- Earnings call transcript Q3 2022

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Operator

Good morning, and thank you for standing by. Welcome to the Arch Resources Third Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. And after the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised, that today's conference is being recorded. like today, the President, Deck Arch now your over Strategy would Resources. speaker first Slone, I to conference hand to at And Senior Vice ahead. go Please

Deck Slone

thanks Good joining morning Louis, and from us St. today. for

this financial Act. me the let Private according our that made relating begin, we be call, business considered remind statements and Before including future to Reform may certain Securities you statements Litigation during performance expected statements to forward-looking

uncertainties, non-GAAP to as or call turn Lang, your call morning’s now Investors our law. file to I’d happy statements, Paul. statements. will at the which may do we a questions. plan CEO; morning this our you are that can by and address press different nature, more this than discuss to will Giljum, on our by be our to in of otherwise, degrees in in to of With at participating described our we which I that financial the Forward-looking of be posted the have a SEC be materially These those reconciliation our copy new take measures required and remarks, Drexler, we to be will like detail matters not release, Matt archrsc.com. our of We Paul that in expressed Also that, section website end information, future result find to COO; cause John except different CFO. over formal the After quarterly uncertain. are future a of statements, reports as with their the events may results update actual you annual that remind the forward-looking whether also undertake our forward-looking we

Paul Lang

to pressures. a this million of are in Thanks, you of pleased isolated join through generating Deck. our $XXX setting view We achievement QX, challenges this generating managing in a operating performance most of one related could on as glad and strengths, evidence interest We and significant Arch the rail cash total disruptions morning. good the record capabilities. I'm flow while Arch cash strong substantial your operating the team in West, cost Arch's call And us geologic appreciate inflation in delivered everyone. morning, clear

addition, capital core served showcase return cash record In our value to and another flow creating yet of are performance program. one powerful strengths Arch's

our share capital the dividend payable a XX% the million, level That or it declared netted we formula. the opportunity, just continue South share With flow return means an against XX% a of the As relaunched while driving attractive delineated or a just as quite has repurchases, deploy during Leer when of a discretionary associated discretionary in $XX QX. XX%, the through the returning in return capital. of return our effective settlement the as after to million that deployment $XX.XX through a to run as build repurchases shareholders the several million board of via clearly return of in program and cash the as cash the principally and XX%. of second during capital million generated our this of total quarter. cash Complementing you $XXX carefully December dividend, cash share per keeping on for board capital returns capital strong now into this our an for translates XX. the In is a we've And value expect $XXX in with program flow spending, capital and of cash investment options February, of of a governed remaining we to also of the but securities. for dilutive amount program potentially Arch's we operating significant the a view in calls we two-year value flow with dividend out formula, proposition. of allocation $XXX.X centerpiece generation return of by this stands shareholders know, other a formula hiatus tenants well considered use simple

addition in liquidity we the made the in while in fashion. and great prudent deploying a In discretionary progress managing quarter to we generating progress made our cash, also cash discretionary QX, during simultaneously

X.X% of we've deployed outstanding XXX,XXX shares this, we'll an third our June shares in approximately avoiding XX. the on repurchase of and quarter put Along cash shares, program short, XXX,XXX was $XX.X approximately Arch use potential place just convertible to that and million creating in incremental the During to portion debt, of nearly a or with our ago. months of In return delivered the dilution. additional already eight thus value significant way settle capital

to momentum ahead, as discretionary look on continually program. we the expect our As well focus returns, ongoing through we and generating additional continue to recharge that sharp cash as

culmination got to in afforded in This a we've of plan is is committed short program, the consistent again was While that which delivering strong reclamation under these to to our billion of a efforts of strategy, great deploy the position and up fortified progress just on carefully first the out than more clear, of the And brought inclusive crafted recap since In cash $XXX sum indebtedness $XXX for us we're of dividend December industry rolled $XXX program level that deal fund, targeted million million to our February. efforts total it the giving of and the mine XXXX point. return indication period the its significant capital million of which the net our is a and have grown operating net us the total generated $XXX at thermal million ability it a to in a $X sheet $XXX million, the position creation. flows. quarter. reduction XX% $XXX capital cash balance of multi-year our us of million, worthwhile by our of year, time, in far value to team turn, this We've so actual cash end return start through contributed the or

