0001193125-26-197606
SEC filingBlue Creek expansion drove 53% revenue growth and improved profitability despite uneven demand.
For the three months ended March 31, 2026, total revenues increased 52.9% to $458.6 million from $299.9 million in the prior year period. The primary driver was a 38.2% increase in steelmaking coal sales volumes to 2,723 thousand metric tons, mainly from the new Blue Creek mine, coupled with a $14.99 per metric ton increase in average net selling price to $164.70. Net income improved from a loss of $8.2 million to a profit of $72.3 million, reflecting higher revenue and improved margins. Operating income was $79.4 million versus a loss of $17.4 million. Operating margin was 17.3% compared to (5.8%) in the prior year.
Cost of sales (exclusive of depreciation and depletion) increased to $290.4 million from $245.7 million, but as a percentage of revenue it declined sharply from 81.9% to 63.3%, due to lower unit costs and the benefit of the 45X credit. Cash cost of sales per metric ton fell 14.4% to $106.02 from $123.87, driven by the lower-cost Blue Creek mine and disciplined cost control. The 45X credit reduced cost of sales by $8.4 million.
The Mining segment, which includes Mine No. 4, Mine No. 7, and Blue Creek, reported Segment Adjusted EBITDA of $158.1 million, up from $49.2 million. Coal sales volumes rose 38.2% to 2.7 million metric tons, and production increased 55.2% to 3.2 million metric tons. The Blue Creek mine, which commenced longwall operations in October 2025, was the primary driver of volume growth and cost reduction. The geographic sales mix shifted to 61% Asia, 25% Europe, and 14% South America (vs. 43%, 36%, 20%, and 1% in the prior year).
Management expects capital expenditures for full year 2026 to range from $155.0 million to $190.0 million, consisting of $105-115 million in sustaining capex and $50-75 million in discretionary capex for final Blue Creek construction. The company believes its liquidity of $363.7 million, including cash and undrawn ABL facility, will be sufficient to fund operations and commitments for at least twelve months. No specific revenue or margin guidance was provided, but the company highlighted ongoing weakness in steelmaking coal demand from China, geopolitical risks, and tariff uncertainty as factors affecting the market outlook.
As of March 31, 2026, Warrior Met Coal held $202.6 million in cash and cash equivalents and $30.6 million in short-term investments, totaling $233.2 million in highly liquid assets. Including restricted cash of $8.0 million, total cash, cash equivalents and restricted cash was $210.5 million. Total debt stood at $154.4 million, consisting of $156.5 million in Senior Secured Notes (net of $2.1 million debt discount) and no borrowings under the Amended ABL Facility. The Company had $140.5 million of availability under the Amended ABL Facility (net of $2.5 million in outstanding letters of credit). Shareholders' equity was $2,204.5 million, up from $2,141.4 million at year-end 2025, driven by net income of $72.3 million partially offset by dividends and share repurchases.
The Company has various transportation and throughput agreements with rail and barge providers and the Alabama State Port Authority that contain annual minimum tonnage guarantees. If minimum throughput obligations are not met, the Company must pay a contractually specified amount per metric ton for the shortfall. As of March 31, 2026, no liability was recorded for these minimum throughput requirements. The Company also has finance lease obligations totaling $89.8 million in future payments (undiscounted), with $27.9 million due in 2026, $24.1 million in 2027, $18.8 million in 2028, $9.9 million in 2029, and $9.1 million thereafter. The present value of finance lease liabilities was $79.6 million. Coal royalty expenses were $27.2 million for Q1 2026.
During Q1 2026, the Company paid $4.7 million in dividends ($0.08 per share quarterly, unchanged YoY). Capital expenditures totaled $80.1 million, of which $77.6 million was in the Mining segment. The Company repurchased no shares during the quarter; the remaining authorization under the New Stock Repurchase Program was $59.4 million as of March 31, 2026. Debt remained essentially flat at $154.4 million, with no new borrowings or repayments on the Senior Secured Notes or ABL Facility. The Company recognized an $8.4 million benefit from the Section 45X Advanced Manufacturing Production Tax Credit, reflected as a reduction to cost of sales.
The Company operates a single reportable segment: Mining, which includes Mine No. 4, Mine No. 7, and the Blue Creek mine. For Q1 2026, Mining segment revenue was $448.5 million (97.8% of total revenues), with segment profit (Segment Adjusted EBITDA) of $158.1 million. Cash cost of sales for the segment was $288.7 million, including transportation and royalties of $113.6 million. Depreciation and depletion for the segment was $50.2 million. The 'all other' category (natural gas and royalty businesses) contributed $10.1 million in revenue and $2.1 million in depreciation and depletion. Two customers each exceeded 10% of Mining segment revenue: Customer A at $62.2 million and Customer B at $50.6 million.
Operating cash flow (CFO) turned negative at -$11.7 million for the three months ended March 31, 2026, versus +$10.9 million in the prior-year period. This decline was primarily driven by a $145.8 million increase in net working capital, largely from higher accounts receivable (due to increased sales volumes and timing) and higher inventories (from higher production), partially offset by lower accrued expenses. Net income was $72.3 million, but the large working capital outflow overwhelmed the positive non-cash adjustments (depreciation & depletion of $52.3 million, stock-based compensation of $10.1 million, deferred tax expense of $1.9 million, and other items).
Capital expenditures (capex) were $57.4 million, with $66.1 million specifically allocated to the Blue Creek development project (note: total capex includes other items, and the Blue Creek figure exceeds total capex, likely due to offsetting proceeds from short-term investments). No free cash flow figure is explicitly provided. Financing activities used $28.1 million, including $14.8 million for tax withholdings on equity awards, $8.6 million in finance lease repayments, and $4.7 million in regular quarterly dividends. No share repurchases were reported.
The significant working capital swing is a key anomaly, indicating that cash conversion lagged behind earnings recognition. The company continues to invest heavily in the Blue Creek project, sustaining high capex intensity. Dividend payments remained modest at $0.08 per share quarterly.