8-K

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): August 13, 2019

RAMACO RESOURCES, INC.

(Exact name of Registrant as specified in its charter)

Delaware	001-38003	38-4018838
(State or other jurisdiction of	(Commission	(I.R.S. Employer
incorporation or organization)	File Number)	Identification No.)
	250 West Main Street, Suite 1800
	Lexington, Kentucky 40507
	(Address of principal executive offices)
	(Zip Code)

Registrant’s Telephone Number, including area code: (859) 244-7455

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value	METC	NASDAQ Global Select Market

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 (see General Instruction A.2.):

□ 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))

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 August 13, 2019, Ramaco Resources, Inc., a Delaware corporation (the “Company”), issued a press release describing its financial and operating results for the second quarter of 2019 (the “Earnings Release”). A copy of the Earnings Release is attached hereto as Exhibit 99.1 to this Current Report on Form 8-K is and incorporated herein by reference.

None of the information furnished in this Item 2.02 will be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section, nor will it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended.

Item 7.01.Regulation FD Disclosure.

The information set forth in Item 2.02 above and in Exhibit 99.1 to this Current Report on Form 8-K is incorporated herein by reference.

None of the information furnished in this Item 7.01 will be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor will it be incorporated by reference into any registration statement filed by the Company under the Securities Act of 1933, as amended.

Item 9.01.        Financial Statements and Exhibits.

(d)Exhibits.

Exhibit Number	Description
99.1	Earnings Release issued on August 13, 2019

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

RAMACO RESOURCES, INC.
By:	/s/ Jeremy R. Sussman
Name:	Jeremy R. Sussman
Title:	Chief Financial Officer

Date: August 13, 2019

EX-99.1

Exhibit 99.1

Ramaco Resources, Inc. Reports Second Quarter 2019 Financial Results

Company Release – August 13, 2019

· Adjusted EBITDA of $19.1 million in the second quarter was our highest reported Adjusted EBITDA quarterly figure, and compared to the previous record of $14.9 million in the second quarter of 2018.

· Diluted EPS of $0.43 in the first half of 2019 compared to first half 2018 diluted EPS of $0.38. Trailing 12-month diluted EPS is $0.66.

· Net income of $10.6 million in the second quarter was our highest reported Net income quarterly figure, and compared to the previous record of $10.2 million in the second quarter of 2018.

· Silo remediation work was completed and the Elk Creek prep plant was fully operational by the beginning of August 2019.

· Based on the midpoint of 2019 guidance, Ramaco is almost 90% contracted at an averaged fixed price of $115/ton for its metallurgical coal sales.

· All key 2019 guidance remains unchanged.

LEXINGTON, KY – (PR NEWSWIRE) – Ramaco Resources, Inc. (NASDAQ: METC) (“Ramaco,”  “Ramaco Resources” or the “Company”) today reported second quarter net income of $10.6 million, or $0.26 per fully diluted share for the quarter ended June 30, 2019, as compared to a net income of $10.2 million in the prior year quarter ended June 30,  2018. The Company’s adjusted earnings before interest, taxes, depreciation, amortization and equity-based compensation expenses (“Adjusted EBITDA”) was $19.1 million for the three months ended June 30,  2019, as compared with Adjusted EBITDA of $14.9 million for the three months ended June 30, 2018.   Key operational and financial metrics are presented below:

