8-K
SunCoke Energy, Inc. (SXC)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): May 2, 2022
SUNCOKE ENERGY, INC.
(Exact name of registrant as specified in its charter)
| Delaware | 001-35243 | 90-0640593 |
|---|---|---|
| (State of<br> <br>Incorporation) | (Commission<br> <br>File Number) | (IRS Employer<br> <br>Identification No.) |
| 1011 Warrenville Road, Suite 600<br> <br>Lisle, Illinois | 60532 | |
| --- | --- | |
| (Address of principal executive offices) | (Zip code) |
Registrant’s telephone number, including area code: (630) 824-1000
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| --- | --- |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading<br>Symbol(s) | Name of each exchange<br> <br>on which registered |
|---|---|---|
| Common Stock, $0.01 par value | SXC | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
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. ☐
| Item 2.02. | Results of Operations and Financial Condition. |
|---|
On May 2, 2022, SunCoke Energy, Inc. (the “Company”) issued a press release announcing its financial results for the first quarter of 2022. A copy of this press release is attached as Exhibit 99.1 and is incorporated herein by reference.
| Item 7.01. | Regulation FD Disclosure. |
|---|
As noted above, on May 2, 2022, the Company issued a press release announcing its financial results for the first quarter of 2022. Additional information concerning the Company’s financial results for the first quarter of 2022 will be presented in a slide presentation to investors during a previously announced teleconference on May 2, 2022. A copy of the slide presentation is attached as Exhibit 99.2 and is incorporated herein by reference.
The information in this report, being furnished pursuant to Items 2.02, 7.01 and 9.01 of Form 8-K, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section, and is not incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing.
| Item 8.01. | Other Events. |
|---|
On May 2, 2022, the Company issued a press release announcing the declaration of its quarterly cash dividend. A copy of this press release is attached hereto as Exhibit 99.3 and is incorporated herein by reference.
Safe Harbor Statement
Statements contained in the exhibits to this report that state the Company’s or management’s expectations or predictions of the future are forward-looking statements intended to be covered by the safe harbor provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934. The Company’s actual results could differ materially from those projected in such forward-looking statements. Factors that could affect those results include those mentioned in the documents that the Company has filed with the Securities and Exchange Commission.
| Item 9.01. | Financial Statements and Exhibits. |
|---|
(d) Exhibits
Page 2 of 3
SIGNATURES
Pursuant to the requirements of the Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| SUNCOKE ENERGY, INC. | |
|---|---|
| By: | /s/ Bonnie M. Edeus |
| Bonnie M. Edeus | |
| Vice President and Controller |
Date: May 2, 2022
Page 3 of 3
EX-99.1
Exhibit 99.1
Investors and Media:
Shantanu Agrawal
(630) 824-1907
SUNCOKE ENERGY, INC. REPORTS RECORD FIRST QUARTER 2022 RESULTS
| • | First quarter 2022 net income attributable to SXC was $29.5 million, or $0.35 per share<br> |
|---|---|
| • | Adjusted EBITDA^(1)^ for the quarter was $83.8 million,<br>up 18.6 percent, versus the prior year period, representing SunCoke’s best ever quarterly results |
| --- | --- |
| • | Well positioned to modestly exceed the full year 2022 Adjusted EBITDA guidance range of $240 million to<br>$255 million |
| --- | --- |
LISLE, Ill. (May 2, 2022)—SunCoke Energy, Inc. (NYSE: SXC) today reported results for the first quarter 2022, reflecting strong performance in our Domestic Coke and Logistics segments.
“Our Domestic Coke and Logistics segments had an excellent start to the year with the backdrop of strong commodity markets and rising demand for our products and services. Although our coke production was impacted by an unusually wet winter, it was more than offset by the higher margins from our export coke sales. Our Logistics segment continues to deliver solid results and we added new customers at our domestic terminals.” said Mike Rippey, President and Chief Executive Officer of SunCoke Energy, Inc. “With the backdrop of current strength in steel and coal markets, but also factoring in the uncertain global macroeconomic conditions, we now expect to modestly exceed the top end of full year 2022 Adjusted EBITDA guidance range.”
