues for the nine months ended September 30, 2025. The decrease was primarily driven by a 5% decrease in gas sales volumes.
Depreciation and depletion expenses were $178.7 million, or 12.1% of total revenues, for the nine months ended September 30, 2026, compared to $132.1 million, or 14.3% of total revenues, for the nine months ended September 30, 2025. The $46.5 million increase in depreciation and depletion expenses was primarily driven by a 50.4% or 3,084 thousand metric ton increase in steelmaking coal sales volume as depreciation and depletion is first capitalized into coal inventory and relieved when the tons are sold combined with additional assets placed into service at Blue Creek.
Selling, general and administrative expenses were $51.7 million, or 3.5% of total revenues, for the nine months ended September 30, 2026, compared to $47.6 million, or 5.1% of total revenues, for the nine months ended September 30, 2025. The $4.1 million increase in selling, general and administrative expenses for the period was primarily due to an increase in employee related expenses offset partially by a gain of $2.4 million related to recoveries received in connection with the Walter Energy bankruptcy proceedings.
Interest expense was $13.2 million, or 0.9% of total revenues, for the nine months ended September 30, 2026, compared to $7.3 million, or 0.8% of total revenues, for the nine months ended September 30, 2025. The $5.9 million increase was due to capitalized interest no longer occurring with the finalization of the Blue Creek project and imputed interest on the federal coal lease obligations.
Interest income was $7.3 million, or 0.5% of total revenues for the nine months ended September 30, 2026, compared to $14.8 million, or 1.6% of total revenues, for the nine months ended September 30, 2025. The $7.5 million decrease was primarily driven by a decrease in invested cash balances.
We recognized income tax expense of $9.7 million and an income tax benefit of $15.5 million for the nine months ended September 30, 2026 and September 30, 2025, respectively. We estimated our annual effective tax rate and applied this effective tax rate to our year-to-date pre-tax income at the end of the interim reporting period. The effective income tax rate for the nine months ended September 30, 2026 varied from the statutory federal income tax rate of 21%, primarily due to pre-tax income and Internal Revenue Code ("IRC") Section 250 Deduction: Foreign-Derived Deduction Eligible Income ("FDDEI") deductions.
The OBBBA was enacted on July 4, 2025, and updated the FDII to FDDEI, which provides for, among other things, a permanent deduction of 33.34% of FDDEI, which reduces the statutory tax rate to 14% of such income. The changes took effect for taxable years beginning after December 31, 2025.
Liquidity and Capital Resources
Overview
Our sources of cash have been steelmaking coal and natural gas sales to customers, proceeds received from the Notes and access to our Amended ABL Facility. Historically, our primary uses of cash have been for funding the operations of our coal and natural gas production operations, working capital, our capital expenditures, including capital expenditures and mine development for the development of Blue Creek, our reclamation obligations, payment of principal and interest on our Notes, professional fees and other non-recurring transaction expenses. In addition, we used available cash on hand to repurchase shares of common stock and to pay our quarterly and special dividends, each of which reduces or reduced cash and cash equivalents.
24
Going forward, we plan to use cash to fund debt service payments on our Notes, the Amended ABL Facility and our other indebtedness, to fund operating activities, working capital, capital expenditures, our reclamation obligations, our finance lease obligations, our black lung obligations, our federal coal lease obligations, professional fees and other non-recurring transaction expenses and strategic investments, stock repurchases, and, if declared, to pay our quarterly and/or special dividends. Our ability to fund our capital needs going forward will depend on our ongoing ability to generate cash from operations and borrowing availability under the Amended ABL Facility, and, in the case of any future strategic investments, capital needs or special dividends financed partially or wholly with debt financing and our ability to access the capital markets to raise additional capital.
Our total liquidity as of September 30, 2026 was $577.6 million, consisting of cash and cash equivalents of $437.1 million and $140.5 million available under our Amended ABL Facility. As of September 30, 2026, no loans were outstanding under the Amended ABL Facility and there were $2.5 million of letters of credit issued and outstanding under the Amended ABL Facility.
In the future, we may, at any time and from time to time, seek to retire or purchase additional Notes in open-market purchases, privately negotiated transactions or otherwise. Such repurchases or exchanges, if any, will be upon such terms and at such prices as we may determine, and will depend on prevailing market conditions, our liquidity requirements, contractual restrictions, if any, and other factors.