Key Second Quarter 2019 Metrics
	2Q19	1Q19	Change	2Q19	2Q18	Change	1H19	1H18	Change
Sales Of Company Produced Tons	499,000	443,000	13%	499,000	493,000	1%	942,000	896,000	5%
Revenue ($ MM)	$ 65.8	$ 57.5	14%	$ 65.8	$ 65.3	1%	$ 123.2	$ 121.2	2%
Cost of Sales ($ MM)	$ 43.2	$ 41.0	5%	$ 43.2	$ 47.9	-10%	$ 84.2	$ 92.2	-9%
Pricing Of Company Produced ($/Ton)	$ 116	$ 104	12%	$ 116	$ 91	27%	$ 110	$ 91	21%
Cash Costs Of Company Produced ($/Ton)	$ 71	$ 68	4%	$ 71	$ 56	27%	$ 69	$ 60	15%
Cash Margins Of Company Produced ($/Ton)	$ 45	$ 36	25%	$ 45	$ 35	29%	$ 41	$ 31	32%
Net Income ($ MM)	$ 10.6	$ 6.9	54%	$ 10.6	$ 10.2	4%	$ 17.5	$ 15.5	13%
Adjusted EBITDA ($ MM)	$ 19.1	$ 13.7	39%	$ 19.1	$ 14.9	28%	$ 32.8	$ 24.2	36%
Capex ($ MM)	$ 11.5	$ 8.2	40%	$ 11.5	$ 14.7	-22%	$ 19.7	$ 27.5	-28%
Diluted Earnings per Share	$ 0.26	$ 0.17	53%	$ 0.26	$ 0.25	4%	$ 0.43	$ 0.38	13%

Second Quarter 2019 Summary

Year over Year Quarterly Comparison

Overall sales of company produced tons in the second quarter of 2019  were 499,000 tons, a 1% increase from the second quarter of 2018 of 493,000 tons.  Cash margins on Company produced and sold coal at Elk Creek improved by 32% from approximately $37 per ton in the second quarter of 2018 to approximately $49  per ton in the second quarter of 2019. Cash mine costs per ton on Company produced and sold coal at Elk Creek were  $66 in the second quarter of 2019 compared to $53 in the second quarter of 2018.  

2019 Quarter over Quarter Comparison

Overall sales of company produced tons in the second quarter of 2019  were up 13% from the first quarter of 2019.  Cash margins on Company produced and sold coal at Elk Creek improved by 26%, from approximately $39 per ton in the first quarter of 2019 to approximately $49  per ton in the second quarter of 2019. Adjusted EBITDA for the second quarter of 2019 was $19.1 million as compared to $13.7 million for the first quarter of 2019 or up over 39%. Cash mine costs per ton on Company produced and sold coal at Elk Creek were $66 in the second quarter of 2019,  up approximately 5% from $63 in the first quarter of 2019.

Randall Atkins, Ramaco Resources’ Executive Chairman remarked, “We are of course very pleased to report our strongest quarter to date, basically across the board. We have achieved record results in all of our key financial and operational metrics and are looking forward to continuing our measured production growth throughout the balance of the year and into 2020. Given the current turbulence in both the financial and coal markets, it is worth reemphasizing the conservative approach which we have deployed to build our company. Ramaco was strategically designed to weather these types of market dislocations. Ramaco continues to have some of the lowest cash mining costs, net debt and legacy liabilities of any of our public peers. We have done so while providing our customers high quality metallurgical coals, which have been widely accepted in the blends of both our domestic and international customers. We look forward to participating in the current 2020 domestic marketing season as an incumbent supplier to many of our best customers and to also expanding our sales profile in this coming year into new export markets.”

Additional Financial Results

The Company ended the quarter with approximately $5.5 million of cash on hand,  $26.1 million of accounts receivable and $21.2 million of availability under the Revolving Credit Facility. Free cash flow generated during 2019, as well as borrowings available through our Revolving Credit Facility, are expected to be used to fund working capital, mine expansion and related capital expenditures.

Actual cash taxes payable for 2019 are expected to be less than $0.2 million.

In the first half of 2019, the Company recorded income tax expense of $3.5 million for an annual effective tax rate of approximately 16.8%.

Capital expenditures totaled approximately $11.5 million during the second quarter of 2019 and approximately $19.8 million through the six months ended June 30, 2019.  Capital expenditures decreased by approximately 22% compared to the second quarter of 2018.

