WARRIOR MET COAL, INC. (HCC): Results of Operations and Financial Condition
WARRIOR MET COAL, INC. (HCC) filed an SEC Form 8-K — Results of Operations and Financial Condition. Exhibit 99.1 Warrior Reports Second Quarter 2026 Results Generates significant free cash flow as Blue Creek helps drive record volumes, lower costs and margin expansion Sales and production volumes grow by 65% and 45% year-over-year, respectively Raises full year volume guidance,
How this was made
The 30-second read
Why it matters
The key tradable items are the quantified Q2 earnings and free cash flow, the record sales/production volumes, and the explicit full-year volume guidance increase, all of which can change near-term expectations for margins and cash generation.
Market read
Record volumes, higher adjusted EBITDA, and positive free cash flow, combined with a raised full-year volume outlook, are likely to drive re-rating of HCC’s forward cash-flow profile.
What to watch
The release highlights improved cash costs and 45X credit benefits, but it does not quantify sensitivity to future steelmaking coal price swings, freight rates, or potential inventory build/draw beyond the quarter.
Warrior Reports Second Quarter 2026 Results Generates significant free cash flow as Blue Creek helps drive record volumes, lower costs and margin expansion
Record sales volumes, sharply higher earnings and Adjusted EBITDA, lower cash cost per short ton, and positive free cash flow followed the Blue Creek ramp-up. The Company also raised full-year volume guidance.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Total revenuesGAAP | $509.7 million | – | – |
| Sales volumesother | 3.7 million short tons | – | 65% increase |
| Production volumesother | 3.3 million short tons | – | 45% increase |
| Inventory levelsother | 1.4 million short tons | – | – |
| Average net selling price of steelmaking coalother | $137.82 per short ton | – | 6% increase |
| Average gross selling price realizationother | approximately 66% of the Platts Premium Low Vol (“PLV”) FOB Australian index price | – | – |
| Cost of salesGAAP | $340.0 million | – | – |
| Cash cost of sales (free-on-board port)non-GAAP | $338.1 million, or 67.1% of mining revenues | – | – |
| Cash cost of sales (free-on-board port) per short tonnon-GAAP | $92.53 | – | decreased by 9% |
| Depreciation and depletion expensesGAAP | $58.3 million, or 11.4% of total revenues | – | – |
| Selling, general and administrative expensesGAAP | $9.8 million, or 1.9% of total revenues | – | – |
| Net interest expenseGAAP | $3.4 million | – | – |
| Pre-tax incomeGAAP | $91.1 million | – | – |
| Income tax expenseGAAP | $3.7 million | – | – |
| Net incomeGAAP | $87.4 million | – | – |
| Diluted earnings per shareGAAP | $1.65 per diluted share | – | – |
| Adjusted EBITDAnon-GAAP | $156.9 million | – | 193% increase |
| Cash provided by operating activitiesGAAP | $132.3 million | – | – |
| Net working capital, excluding cashother | increased by $13.7 million from the first quarter of 2026 | – | – |
| Cash used in investing activities for capital expenditures and mine developmentGAAP | $18.3 million | – | – |
| Free cash flownon-GAAP | $103.4 million | – | – |
| Cash flows used in financing activitiesGAAP | $14.2 million | – | – |
| Total liquidityother | $452.9 million | – | – |
| Cash and cash equivalentsGAAP | $302.3 million | – | – |
| Short-term investmentsGAAP | $10.1 million, which is net of $10.1 million posted as collateral | – | – |
| Available liquidity under ABL Facilityother | $140.5 million, net of outstanding letters of credit of $2.5 million | – | – |
full year 2026 outlook
- NoteCoal sales 13.0 - 14.0 million short tons
- NoteCoal production 12.5 - 13.5 million short tons
- NoteCash cost of sales (free-on-board port) $95 - $105 per short ton
- NoteCapital expenditures for sustaining existing mines $105 - $115 million
- NoteCapital expenditures for Blue Creek project $50 - $75 million
- NoteDepreciation and depletion $225 - $250 million
- NoteSelling, general and administrative expenses $75 - $85 million
- NoteInterest expense $20 - $25 million
- NoteInterest income $3 - $8 million
Capital returns
- On July 28, 2026, the Board declared a regular quarterly cash dividend of $0.08 per share.
- The Company plans to distribute the dividend on August 17, 2026, to stockholders of record as of the close of business on August 10, 2026.
- Cash flows used in financing activities were primarily due to principal repayments of financing lease obligations of $9.9 million and payment of a regular quarterly dividend of $4.2 million.
What drove it
- Sales volumes increased primarily because of sales of Blue Creek steelmaking coal.
- Revenue reflected the 65% increase in sales volumes combined with a 6% increase in the average net selling price.
- Cash cost of sales per short ton declined primarily because of the Blue Creek sales mix and its inherently lower cost structure, plus a benefit from the 45X Credit.
- Depreciation expense increased due to additional assets placed into service at Blue Creek and higher sales volumes.
- Selling, general and administrative expenses included a gain of $2.4 million related to recoveries received in connection with the Walter Energy bankruptcy proceedings.
Concerns
- Average gross selling price realization was approximately 66% of the PLV FOB Australian index price, compared to 80% in the second quarter of 2025.
- The lower index realization was primarily driven by a 21% higher sales mix of high-vol A steelmaking coal predominantly sold into the Pacific Basin at elevated freight rates and persistently low second tier price relativities compared to the PLV.
- The outlook is subject to global trade and tariff uncertainties, market conditions in the steel and steelmaking coal industries, and overall global economic and competitive conditions.
- The Company identified HCC index pricing, geography of sales, freight rates, a new labor contract, and inflationary pressures as factors affecting the full-year outlook.