We are responsible for medical and disability benefits for black lung disease under the Federal Coal Mine Health and Safety Act of 1969, as amended. Beginning on April 1, 2016 through May 31, 2018, we were insured under a guaranteed cost insurance policy, through a third-party insurance carrier, for black lung claims raised by any employee subsequent to the acquisition of certain assets of Walter Energy, Inc. ("Walter Energy"). From June 1, 2018 to May 31, 2020 and June 1, 2020 to May 31, 2024, we had a deductible policy where the Company was responsible for the first $0.5 million and $1.0 million, respectively, for each black lung and workers compensation related claim from any of our employees. Beginning on June 1, 2024, we have a deductible policy where we are responsible for the first $2.0 million of each black lung and workers compensation related claim from any of our employees.
We assumed all of the black lung liabilities of Walter Energy and its U.S. subsidiaries. We are self-insured for these black lung liabilities and have posted $18.6 million in surety bonds and $10.2 million of collateral recognized as short-term investments in addition to maintaining a black lung trust of $0.6 million that was acquired from Walter Energy. We received a letter from the Division of Coal Mine Workers' Compensation ("DCMWC") on February 21, 2020, under its new process for self-insurance renewals, which would require us to increase the amount of collateral posted to $39.8 million, but we appealed such increase. We received another letter from the DCMWC on December 8, 2021 requesting additional information to support our appeal of the collateral requested by the DOL. On February 9, 2022, the DCMWC held a conference call with representatives from the Company related to our appeal. On July 12, 2022, we received a decision on our appeal from the DCMWC lowering the amount of collateral required to be posted from $39.8 million to $28.0 million. We appealed this decision.
On January 19, 2023, the DOL proposed revisions to regulations under the Black Lung Benefits Act governing authorization of self-insurers, which was then subsequently revised as part of the final rules published on December 12, 2024, which became effective on January 13, 2025 (the "2025 Final Regulations"). The 2025 Final Regulations required, among other requirements, all self-insured operators to post security of at least 100 percent of their projected black lung liabilities. On January 14, 2025, we received a letter from the DCMWC outlining the new procedures and application process for authorizing operators to self-insure under the new regulations. The letter outlined authorization form requirements and provided a 60-day period for the submission of the required documents. Subsequently, on February 20, 2025, we received another letter from the DCMWC stating that the 60-day deadline to provide information was no longer applicable and no information was required to be submitted at this time. DCMWC further stated that additional guidance would be provided in due course after consultation with the new DOL leadership.
On July 30, 2026, the DOL published a notice of proposed rulemaking that would amend the 2025 Final Regulations. Among other changes, the proposal would replace the current requirement that self-insured operators post security equal to 100% of projected black lung liabilities with a risk-based framework and would permit qualifying operators to phase in required security over a three-year period. The proposed rule may be modified before adoption. The Company is evaluating the proposal and cannot currently predict the ultimate outcome of the rulemaking or reasonably estimate its effect, if any, on the Company's financial position, results of operations or liquidity.
In the ordinary course of our business, we are required to provide surety bonds and letters of credit to provide financial assurance for certain transactions and business activities. Federal and state laws require us to obtain surety bonds or other acceptable security to secure payment of certain long-term obligations including mine closure or reclamation costs and other miscellaneous obligations. As of September 30, 2026, we had outstanding surety bonds and letters of credit with parties for post-mining reclamation at all of our mining operations totaling $47.5 million, $18.6 million as collateral for self-insured black lung related claims, $16.0 million for federal coal leases and $6.4 million for miscellaneous purposes.
We believe that our future cash flows from operations, together with cash on our balance sheet and proceeds from the borrowings under our Amended ABL Facility, will provide adequate resources to fund our debt service payments, asset retirement
25
obligations, finance lease obligations, federal coal lease obligations, black lung obligations and planned operating and capital expenditure needs for at least the next twelve months and beyond.
The Company's principal contractual commitments include repayments of long-term debt and related interest, potential minimum throughput payments associated with our rail and port providers, asset retirement obligation payments, black lung obligation payments, payments on various coal and land leases, including the federal coal lease obligations, and payments under financing lease obligations. Currently, there are no known trends or expected changes anticipated in future periods that would not be indicative of past results for our contractual commitments.