Operational Results

The exhibit below summarizes some of the key sales, production and financial metrics for the periods noted:

	Three months ended						Six months ended
	June 30,		March 31,		June 30,		June 30,		June 30,
In thousands, except per ton amounts	2019		2019		2018		2019		2018
Sales Volume
Company		499		443		493		942		896
Purchased		26		35		122		61		241
Total		525		478		615		1,003		1,137
Company Production
Elk Creek Mining Complex		423		440		478		863		838
Berwind Development Deep Mine		53		32		19		85		39
Total		476		472		497		948		877
Company Financial Metrics(a)
Average revenue per ton	$	116	$	104	$	91	$	110	$	91
Average cash costs of coal sold		71		68		56		69		60
Average cash margin per ton	$	45	$	36	$	35	$	41	$	31
Elk Creek Financial Metrics(a)
Average revenue per ton	$	115	$	102	$	90	$	109	$	90
Average cash costs of coal sold		66		63		53		65		57
Average cash margin per ton	$	49	$	39	$	37	$	44	$	33
Purchased Coal Financial Metrics(a)
Average revenue per ton	$	123	$	127	$	101	$	125	$	101
Average cash costs of coal sold		122		108		100		114		95
Average cash margin per ton	$	1	$	19	$	1	$	11	$	6
Capital Expenditures	$	11,538	$	8,199	$	14,709	$	19,737	$	27,478

^(a) Excludes transportation.

2019  Outlook

Michael Bauersachs, Ramaco Resources’ President and CEO commented, “Overall, our second quarter performance was very good. Our mines, although continuing to lose some potential operating shifts, performed quite well. There were no noteworthy production issues in the second quarter. We anticipate a stable and slightly improving production profile throughout the second half of the year.”

“As the third quarter is progressing, we are watching two trends develop. First, we are seeing a deceleration in international pricing, mostly driven by lower demand and uncertainty surrounding Chinese import restrictions.  Second, we are seeing pronounced financial weakness in the form of numerous coal bankruptcies.  Our well capitalized mines are becoming the new standard in our operating regions. The reliability and quality that comes from our mines has created one of the strongest North American coal sales portfolios in the space. 2020 domestic contracting has begun. It is a very good time to have an outsized incumbent North American sales position that is well embedded into our customer’s blends.”

“With that being said, we have made a large push to qualify our coal in all key international markets. The large number of recent US coal bankruptcies has caused concern with potential export customers. Our advantaged balance sheet, combined with our approach to mining, is helping set us apart and advance these important efforts.”

2019 Estimated Production, Sales, Cost and Capital Expenditure Guidance

(In thousands, except per ton amounts)

	2019 Guidance					2018 Actuals
Company Production
Elk Creek		1,600	-		1,900		1,669
Berwind Development Deep Mine		200	-		300		81
Total		1,800	-		2,200		1,750
Sales Mix
Metallurgical		1,925	-		2,300		2,066
Steam		75	-		100		82
		2,000	-		2,400		2,148
Cost Per Ton (a)
Elk Creek	$	63	-	$	67	$	60
Capital Expenditures	$	35,000	-	$	40,000	$	48,137

(a) Cost per ton guidance does not include the potential impact of inventory adjustments.

Committed 2019 Sales Volume (b)

(In thousands, except per ton amounts)

	Volume	Average Price
Committed 2019 Sales Volume
Domestic, fixed priced	1,519	$	113
Export, fixed priced	312	$	124
Total, fixed priced	1,831	$	115
Domestic, indexed	166
Total, indexed priced	166
Total Committed Tons	1,997

(b) As of June 30, 2019, amounts include approximately 100,000 tons of purchased coal

About Ramaco Resources, Inc.

Ramaco Resources, Inc. is an operator and developer of high-quality, low cost metallurgical coal in southern West Virginia, southwestern Virginia and southwestern Pennsylvania. Its executive offices are in Lexington, Kentucky, with operational offices in Charleston, West Virginia. The Company has five active mines within two mining complexes at this time.

News and additional information about Ramaco Resources, including filings with the Securities and Exchange Commission, are available at http://www.ramacoresources.com. For more information, contact investor relations at (859) 244-7455.

Second Quarter Earnings Conference Call

Ramaco Resources will hold its quarterly conference call and webcast at 9:00 AM Eastern Time (ET) on Wednesday, August 14, 2019 to present its results for the second quarter of 2019.