FIRST QUARTER CONSOLIDATED RESULTS
| Three Months Ended March 31, | ||||||
|---|---|---|---|---|---|---|
| (Dollars in millions) | 2022 | 2021 | Increase | |||
| Revenues | $ | 439.8 | $ | 359.9 | $ | 79.9 |
| Net (loss) income attributable to SXC | $ | 29.5 | $ | 16.5 | $ | 13.0 |
| Adjusted EBITDA^(1)^ | $ | 83.8 | $ | 70.6 | $ | 13.2 |
| (1) | See definition of Adjusted EBITDA and reconciliation elsewhere in this release. | |||||
| --- | --- |
Revenues in the first quarter of 2022 increased $79.9 million as compared to the same prior year period, primarily reflecting the pass-through of higher coal prices and favorable export and foundry coke pricing.
Net income attributable to SXC and Adjusted EBITDA increased $13.0 million and $13.2 million, respectively, as compared to the same prior year period, primarily as a result of higher margins on export sales partially offset by lower domestic coke sales described below.
FIRST QUARTER SEGMENT RESULTS
Domestic Coke
Domestic Coke consists of cokemaking facilities and heat recovery operations at our Jewell, Indiana Harbor, Haverhill, Granite City and Middletown plants.
| Three Months Ended March 31, | |||||||
|---|---|---|---|---|---|---|---|
| (Dollars in millions, except per ton amounts) | 2022 | 2021 | Increase<br>(decrease) | ||||
| Revenues | $ | 411.6 | $ | 335.3 | $ | 76.3 | |
| Adjusted EBITDA^(1)^ | $ | 76.0 | $ | 63.5 | $ | 12.5 | |
| Sales volumes (thousands of tons) | 962 | 1,038 | (76 | ) | |||
| Adjusted EBITDA per ton^(2)^ | $ | 79.00 | $ | 61.18 | $ | 17.82 | |
| (1) | See definition of Adjusted EBITDA and reconciliation elsewhere in this release. | ||||||
| --- | --- | ||||||
| (2) | Reflects Domestic Coke Adjusted EBITDA divided by Domestic Coke sales volumes. | ||||||
| --- | --- |
Revenues increased $76.3 million as compared to the same prior year period, primarily reflecting the pass-through of higher coal prices and favorable export and foundry pricing.
Adjusted EBITDA increased $12.5 million as compared to the same prior year period largely due to higher margins on export sales partially offset by lower domestics coke sales volumes as a result of changes in the mix of production and unfavorable weather conditions.
2
Logistics
Logistics consists of the handling and mixing services of coal and other aggregates at our Convent Marine Terminal (“CMT”), Lake Terminal, Kanawha River Terminals (“KRT”) and Dismal River Terminal (“DRT”).
| Three Months Ended March 31, | |||||||
|---|---|---|---|---|---|---|---|
| (Dollars in millions, except per ton amounts) | 2022 | 2021 | Increase<br>(decrease) | ||||
| Revenues | $ | 18.8 | $ | 16.1 | $ | 2.7 | |
| Intersegment sales | $ | 7.5 | $ | 6.6 | $ | 0.9 | |
| Adjusted EBITDA^(1)^ | $ | 12.6 | $ | 10.9 | $ | 1.7 | |
| Tons handled (thousands of tons) | 5,236 | 5,300 | (64 | ) | |||
| (1) | See definition of Adjusted EBITDA and reconciliation elsewhere in this release. | ||||||
| --- | --- |
Revenues and Adjusted EBITDA increased by $2.7 million and $1.7 million, respectively, as compared to the same prior year period driven by favorable pricing at CMT based on the API2 coal index price.
Brazil Coke
Brazil Coke consists of a cokemaking facility in Vitória, Brazil, which we operate for an affiliate of ArcelorMittal.
Revenues and Adjusted EBITDA were $9.4 million and $4.2 million, respectively, during the first quarter 2022, which was comparable to results in the first quarter 2021.
Corporate and Other
Corporate and other expenses, which include activity from our legacy coal mining business, was $9.0 million during first quarter 2022, $0.7 million higher than $8.3 million during first quarter 2021 driven primarily by higher employee related costs, partly offset by a $0.9 million favorable change in period-over-period, mark-to-market adjustments on deferred compensation as compared to the same prior year period.