Before increasingly to outlook business. like in are current after turning year, already the to talking continues Despite to and is coal impressive remain call over levels. our weakened coal historic the I'd prices with and few import the prices logistical the coal a constructive core minutes resilience around John, consider coal XXXX, regions pandemic levels. major Canada, coking bans largely earlier exports exports coking supply, dynamics, producing is lag of face the but step up profitable dramatically given these X% still, of challenges, levels. better Australia, continues supply pressures versus investment negative time, the seaborne global down to nearly last build is production, down market about dip the attributable markets modestly metallurgical languish. in in recessionary are to the steel strong the Even for compared achieved At which spend world. This pressures And for starting on levels XX% which part from coal the knock-on of countries, In pre when down year-to-date, climate. coking profound in the the this United X%. We in had same coking the years. continue the coking coal, and to that over when effect coal the global is around continue more the States source in impressive coking you last underinvestment recent have supply In global of the at supply an years, many to metallurgical Russian to six of year's even believe

come historic pressure thermal global While remain coking coal at markets have near under highs. markets

thermal coking prices, at and opportunities are for thermal of currently while simultaneously market to legacy helping $XXX nearly out strong metric these Arch's products. the seaborne for creating The such per And coal coal $XXX Australia opportunities coal the coking stands makes XXX,XXX sold price of Europe nearly buttress Importantly, thermal price XXXX. dynamics stands sense. into thermal ton, customers for it attractive quarter Northern tons to of Arch's delivery we're metric for actively fourth where coal over in exploring other per ton. at

of these them at customers, is driving appropriate the our we're when believe we delivering cash dual on these the and reclamation industry side for this including responsible shut its this harvesting thermal from logical the period Arch long-term we business, which on continued level time thermal to complete of simultaneously major operate. reclamation part deliver which final approach legacy hand wind with the appropriate be while ensures funding in employing plans By of accelerated to value -- communities that the assets. our to providing an all an objectives the at forward delivering fund, mine transition On while reclamation down we'll greatest employees, has shareholders, same first our we're strategy for time comes of work cash our an of stakeholders, down. A operations our

the operations generated than segment strategy, in less years $X.X this $X while That $XXX legacy million third EBITDA while the Following million of over $XX billion six delivered amount million to just Arch's level EBITDA of past quarter, expanding thermal in under segment the total thermal during the only capital. by adjusted investing brings capital. the

verbal Arch. XXXX. levels our thermal me more impressive our our business, reiterate contracted upgraded QX. about period figure. significant robust of to continued expanded cash. at progress pricing, we're becoming has strong optimistic an typical noted been portfolio generate again Even same ability that's for and given the coking great challenges metallurgical is coal closing, set earlier, more, believe of of stage In in thermal the in mining While, year domestic ongoing with replicate strength the contribution We continues and a let What's this book XXXX segment to increasingly of the and

is for In addition, from medium for thermal outlook derisk to term the legacy continues as complimentary In believe believe we strengthen significant the short, and segment set our stage returns. two continued we additional contributions With three operating most creation, and value success, that, some significantly, shareholder our performance, for Drexler on call now over substantial John. the turn John comments I'll to ongoing well.

John Drexler

morning, Thanks, everyone. Paul. And good

metrics. Arch ongoing As the the ESG behalf and pressures, key operating performance, on importantly, management progress drove highest team thank Most dedication as localized executed our the governance highest geologic even level and Paul principles. the at through areas team. social, just want entire challenges, environmental inflationary most logistical in stewardship, exceptional delivered quarter, to for the and the I their record team cash of and we workforce the strategic flow On Arch of issues. environmental, critical continued during other to safety, discussed, plan the navigated

Let's of performance. drivers begin with our QX key the

is during challenges at geologic the our isolated news good as that address anticipated, been we tough segment cutting in ever levels The generated metallurgical through and to volumes As the robust rates costs. unit the advanced September, indicated, that Leer and have of advanced core quarter, achieving early suppress cash its of segment and as South productivity we since. sales area that improved much even levels pressure acted