The conference call can be accessed by calling (844) 852-8392 domestically or (703) 639-1226 internationally. The webcast for this release will be accessible by visiting https://edge.media-server.com/mmc/p/ewe5d2jw.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

Certain statements contained in this news release constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent Ramaco Resources’ expectations or beliefs concerning 2019 guidance, future events, anticipated revenues, costs and expectations regarding operating results, and it is possible that the results described in this news release will not be achieved. These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of Ramaco Resources’ control, which could cause actual results to differ materially from the results discussed in the forward-looking statements. These factors include, without limitation, unexpected delays in our current mine development activities, failure of our sales commitment counterparties to perform, increased government regulation of coal in the United States or internationally, or unexpected decline of demand for coal in export markets and underperformance of the railroads. Any forward-looking statement speaks only as of the date on which it is made, and, except as required by law, Ramaco Resources does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. New factors emerge from time to time, and it is not possible for Ramaco Resources to predict all such factors. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements found in Ramaco Resources’ filings with the Securities and Exchange Commission (“SEC”), including its Annual Report on Form 10-K. The risk factors and other factors noted in Ramaco Resources’ SEC filings could cause its actual results to differ materially from those contained in any forward-looking statement.

Ramaco Resources, Inc.
Consolidated Statements of Operations

	Three months ended June 30,				Six months ended June 30,
In thousands, except per share amounts	2019		2018		2019		2018
Revenue	$	65,761	$	65,278	$	123,221	$	121,221
Cost and expenses
Cost of coal sales (exclusive of items shown separately below)		43,219		47,860		84,225		92,191
Asset retirement obligation accretion		128		124		256		247
Depreciation and amortization		4,822		2,955		8,938		5,393
Selling, general and administrative		4,703		3,692		8,664		7,123
Total cost and expenses		52,872		54,631		102,083		104,954
Operating income		12,889		10,647		21,138		16,267
Other income		194		513		492		1,002
Interest expense, net		(302)		(314)		(609)		(414)
Income before tax		12,781		10,846		21,021		16,855
Income tax expense		2,168		642		3,525		1,385
Net income	$	10,613	$	10,204	$	17,496	$	15,470
Earnings per common share
Basic earnings per share	$	0.26	$	0.25	$	0.43	$	0.39
Diluted earnings per share	$	0.26	$	0.25	$	0.43	$	0.38
Basic weighted average shares outstanding		40,869		40,082		40,737		39,994
Diluted weighted average shares outstanding		40,965		40,340		40,810		40,242

Ramaco Resources, Inc.

Consolidated Balance Sheets

In thousands, except share amounts	June 30, 2019		December 31, 2018
Assets
Current assets
Cash and cash equivalents	$	5,541	$	6,951
Accounts receivable		26,099		10,729
Inventories		16,593		14,185
Prepaid expenses		1,604		3,154
Total current assets		49,837		35,019
Property, plant and equipment, net		164,193		149,205
Advanced coal royalties		3,113		3,045
Other assets		994		975
Total Assets	$	218,137	$	188,244
Liabilities and Stockholders' Equity
Liabilities
Current liabilities
Accounts payable	$	16,325	$	16,393
Accrued expenses		9,390		8,094
Asset retirement obligations		513		71
Current portion of long-term debt		5,000		5,000
Other		—		287
Total current liabilities		31,228		29,845
Asset retirement obligations		12,656		12,707
Long-term debt, net		10,002		4,474
Deferred tax liability		3,537		109
Other long-term liabilities		155		—
Total liabilities		57,578		47,135
Commitments and contingencies		—		—
Stockholders' Equity
Preferred stock, $0.01 par value		—		—
Common stock, $0.01 par value		409		401
Additional paid-in capital		152,872		150,926
Retained earnings (deficit)		7,278		(10,218)
Total stockholders' equity		160,559		141,109
Total Liabilities and Stockholders' Equity	$	218,137	$	188,244

Ramaco Resources, Inc.

