Alpha Metallurgical Resources (AMR) 26 Feb 242023 Q4 Earnings call transcript

Greetings, and welcome to the Alpha Metallurgical Resources Fourth Quarter 2023 Results Conference Call. [Operator Instructions] Please note this conference is being recorded. I will now turn the conference over to your host, Emily O'Quinn, Senior Vice President, Investor Relations and Communications.

You may begin.

Thank you, Rob, and good morning, everyone.

Before we get started, let me remind you that during our prepared remarks, our comments regarding anticipated business and financial performance contain forward-looking statements, and actual results may differ materially from those discussed.

earnings forward-looking them, some company's please and year regarding that the fourth information associated full affect the can refer XXXX more statements of and factors quarter SEC For filing. and release to the about those and non-GAAP to measures. information reconciliation use of Please also for our see GAAP documents measures their and and Chief Operating on today Alpha's are President Participating Chief Executive Jason our Whitehead. the call Officer, Andy Eidson, Officer, Chief and Commercial are call Todd our Dan the turn Horne, Officer; call our that, on to participating Also the Officer. With Chief Munsey, will I Andy. Financial over

Emily. announced EBITDA morning, results Thanks, of Good fourth adjusted everyone. This we with our morning, $XXX million. quarter

over marks For the in achieving year generated in adjusted row, $X the Alpha second EBITDA which full a year, milestone. billion that

we without the the challenges, of being prouder of excellent XX overcome with of having a coal. its be identifying the total to a and decisively than as or million of responded an shipped $XX.X our building not way plan we to guidance We all strong. The year a face. couldn't whatever million of executing those company challenges nearly better Met within job issues, year finish I ranges, and XXXX While obstacle did that that ended team was tons battle

all below Our range. the $XXX.XX. guidance. SG&A which is than idle overall were [indiscernible] the year other end $XXX.X came the million, Met at within came segment and low of in year range. in better CapEx operations rate costs in costs tax all line ended for technically our given the at DD&A category in guidance the expense,

us our exactly into carryover for of year. issued at XXXX, million the $XX that we that the of adding have when last guidance midpoint rolled nearly puts However,

the than program. Since remain the We contingent milestone more fourth exceeding stated repurchase minimum we billion of available billion returning the form repurchasing reached X.X in flow we in of to Alpha in utilizing cash buybacks, over committed program's of method have stock. in free cash market strategy inception as previously March the capital returned XXXX, to $X.X stockholders shares conditions. million share quarter preferred program of the our of $X and Another was the levels upon for

Board who As look announced Xnd election Annual will our May for the of board ahead, this we list date has Stockholders. as stand set of we at next the And candidates director a to meeting. Meeting morning, that our of

significant influence election Natural been this effective Board we have. blessed to morning, as as but hard Board director, AL this no he to an have that our and age Resources, tenures of building We is how retired effective with company, X can accounting decades per with the in he last current AL particularly X and this and finance for directors Ferrara has thing back when and imagine from Mike from the audit current us also the and long say our corporate today. the longer reached its we you stand template governance has our led, appreciate in having Alpha success. already devoted been following longest as today. may Board how they committee which announced company. Mike announced also directors, through these about the that retired Alpha guidelines, has set XXXX impacted the it X the for the Liz of It's said, founded company long-standing have of started Fessenden without functions we've for since hasn't of what seeing he's the to be And much and should serving been this them XXXX. we Quillen they've whole to

the thing safety than Director and in Liz been in Board's good performance year, for and the since her encouragement great XXXX for miss [indiscernible]. a a and much. source over company the will across mindset her average wonderful Environmental all support these are and past very of and She's dial time Chair are and of best. still particular. her list. coach Committee. the been We first a environmental year accomplishment that thank appreciate records all the speed 'XX all of and list. Safety, personally great The Liz and back-to-back portfolio during in these thing my that The folks on me the Health as folks She's almost them We XXXX is overseen She's for TRIR, leadership speed national respectively. I to awards, my want dial better is for served a NFDL in wish bad

be our comes of Shelly years with with on and This to wait financial frequent Wall Shelly other to the results. will X of with for can't connection more begin welcome with working it are to be departures, variable quarter and financial now year the Board a appointment Board new will full to and XX these of than Todd our X sector. turn size use in I excited her. I'll of addition discussion experience the Lombard. Board fourth contracted over I that to Street So has a seats, we areas individuals to and highly making list. In Audit and of qualified our to us and from a Committee,