Leer we're both costs at XXXX. productivity October, ahead, We're and meaningful have further pleased on by what be better through based productivity five still. achieving ongoing march Looking Again, to followed in in in upward work. expect start improvements should metallurgical with improvements district expect in good we to levels continue to we in unit the panel are the conditions as off first Believe and two we And a the QX, progress we fully districts. development trajectory fully we segment experienced levels our in South.

what about Before for in talk QX. proceeding, expect coal let's to volumes coking

to on our shipments we in during we further expect QX. As the an revised progress XXXX towards midpoint increase we productivity as improvements continuing you in also stress compared and our annual average expected run-rate. fact cost of cost noticed, QX. That given we so further are the progress. that also QX still based making to the that also still now the have step guidance, XX% coking on projecting in costs at are significant that that Well, our It's in South in worth expect we Leer full a around may reduction noting here reflects metallurgical coal improvements would up move guidance when of underscores segment, I XXXX. again, normalized we front in for the anticipating year our represents are want or XX%

East we for As coking consistent more anticipate into coal projected mentioned coal coking embedded volume marks. current as coal Coast our shipping in guidance QX prices tons markets XXX,XXX thermal QX, and Paul of coking generally with than in

more thermal As past, value absence remain creating serving customers, customers we to staunchly to committed of our the steel of we in have are tons the metallurgical to we the stated in redirect arena. longstanding needs alternatives also the happy but steel in

opportunities could to continue crossover interest believe we to market fact, hard QX our coking in further In to BTUs our thermal coal additional high products. garner serve shipments and work identify

we quarter ton. North million projected of delivery a tons per at American of price coking In approximately X with net percentage entered into $XXX we year locked the fixed During agreements an our value coal average of for nearly next creating total, also in for business XXXX output. back customers small

our substantial to to output. cash this projected a should Given or business equate year's XXXX of anticipated structure cost constituting XXXX, so XX% next flows, for metallurgical our despite only contribution

past, say established As the very market, we XXX plus we an primary of thermal legacy the of segment our thermal operating where have to we marketing the the managing remains and by we and continue reputation. CapEx the million generating can for per business. that compete expansive presence cash while plan the stated year many Transitioning I'm tightly. times pleased focus an substantial to in where have to flow amounts now on effectively, deliver excellent ton seaborne side

the Fortunately, we we are through can accomplish specifically service in continuing PRB. to even significant manage while this rail issues, confident

XXXX. segment generated segment the of capital Moreover, same of quarter well and are believe has times impressive operations delivered the more in past the has to XX in thermal capital reiterate expended to QX. invested the than positioned noted, EBITDA million thermal than it To the of $XX Paul against EBITDA over ratio nearly we in years, $X generated during that million team level exceptionally As maintain six cash generated thermal in the less we capital. more

volume both of the and place to very needed but several limited, coal agreements as of the with as have a we network for tight XXXX highly seaborne already markets. future, into for terms logistical for In business well considerations, thermal a years top-line of profitable leveraging along book move thermal into in extremely thermal our throughput operations

very than the XXXX shipping XX% XXXX are As another against realizations levels, more contribution cashflow should when to strong now we that year. PRB, projected for committed at next average measured drive for

West next our tons. for million of essentially is operation year a addition, In capacity out X.X Elk at sold

projected and improving. price, are for prospects committed we thermal fixed cash fixed generation favorable Given opportunity for our replicating the of percentage a combined sales volumes export futures high believe curve, very XXXX at segments pricing incremental with against the the its XXXX that strong

at We will provide a call. earnings the complete update on fourth quarter XXXX guidance

first where already Matt, let me Before with on execution. an about the the of conclude continue turning performance to leading average to incident same operations few Through of X.X in the months our approximately XXXX Arch's better words the call subsidiary rate over QX nine industry a over than our we the industry lost ESG build arena aggregate time have times achieved period.

to their operations recorded the XX exceedances zero during In environmental while string quarter, subsidiary months. our water quality addition, no violations extending third of

the impressive of XX Mining short, reclamation months, XXXX was which the course XX% Finally, remains performance even higher was on for bar by results. of in With area will this that, Matt? raising to performance now turn call I by over work state where the is Wyoming the final completed in Excellence of the with the critical discussion In Arch Coal honored financial roughly another our Reclamation award. the committed Creek team team Mine the it over of past to further and Matt performance. the