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2022 OUTLOOK
Our 2022 guidance is as follows:
| • | Domestic Coke total production is expected to be approximately 4.1 million tons |
|---|---|
| • | Consolidated Adjusted EBITDA is expected to be modestly above the guidance range of $240 million to<br>$255 million |
| --- | --- |
| • | Capital expenditures are projected to be approximately $80 million |
| --- | --- |
| • | Cash generated by operations is estimated to be between $190 million to $205 million<br> |
| --- | --- |
| • | Cash taxes are projected to be $8 million to $12 million |
| --- | --- |
RELATED COMMUNICATIONS
We will host our quarterly earnings call at 11:30 a.m. Eastern Time (10:30 a.m. Central Time) today. The conference call will be webcast live and archived for replay in the Investors section of www.suncoke.com. Investors and analysts may participate in this call by using the following link:
https://conferencingportals.com/event/QkyupBiI
Upon registration, each participant will be emailed a confirmation and dial-in details.
SUNCOKE ENERGY, INC.
SunCoke Energy, Inc. (NYSE: SXC) supplies high-quality coke to domestic and international customers. Our coke is used in the blast furnace production of steel as well as the foundry production of casted iron, with the majority of sales under long-term, take-or-pay contracts. We also export coke to overseas customers seeking high-quality product for their blast furnaces. Our process utilizes an innovative heat-recovery technology that captures excess heat for steam or electrical power generation and draws upon more than 60 years of cokemaking experience to operate our facilities in Illinois, Indiana, Ohio, Virginia and Brazil. Our logistics business provides export and domestic material handling services to coke, coal, steel, power and other bulk customers. The logistics terminals have the collective capacity to mix and transload more than 40 million tons of material each year and are strategically located to reach Gulf Coast, East Coast, Great Lakes and international ports. To learn more about SunCoke Energy, Inc., visit our website at www.suncoke.com.
SunCoke routinely announces material information to investors and the marketplace using press releases, Securities and Exchange Commission filings, public conference calls, webcasts and SunCoke’s website at http://www.suncoke.com/English/investors/sxc. The information that SunCoke posts to its website may be deemed to be material. Accordingly, SunCoke encourages investors and others interested in SunCoke to routinely monitor and review the information that SunCoke posts on its website, in addition to following SunCoke’s press releases, Securities and Exchange Commission filings and public conference calls and webcasts.
DEFINITIONS
| • | Adjusted EBITDA represents earnings before interest, taxes, depreciation and amortization<br>(“EBITDA”), adjusted for any impairments, restructuring costs and gains or losses on extinguishment of debt. EBITDA and Adjusted EBITDA do not represent and should not be considered alternatives to net income or operating income under GAAP<br>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<br>highlights trends in our business that may not otherwise be apparent when relying solely on GAAP measures and because it eliminates items that have less bearing on our operating performance. EBITDA and Adjusted EBITDA are not measures calculated in<br>accordance with GAAP, and they should not be considered a substitute for net income or any other measure of financial performance presented in accordance with GAAP. **** Additionally, other companies may calculate Adjusted EBITDA differently than<br>we do, limiting its usefulness as a comparative measure. |
|---|---|
| • | Adjusted EBITDA attributable to SXC represents Adjusted EBITDA less Adjusted EBITDA<br>attributable to noncontrolling interests. |
| --- | --- |
4
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). Such forward-looking statements include statements that are not strictly historical facts, and include, among other things, statements regarding: our expectations of financial results, condition and outlook; anticipated effects of the COVID-19 pandemic and responses thereto.
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. Forward-looking statements are inherently uncertain and involve significant known and unknown risks and uncertainties (many of which are beyond the control of SunCoke) that could cause actual results to differ materially. Such risks and uncertainties include, but are not limited to domestic and international economic, political, business, operational, competitive, regulatory and/or market factors affecting SunCoke, as well as uncertainties related to: pending or future litigation, legislation or regulatory actions; liability for remedial actions or assessments under existing or future environmental regulations; gains and losses related to acquisition, disposition or impairment of assets; recapitalization; access to, and costs of, capital; the effects of changes in accounting rules applicable to SunCoke; and changes in tax, environmental and other laws and regulations applicable to SunCoke’s businesses.
Currently, such risks and uncertainties also include the impacts on our industry and on the U.S. and global economy resulting from COVID-19, including actions by domestic and foreign governments and others to contain the spread, or mitigate the severity, thereof.
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. The reader should not place undue reliance on these forward-looking statements, which speak only as of the date of the earnings 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 the earnings release except as required by applicable law.