per in costs the and of category segment per per indices the segment third level $XXX.XX for X.X as increased the quarter $XXX.XX were a in which of compared Andy. both million. quarter $XXX.XX in all was were purchase the the to per increase was to decreased $XXX coal in primarily sales compared up was costs, and to weighted quarter. Higher cost $XX.XX as in sales-related in of fourth metallurgical With ton ton ton sales per on per sold the ton also Met category $XXX.XX, in $XX.XX $XXX mechanisms during in coal QX. our per the in were of $XXX.XX quarter. compared per on our $XXX quarter quarter other our priced per impacted Cost quarter $XX.XX from to for guidance. items up prior third of to by a to category. while realization fourth some sales labor other from We the EBITDA all higher in adjusted respectively. Realization for in ton $XX.XX ton $XXX.XX, which tons significant third QX. ton are real-time thermal compared regard incidental factor of the tonnes quarter. Export quarter to tons Realizations indices realizations realizations QX ton, coal Met for for against of our $XX.XX in Atlantic our costs Other the the with Cost the XX,XXX indices ton Met increase priced came average QX. came from $XXX.XX fourth the the the quarter. Met of costs, Met Thanks, and to Other in up quarter, pressure as from of Fourth per realized Fourth $XX.XX realizations $XXX.XX almost there the ton, by ton compared export all all these of The coal higher quarter XXXX a was in XXXX. quarter realized per million from in increased Australian quarter, pricing $XXX.XX creating fourth million, driven are total average an segment. Quarter-over-quarter the segment third coal portion couple

we're coal purchases third million levels coal seeing published QX continue And quarter. above pressure than indicated to this our up remaining First, with we to $XX.X the in to portfolio a quarter. had and guidance. SG&A, by was the as budgeted. noncash opportunities in from the sales-related indices fourth clean higher to $XX.X purchase the volumes, the in add CapEx costs than our when million million, compensation increased was November material trading was back the stock of of to guidance these were volume nonrecurring create million degree also issued, Also, quarter items sales excluding that budgeted. on third to $XX.X compared the $XX.X futures higher have in will at cost 'XX

and balance to cash sheet flows. Moving the

$XXX.X As activities cash, the liquidity unrestricted under million had million increased QX. had liquidity our at which ABL quarter-over-quarter third we to end of had million $XXX.X operating quarter. end quarter. Alpha $XXX.X XX, December, is Cash $XXX.X end total million of unused net million as of at of in We down in $XX the from the the $XXX.X to of as by the ABL XXXX, million provided of $XX.X availability December compared million QX in covenant. a of minimum in

credit outstanding, quarter. is our borrowings XX, December and million from $XX.X of of no the facility As had of letters unchanged ABL prior which

at our for at our Turning metallurgical midpoint Met is tonnage in and of of now position our to price priced of an segment the $XXX.XX. average committed guidance XX% XXXX. committed

Another the reduced price at repurchase price approximately program, guidance of quarter $XX.XX. Pursuant to billion outstanding cost than more by beginning in portion XX% share not midpoint of count our repurchased time stock an of Met at shares XXXX. XX% Alpha's the segment spent roughly and XXX,XXX priced shares Thermal the has of a fourth per the The is we X.X of $XXX of our common of have began. average the at of the byproduct but of yet been million priced. weighted million Since share fully committed is tonnage the program, $X.XX committed at average acquire approximately Met $XXX.XX to we from share. program a

the issued number in January of $XX The and shares vesting permits includes awards The remaining million, As conditions. December shares repurchases. previously authorization levels periods of XXXX. plan. XXXX flow under on and additional XXX,XXX outstanding $XXX was cash of resulted equity stock incentive of in company's shares common net million XXXX, XX, Contingent, the from these as always, long-term approximately granted market February which the issued impact in approximately

to are We call build of levels. I the will months to share a operations. targeted for over balances over details a pausing to buybacks planning few next bit cadence some turn up to on potentially the cash our back Jason program reduction of now the for our the

now, Todd, and maintained years beyond from our expanding and Thanks, everyone. teams performance for want safety environmental the compliance many and compliance by we'll quality our I XXXX. to compliance initiatives. good rate continue water outstanding recognizing start our XX% in morning, We've

company For say another in in about enough can't safety, we followed top XXXX. NFDL this making members priority team time for this XXXX our company TR with performance record I a better day in hard the national is focus that resulted consistently and day future. out, trend the than positive average. day has and in to We into this continue record every that work performance