Matt Giljum

additional total in perspective, exceeds good To flows, detail Paul the that which Arch is Thanks, about begin any flow $XXX were third highlighted by everyone. put John. cash And years. full of operating that that generated noted XX by last as cash morning, amount I'll record into year providing quarter million.

benefited changes receivable our we've the in to favorable from with accounts $XXX addition total. operating working capital, decline solid in the quarters In to contributing million underlying earnings,

While capital this quarter, was higher in expected deal trend second than increase good amount working was anticipated. actual the after significant a the the

accelerated fund payments hand, were with $XX On affected thermal million reclamation the to fund flows by cash the other now operating complete. adversely that our a into contribution

cash million Turning million utilizing $XXX payments, the nearly flows, in to in return we for for the share November that the cash or December their for dividend capital the amount, our million, capital The hand XX% $XX.XX with our Discretionary liquidity declared record in of including were convertible of and repurchases of ended will and liquidity under $XXX dividend formula, facilities. with bonds. on collections $XXX while per the million million payments target. and cash stockholders were was a availability XX. spent board has of well to $XXX credit to million quarter $XXX push to our share. additional timing quarter, The retire $XX used of quarter the invested cash our to capital expenditures financing customer including and million made that on be $XX in flow third and million paid program to XX, on late date, some prior $XX dividend quarter, We that levels investing due under above return total

last liquidity stated by quarter $XXX our cash to minimum supplemented cover $XXX following end additional million, is enough goal portion quarter, to a dividend. substantial to I with As of each quarters the million of

and August capacity. to the $XXX from million. XXXX we the I to $XXX on, provide both facility. enhance moving In of our finalized letter facility the inventory extension necessary credit liquidity and August, our the securitization to one securitization accounts additional to highlight extends and facilities continue facility liquidity These now facilities amendment both The of receivable from wanted million of term increased Before and size of was note credit quarter. our

are and We support company. their the bank partners our of of continued long-term appreciative

than cash levels flow relationship revenues course to second capital levels. in discretionary clearly in decline in Looking normal to third and at return would expect of end to favorable we changes September is would revert expect we program are forward quarter improved both our outflows already in lower over to see And XX% capital that were expect deployed a QX, we we repeatable. perspective, QX the the of The the as in fourth receivable a fact, at as the amounts expect working discussed working well. while not dividend Accounts increase. capital compared historical likely the as the fourth From quarter. norms of the from performance, cash in larger operating in to quarter, the to much we've

to As vary normal given were on greatly timing likely to especially deploy able will in amount the cash depending relation the the ladder to any quarter in we of blackout flows, periods.

that us against capacity, XX%. third are levels cash starting even QX given targets in While, the we fourth quarter, on and second our worked with quarter double liquidity to nearly the sufficient the spending

for our that part program, a capital terms In provides the third good return of quarter activity roadmap. priorities the of

repurchase Our buybacks, to primary bonds. will but look the remaining the focus share likely more $XXX be than will we attractive September, convertible for to our remaining authorization continue was At opportunities end for of million. share repurchases

have the settled million leaving approximately now a the million principal $XXX outstanding. we repurchased Regarding original of value, $XX just bonds,

price cash approximately share represent $XXX shares, and dilution using and settlement of a Assuming of those potential bonds shares. XXX,XXX would

the issued two of thirds money call we in price, the approximately offset that reminder, million is XXXX. the that of represents call intrinsic bonds As would value $XXX roughly dilution. were more time paid outstanding. of that of as purchased cap The than the cap that November remains call same a value intrinsic an an cap the or XXX,XXX be $XX share in with the At shares, expiration of at deeply

for company's be call the in fully as or an do count a As sheet. balance to on not value allow asset accounting the the share the rules cap reflected the diluted of reminder,

will wanted a call I on item the to reported over that Before address our turning for positive questions, impact material income for quarter. fourth the have one

this SEC of carryforwards As Arch loss the we deferred including has assets, tax have filings, beginning disclosed operating over year. in $X as billion substantial of our of well net

allowance assets to tax ability about have before expire. those of a them result the full they valuation against fully maintained as We utilize uncertainty a

the with fourth for quarter. Given benefit far a thus we cash reserves income valuation in XXXX expected expectations our the FIN in along our continued adjustments million XX taxable profitability, with allowance expect onetime in This $XXX of million. to nine income XXXX, approximately to in will $XXX tax to release and result along

remain pay that, call continue we reminder, If ready to over to back rate a an Texas taxes effective begin are would to With market of in we As next to we expect favorable, up year X% no operator, to pretax cash the take expect turn pay will I you. to coal of to cash with questions conditions XXXX. earnings.