In accordance with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, SunCoke has included in its filings with the Securities and Exchange Commission cautionary language identifying important factors (but not necessarily all the important factors) that could cause actual results to differ materially from those expressed in any forward-looking statement made by SunCoke. For information concerning these factors and other important information regarding the matters discussed in this press release, see SunCoke’s Securities and Exchange Commission filings such as its annual and quarterly reports and current reports on Form 8-K, copies of which are available free of charge on SunCoke’s website at www.suncoke.com. All forward-looking statements included in this press release are expressly qualified in their entirety by such cautionary statements. Unpredictable or unknown factors not discussed in this press release also could have material adverse effects on forward-looking statements.
5
SunCoke Energy, Inc.
Consolidated Statements of Income
(Unaudited)
| Three Months Ended March 31, | ||||
|---|---|---|---|---|
| 2022 | 2021 | |||
| (Dollars and shares in millions,except per share amounts) | ||||
| Revenues | ||||
| Sales and other operating revenue | $ | 439.8 | $ | 359.9 |
| Costs and operating expenses | ||||
| Cost of products sold and operating expenses | 338.0 | 274.0 | ||
| Selling, general and administrative expenses | 18.0 | 15.3 | ||
| Depreciation and amortization expense | 35.2 | 32.4 | ||
| Total costs and operating expenses | 391.2 | 321.7 | ||
| Operating income | 48.6 | 38.2 | ||
| Interest expense, net | 8.0 | 12.7 | ||
| Income before income tax expense | 40.6 | 25.5 | ||
| Income tax expense | 10.0 | 7.3 | ||
| Net income | 30.6 | 18.2 | ||
| Less: Net income attributable to noncontrolling interests | 1.1 | 1.7 | ||
| Net income attributable to SunCoke Energy, Inc. | $ | 29.5 | $ | 16.5 |
| Earnings attributable to SunCoke Energy, Inc. per common share: | ||||
| Basic | $ | 0.35 | $ | 0.20 |
| Diluted | $ | 0.35 | $ | 0.20 |
| Weighted average number of common shares outstanding: | ||||
| Basic | 83.2 | 82.8 | ||
| Diluted | 84.2 | 83.5 |
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SunCoke Energy, Inc.
Consolidated Balance Sheets
| December 31, 2021 | |||||
|---|---|---|---|---|---|
| Assets | |||||
| Cash and cash equivalents | 79.7 | $ | 63.8 | ||
| Receivables, net | 99.5 | 77.6 | |||
| Inventories | 194.1 | 127.0 | |||
| Other current assets | 10.0 | 3.5 | |||
| Total current assets | 383.3 | 271.9 | |||
| Properties, plants and equipment (net of accumulated depreciation of 1,195.0 million and<br>1,160.1 million at March 31, 2022 and December 31, 2021, respectively) | 1,266.1 | 1,287.9 | |||
| Intangible assets, net | 34.7 | 35.2 | |||
| Deferred charges and other assets | 21.6 | 20.4 | |||
| Total assets | 1,705.7 | $ | 1,615.4 | ||
| Liabilities and Equity | |||||
| Accounts payable | 168.1 | $ | 126.0 | ||
| Accrued liabilities | 48.9 | 52.4 | |||
| Current portion of financing obligation | 3.2 | 3.2 | |||
| Interest payable | 6.1 | — | |||
| Income tax payable | 3.9 | 0.6 | |||
| Total current liabilities | 230.2 | 182.2 | |||
| Long-term debt and financing obligation | 625.0 | 610.4 | |||
| Accrual for black lung benefits | 58.7 | 57.9 | |||
| Retirement benefit liabilities | 21.3 | 21.8 | |||
| Deferred income taxes | 174.3 | 169.0 | |||
| Asset retirement obligations | 11.9 | 11.6 | |||
| Other deferred credits and liabilities | 22.4 | 27.1 | |||
| Total liabilities | 1,143.8 | 1,080.0 | |||
| Equity | |||||
| Preferred stock, 0.01 par value. Authorized 50,000,000 shares; no issued shares at both<br>March 31, 2022 and December 31, 2021 | — | — | |||
| Common stock, 0.01 par value. Authorized 300,000,000 shares; issued 98,754,995 and 98,496,809<br>shares at March 31, 2022 and December 31, 2021, respectively | 1.0 | 1.0 | |||
| Treasury stock, 15,404,482 shares at both March 31, 2022 and December 31, 2021 | (184.0 | ) | (184.0 | ) | |
| Additional paid-in capital | 722.3 | 721.2 | |||
| Accumulated other comprehensive loss | (15.3 | ) | (16.7 | ) | |
| Retained earnings (deficit) | 1.0 | (23.4 | ) | ||
| Total SunCoke Energy, Inc. stockholders’ equity | 525.0 | 498.1 | |||
| Noncontrolling interest | 36.9 | 37.3 | |||
| Total equity | 561.9 | 535.4 | |||
| Total liabilities and equity | 1,705.7 | $ | 1,615.4 |
All values are in US Dollars.