teams record-setting want winning that didn't performance, the best-in-class competition of publicly also difficult to top tight, is how we're we outstanding I The congratulate spot. XXXX That's winners awards. award. highlighting it had up was overall end to the While the and Alpha's claim

mine exceeding For Kingston as years the won in Midwest deep also is Kingston surface and categories, Wood want Those #X, Virginia years and Kingston difficult received the claimed thank and winters underground XXXX, for processing, team as of accolades River are a [indiscernible] facility Jimmy are X X X surface honors [indiscernible] X and to winners his plant. belt which top preparation in Midwest Kingston back-to-back Bishop, categories determination and deserve all respectively. all do. In South to region, those mine, row. very the Virginia well, their surface they system. and has for transfer in Dock commitment the surface South known teams mine, I surface Marmite have Both category, of row best-in-class sweeping expectations. while to a those

some Turning to updates. operational

online Olkon and and an newest XX, incidents quarter, coal clean of now our experienced the to clean ignition silo. high mentioned by discharge and of Alpha. Investigations this the no Check as there processing a our have for chest noninjury and complex McClure solidify fork a mention CheckMate we serving near dust Fountain retired last Also ignited coal and ignition new mine. was the is in As a quickly issued. at the processing May we couple injuries, fueled QX. we and Also been shorted to ball in during appropriately our Processing want plant installation. Deep Core's believe Together, first at fire. renovations chest January on citations ensure necessary development top XX to no the Again, notifications occurred to and plant celebrated quarter, acted and which Poulton I January Road line, completed make in We members by formerly mine. On occurred belt a no was agencies team contributing electrical cuts

at retrieve started fully processing entry few ignition a to in to the longwall. Investigations [indiscernible] mined at by those the resulted we that swift still source are and their exposing XX, likely break the into are reroute normalized active on and to it's ignition been immediately a of of and under thank panel of rock to investigating first being and the is Then the on Of high X On depleted from about material incident coal-bed coal in this operating will not and [indiscernible] revealed was minors roof shipments occurred days to term XX, the actions X that any and regulatory January Fork able want issues. Despite overlying the similar noninjury has tedious ignition. or X the my repairs. Due seam, believe Other and in been [indiscernible] idle we related [indiscernible] identified. now section this dusting our responses, [indiscernible] January is a exact the [indiscernible] time. I like but personally, night from than that of and call days. citations. the last solo concluded sound, in to the and the [indiscernible] coal storage Road exposed their [indiscernible] area is markets. has before to analyzed, areas for impact #X their the XXXX, reports examined on XX's were XX, that #X and area the in in bolt underground, of noninjury in serious the contributory the entry mining, team standards While the sections fourth ignition cause and prevented the roof left section designs silo the district. regarding #X and nature continued more collapse structurally opinion, not any an here only over as coal describe section clean some rates of scene. entered and event housekeeping turn investigators business XX enable team exclude behind areas that Fork Dan And January during XXXX, did we methane use experience to of run Road #X the at that Investigations XX, CM information importantly, I more for the within the the

economic the with markets around morning. periods experienced coal good in European the and and geopolitical Jason, others uncertainty significant metallurgical Thanks, Throughout remaining pressures, States to have pressures, these XXXX, recessionary with of volatility like generally the economies while Macroeconomic showed global do. of face exhibiting continued like consistent Union strength United resilience fears. external conditions the world some

stemming Fund International citing response monetary and as the have United issued downside and from quickly uncertainty expectations to supply delays historical interest or the in calendar by and prospects to natural impact times may geopolitical be has may muted Organizations to pace flows lower rates shipping in bankers XXXX, coal and central such States economic war and prolonged strife, global growth and the and Russian Bank While markets impacted East they Monetary actions upending the namely disruptions due for in shocks, inflation, when year risks at how average conditions. Geopolitical slower the causing Middle overall are remains Ukraine Europe conflicts. XXXX within easing about the those violence the than in regarding related to expansion conditions. tight XXXX trade taken violence of expected World a these

the A East the evolve. Metallurgical metric to started U.S. of per increased the But the points at quarter. in of since markets December indices metric well low-vol attacks from coal at the in beginning tonne start index per decreased at X ton from believe per directly ton ended High-Vol $XXX quarter few where a index Coast at geopolitical Coast metric we the lastly, softened. they indices been ton then, $XXX.XX at quarter Coast Red start of the high-vol end of within well-publicized by metallurgical the wall index East XX, to to October. macroeconomic October the $XXX While of $XXX the end of from as fourth metric U.S. the $XXX ton increased we of year. from Australian premium beginning ton East to on December and on $XXX the all ton fourth per metric B have is per possible XX. The have per live continued the circumstances U.S. these metric percentage quarter the in index not impacted volatility And the per October at $XXX XXXX. Sea, $XXX