What to watch
- Three planned longwall moves before year-end, including two in Q3 and one in Q4.
- Continued customer reception of Blue Creek volume trials and adoption by customers.
- Cash cost of sales (free-on-board port) against the full-year guidance of $95 - $105 per short ton.
- Capital expenditures for sustaining existing mines and for the Blue Creek project.
- HCC index pricing, the geography of sales, and freight rates.
Balance sheet and cash flow
- Cash provided by operating activities was $132.3 million.
- Free cash flow was $103.4 million.
- Cash used in investing activities for capital expenditures and mine development was $18.3 million.
- Net working capital, excluding cash, increased by $13.7 million from the first quarter of 2026.
- Total liquidity as of June 30, 2026 was $452.9 million, consisting of cash and cash equivalents of $302.3 million, short-term investments of $10.1 million, and available liquidity under its ABL Facility of $140.5 million, net of outstanding letters of credit of $2.5 million.
Analysis
Warrior delivered a substantially stronger second quarter of 2026 as Blue Creek supported record quarterly sales volumes for the fourth consecutive quarter. Sales volumes were 3.7 million short tons, up 65%, while production was 3.3 million short tons, up 45%. Total revenues rose to $509.7 million from $297.5 million, reflecting volume growth and a 6% increase in average net selling price to $137.82 per short ton.
The operating-cost profile improved despite higher total cost of sales. Cost of sales increased to $340.0 million as sales tons increased, but cash cost of sales per short ton fell to $92.53 from $101.17. Management attributed the decline primarily to Blue Creek's lower-cost structure and the 45X Credit. Adjusted EBITDA increased 193% to $156.9 million, while net income rose to $87.4 million, or $1.65 per diluted share, from $5.6 million, or $0.11 per diluted share.
Pricing and mix remain important offsets to the volume and cost gains. Average gross selling price realization was approximately 66% of the PLV FOB Australian index price, compared with 80% in the prior-year quarter. The Company attributed the lower realization to a 21% higher mix of high-vol A coal sold predominantly into the Pacific Basin at elevated freight rates and to persistently low second tier price relativities. Depreciation and depletion increased to $58.3 million as Blue Creek assets entered service and sales volumes rose.
Cash generation accelerated after completion of the Blue Creek construction phase. Operating cash flow was $132.3 million, capital expenditures and mine development spending were $18.3 million, and free cash flow was $103.4 million, compared with negative free cash flows of $56.7 million in the second quarter of 2025. Total liquidity was $452.9 million as of June 30, 2026. The Company also declared a regular quarterly cash dividend of $0.08 per share.
The Company raised full-year volume guidance by 0.5 million short tons following continued positive reception of Blue Creek trials and customer adoption. Full-year coal sales guidance is 13.0 - 14.0 million short tons and production guidance is 12.5 - 13.5 million short tons. Execution through the remaining longwall moves, cash costs, freight and geographic sales mix, steelmaking-coal pricing, trade and tariff policies, the new labor contract, and inflationary pressures are the stated factors that will shape the outlook.
Management, verbatim
We delivered record sales volumes, improved pricing and a lower-cost profile in the second quarter, driving significant margin expansion and generating more than $103 million of free cash flow.
Walt Scheller, CEO of Warrior
Blue Creek continues to be an important contributor to our performance, adding incremental earnings and cash flow as customers respond positively to our offering.
Walt Scheller, CEO of Warrior
In summary, with Blue Creek operational and our development spending complete, this second quarter marked the start of the next phase of Warrior's growth, which is focused on free cash flow generation, balance sheet strength and long-term stockholder returns.
Walt Scheller, CEO of Warrior
Not in the filing
stated, not guessed- GAAP gross profit and gross margin
- GAAP operating income and operating margin
- Non-GAAP adjusted diluted earnings per share
- Total debt and net debt
- Share repurchases
- Prior-quarter total revenue, net income, diluted earnings per share, Adjusted EBITDA, and operating cash flow
- Prior full-year guidance for comparison
- Full-year revenue, gross margin, tax rate, and operating expense guidance
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
This is an SEC Form 8-K with Exhibit 99.1 reporting Warrior Met Coal’s Q2 2026 operating results, cash flow, and liquidity, with emphasis on the Blue Creek mine ramp and cost structure.
Ticker impact
Warrior Met Coal reported Q2 2026 net income of $87.4M, record 3.7M tons sales, and raised full-year volume guidance tied to Blue Creek ramp.
Likely positive bias for HCC as traders reprice forward free cash flow and cost structure improvements from Blue Creek and the 45X credit.
The filing is a primary earnings release with quantified operating and cash-flow metrics, and it explicitly states full-year volume guidance was raised based on continued customer reception and Blue Creek performance.
Market effects
Steelmaking coal producers may see read-across demand and pricing support if Blue Creek-style low-cost supply continues to expand volumes and margins.
US-based exporter performance could influence sentiment around seaborne steelmaking coal supply tightness and freight-linked realizations.
Improved Chinese import demand support and India steel growth commentary may reinforce broader seaborne pricing expectations for the sector.
Counterpoint
Margin expansion may be partly credit- and mix-driven, so normalized costs or weaker pricing could reduce the durability of free cash flow.
Key entities
- companyWarrior Met Coal, Inc.
NYSE-listed steelmaking coal producer reporting Q2 2026 results and raising full-year volume guidance.
- assetBlue Creek mine
Primary driver of volume growth and profitability contribution cited in the release.
- policySection 45X Advanced Manufacturing Production Tax Credit
Tax credit cited as a contributor to lower cash cost of sales per ton.