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SunCoke Energy, Inc.
Consolidated Statements of Cash Flows
(Unaudited)
| Three Months Ended March 31, | ||||||
|---|---|---|---|---|---|---|
| 2022 | 2021 | |||||
| (Dollars in millions) | ||||||
| Cash Flows from Operating Activities | ||||||
| Net income | $ | 30.6 | $ | 18.2 | ||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||
| Depreciation and amortization expense | 35.2 | 32.4 | ||||
| Deferred income tax expense | 5.3 | 3.1 | ||||
| Share-based compensation expense | 1.1 | 0.5 | ||||
| Changes in working capital pertaining to operating activities: | ||||||
| Receivables, net | (21.9 | ) | 0.5 | |||
| Inventories | (66.9 | ) | (8.9 | ) | ||
| Accounts payable | 41.9 | 12.9 | ||||
| Accrued liabilities | (3.9 | ) | (3.7 | ) | ||
| Interest payable | 6.1 | 11.0 | ||||
| Income taxes | 3.3 | 3.8 | ||||
| Other | (8.1 | ) | (5.0 | ) | ||
| Net cash provided by operating activities | 22.7 | 64.8 | ||||
| Cash Flows from Investing Activities | ||||||
| Capital expenditures | (12.9 | ) | (20.1 | ) | ||
| Other investing activities | (0.1 | ) | — | |||
| Net cash used in investing activities | (13.0 | ) | (20.1 | ) | ||
| Cash Flows from Financing Activities | ||||||
| Proceeds from revolving facility | 137.0 | 161.8 | ||||
| Repayment of revolving facility | (122.0 | ) | (194.1 | ) | ||
| Repayment of financing obligation | (0.8 | ) | (0.7 | ) | ||
| Dividends paid | (5.0 | ) | (5.1 | ) | ||
| Cash distribution to noncontrolling interests | (1.5 | ) | — | |||
| Other financing activities | (1.5 | ) | (1.0 | ) | ||
| Net cash provided by (used in) financing activities | 6.2 | (39.1 | ) | |||
| Net increase in cash and cash equivalents | 15.9 | 5.6 | ||||
| Cash and cash equivalents at beginning of period | 63.8 | 48.4 | ||||
| Cash and cash equivalents at end of period | $ | 79.7 | $ | 54.0 | ||
| Supplemental Disclosure of Cash Flow Information | ||||||
| Interest paid, net of capitalized interest of zero and $0.1 million, respectively | $ | 0.9 | $ | 0.5 | ||
| Income taxes paid | $ | 1.4 | $ | 0.4 |
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SunCoke Energy, Inc.
Segment Financial and Operating Data
The following tables set forth financial and operating data for the three months ended March 31, 2022 and 2021, respectively:
| Three Months Ended March 31, | ||||||
|---|---|---|---|---|---|---|
| 2022 | 2021 | |||||
| (Dollars in millions, except perton amounts) | ||||||
| Sales and other operating revenues: | ||||||
| Domestic Coke | $ | 411.6 | $ | 335.3 | ||
| Brazil Coke | 9.4 | 8.5 | ||||
| Logistics | 18.8 | 16.1 | ||||
| Logistics intersegment sales | 7.5 | 6.6 | ||||
| Elimination of intersegment sales | (7.5 | ) | (6.6 | ) | ||
| Total sales and other operating revenues | $ | 439.8 | $ | 359.9 | ||
| Adjusted EBITDA^(1)^: | ||||||
| Domestic Coke | $ | 76.0 | $ | 63.5 | ||
| Brazil Coke | 4.2 | 4.5 | ||||
| Logistics | 12.6 | 10.9 | ||||
| Corporate and Other, net | (9.0 | ) | (8.3 | ) | ||
| Total Adjusted EBITDA | $ | 83.8 | $ | 70.6 | ||
| Coke Operating Data: | ||||||
| Domestic Coke capacity<br>utilization^(2)^ | 99 | % | 101 | % | ||
| Domestic Coke production volumes (thousands of tons) | 975 | 1,036 | ||||
| Domestic Coke sales volumes (thousands of tons) | 962 | 1,038 | ||||
| Domestic Coke Adjusted EBITDA per<br>ton^(3)^ | $ | 79.00 | $ | 61.18 | ||
| Brazilian Coke production—operated facility (thousands of tons) | 419 | 417 | ||||
| Logistics Operating Data: | ||||||
| Tons handled (thousands of tons) | 5,236 | 5,300 | ||||
| (1) | See definition of Adjusted EBITDA and reconciliation to GAAP elsewhere in this release. | |||||
| --- | --- | |||||
| (2) | The production of foundry coke tons does not replace blast furnace coke tons on a ton for ton basis, as foundry<br>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. | |||||
| --- | --- | |||||
| (3) | Reflects Domestic Coke Adjusted EBITDA divided by Domestic Coke sales volumes. | |||||
| --- | --- |
9
SunCoke Energy, Inc.