Refer to the respective notes to our audited financial statements for the year ended December 31, 2025 included in our 2025 Annual Report for further information about our asset retirement obligations (Note 9), black lung obligations (Note 10), financing lease payment obligations (Note 11), federal coal leases (Note 12), credit facilities and long-term debt (Note 13), commitments and contingencies (Note 14), share repurchase programs (Note 17) and derivative instruments (Note 18).
If our cash flows from operations are less than we require, we may need to incur additional debt or issue additional equity. From time to time, we may need to access the long-term and short-term capital markets to obtain financing. Our access to, and the availability of, financing on acceptable terms and conditions in the future will be affected by many factors, including: (i) our credit ratings, (ii) the liquidity of the overall capital markets, (iii) the current state of the global economy and (iv) restrictions in our Amended ABL Facility, the indenture governing the Notes (the "Indenture"), and any other existing or future debt agreements. There can be no assurance that we will have or continue to have access to the capital markets on terms acceptable to us or at all.
Statements of Cash Flows
Cash and cash equivalent balances were $437.1 million and $300.0 million at September 30, 2026 and December 31, 2025, respectively.
The following table sets forth a summary of the net cash provided by (used in) operating, investing and financing activities for the period (in thousands):
|
|
For the nine months ended September 30, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Net cash provided by operating activities |
|
$ |
286,539 |
|
|
$ |
153,157 |
|
Net cash used in investing activities |
|
|
(92,768 |
) |
|
|
(305,926 |
) |
Net cash used in financing activities |
|
|
(56,463 |
) |
|
|
(2,266 |
) |
Net increase (decrease) in cash, cash equivalents and restricted cash |
|
$ |
137,308 |
|
|
$ |
(155,035 |
) |
Operating Activities
Net cash flows from operating activities consist of net income adjusted for noncash items, such as depreciation and depletion of property, plant and equipment and mineral interests, deferred income tax expense (benefit), stock-based compensation expense, amortization of debt issuance costs and debt discount, accretion of asset retirement obligations, mark-to-market adjustments on gas hedges and changes in net working capital. The timing between the conversion of our billed and unbilled receivables into cash from our customers, production and sale of coal inventory and disbursements to our vendors is the primary driver of changes in our working capital.
Net cash provided by operating activities was $286.5 million for the nine months ended September 30, 2026, and was primarily attributed to a net income of $209.1 million adjusted for depreciation and depletion expense of $178.7 million, stock based compensation expense of $16.0 million, deferred income tax expense of $5.9 million, accretion of asset retirement obligations of $3.3 million and amortization of debt issuance costs and debt discount of $1.1 million offset by an increase in our net working capital of $125.8 million. The increase in net working capital reflects higher accounts receivable due to higher sales volumes and the timing of sales, higher prepaid expenses and other receivables due to an income tax receivable related to the 45X credit and deposits on future finance lease obligations and lower accrued expenses due to timing of payments.
Net cash provided by operating activities was $153.2 million for the nine months ended September 30, 2025, and was primarily attributed to a net income of $34.0 million adjusted for depreciation and depletion expense of $132.1 million, stock based compensation expense of $15.3 million, deferred income tax benefit of $14.3 million, accretion of asset retirement obligations of $4.0 million, amortization of debt issuance costs and debt discount of $1.2 million and mark-to-market gain on gas hedges of $0.3 million offset by an increase in our net working capital of $14.6 million. The increase in our working capital was primarily driven by increases in prepaid longwall costs and higher inventory balances, offset partially by higher accounts payable due to timing of payments.
26
Investing Activities
Net cash used in investing activities was $92.8 million and $305.9 million for the nine months ended September 30, 2026 and 2025, respectively, primarily due to purchases of property, plant and equipment and mine development offset partially by proceeds from the sale of investments.
Financing Activities
Net cash used in financing activities was $56.5 million for the nine months ended September 30, 2026, primarily due to principal repayments of finance lease obligations of $28.5 million, payments for taxes related to net share settlement of equity awards of $14.8 million and payment of regular quarterly dividends of $13.2 million.
Net cash used in financing activities was $2.3 million for the nine months ended September 30, 2025, primarily due to the receipt of proceeds on equipment financing for leases yet to commence of $48.8 million offset by principal repayments of finance lease obligations of $28.0 million, payment of regular quarterly dividends of $13.6 million, and payments for taxes related to net share settlement of equity awards of $9.4 million.