Statement of Cash Flows

	Six months ended June 30,
In thousands	2019		2018
Cash flows from operating activities
Net income	$	17,496	$	15,470
Adjustments to reconcile net income (loss) to net cash from operating activities:
Accretion of asset retirement obligations		256		247
Depreciation and amortization		8,938		5,393
Amortization of debt issuance costs		28		187
Equity-based compensation		1,954		1,245
Deferred income taxes		3,429		1,385
Changes in operating assets and liabilities:
Accounts receivable		(15,370)		(21,100)
Prepaid expenses		1,550		(977)
Inventories		(2,408)		(1,237)
Advanced coal royalties		(68)		82
Other assets		135		(206)
Accounts payable		(4,121)		1,340
Accrued expenses		1,295		6,282
Net cash from operating activities		13,114		8,111
Cash flow from investing activities:
Purchases of property, plant and equipment		(19,737)		(27,478)
Proceeds from maturities of investment securities		—		5,200
Net cash from investing activities		(19,737)		(22,278)
Cash flows from financing activities
Proceeds from borrowings		44,300		13,000
Proceeds from notes payable - related party		—		3,000
Payments of debt issuance cost		—		(429)
Repayment of borrowings		(38,800)		(1,000)
Repayments of financed insurance payable		(287)		(427)
Net cash from financing activities		5,213		14,144
Net change in cash and cash equivalents		(1,410)		(23)
Cash and cash equivalents, beginning of period		6,951		5,934
Cash and cash equivalents, end of period	$	5,541	$	5,911

Reconciliation of Non-GAAP Measure

Adjusted EBITDA

Adjusted EBITDA is used as a supplemental non-GAAP financial measure by management and external users of our financial statements, such as industry analysts, investors, lenders and rating agencies. The Company believes Adjusted EBITDA is useful because it allows us to more effectively evaluate our operating performance.

We define Adjusted EBITDA as net income (loss) plus net interest expense, equity-based compensation, depreciation and amortization expenses and any transaction related costs. A reconciliation of income (loss) from continuing operations, net of income taxes to Adjusted EBITDA is included below. Adjusted EBITDA is not intended to serve as an alternative to U.S. GAAP measures of performance and may not be comparable to similarly-titled measures presented by other companies.

	Three months ended June 30,				Six months ended June 30,
(In thousands)	2019		2018		2019		2018
Reconciliation of Net Income (Loss) to Adjusted EBITDA
Net income (loss)	$	10,613	$	10,204	$	17,496	$	15,470
Depreciation and amortization		4,822		2,955		8,938		5,393
Interest expense (income), net		302		314		609		414
Income taxes		2,168		642		3,525		1,385
EBITDA		17,905		14,115		30,568		22,662
Equity-based compensation		1,060		694		1,954		1,245
Accretion of asset retirement obligation		128		124		256		247
Adjusted EBITDA	$	19,093	$	14,933	$	32,778	$	24,154

Non-GAAP revenue and cash cost per ton

Non-GAAP revenue per ton (FOB mine) is calculated as coal sales revenues less transportation costs, divided by tons sold. Non-GAAP cash cost per ton sold is calculated as cash cost of coal sales less transportation costs, divided by tons sold.  We believe revenue per ton (FOB mine) and cash cost per ton provides useful information to investors as it enables investors to compare revenue per ton and cash cost per ton for the Company against similar measures made by other publicly-traded coal companies and more effectively monitor changes in coal prices and costs from period to period excluding the impact of transportation costs which are beyond our control. The adjustments made to arrive at these measures are significant in understanding and assessing the Company’s financial condition.  Revenue per ton sold (FOB mine) and cash cost per ton are not measures of financial performance in accordance with U.S. GAAP and therefore should not be considered as an alternative to revenues and cost of sales under U.S. GAAP.  The tables below show how we calculate Non-GAAP revenue and cash cost per ton:

Non-GAAP revenue per ton

	Three months ended June 30, 2019						Three months ended June 30, 2018
	Company		Purchased				Company		Purchased
	Produced		Coal		Total		Produced		Coal		Total
In thousands, except per ton amounts
Revenues	$	62,516	$	3,245	$	65,761	$	52,051	$	13,227	$	65,278
Less: Adjustments to reconcile to Non-GAAP revenues (FOB mine)
Transportation costs		4,695		42		4,737		7,118		808		7,926
Non-GAAP revenues (FOB mine)	$	57,821	$	3,203	$	61,024	$	44,933	$	12,419	$	57,352
Tons sold		499		26		525		493		123		616
Revenues per ton sold (FOB mine)	$	116	$	123	$	116	$	91	$	101	$	93