Reconciliation of Non-GAAP Information
Net Income to Adjusted EBITDA
| Three Months Ended March 31, | ||||
|---|---|---|---|---|
| 2022 | 2021 | |||
| (Dollars in millions) | ||||
| Net income attributable to SunCoke Energy, Inc. | $ | 29.5 | $ | 16.5 |
| Add: Net income attributable to noncontrolling interests | 1.1 | 1.7 | ||
| Net income | $ | 30.6 | $ | 18.2 |
| Add: | ||||
| Depreciation and amortization expense | 35.2 | 32.4 | ||
| Interest expense, net | 8.0 | 12.7 | ||
| Income tax expense | 10.0 | 7.3 | ||
| Adjusted EBITDA | 83.8 | 70.6 | ||
| Subtract: Adjusted EBITDA attributable to noncontrolling interests^(1)^ | 2.1 | 2.6 | ||
| Adjusted EBITDA attributable to SunCoke Energy, Inc. | $ | 81.7 | $ | 68.0 |
| (1) | Reflects noncontrolling interest in Indiana Harbor. | |||
| --- | --- |
10
SunCoke Energy, Inc.
Reconciliation of Non-GAAP Information
Estimated 2021 Net Income
to Estimated Consolidated Adjusted EBITDA
| 2022 | ||||
|---|---|---|---|---|
| Low | High | |||
| (Dollars in millions) | ||||
| Net income | $ | 50 | $ | 65 |
| Add: | ||||
| Depreciation and amortization expense | 141 | 137 | ||
| Interest expense, net | 31 | 29 | ||
| Income tax expense | 18 | 24 | ||
| Adjusted EBITDA | $ | 240 | $ | 255 |
| Subtract: Adjusted EBITDA attributable to noncontrolling interest^(1)^ | 9 | 9 | ||
| Adjusted EBITDA attributable to SunCoke Energy, Inc. | $ | 231 | $ | 246 |
| (1) | Reflects noncontrolling interest in Indiana Harbor. | |||
| --- | --- |
11
EX-99.2
SunCoke Energy, Inc. Q1 2022 Earnings Conference Call Exhibit 99.2
This slide presentation should be reviewed in conjunction with the First Quarter 2022 earnings release of SunCoke Energy, Inc. (SunCoke) and conference call held on May 2, 2022 at 11:30 a.m. ET. This presentation call contains “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). Such forward-looking statements include statements that are not strictly historical facts, and include, among other things, statements regarding: our expectations of financial results, condition and outlook; anticipated effects of the COVID-19 pandemic and responses thereto. 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. Forward-looking statements are inherently uncertain and involve significant known and unknown risks and uncertainties (many of which are beyond the control of SunCoke) that could cause actual results to differ materially. Such risks and uncertainties include, but are not limited to domestic and international economic, political, business, operational, competitive, regulatory and/or market factors affecting SunCoke, as well as uncertainties related to: pending or future litigation, legislation or regulatory actions; liability for remedial actions or assessments under existing or future environmental regulations; gains and losses related to acquisition, disposition or impairment of assets; recapitalizations; access to, and costs of, capital; the effects of changes in accounting rules applicable to SunCoke; and changes in tax, environmental and other laws and regulations applicable to SunCoke's businesses. Currently, such risks and uncertainties also include the impacts on our industry and on the U.S. and global economy resulting from COVID-19, including actions by domestic and foreign governments and others to contain the spread, or mitigate the severity, thereof. 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. The reader should not place undue reliance on these forward-looking statements, which speak only as of the date of the earnings 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 the earnings release except as required by applicable law. In accordance with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, SunCoke has included in its filings with the Securities and Exchange Commission cautionary language identifying important factors (but not necessarily all the important factors) that could cause actual results to differ materially from those expressed in any forward-looking statement made by SunCoke. For information concerning these factors and other important information regarding the matters discussed in this presentation, see SunCoke's Securities and Exchange Commission filings such as its annual and quarterly reports and current reports on Form 8-K, copies of which are available free of charge on SunCoke's website at www.suncoke.com. All forward-looking statements included in this presentation are expressly qualified in their entirety by such cautionary statements. Unpredictable or unknown factors not discussed in this presentation also could have material adverse effects on forward- looking statements. Forward-Looking Statements
