SunCoke Energy, Inc. Reports Third Quarter 2024 Results
-
Third quarter 2024 net income was
$33.3 million , compared to$8.5 million in the prior year period; third quarter 2024 net income attributable to SXC was$30.7 million , or$0.36 per diluted share, compared to$7.0 million , or$0.08 per diluted share in the prior year period -
Consolidated Adjusted EBITDA(1) for the quarter was
$75.3 million , compared to$65.4 million in the prior year period -
Received a regulatory exemption from the
United States Department of Labor (DOL), eliminating the majority of our legacy black lung liabilities in exchange for a one-time payment of$36.0 million , resulting in a one-time gain of$9.5 million -
Extended
Granite City coke supply agreement withU.S. Steel throughJune 2025 -
Signed a three-year, take-or-pay coal handling agreement at
Kanawha River Terminal , beginning in Q2 2025; capital investment of$12 million to develop additional handling capacity -
Increasing full-year 2024 Consolidated Adjusted EBITDA(1) guidance range to
$260 million -$270 million , reflecting favorable logistics performance, and the gain resulting from the DOL regulatory exemption
"Our domestic coke fleet continued running at full capacity this quarter, and our logistics segment again delivered strong results," said
(1) See definition of Adjusted EBITDA and reconciliation to GAAP elsewhere in this release.
THIRD QUARTER CONSOLIDATED RESULTS
|
Three Months Ended |
||||||||
(Dollars in millions) |
|
2024 |
|
|
2023 |
|
Increase (decrease) |
||
Revenues |
$ |
490.1 |
|
$ |
520.4 |
|
$ |
(30.3 |
) |
Net income attributable to SXC |
$ |
30.7 |
|
$ |
7.0 |
|
$ |
23.7 |
|
Adjusted EBITDA(1) |
$ |
75.3 |
|
$ |
65.4 |
|
$ |
9.9 |
|
(1) See definition of Adjusted EBITDA and reconciliation to |
Revenues in the third quarter of 2024 decreased
Net income attributable to SXC increased
Adjusted EBITDA increased
THIRD QUARTER SEGMENT RESULTS
Domestic Coke
Domestic Coke consists of cokemaking facilities and heat recovery operations at our Jewell,
|
Three Months Ended |
||||||||
(Dollars in millions, except per ton amounts) |
|
2024 |
|
|
2023 |
|
Increase (decrease) |
||
Revenues |
$ |
459.9 |
|
$ |
495.7 |
|
$ |
(35.8 |
) |
Adjusted EBITDA(1) |
$ |
58.1 |
|
$ |
64.0 |
|
$ |
(5.9 |
) |
Sales volumes (thousands of tons) |
|
1,027 |
|
|
1,016 |
|
|
11 |
|
Adjusted EBITDA per ton(2) |
$ |
56.57 |
|
$ |
62.99 |
|
$ |
(6.42 |
) |
(1) See definition of Adjusted EBITDA elsewhere in this release. |
|||||||||
(2) Reflects Domestic Coke Adjusted EBITDA divided by Domestic Coke sales volumes. |
Revenues in the third quarter of 2024 decreased
Adjusted EBITDA in the third quarter of 2024 decreased
Logistics
Logistics consists of the handling and mixing services of coal and other aggregates at our
|
Three Months Ended |
||||||||
(Dollars in millions, except per ton amounts) |
|
2024 |
|
|
2023 |
|
Increase (decrease) |
||
Revenues |
$ |
21.4 |
|
$ |
15.6 |
|
$ |
5.8 |
|
Intersegment sales |
$ |
6.0 |
|
$ |
5.6 |
|
$ |
0.4 |
|
Adjusted EBITDA(1) |
$ |
13.7 |
|
$ |
8.4 |
|
$ |
5.3 |
|
Tons handled (thousands of tons)(2) |
|
5,843 |
|
|
4,961 |
|
|
882 |
|
(1) See definition of Adjusted EBITDA elsewhere in this release. |
|||||||||
(2) Reflects inbound tons handled during the period. |
Revenues in the third quarter of 2024 increased
Adjusted EBITDA increased by
Brazil Coke
Brazil Coke consists of a cokemaking facility in Vitória,
Revenues were
Corporate and Other
Corporate and Other, which includes activity from our legacy coal mining business, was a net positive
2024 REVISED OUTLOOK
Our 2024 revised guidance reflects favorable performance from our Logistics segment, and impacts from the agreement with the DOL.