	Three months ended March 31, 2019
	Company		Purchased
	Produced		Coal		Total
(In thousands, except per ton amounts)
Revenues	$	52,486	$	4,974	$	57,460
Less: Adjustments to reconcile to Non-GAAP revenues (FOB mine)
Transportation costs		6,636		531		7,167
Non-GAAP revenues (FOB mine)	$	45,850	$	4,443	$	50,293
Tons sold		443		35		478
Revenues per ton sold (FOB mine)	$	104	$	127	$	105

	Six months ended June 30, 2019						Six months ended June 30, 2018
	Company		Purchased				Company		Purchased
(In thousands, except per ton amounts)	Produced		Coal		Total		Produced		Coal		Total
Revenues	$	115,216	$	8,005	$	123,221	$	95,009	$	26,212	$	121,221
Less:  Adjustments to reconcile to Non-GAAP revenues (FOB mine)
Transportation costs		11,646		373		12,019		13,224		1,955		15,179
Non-GAAP revenues (FOB mine)	$	103,570	$	7,632	$	111,202	$	81,785	$	24,257	$	106,042
Tons sold		942		61		1,003		896		241		1,137
Revenues per ton sold (FOB mine)	$	110	$	125	$	111	$	91	$	101	$	93

Non-GAAP cash cost per ton

	Three months ended June 30, 2019						Three months ended June 30, 2018
	Company		Purchased				Company		Purchased
	Produced		Coal		Total		Produced		Coal		Total
In thousands, except per ton amounts
Cost of sales	$	39,811	$	3,408	$	43,219	$	34,739	$	13,121	$	47,860
Less: Adjustments to reconcile to Non-GAAP cash cost of coal sales
Transportation costs		4,504		234		4,738		7,360		868		8,228
Non-GAAP cash cost of coal sales	$	35,307	$	3,174	$	38,481	$	27,379	$	12,253	$	39,632
Tons sold		499		26		525		493		123		616
Cash cost per ton sold	$	71	$	122	$	73	$	56	$	100	$	64

	Three months ended March 31, 2019
	Company		Purchased
	Produced		Coal		Total
(In thousands, except per ton amounts)
Cost of sales(a)	$	36,710	$	4,296	$	41,006
Less: Adjustments to reconcile to Non-GAAP cash cost of coal sales
Transportation costs		6,636		531		7,167
Non-GAAP cash cost of coal sales	$	30,074	$	3,765	$	33,839
Tons sold		443		35		478
Cash cost per ton sold	$	68	$	108	$	71

	Six months ended June 30, 2019						Six months ended June 30, 2018
	Company		Purchased				Company		Purchased
	Produced		Coal		Total		Produced		Coal		Total
(In thousands, except per ton amounts)
Cost of sales	$	76,914	$	7,311	$	84,225	$	67,174	$	25,017	$	92,191
Less:  Adjustments to reconcile to Non-GAAP cash cost of coal sales
Transportation costs		11,646		373		12,019		13,722		2,089		15,811
Non-GAAP cash cost of coal sales	$	65,268	$	6,938	$	72,206	$	53,452	$	22,928	$	76,380
Tons sold		942		61		1,003		896		241		1,137
Cash cost per ton sold	$	69	$	114	$	72	$	60	$	95	$	67

We do not provide reconciliations of our outlook for cash cost per ton to cost of sales in reliance on the unreasonable efforts exception provided for under Item 10(e)(1)(i)(B) of Regulation S-K. We are unable, without unreasonable efforts, to forecast certain items required to develop the meaningful comparable GAAP cost of sales. These items typically include non-cash asset retirement obligation accretion expenses, mine idling expenses and other non-recurring indirect mining expenses that are difficult to predict in advance in order to include a GAAP estimate.

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