Q1 2022 Highlights Strong start to the year across our coke and logistics operations Delivered Q1 ‘22 Adjusted EBITDA of $83.8M, representing best ever quarterly results Export and foundry coke initiatives continue to excel Extended coal handling contract at CMT through 2024; 4.0M tons annual take-or-pay volume commitment with higher base rate and upside potential with price adjustment based on API2 index pricing Gross leverage at 2.2x on a trailing twelve month Adj. EBITDA basis Well positioned to modestly exceed FY 2022 Adjusted EBITDA guidance range of $240M - $255M See appendix for a definition and reconciliation of Adjusted EBITDA
Q1 2022 Financial Performance See appendix for a definition and reconciliation of Adjusted EBITDA Coke Adjusted EBITDA includes Domestic Coke and Brazil Coke Q1 ’22 Corporate and Other Adj. EBITDA includes activity from our legacy coal mining business ($/share) ($ in millions) Diluted EPS Adj. EBITDA(1) $13.2M Q1 2022 Earnings Review Q1 ‘22 EPS of $0.35, up $0.15 from the prior year quarter Adjusted EBITDA(1) of $83.8M, up $13.2M from the prior year quarter Coke operations up $12.2M, driven by higher margins on export sales Logistics segment up $1.7M driven by API2 price adjustment benefit $0.35 $ +0.15
Domestic Coke Performance Domestic Coke Business Summary M M M M M Sales Tons (Coke Production, Kt) Delivered Adj. EBITDA of $76.0M in Q1 ‘22 vs $63.5M in Q1 ‘21 Higher Adj. EBITDA driven by higher margins on export sales Lower production and sales across the fleet driven by unusually wet winter weather Expect FY 2022 Domestic Coke EBITDA to modestly exceed the guidance range of $229M - $235M See appendix for a definition and reconciliation of Adjusted EBITDA (1) 962K 1,063K 1,038K 1,026K Coke business driven by higher margins on export sales including one time benefit of lower cost carry over coal from 2021 1,056K
$11.6M $9.6M $12.6M Logistics Business Summary (Tons Handled, Kt) Logistics segment contributed $12.6M to Q1 ‘22 Adj. EBITDA Domestic terminals volume higher versus Q1 ‘21 driven by increased demand and new customers CMT coal handling benefitted from API2 price adjustment CMT volumes lower than Q1 ’21 driven by continued coal supply and rail delivery issues Extended take-or-pay coal handling agreement through 2024 4.0M annual take-or-pay volume Higher base rate than current contract Price adjustment tied to API2 index provides upside potential Volume guidance remains unchanged (1) See appendix for a definition and reconciliation of Adjusted EBITDA. Q1 ’22 CMT volumes lower than Q1 ’21 driven by coal supply and rail delivery issues; Domestic terminals experiencing increased demand and new customers Logistics Performance and Guidance
Revolver Availability: $220.0M (Consolidated) Q1 ’22 Total Debt $641M Gross Leverage(1) 2.22x Net Leverage(1) 1.94x Gross leverage and Net leverage for Q1 2022 calculated using Last Twelve Month(LTM) Adjusted EBITDA Q1 2022 Liquidity Maintained strong liquidity position of ~$300M; Continued objective to strengthen the balance sheet ($ in millions) Operating cash flow impacted by timing of receivables, increase in coal inventory and change in coal payment terms
Further strengthen customer relationships and grow market share for long term success Support full capacity utilization of cokemaking assets Build on the Commercial Success of Foundry/Export Business 2022 Key Initiatives $240M - $255M Adjusted EBITDA Achieve 2022 Financial Objectives Deliver Safety/Operational Excellence and Combat Inflationary Pressures Continue to deliver strong safety and operational excellence Continued focus on developing projects to minimize inflationary impacts Continue work on further diversifying CMT with new product and customer mix Pursue New Customers for Logistics Business Continue to execute against our well-established capital allocation priorities of deleveraging, exploring growth opportunities and returning capital to shareholders Pursue Balanced Capital Allocation
APPENDIX