Capital Allocation Policy
On May 17, 2017, the Board adopted the Capital Allocation Policy of paying a quarterly cash dividend of $0.05 per share. In February 2022, we announced that the Board approved an increase in the regular quarterly cash dividend by 20%, from $0.05 per share to $0.06 per share. In February 2023, we announced that the Board approved an increase in the regular quarterly cash dividend by 17%, from $0.06 per share to $0.07 per share. On February 9, 2024, we announced the Board approved an increase in the regular quarterly cash dividend by 14% from $0.07 per share to $0.08 per share. We intend on returning cash to stockholders in stronger price markets where we are generating significant amounts of cash flow, and less cash to stockholders during weaker markets. We also intend on using stock repurchases when there is no short- or long-term use for additional cash that will deliver meaningful value to stockholders. We have paid a regular quarterly cash dividend every quarter since the Board adopted the Capital Allocation Policy.
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. The Company will also seek to optimize its capital structure to improve returns to stockholders while allowing flexibility for the Company to pursue selective strategic growth opportunities that can provide compelling stockholder returns.
During the nine months ended September 30, 2026, we paid $13.2 million of regular quarterly dividends under the Capital Allocation Policy.
Regular Quarterly Dividend
On February 11, 2025, our Board declared a regular quarterly cash dividend of $0.08 per share, which was paid March 3, 2025, to stockholders of record as of the close of business on February 24, 2025.
On April 23, 2025, our Board declared a regular quarterly cash dividend of $0.08 per share, which was paid on May 12, 2025, to stockholders of record as of the close of business on May 5, 2025.
On July 29, 2025, our Board declared a regular quarterly cash dividend of $0.08 per share, which was paid on August 15, 2025, to stockholders of record as of the close of business on August 8, 2025.
On October 28, 2025, our Board declared a regular quarterly cash dividend of $0.08 per share, which was paid on November 14, 2025, to stockholders of record as of the close of business on November 7, 2025.
On February 10, 2026, the Board declared a regular quarterly cash dividend of $0.08 per share, which was paid on March 2, 2026, to stockholders of record as of the close of business on February 23, 2026.
On April 20, 2026, the Board declared a regular quarterly cash dividend of $0.08 per share, which was paid on May 7, 2026, to stockholders of record as of the close of business on May 1, 2026.
On July 28, 2026, the Board declared a regular quarterly cash dividend of $0.08 per share, which was paid on August 17, 2026, to stockholders of record as of the close of business on August 10, 2026.
27
On October 27, 2026, the Board declared a regular quarterly cash dividend of $0.08 per share, which the Company plans to distribute on November 13, 2026, to stockholders of record as of the close of business on November 6, 2026.
Special Dividend
On October 27, 2026, the Board declared a special cash dividend of $2.00 per share, which the Company plans to distribute on November 20, 2026, to stockholders of record as of the close of business on November 9, 2026.
Amended ABL Facility
On August 28, 2025, Warrior Met Coal, Inc. (the “Company”) entered into that certain First Amendment to Second Amended and Restated Asset-Based Revolving Credit Agreement (the “Amendment”), by and among the Company and certain of its subsidiaries, as borrowers, the guarantors party thereto, the lenders party thereto and Citibank, N.A. as administrative agent, which amended the Company's Second Amended and Restated Asset-Based Revolving Credit Agreement (the “credit facility”, and the credit facility as amended by the Amendment, the “Amended ABL Facility”). The Amendment, among other things, (i) increased the aggregate commitments available to be borrowed under the Amended ABL Facility by $27.0 million to $143.0 million; (ii) extended the maturity date of the credit facility to the earlier of (x) August 28, 2030 and (y) 91 days prior to the maturity date of the Company's 7.875% Senior Notes due 2028 (if such notes are still outstanding as of such date); and (iii) amended certain borrowing base calculations and other terms and provisions of the credit facility. As of September 30, 2026, no loans were outstanding under the Amended ABL Facility and there were $2.5 million of letters of credit issued and outstanding under the Amended ABL Facility. At September 30, 2026, we had $140.5 million of availability under the Amended ABL Facility.