much. question-and-answer you a time, our thank will [Operator At very this session. Okay, question. Instructions] conduct Okay, we first

Gagliano now from comes the from line is your of line question BMO. Dave first Dave, Our open.

Dave Gagliano

taking questions. a Alright, actually questions. I thanks up of for my have number follow

me quick. with sold the bear this, the into So all, XXX,XXX? tons on just of the price I'll first crossover try the XXX,XXX quarter for -- I'm thermal that on was be of and for What fourth market.

John Drexler

prices think markets the existing I of as with approximating indicated we met seeing what seeing today. the netbacks we're Dave, if the that we're kind

Dave Gagliano

pricing. actually giving that's my remember date Okay,

Sorry.

Deck Slone

Hey, David, in those of it's remember times earlier And quarter some committed the prices were at were lower. that when times Deck.

So where today. a of we are those of reflective But kind today, they're volumes. the of actually some markets on premium fairly got

accurate from comment looking you're that's today, at that. pricing If

Dave Gagliano

mean, is coal? Okay, I'm, market basin I your for high volume -- A, what for well, High-Vol actually my is prices, get Atlantic we for that today published the but indices

Matt Giljum

XXX above right now, It's Dave.

XXX East sort that U.S. the So Coast. of arrange for FOB

Dave Gagliano

thank -- you. And Okay, then

Matt Giljum

that way simply to you back, back and the get -- that calculation. net it to back do number that we typically the get to then that net And the take work do would mine

Dave Gagliano

a that to And quarterly you. range switching tons XXXX? helpful. thermal, million basis quarter been Okay, XX for roughly. Thank per it's a reasonable on then over million Is XX

John Drexler

a PRB, that range look talked million been it the guidance, would midpoint of with to we ton that XX you X plus million that. kind at last over X tons, in remember, of in guidance pricing. achieve going in kind the imply by the issues tons. if that our Those challenged we at about Yeah, to midpoint of of lot are We've carried reduced remarks. next dropped are committed prepared quarter, attractive into if that get by of times year million you that rail thermal We've

we plus lost of that. achieve that we're run-rate, kind need XX are correct. and We're volume, but that working that going to haven't So you to million hard

Deck Slone

question was I Dave, you our And a think understood was your also it's start it look 'XX. way I think I think I 'XX place if our 'XX, good to volumes. at

Dave Gagliano

Okay, on met sales XXXX. and for then the domestic

per price? think ton said I you was the $XXX average

Matt Giljum

That's right.

Dave Gagliano

right. That's

how does Okay, I price? contract average just don't price, that me? compare have How in of does front the XXXX to

Matt Giljum

lower. slightly It's

follow I putting the think you about where able to pleased it's we in those trade fixed out of definitely commitment, we and market curve achieve if and where as good were tons steady we're everything's service. train value the feel was kind -- the there, million what in rags forward fixed real with with very

remaining describe is we're we So for the still us. feel and very But to lock market for provide book of those we pleased lot that exposure over as a flows the going in. to time attractive achieve cash that be

Deck Slone

And were Dave, for actually it's just a are bit the A that a a very in small of High-Vol at small the fact discount we that's today. a marks time and I just fact marks as premium. looked the $XXX kind very in reflected deals today little And the where done, of discount where just at to discussed,

getting bad and the fixed fixed feel cost, we prices we put So done. is that about what good

Dave Gagliano

the for to do or 'XX for for it met? are there domestic is more that any And plans

John Drexler

we're I here this think that. it, Dave, fine again, with is

I is focus market. we're Our think seaborne set the up. And

could this year. North sitting next And in that's our Let's of state see, it's and parallel year, see we'll about drabs XX% if in. America. a We're up we coal where dribs end come

Dave Gagliano

real Just was average or quick, average for what's of more XXXX is that in Two the thermal overall. that an of XX% locked the in XXXX? Okay. for price locked --