new in Alpha I you've note. We the XX. without internal of are of and Despite my year February goals, while which strong close heard. dedicated efforts company. logistic doing within we I February XX, A has worked records metric and ton per out team, disease specifically APIX on year high-vol even the level faced, down accomplishments low-vol, to as As decreased at of down as from last team in the high-vol market, challenges achieved. outstanding even vol for The coal hard East its $XX.XX the the we index impossible end close from Alpha low same to B indices $XXX want measured of per to of setting and proud on per meet sales commend respectively. October team and ton, premium Coast their ton the The the U.S. am finished per day. metric some the were quarter some successful $XXX $XXX.XX to Australian at to a $XXX, of metric the In high our of the a to the the start year ton what of index thermal moved further year $XXX $XXX.XX

to year. And work are we call operator, we're ready the continue to for now hoping Of in good with course, questions. open this that,

Instructions] B. Pipes Our comes [Operator Securities. Riley Lucas first from question with

it But you have really about of bit hard I work, all a current job. that. question environment, easy. and want you. I you the Dan, there's how the Andy, Great, great your And I into of as again, could and starts shorter make then of you it. you feeds look of you I with on appreciate I well. buyback know longer pullback near on longer a allocation a congratulate mentioned how little if kind priorities Look, on market that think as what the it think in are term, to your a term lot just would elaborate for X and Todd, kind expectations term capital well, Todd, of that

Lucas, comments. Jason underground, on we really surface as broader safely you're a things it's they've not when things big made and And things into come a and the been the things impact. of relatively situations. to for a Andy. broader And couple that comments at it's that have ran these said, Will, testament teams looking operational through those happen the it's able Thanks go the you these manage frequently easy on managed you're sideways without and to sometimes, that mine, team that

I'd So to do, know But along our to I that pass it's team it's difficult. do very operations it as that easy well look easy. you very, they as make from not And like the perspective.

As into buyback. far how the as market the feeds

to target It's is going that the our dollar have a flow to buyback. into every certain it's cash going go liquidity by been. buyback the is available we So driven be as always above

now year, little end to But probably let so shaken, to level a starts right into it toward a typically seeing the building of Dan part put it. had handy some capital the that higher purchase with liquidity a toward with a on some that of Todd this And some chance the the in bit do coal, a we that get get shipments. to we we piece mentioned, opportunistically the particularly bit come coal feeling the where do create bit the versus working ends the realizing lower the of we're doldrums And we're in -- the our little spring also, some it it of up some we then little end see does the receipt. could ultimate point building -- from if kind pressures and imbalance higher we've cash into the buying coal versus range of in buying if I'll of incremental as while comment at the market, we've as of look been year. And timing of it, ultimately tend cost as and going as at EBITDA, Dan

watching cognizant So as additional shares, have buying on just of is. for. of cash we'll long AMR but bit is and But the the it's there, said, we're -- an out along I keep that pressure little it's cash as we to that's where as market be those

Dan, add So you to want there? anything

Yes. we think with Lucas, we're book right pleased our have it way I now. the

looking here, be going previous in the calls. to I we're think that markets forward shipping about same talking been we've the in

can't coke mean, I'm It us. and had a That's year our bit Europe they I I they coal. probably positive a more most as a have need the customers. European production metal to of they'll think of in talking coking Europe in and expect probably to last increase. as little hot to more talking They year for some encouraged tough customers.

now, have don't kind every confident watching I It day. uncertainty. something and about of we're seems every in detail -- the add of look, the list. But in front I So day, economic geopolitical with think We're we I like to see what for new spoke there's to that great us.

I the look new transcript, Andy, used. on forward to that you helpful. word very That's

you what pressures you bit of the I the you question, of today? provide to QX, a then outlook. to cost wanted inflationary ask second seeing a front? an And the kind still to little the is can on bit my you of situation about cadence easement side, some if circle QX, shipments Were could where labor speak little up and see on For

Yes, Lucas.