Revolving loan (and letter of credit) availability under the Amended ABL Facility is subject to a borrowing base, which at any time is equal to the sum of certain eligible billed and unbilled accounts receivable, certain eligible inventory, certain eligible supplies inventory and qualified cash, in each case, subject to specified advance rates. The borrowing base availability is subject to certain reserves, which may be established by the agent in its reasonable credit discretion. The reserves may include rent reserves, lower of cost or market reserves, port charges reserves and any other reserves that the Agent determines in its reasonable credit judgment to the extent such reserves relate to conditions that could reasonably be expected to have an adverse effect on the value of the collateral included in the borrowing base.
Borrowings under the Amended ABL Facility bear interest at a rate equal to either (i) the Secured Overnight Financing Rate ("SOFR"), or (ii) an alternate base rate plus, in each case of the foregoing (i) and (ii), an applicable margin, which is determined based on the average availability of the commitments under the Amended ABL Facility, ranging currently from 150 bps to 200 bps or 50 bps to 100 bps, respectively. In addition to paying interest on the outstanding borrowings under the Amended ABL Facility, we are required to pay a fee in respect of unutilized commitments, which is based on the availability of the commitments under the Amended ABL Facility, ranging from 25 bps to 37.5 bps. We are also required to pay a fee on amounts available to be drawn under outstanding letters of credit under the Amended ABL Facility at a rate not in excess of 200 bps, and certain administrative fees.
The Amended ABL Facility contains customary covenants for asset-based credit agreements of this type, including among other things: (i) requirements to deliver financial statements, other reports and notices; (ii) restrictions on the existence or incurrence of certain indebtedness; (iii) restrictions on the existence or incurrence of certain liens; (iv) restrictions on making certain restricted payments; (v) restrictions on making certain investments; (vi) restrictions on certain mergers, consolidations and asset dispositions; (vii) restrictions on certain transactions with affiliates; and (viii) restrictions on modifications to certain indebtedness. Additionally, the Amended ABL Facility contains a springing fixed charge coverage ratio of not less than 1.00 to 1.00, which ratio is tested if availability under the Amended ABL Facility is less than a certain amount. As of September 30, 2026, we were not subject to this covenant. Subject to customary grace periods and notice requirements, the Amended ABL Facility also contains customary events of default.
We were in compliance with all applicable covenants under the Amended ABL Facility as of September 30, 2026.
Senior Secured Notes
On December 6, 2021, we issued $350.0 million in aggregate principal amount of 7.875% senior secured notes due 2028 (the “Notes”) at an initial price of 99.3% of their face amount. The Notes were issued to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), and to certain non-U.S. persons in transactions outside the United States in accordance with Regulation S under the Securities Act. We used the net proceeds of the offering of the Notes, together with cash on hand, to fund the redemption of all of our outstanding 8.00% senior secured notes due 2024 (the “Existing Notes”), including payment of the redemption premium in connection with such redemption. Since inception, the Company has paid down principal totaling $193.5 million on the Notes. Interest on the Notes is payable on June 1 and December 1 of each year, commencing on June 1, 2022. The Notes will mature on December 1, 2028.
28
Capital Expenditures
Our mining operations require investments to maintain, expand, upgrade or enhance our operations and to comply with environmental regulations. Maintaining and expanding mines and related infrastructure is capital intensive. Specifically, the exploration, permitting and development of met coal reserves, mining costs, the maintenance of machinery and equipment and compliance with applicable laws and regulations require ongoing capital expenditures. The cost of our capital expenditures is also impacted by inflation and tariffs and any prolonged inflation and/or tariffs could result in higher costs and decreased margins and earnings. While a significant amount of the capital expenditures required at our mines has been spent, we must continue to invest capital to maintain our production. In addition, any decisions to increase production at our mines could also affect our capital needs or cause future capital expenditures to be higher than in the past and/or higher than our estimates.
To fund our capital expenditures, we may be required to use cash from our operations, incur debt or sell equity securities. Our ability to obtain bank financing or our ability to access the capital markets for future equity or debt offerings may be limited by our financial condition at the time of any such financing or offering and the covenants in our current or future debt agreements, as well as by general economic conditions and uncertainties that are beyond our control.