Deck Slone

Dave, it's Deck. So

some relative PRB. So another I realizations we've look, year This the strong indicated in will We be very be margin be but year that And PRB another then not for we But historic that be and obviously year's now, we to continue sort I to to we like XXXX. do And have very West seaborne curve. done prices current be may this at markets. looks business of have small solid to a strong futures right current is explore volumes as think XXXX going international opportunities strong out to see is the haven't price really given that fixed it were of to level that Elk particularly values. will discussed down in as the very attractive said, strong. there yet. feel relative quite fix we it it additional another creating could XXXX, to a we'll And step

would having million are other counterbalance and $XXX that, I things emphasize year Now, said that, made is that there contribution to one mine this we point certainly the thermal reclamation fund.

Next year, de-minimis. that will be contribution

availability for the capital to even cash program. to the generate thermal expect return more segment reality, would So, in we

Dave Gagliano

no commentary, then And the to my movements capital hear variable during net the I outflow, dividend. regarding didn't changes there that in at thought you. last flow result all end the heard heard commentary there the catch but implies correctly? was me I I as which that thank a Did fourth quarter. cash Okay, it I with question, that the I working cash

Matt Giljum

in The would if a as performance you look guiding be increase you working an as QX, capital at be operating think we should work cash in peace, reduction I to our if stronger saw compared should to we're flow that overall, guidance, opposed what over quarter QX. But to we QX. through QX a quarter, the in in

going work as are XXX% receivables So typically headwind. as capital get getting to we our $XXX be a every the of in great not starting thirds with amount, as forward. a to those as we see to make monthly was assume the about positive, that groups cash at of increase And, we quarter on but capital be working below plan our and going our would instead the September, that the as sit were at we did, sure If to we and as being And million, should billing pull we're that don't that a could some of offset quarter acknowledge that point, here, the of QX. cashflow. sales. levels, look Still those that QX end normal earnings admin working want that sales to working nearly much capital we're operating and contract as tailwind, down that they generally, back in But, any of increase. go two get able an and robust

Deck Slone

out other capital twice XX% pointed as second can though, be that Dave, -- to we Matt the QX. in in in And expect quote as that as terms area, the for was in the of it what much fourth quarter the deploy

of could counterbalance that negative to, what front? the somewhat working be on So, capital a move

Dave Gagliano

answering Thank that's questions. you all Okay, the helpful. for

Deck Slone

Thanks, Dave.

Operator

we our Lucas Okay, is Riley. caller -- your now B. our -- open. from Lucas, line Pipes is next have

Lucas Pipes

morning, Operator. much. very you Thank Good everyone.

Deck Slone

Good morning, Lucas.

Lucas Pipes

I So the wanted million going on the coal And tons I think X be sales. outlook. that's a have about XXXX you market, total to your bit little and to of met into you mentioned XX% touch contracted domestic

there year can't confirm you geologic implies net from change XX of that you coal million nicely were then So if this And but year. incidents then this year, that, and isolated secondly, obviously geology. pretty next tons these could up first

very can think gives you working coming. mentioned I a done And maybe confidence in if more but on you anticipate visibility it. you development fact, of work elaborate year. you've what's for much. good more a if job could tons you million you through work, increased to XX the it, little I and you wondered Thank next did can bit development have you And you in that, the

John Drexler

panel one. encountered And the panel talk out timeframe move beginning ramp a the of when of quarter. successful had We very ramp as in Leer it we're the in up South and cutting in the longwall a reminder, about in, May related healthy sandstone, And saw very came South Lucas. of Leer two, a encountered conditions we panel difficult and that talked mining sandstone. to about actually we move completed current Thanks, last and we

panels. move first east the first As to has we indicated, further we as district, five longwall in district continue that

conditions, the new that of developing to quarter. we the geology into to is as as as move two, should issues miners the it's forward, Probably, experiencing that we district continuous the head improvement, productivities. impact that the geology now are of out says improve, going experienced overall as well, importantly, we as that down developing we move there, giving As we're were us of down we should again, where east of have all confidence show we are developing we're those the miners those we're experiencing have should continue better less see that gates, what's we there. types panels, during we panel, And to conditions continuous improved each once see more

