Arch Coal Continues Strong Operating Performance

ST. LOUIS, MO - John W. Eaves, CEO of Arch Coal, Inc. said, “The Company is out of the gates in excellent fashion in 2019 with yet another strong operating performance, a robust level of capital returned to shareholders, and significant progress in the development of our next world-class coking coal mine. During the first quarter, we captured record margins from our coking coal portfolio, exhibited solid cost control in our Metallurgical segment during a lighter-than-ratable shipping quarter, and overcame flood-related rail service disruptions at our Powder River Basin operations.  In addition, we returned $86 million to shareholders under our capital return program, bringing the total returned since the program's inception to $726 million.  All told, Arch has now bought back nearly one third of our initial shares outstanding. Given our outlook for strong and continued free cash generation through the balance of the year, Arch expects to be in excellent position to drive ahead with our capital return program while simultaneously laying a powerful foundation for future volume and earnings growth at the new Leer South mine"

Net income of $72.7 million in the first quarter of 2019, compared with net income of $60.0 million in the prior-year period.  The company earned adjusted earnings before interest, taxes, depreciation, depletion, amortization, accretion on asset retirement obligations, and non-operating expenses ("adjusted EBITDA")1 of $107.3 million in the first quarter of 2019, which includes a $13.0 million non-cash mark-to-market gain associated with the company's coal-hedging activities.  This compares to $104.9 million of adjusted EBITDA recorded in the first quarter of 2018.  Revenues totaled $555.2 million for the three months ended March 31, 2019, versus $575.3 million in the prior-year quarter.

During the first quarter, Arch repurchased 872,000 shares of common stock, representing 3.5 percent of initial shares outstanding, at a total investment of $78.3 million.  In the past eight quarters, Arch has invested a total of $662.1 million to buy back 8.1 million shares, which has served to lower the corporation's outstanding share count from 25.0 million to 16.9 million.

In addition to the buybacks, Arch returned $7.8 million to shareholders through its recurring quarterly dividend, bringing total capital returned to $86 million for the quarter just ended.  The $86 million returned to shareholders during the first quarter represented an 11 percent increase over the quarterly average achieved in 2018, even with the expenditure of roughly $18 million on the development of Leer South.  Since launching the capital return program in May 2017, Arch has returned a total of $725.6 million to shareholders via buybacks and dividends.   

"Our coking coal operations performed exceptionally well during the quarter as we captured record per-ton realizations on coking coal sales, delivered a solid cost performance and achieved record margins, even with the anticipated, lower-than-ratable shipments," said Paul A. Lang, President and COO.  "This strong performance more than offset lower volumes in both our Powder River Basin and Colorado operations, where we were adversely affected by widespread rail outages stemming from historic flooding in the Midwest in February and March."    

The company’s address is One City Place Drive, Suite 300, St. Louis, MO 63141, (314) 994-2700, www.archcoal.com