Our capital expenditures were $136.2 million and $226.1 million for the nine months ended September 30, 2026 and September 30, 2025, respectively. Capital expenditures for these periods are primarily related to investments required to finalize the development of Blue Creek as well as expenditures necessary to maintain our property, plant and equipment. Capital expenditures for the development of Blue Creek for the nine months ended September 30, 2026 were $71.3 million and $1,028.1 million has been spent on this project to date. Our deferred mine development costs were $71.8 million for the nine months ended September 30, 2025, and relate to the development of Blue Creek.
Our capital spending is expected to range from $155.0 million to $190.0 million for the full year 2026, consisting of sustaining capital expenditures of approximately $105.0 to $115.0 million and discretionary capital expenditures of $71.3 million invested for the final construction of Blue Creek. Our sustaining capital expenditures include expenditures related to longwall operations and continuous miners.
Critical Accounting Policies
The financial statements are prepared in conformity with U.S. GAAP, which requires the use of estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses in the period presented. Management evaluates these estimates and assumptions on an ongoing basis, using historical experience, consultation with experts and other methods considered reasonable in the particular circumstances. Nevertheless, actual results may differ significantly from management’s estimates.
Our most critical accounting estimates are those that are most important to the presentation of our financial condition and results of operations and require management’s most difficult, subjective and complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. These estimates are based upon management’s historical experience and on various other assumptions that we believe are reasonable under the circumstances. Changes in estimates used in these and other items could have a material impact on our financial statements.
As of September 30, 2026, there have been no material changes to our critical accounting estimates as described in the "Critical Accounting Policies" in Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations in the 2025 Annual Report.
Off-Balance Sheet Arrangements
In the ordinary course of our business, we are required to provide surety bonds and letters of credit to provide financial assurance for certain transactions and business activities. Federal and state laws require us to obtain surety bonds or other acceptable security to secure payment of certain long-term obligations including mine closure or reclamation costs and other miscellaneous obligations. As of September 30, 2026, we had outstanding surety bonds and letters of credit with parties for post-mining reclamation at all of our U.S. mining operations totaling $47.5 million, for collateral for self-insured black lung related claims totaling $18.6 million, for federal coal leases totaling $16.0 million and for miscellaneous purposes totaling $6.4 million.
29
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Commodity Price Risk
We are exposed to commodity price risk on sales of coal. We typically sell our steelmaking coal under contracts primarily with pricing terms of three months and volume terms of one to three years. Sales commitments in the steelmaking coal market are typically not long-term in nature, and we are, therefore, subject to fluctuations in market pricing.
We occasionally enter into natural gas swap contracts to hedge the exposure to variability in expected future cash flows associated with the fluctuations in the price of natural gas related to our forecasted sales. Our natural gas swap contracts economically hedge certain risk but are not designated as hedges for financial reporting purposes. All changes in the fair value of these derivative instruments are recorded as other revenues in the Condensed Statements of Operations. Historically, all of our derivative instruments were entered into for hedging purposes rather than speculative trading. As of September 30, 2026, the Company had no gas contracts outstanding.
We have exposure to price risk for supplies that are used directly or indirectly in the normal course of production, such as diesel fuel, steel, tungsten, explosives and other items. We manage our risk for these items through strategic sourcing contracts in normal quantities with our suppliers. We historically have not entered into any derivative commodity instruments to manage the exposure to changing price risk for supplies.
Credit Risk
Financial instruments that potentially subject us to a concentration of credit risk consist principally of trade receivables. We provide our products to customers based on an evaluation of the financial condition of our customers. In some instances, we require letters of credit, cash collateral or prepayments from our customers on or before shipment to mitigate the risk of loss. Exposure to losses on receivables is principally dependent on each customer’s financial condition. We monitor the exposure to credit losses and maintain allowances for anticipated losses. As of September 30, 2026 and December 31, 2025, the estimated allowance for credit losses was immaterial and did not have a material impact on the Company's financial statements.
Interest Rate Risk
We are exposed to market risk from changes in interest rates. Our Notes have a fixed rate of interest of 7.875% per annum and are payable semi-annually in arrears on June 1 and December 1 of each year.
Our Amended ABL Facility bears an interest rate equal to SOFR, or an alternate base rate plus an applicable margin, which is determined based on the average availability of the commitments under the Amended ABL Facility, ranging currently from 150 bps to 200 bps or 50 bps to 100 bps, respectively. Any debt that we incur under the Amended ABL Facility will expose us to interest rate risk. If interest rates increase significantly in the future, our exposure to interest rate risk will increase. As of September 30, 2026, assuming we had $140.5 million outstanding under our Amended ABL Facility, a 100-basis point increase or decrease in interest rates would increase or decrease our annual interest expense under the Amended ABL Facility by approximately $1.4 million.