Adjusted EBITDA represents earnings before interest, loss (gain) on extinguishment of debt, taxes, depreciation and amortization (“EBITDA”), adjusted for impairments, loss on extinguishment of debt, restructuring costs, changes to our contingent consideration liability related to our acquisition of CMT, and/or transaction costs incurred as part of the Simplification Transaction. EBITDA and Adjusted EBITDA do not represent and should not be considered alternatives to net income or operating income under 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 on 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 with GAAP, and they should not be considered a substitute for net income or any other measure of financial performance presented in accordance with GAAP. EBITDA represents earnings before interest, taxes, depreciation and amortization. Adjusted EBITDA attributable to SXC represents Adjusted EBITDA less Adjusted EBITDA attributable to non-controlling interests. Adjusted EBITDA/Ton represents Adjusted EBITDA divided by tons sold/handled. Free Cash Flow (FCF) represents operating cash flow adjusted for capital expenditures. Management believes FCF is an important measure of liquidity. FCF is not a measure calculated in accordance with GAAP, and it should not be considered a substitute for operating cash flow or any other measure of financial performance presented in accordance with GAAP. Definitions
2022 Guidance Summary Well positioned to modestly exceed Adjusted EBITDA guidance driven by higher margins on export coke sales and coal handling at CMT See appendix for a definition and reconciliation of Adjusted EBITDA Domestic coke sales for 2022 estimate includes production for foundry and export sales Domestic Coke Adj. EBITDA/ton calculated as Domestic Coke EBITDA/Domestic Coke Sales Capital expenditure guidance excludes the impact of capitalized interest See appendix for a definition and reconciliation of Free Cash Flow (FCF) See appendix for definition and reconciliation of Adjusted EBITDA See appendix for definition and reconciliation of Free Cash Flow (FCF)
Coke Facility Capacity and Contract Duration/Volume Capacity represents blast furnace equivalent production capacity Represents production capacity for blast-furnace sized coke, however, customer takes all on a “run of oven” basis, which represents >600k tons per year.
Balance Sheet & Debt Metrics
2022 Guidance Reconciliation Reflects non-controlling interest in Indiana Harbor Free Cash Flow Reconciliation
SXC FCF/Share Reconciliation
Reconciliation to Adjusted EBITDA and Adjusted EBITDA attributable to SXC Reflects non-controlling interests in Indiana Harbor and the portion of the Partnership owned by public unitholders prior to the closing of the Simplification Transaction
Adjusted EBITDA and Adjusted EBITDA per ton (1) Corporate and Other includes the results of our legacy coal mining business.
EX-99.3
Exhibit 99.3
Investors and Media:
Shantanu Agrawal
630-824-1907
SUNCOKE ENERGY, INC. DECLARES CASH DIVIDEND
Lisle, IL (May 2, 2022) – Today, SunCoke Energy, Inc. (NYSE: SXC) announced that its Board of Directors declared a cash dividend of $0.06 per share of the Company’s common stock to be paid June 1, 2022 to stockholders of record at the close of business on May 18, 2022.
ABOUTSUNCOKE ENERGY, INC.
SunCoke Energy, Inc. (NYSE: SXC) supplies high-quality coke to domestic and international customers. Our coke is used in the blast furnace production of steel as well as the foundry production of casted iron, with the majority of sales under long-term, take-or-pay contracts. We also export coke to overseas customers seeking high-quality product for their blast furnaces. Our process utilizes an innovative heat-recovery technology that captures excess heat for steam or electrical power generation and draws upon more than 60 years of cokemaking experience to operate our facilities in Illinois, Indiana, Ohio, Virginia and Brazil. Our logistics business provides export and domestic material handling services to coke, coal, steel, power and other bulk customers. The logistics terminals have the collective capacity to mix and transload more than 40 million tons of material each year and are strategically located to reach Gulf Coast, East Coast, Great Lakes and international ports. To learn more about SunCoke Energy, Inc., visit our website at www.suncoke.com.