Basically, current typically of the configuration of if we shipments fourth basically Alpha, historically, every back the of And talked quarter had I those. to at team an and shipment largest year -- behind complement QX Met has about to tons, to you the XXXX. QX. again. been if QX, Right going us else of record look about $X.X trying being QX. specifically the osolate year. mean talking I I'm side, year the On so you strong deliver very is and they have something I finish anything could imagined about for X.X this all-time beyond do million Met we've not that's want We strong total our million

And we schedules so aggressive our accelerate is shipments, which that, have or XX a into good thing. part of should And being which that pulled X that's probably was cargoes on been thing. Anytime shipping the good X you quarter, and can a that logistics. goes fourth QX

it on other, think QX into probably Dan, how still to a end QX which, we that? we'll relatively on see even to way on out. on create but end, thus up the the more quarter where to okay the normally have I again, lighter, we'll lighter far. be based each just see feeling little QX plays typically So and blended bit on or stronger pressure we're you But But X have QX was add be but anything and will shipments would QX, X that end, like the about

think you covered it. Yes, I

Ok.

of of story Inflation it's side, cost a still labor. still a story the is On

still there's supplies inflation. top costs I think and we've but a slow bit start of dollars, little maintenance absolute down seen to in

turnover a which the the seen of think our is think quarter, drop labor result we past Appalachian try lead have -- and our benefit packages. over I be employer rates to attempts that's in to the On been Central side, or wage I

we've I goal to everyone seat. people wants will of But is certain people. there those a choose and every to that. Obviously, think get large pool continue. in degree, So only the it And to a from are candidates accomplished

either improving hopefully we continue ways pretty or situation. right creative So our that in down about be to cost just trends board out across figure productivity to cost focused a on a But But get feel fashion metric. it, good of direct we're somewhat our the challenge. up and to going think our I start now,

Instructions] [Operator

Our Martin the with next from question comes Benchmark Nathan Company.

Dan, to drive end are spreads your It'd strong think that be what Met thoughts Australian indices persists, the the how how improvement thinking to the maybe year. get you between of the wide. remain there? U.S. you on for maybe on And start, Congrats indices to great would X about long on could historically Aussie then you price. mix think sell and committed tons committed the and thus on indices? into you committed then XX% some those Asian very I that markets and on the XX% then which maybe Alpha's is, more have opportunity And mix maybe helpful. what, based be far, priced maybe comments That

each indices products. Yes,. realizations follow to not going they're our when obviously, to those pretend But understand I'm Well, with exactly and sync for how in other. move and we'll the best for us

Aussie will of Link quarters. at Asia, in be as when that, course, a the we've So in of business lot we past said look

that our So on will be primarily. eyes

real for is there's sectors. and But don't fair in not think that. -- reflected here amount vol, a the in we lot And hear high in the indices what right I about vol strength ball that. away. directly demand the see the those We high the of of vol medium this, low-vol always strength high talk it's a

will I think and sense bit the of with it's things there's right the back the I term Chinese a business been already the of steelmakers bed, now normal have and of market to now. soon. is lot to here Year New But soft of period some put Indian here get a out that's little ending

year opportunities do Our as to as come going rotten said, mix but be is, Europe back from well a in think as I focus Europe. I the there's more Asia, on steelmakers in

Dan. I you That's selling that the as the mean Asian very those CFR of tons at you prices? haven't markets sell helpful, into been well, some or question

will on have basis, to. CFR sell do where that. do need a it is a business. to -- there is and are not Most business say it to -- vessel. opportunities we We But don't I on we we want of it of CFR FOB some can if most is

some for entire would low Got sticking that. in it. mentioned to the on remarks, of cetera, your delays it late is Sea, logistical et levels update Panama hurdles logistics the great front. There been Perfect. on prepared Maybe with for the be as have you and maybe of Canal, in guys seeing transportation industry, water the kind numerous what get Alpha an Red

a take at shot I'll that. Sure.

doing in It move some other situation all. job their from both on you aware the would and pleased of for more the has little With been transit than freight railroads recent grain basis. We Canal some on of now. reasons, because freight most weakness some the too. The As well. right changed is probably way bigger FOB the markets hasn't good see right U.S. now adding as on Asia ocean situation erratic seasonal but We're our it. our vessels et have the Africa. of They that of ocean cetera. vessel going moved they're overall those months. That's targets cost to certainly these freight season, us ocean through events. that are the see said, other don't voyages days economic around business the for We're a coal at impact regard here a normally an now do Suez direct moving of railroads, to a the we to effect to

little there. the situation So Panama really as I Canal getting well. be no to seems have better other comments a

remarks. of over the Eidson to closing end now question-and-answer Andy for the I turn reached have the back session. call will We

interest joining Thanks hope in Alpha. today a rest everyone again day. for you of us for have the great to your and We

conference. This concludes today's

we lines thank for your at participation. disconnect may You you your and time, this