Impact of Inflation
We have exposure to inflation for supplies that are used directly or indirectly in the normal course of production, such as belt structure, roof bolts, bits, cable, magnetite, rock dust and other supplies, plus labor and parts on repair and rebuild equipment. These inflationary pressures have contributed to rising costs for us and may continue to do so in the future. We are applying a number of different strategies to mitigate the impact of inflation on our operations, including placing purchase orders earlier, utilizing short term contracts and leveraging our supplier relationships.
Tariff Risks
We are exposed to the impact of tariffs. New and existing tariffs as well as other trade measures that may be implemented by the U.S. or retaliatory trade measures or tariffs implemented by other countries could result in reduced economic activity, increased costs in operating our business, reduced demand and/or changes in purchasing behavior for steelmaking coal, disruptions in our supply chain, material changes in the pricing of steelmaking coal, limits on trade with the United States or other potentially adverse economic outcomes. We continue to analyze the impact of tariffs on our business and actions we can take to minimize their impact.
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ITEM 4. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
As required by Rule 13a-15(b) under the Exchange Act, our management, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) under the Exchange Act) as of September 30, 2026. Based on the evaluation of our disclosure controls and procedures as of September 30, 2026, our Chief Executive Officer and Chief Financial Officer have concluded that, as of September 30, 2026, our disclosure controls and procedures were effective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is (1) recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms and (2) accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosures.
Changes in Internal Control Over Financial Reporting
There have been no changes in our internal control over financial reporting that occurred during our most recently completed fiscal quarter that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Limitations on the Effectiveness of Disclosure Controls and Procedures
In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
See Note 8 of the “Notes to Condensed Financial Statements” in this Form 10-Q for a description of current legal proceedings, which is incorporated by reference in this Part II, Item 1.
We and our subsidiaries are parties to a number of other lawsuits arising in the ordinary course of our business. We record costs relating to these matters when a loss is probable and the amount can be reasonably estimated. The effect of the outcome of these matters on our future results of operations cannot be predicted with certainty as any such effect depends on future results of operations and the amount and timing of the resolution of such matters. While the results of litigation cannot be predicted with certainty, we believe that the final outcome of such litigation will not have a material adverse effect on our financial statements.
Item 1A. Risk Factors.
There have been no material changes to the risk factors disclosed in “Risk Factors” in “Part I, Item 1A. Risk Factors” in our 2025 Annual Report. Our business, financial condition, operating results and cash flows can be impacted by a number of factors, any one of which could cause actual results to vary materially from recent results or from anticipated future results. In addition to the other information set forth in this Form 10-Q, you should carefully consider the risks discussed in “Part I, Item 1A. Risk Factors” in our 2025 Annual Report, which could materially affect our business, financial condition or future results. However, the risks described in our 2025 Annual Report are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also become material and adversely affect our business, financial condition and/or operating results.
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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
The following table sets forth share repurchases of our common stock made during the three months ended September 30, 2026:
Period |
|
Total |
|
|
Average |
|
|
Total |
|
|
Approximate |
|
||||
July 1, 2026 - July 31, 2026 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
New Stock Repurchase Program(1) |
|
|
— |
|
|
$ |
— |
|
|
|
— |
|
|
$ |
59,000,000 |
|
Employee Transactions(2) |
|
|
— |
|
|
$ |
— |
|
|
|
— |
|
|
|
|
|
August 1, 2026 - August 31, 2026 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
New Stock Repurchase Program(1) |
|
|
— |
|
|
$ |
— |
|
|
|
— |
|
|
|
|
|
Employee Transactions(2) |
|
|
— |
|
|
$ |
— |
|
|
|
— |
|
|
|
|
|
September 1, 2026 - September 30, 2026 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
New Stock Repurchase Program(1) |
|
|
— |
|
|
$ |
— |
|
|
|
— |
|
|
|
|
|
Employee Transactions(2) |
|
|
— |
|
|
$ |
— |
|
|
|
— |
|
|
|
|
|
Total |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Item 3. Defaults on Senior Securities.