Our 2024 revised guidance is as follows:
- Domestic Coke total production is expected to be approximately 4.1 million tons
-
Consolidated Net Income is expected to be between
$85 million and$97 million -
Consolidated Adjusted EBITDA is expected to be between
$260 million and$270 million -
Capital expenditures are projected to be between
$75 million and$80 million -
Operating cash flow is estimated to be between
$155 million to$165 million -
Cash taxes are projected to be between
$16 million to$20 million
Disclaimer: The Company's 2024 outlook and guidance are based on the Company's current estimates and assumptions that are subject to change and may be outside the control of the Company. If actual results vary from these estimates and assumptions, the Company's expectations may change. There can be no assurances that SunCoke will achieve the results expressed by this outlook and guidance.
RELATED COMMUNICATIONS
We will host our quarterly earnings call at
SunCoke routinely announces material information to investors and the marketplace using press releases,
NON-GAAP FINANCIAL MEASURES
In addition to
DEFINITIONS
-
Adjusted EBITDA
represents earnings before interest, taxes, depreciation and amortization (“EBITDA”), adjusted for any impairments, restructuring costs, gains or losses on extinguishment of debt, and/or transaction costs ("Adjusted EBITDA"). EBITDA and Adjusted EBITDA do not represent and should not be considered alternatives to net income or operating income under
U.S. GAAP and may not be comparable to other similarly titled measures in other businesses. Management believes Adjusted EBITDA is an important measure in assessing operating performance. Adjusted EBITDA provides useful information to investors because it highlights trends in our business that may not otherwise be apparent when relying solely onU.S. GAAP measures and because it eliminates items that have less bearing on our operating performance. EBITDA and Adjusted EBITDA are not measures calculated in accordance withU.S. GAAP, and they should not be considered a substitute for net income, or any other measure of financial performance presented in accordance withU.S. GAAP. - Adjusted EBITDA attributable to SXC represents Adjusted EBITDA less Adjusted EBITDA attributable to noncontrolling interests.
-
Domestic logistics terminals
represents
Lake Terminal and Kanawha River Terminals.
FORWARD-LOOKING STATEMENTS
This press release and related conference call contain “forward-looking statements” (as defined in Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended). Forward-looking statements often may be identified by the use of such words as "believe," "expect," "plan," "project," "intend," "anticipate," "estimate," "predict," "potential," "continue," "may," "will," "should," or the negative of these terms, or similar expressions. However, the absence of these words or similar expressions does not mean that a statement is not forward-looking. Any statements made in this press release or during the related conference call that are not statements of historical fact, including statements about our full-year 2024 outlook and guidance, our 2024 key initiatives, the ability of our domestic coke plants to continue to operate at full capacity, future dividends and the timing of such dividend payments, the expected lower annual legacy expenses and elimination of potential higher collateral requirements resulting from the DOL exemption, the anticipated timing, completion, and increased volume capabilities as a result of the capital investment project at the KRT logistics facility, and future sales commitments, are forward-looking statements and should be evaluated as such. Forward-looking statements represent only our present beliefs regarding future events, many of which are inherently uncertain and involve significant known and unknown risks and uncertainties (many of which are beyond the control of SunCoke) that could cause our actual results and financial condition to differ materially from the anticipated results and financial condition indicated in such forward-looking statements. These risks and uncertainties include, but are not limited to, the risks and uncertainties described in Item 1A (“Risk Factors”) of our Annual Report on Form 10-K for the most recently completed fiscal year, as well as those described from time to time in our other reports and filings with the
In accordance with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, SunCoke has included in its filings with the
Forward-looking statements are not guarantees of future performance, but are based upon the current knowledge, beliefs and expectations of SunCoke management, and upon assumptions by SunCoke concerning future conditions, any or all of which ultimately may prove to be inaccurate. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. SunCoke does not intend, and expressly disclaims any obligation, to update or alter its forward-looking statements (or associated cautionary language), whether as a result of new information, future events, or otherwise, after the date of this press release except as required by applicable law.
|
||||||||||||
Consolidated Statements of Income |
||||||||||||
(Unaudited) |
||||||||||||
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||
|
|
|
|
|
|
|
|
|
||||
|
|
(Dollars and shares in millions, except per share amounts) |
||||||||||
Revenues |
|
|
|
|
|
|
|
|
||||
Sales and other operating revenue |
|
$ |
490.1 |
|
$ |
520.4 |
|
$ |
1,449.4 |
|
$ |
1,542.6 |
Costs and operating expenses |
|
|
|
|
|
|
|
|
||||
Cost of products sold and operating expenses |
|
|
405.2 |
|
|
436.1 |
|
|
1,197.1 |
|
|
1,281.2 |
Selling, general and administrative expenses |
|
|
9.6 |
|
|
19.1 |
|
|
45.8 |
|
|
55.3 |
Depreciation and amortization expense |
|
|
28.1 |
|
|
35.5 |
|
|
90.1 |
|
|
107.2 |
Total costs and operating expenses |
|
|
442.9 |
|
|
490.7 |
|
|
1,333.0 |
|
|
1,443.7 |
Operating income |
|
|
47.2 |
|
|
29.7 |
|
|
116.4 |
|
|
98.9 |
Interest expense, net |
|
|
5.7 |
|
|
6.6 |
|
|
17.8 |
|
|
21.0 |
Income before income tax expense |
|
|
41.5 |
|
|
23.1 |
|
|
98.6 |
|
|
77.9 |
Income tax expense |
|
|
8.2 |
|
|
14.6 |
|
|
20.9 |
|
|
29.7 |
Net income |
|
|
33.3 |
|
|
8.5 |
|
|
77.7 |
|
|
48.2 |
Less: Net income attributable to noncontrolling interests |
|
|
2.6 |
|
|
1.5 |
|
|
5.5 |
|
|
4.5 |
Net income attributable to |
|
$ |
30.7 |
|
$ |
7.0 |
|
$ |
72.2 |
|
$ |
43.7 |
Earnings attributable to |
|
|
|
|
|
|
|
|
||||
Basic |
|
$ |
0.36 |
|
$ |
0.08 |
|
$ |
0.85 |
|
$ |
0.52 |
Diluted |
|
$ |
0.36 |
|
$ |
0.08 |
|
$ |
0.85 |
|
$ |
0.51 |
Weighted average number of common shares outstanding: |
|
|
|
|
|
|
|
|
||||
Basic |
|
|
85.1 |
|
|
84.8 |
|
|
85.1 |
|
|
84.7 |
Diluted |
|
|
85.3 |
|
|
85.1 |
|
|
85.3 |
|
|
84.9 |
|
||||||||
Consolidated Balance Sheets |
||||||||
|
|
|
|
|
||||
|
|
(Unaudited) |
|
|
||||
|
|
(Dollars in millions, except par value amounts) |
||||||
Assets |
|
|
|
|
||||
Cash and cash equivalents |
|
$ |
164.7 |
|
|
$ |
140.1 |
|
Receivables, net |
|
|
80.2 |
|
|
|
88.3 |
|
Inventories |
|
|
195.9 |
|
|
|
182.6 |
|
Income tax receivable |
|
|
5.6 |
|
|
|
1.4 |
|
Other current assets |
|
|
9.6 |
|
|
|
4.4 |
|
Total current assets |
|
|
456.0 |
|
|
|
416.8 |
|
Properties, plants and equipment (net of accumulated depreciation of |
|
|
1,147.4 |
|
|
|
1,191.1 |
|
Intangible assets, net |
|
|
29.6 |
|
|
|
31.1 |
|
Deferred charges and other assets |
|
|
21.8 |
|
|
|
21.4 |
|
Total assets |
|
$ |
1,654.8 |
|
|
$ |
1,660.4 |
|
Liabilities and Equity |
|
|
|
|
||||
Accounts payable |
|
$ |
152.0 |
|
|
$ |
172.1 |
|
Accrued liabilities |
|
|
47.1 |
|
|
|
51.7 |
|
Interest payable |
|
|
6.1 |
|
|
|
— |
|
Total current liabilities |
|
|
205.2 |
|
|
|
223.8 |
|
Long-term debt |
|
|
491.8 |
|
|
|
490.3 |
|
Accrual for black lung benefits |
|
|
13.2 |
|
|
|
53.2 |
|
Retirement benefit liabilities |
|
|
14.8 |
|
|
|
15.8 |
|
Deferred income taxes |
|
|
198.1 |
|
|
|
190.4 |
|
Asset retirement obligations |
|
|
14.9 |
|
|
|
14.1 |
|
Other deferred credits and liabilities |
|
|
25.8 |
|
|
|
27.3 |
|
Total liabilities |
|
|
963.8 |
|
|
|
1,014.9 |
|
Equity |
|
|
|
|
||||
Preferred stock, |
|
|
— |
|
|
|
— |
|
Common stock, |
|
|
1.0 |
|
|
|
1.0 |
|
|
|
|
(184.0 |
) |
|
|
(184.0 |
) |
Additional paid-in capital |
|
|
730.3 |
|
|
|