None.
Item 4. Mine Safety Disclosures.
The information concerning mine safety violations and other regulatory matters is filed as Exhibit 95 to this Form 10-Q pursuant to the requirements of Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K (17 CFR 229.104).
Item 5. Other Information.
Rule 10b5-1 Trading Plans
From time to time, members of the Company's Board of Directors and officers of the Company may enter into Rule 10b5-1 trading plans, which allow for the purchase or sale of common stock under pre-established terms at times when directors and officers might otherwise be prevented from trading under insider trading laws or because of self-imposed blackout periods. Such trading plans are intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act and comply with the Company's insider trading policy. During the three months ended September 30, 2026, none of the Company's directors or officers
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Item 6. Exhibits
Exhibit Number |
|
Description |
3.1 |
|
Certificate of Incorporation of Warrior Met Coal, Inc. (incorporated by reference to Exhibit 3.1 to the Registrant’s Registration Statement on Form S-8 (File No. 333-217389) filed with the Commission on April 19, 2017). |
|
|
|
3.2 |
|
Certificate of Amendment to the Certificate of Incorporation of Warrior Met Coal, Inc. (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K (File No. 001-38061) filed with the Commission on March 20, 2020). |
|
|
|
3.3 |
|
Second Certificate of Amendment of the Certificate of Incorporation of Warrior Met Coal, Inc. (incorporated by reference to Exhibit 3.1 to the Registrant's Current Report on Form 8-K (File No. 001-38061) filed with the Commission on April 26, 2022). |
|
|
|
3.4 |
|
Second Amended and Restated Bylaws of Warrior Met Coal, Inc. (incorporated by reference to Exhibit 3.1 to the Registrant's Current Report on Form 8-K (File No. 001-38061) filed with the Commission on August 1, 2025). |
|
|
|
3.5 |
|
Certificate of Designations of Series A Junior Participating Preferred Stock of Warrior Met Coal, Inc., as filed with the Secretary of State of the State of Delaware on February 14, 2020 (incorporated by reference to Exhibit 3.1 to the Registrant's Current Report on Form 8-K (File No. 001-38061) filed with the Commission on February 14, 2020) |
|
|
|
10.1 |
|
First Amendment to Second Amended and Restated Asset-Based Revolving Credit Agreement, dated as of August 28, 2025, by and among Warrior Met Coal, Inc. and certain of its subsidiaries, as borrowers, the guarantors party thereto, the lenders party thereto and Citibank, N.A., as administrative agent) (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (File No. 001-38061) filed with the Commission on September 2, 2025). |
|
|
|
10.2 |
|
Federal Coal Lease ALES-056519/ALES106175190: Warrior Met Coal BC, LLC (incorporated by reference to Exhibit 10.34 to the Registrant's Annual Report on Form 10-K (File No. 001-38061) filed with the Commission on February 12, 2026). |
|
|
|
10.3 |
|
Federal Coal Lease ALES-055797/ALES105879673: Warrior Met Coal Mining, LLC (incorporated by reference to Exhibit 10.35 to the Registrant's Annual Report on Form 10-K (File No. 001-38061) filed with the Commission on February 12, 2026). |
|
|
|
10.4† |
|
Warrior Met Coal, Inc. 2026 Equity Incentive Plan (incorporated by reference to Exhibit 4.6 to the Registrant's Registration Statement on Form S-8 (File No. 333-295185) filed with the Commission on April 20, 2026). |
|
|
|
31.1* |
|
Certification of Chief Executive Officer Pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended. |
|
|
|
31.2* |
|
Certification of Chief Financial Officer Pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended. |
|
|
|
32.1** |
|
Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
|
|
|
95* |
|
Mine Safety Disclosures Pursuant to Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K (17 CFR 229.104). |
|
|
|
101.INS* |
|
XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |
|
|
|
101.SCH* |
|
Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents |
|
|
|
104 |
|
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
* Filed herewith.
** Furnished herewith.
† Management contract, compensatory plan or arrangement.
33
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
|
WARRIOR MET COAL, INC. |
|
|
|
|
|
|
|
Date: November 4, 2026 |
By: |
/s/ Dale W. Boyles |
|
|
Dale W. Boyles |
|
|
Chief Financial Officer (on behalf of the registrant and as Principal Financial and Accounting Officer) |
34