729.8 |
|
Accumulated other comprehensive loss |
|
|
(13.5 |
) |
|
|
(12.8 |
) |
Retained earnings |
|
|
124.8 |
|
|
|
80.2 |
|
|
|
|
658.6 |
|
|
|
614.2 |
|
Noncontrolling interest |
|
|
32.4 |
|
|
|
31.3 |
|
Total equity |
|
|
691.0 |
|
|
|
645.5 |
|
Total liabilities and equity |
|
$ |
1,654.8 |
|
|
$ |
1,660.4 |
|
|
||||||||
Consolidated Statements of Cash Flows |
||||||||
(Unaudited) |
||||||||
|
|
Nine Months Ended |
||||||
|
|
2024 |
|
2023 |
||||
|
|
(Dollars in millions) |
||||||
Cash Flows from Operating Activities |
|
|
|
|
||||
Net income |
|
$ |
77.7 |
|
|
$ |
48.2 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
||||
Depreciation and amortization expense |
|
|
90.1 |
|
|
|
107.2 |
|
Deferred income tax expense |
|
|
7.7 |
|
|
|
15.8 |
|
Share-based compensation expense |
|
|
4.1 |
|
|
|
4.3 |
|
Gain on extinguishment of legacy coal liabilities |
|
|
(9.5 |
) |
|
|
— |
|
Changes in working capital pertaining to operating activities: |
|
|
|
|
||||
Receivables, net |
|
|
7.6 |
|
|
|
24.3 |
|
Inventories |
|
|
(13.2 |
) |
|
|
(31.3 |
) |
Accounts payable |
|
|
(17.0 |
) |
|
|
25.5 |
|
Accrued liabilities |
|
|
(35.1 |
) |
|
|
(6.2 |
) |
Interest payable |
|
|
6.1 |
|
|
|
6.1 |
|
Income taxes |
|
|
(4.2 |
) |
|
|
0.7 |
|
Other operating activities |
|
|
(6.4 |
) |
|
|
(2.0 |
) |
Net cash provided by operating activities |
|
|
107.9 |
|
|
|
192.6 |
|
Cash Flows from Investing Activities |
|
|
|
|
||||
Capital expenditures |
|
|
(48.1 |
) |
|
|
(84.5 |
) |
Other investing activities |
|
|
0.5 |
|
|
|
(0.9 |
) |
Net cash used in investing activities |
|
|
(47.6 |
) |
|
|
(85.4 |
) |
Cash Flows from Financing Activities |
|
|
|
|
||||
Proceeds from revolving facility |
|
|
11.0 |
|
|
|
273.0 |
|
Repayment of revolving facility |
|
|
(11.0 |
) |
|
|
(308.0 |
) |
Repayment of financing obligation |
|
|
— |
|
|
|
(2.5 |
) |
Dividends paid |
|
|
(27.5 |
) |
|
|
(22.3 |
) |
Cash distribution to noncontrolling interests |
|
|
(4.4 |
) |
|
|
(8.1 |
) |
Other financing activities |
|
|
(3.8 |
) |
|
|
(3.4 |
) |
Net cash used in financing activities |
|
|
(35.7 |
) |
|
|
(71.3 |
) |
Net increase in cash and cash equivalents |
|
|
24.6 |
|
|
|
35.9 |
|
Cash and cash equivalents at beginning of period |
|
|
140.1 |
|
|
|
90.0 |
|
Cash and cash equivalents at end of period |
|
$ |
164.7 |
|
|
$ |
125.9 |
|
Supplemental Disclosure of Cash Flow Information |
|
|
|
|
||||
Interest paid |
|
$ |
12.2 |
|
|
$ |
13.4 |
|
Income taxes paid |
|
$ |
17.3 |
|
|
$ |
13.1 |
|
|
||||||||||||||||
Segment Financial and Operating Data |
||||||||||||||||
The following tables set forth financial and operating data for the three and nine months ended |
||||||||||||||||
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
|
(Dollars in millions, except per ton amounts) |
||||||||||||||
Sales and Other Operating Revenues: |
|
|
|
|
|
|
|
|
||||||||
Domestic Coke |
|
$ |
459.9 |
|
|
$ |
495.7 |
|
|
$ |
1,361.0 |
|
|
$ |
1,460.4 |
|
Brazil Coke |
|
|
8.8 |
|
|
|
9.1 |
|
|
|
26.2 |
|
|
|
25.8 |
|
Logistics |
|
|
21.4 |
|
|
|
15.6 |
|
|
|
62.2 |
|
|
|
56.4 |
|
Logistics intersegment sales |
|
|
6.0 |
|
|
|
5.6 |
|
|
|
17.8 |
|
|
|
16.9 |
|
Elimination of intersegment sales |
|
|
(6.0 |
) |
|
|
(5.6 |
) |
|
|
(17.8 |
) |
|
|
(16.9 |
) |
Total sales and other operating revenues |
|
$ |
490.1 |
|
|
$ |
520.4 |
|
|
$ |
1,449.4 |
|
|
$ |
1,542.6 |
|
Adjusted EBITDA: |
|
|
|
|
|
|
|
|
||||||||
Domestic Coke |
|
$ |
58.1 |
|
|
$ |
64.0 |
|
|
$ |
177.4 |
|
|
$ |
192.6 |
|
Brazil Coke |
|
|
2.5 |
|
|
|
2.2 |
|
|
|
7.4 |
|
|
|
6.9 |
|
Logistics |
|
|
13.7 |
|
|
|
8.4 |
|
|
|
38.9 |
|
|
|
33.6 |
|
Corporate and Other, net(1) |
|
|
1.0 |
|
|
|
(9.2 |
) |
|
|
(17.0 |
) |
|
|
(26.6 |
) |
Total Adjusted EBITDA(2) |
|
$ |
75.3 |
|
|
$ |
65.4 |
|
|
$ |
206.7 |
|
|
$ |
206.5 |
|
Coke Operating Data: |
|
|
|
|
|
|
|
|
||||||||
Domestic Coke capacity utilization(3) |
|
|
102 |
% |
|
|
102 |
% |
|
|
100 |
% |
|
|
101 |
% |
Domestic Coke production volumes (thousands of tons) |
|
|
1,031 |
|
|
|
1,032 |
|
|
|
3,009 |
|
|
|
3,024 |
|
Domestic Coke sales volumes (thousands of tons) |
|
|
1,027 |
|
|
|
1,016 |
|
|
|
2,996 |
|
|
|
3,009 |
|
Domestic Coke Adjusted EBITDA per ton(4) |
|
$ |
56.57 |
|
|
$ |
62.99 |
|
|
$ |
59.21 |
|
|
$ |
64.01 |
|
Brazilian Coke production—operated facility (thousands of tons) |
|
|
423 |
|
|
|
381 |
|
|
|
1,191 |
|
|
|
1,175 |
|
Logistics Operating Data: |
|
|
|
|
|
|
|
|
||||||||
Tons handled (thousands of tons) |
|
|
5,843 |
|
|
|
4,961 |
|
|
|
17,277 |
|
|
|
15,461 |
|
(1) Corporate and Other, net is not a reportable segment. |
||||||||||||||||
(2) See definition of Adjusted EBITDA and reconciliation to GAAP elsewhere in this release. | ||||||||||||||||
(3) The production of foundry coke tons does not replace blast furnace coke tons on a ton for ton basis, as foundry coke requires longer coking time. The Domestic Coke capacity utilization is calculated assuming a single ton of foundry coke replaces approximately two tons of blast furnace coke. | ||||||||||||||||
(4) Reflects Domestic Coke Adjusted EBITDA divided by Domestic Coke sales volumes. | ||||||||||||||||
|
||||||||||||
Reconciliation of Non-GAAP Information |
||||||||||||
Net Income to Consolidated Adjusted EBITDA |
||||||||||||
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||
|
|
(Dollars in millions) |
||||||||||
Net income |
|
$ |
33.3 |
|
$ |
8.5 |
|
$ |
77.7 |
|
$ |
48.2 |
Add: |
|
|
|
|
|
|
|
|
||||
Depreciation and amortization expense |
|
|
28.1 |
|
|
35.5 |
|
|
90.1 |
|
|
107.2 |
Interest expense, net |
|
|
5.7 |
|
|
6.6 |
|
|
17.8 |
|
|
21.0 |
Income tax expense |
|
|
8.2 |
|
|
14.6 |
|
|
20.9 |
|
|
29.7 |
Transaction costs(1) |
|
|
— |
|
|
0.2 |
|
|
0.2 |
|
|
0.4 |
Adjusted EBITDA |
|
$ |
75.3 |
|
$ |
65.4 |
|
$ |
206.7 |
|
$ |
206.5 |
(1) Costs incurred as part of the granulated pig iron project with |
||||||||||||
|
||||||
Reconciliation of Non-GAAP Information |
||||||
Estimated 2024 Net Income |
||||||
to Estimated 2024 Consolidated Adjusted EBITDA |
||||||
|
|
2024 |
||||
|
|
Low |
|
High |
||
|
|
(Dollars in millions) |
||||
Net income |
|
$ |
85 |
|
$ |
97 |
Add: |
|
|
|
|
||
Depreciation and amortization expense |
|
|
122 |
|
|
118 |
Interest expense, net |
|
|
28 |
|
|
26 |
Income tax expense |
|
|
25 |
|
|
29 |
Adjusted EBITDA |
|
$ |
260 |
|
$ |
270 |
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