So continuing as we're that's to progress here. why

continues to stronger. and confidence level get of the productivity Our

to expect so continue And that play we out. improvement to itself

if And forward opportunity as as see you're an As year, the right. tons across we expected we we've to exactly our up next everything to to annual indicated look basis. running XX produce before, is on should platform, million

We'll earnings yet. do release. guidance specific on provided haven't that that all quarter the fourth we at So

that once before our However, see to each as million should about their comfortable at XX is produce. we the operations, ton we've this productivities look that talked we capability we arena are all around with where again, of

Lucas Pipes

here? you to My That's for should very from may and capital, Thank helpful. of and level over but good think that. Very you have any the working How of we Thank have cash dividend should movements targets, that's the the I little considering second payable much. this hear. minimum about approach a that, missed the cadence investors now of buybacks a month? in your very How buybacks between question, here?

Matt Giljum

really earnings. to look QX collection on Matt, is quite our know, weeks sheet more wanted balance a a blackout with which little we is this of of you came out to strong as last a it, performance period the than clearly probably of quarter, we the way cash at best Lucas, and the couple in around

mentioned So in limited very as remarks, in cash we in how a of my that but that much head QX, QX. as I could deploy really good into puts we position, us

double going as the XX% QX much the we So that's said, in those And what in as as we remarks, spent to on likely buybacks. indicated we be we I as can second program. think of

shares QX. did over in put nearly perspective, XXX,XXX to shares we buyback XXX,XXX Just in that

million the depending more, on even if price, share we're or to that, QX. doubling slightly as so a maybe we more And buyback can slightly that, hit of shares, level go able we that as much through as

Deck Slone

of think us we end I be modeling cash was of of how lumpy I lot put -- a What at what capital one the we can think kind of Lucas, was us, did all return surprised had flow program of $XXX the a the received for great think allocation one all Matt day. the paid people time. surprises And receivable. where thought the into kind and This of people or the the of didn't is little weird those of I it million distorted. but but on almost the we've a story, last really time. quarters month, It's quarters of where pay the generous, day ahead we makes numbers method.

the going cash be line of but end intent the is and think XX% as is of down the So ultimately convertible flow buy bottom lumpy, or I is up a that go little capital is unfortunately, share can dividend second to I think discretionary same XX% variable the will to return buybacks the the debt. the

Lucas Pipes

rid maybe inflation interesting. to can't wait current get their Very people of rates, at just cash. Well,

and appreciate So -- I of really continued perspective best I appreciate really the luck. the

Deck Slone

Thank you, Lucas.

Operator

next Nathan open. Company. our Okay, line now Instructions] your, [Operator from Nathan, line comes the of question The from Benchmark Martin is

Deck Slone

Good morning, Nate.

Nathan Martin

it's more looking forward Thanks. based lower to in right Maybe just as been just I'll pretty which prices benchmark my the quarter-over-quarter that we the just for little coal up start possibly trying on lot the off, stays now. example, of in than quarter, quarter? close had be to let's were color realizations, I new a than we fact just Thanks But saw what on the more quarter averaging flattish the the taking stable it I XQ to that then, that questions. really notably little a actually some Maybe to during you on realizations quarter. prior I'm result? unreasonable can is, at assume, price a get they well, Yeah. in my conversations. fourth think for have expect given fourth some the touching fourth coking Obviously, thought to is in get volatility say third guess And quarter, of

Matt Giljum

from quarter, around mid-XXXs costs it the just out of associated kind I methodology. a of by that, kind port. the quarter the back back, mine $XX for portfolio, the that's Nate, so just places third reviewing convert and of performance you world if of So you're to lot to into shipping think about XXX, get for for then $XXX-$XXX end of lot our a High-Vol affected that to short, average back the the that kind of ton. the kind And take at A, to transportation of the High-Vol the benchmarks. it netting benchmark big driver, the But different A different day, across around we're Obviously, that of of using type price you're a and

the this here be. what depending we we expect, were for price but it's we you're forward. would the far at flat that the price kind they again, where essentially of quarter. will be expected driver, where big today, we outcome achievement of quarter So be perspective, very today coking a from as -- as things it quarter. where But a going our Once it relatively we of from coal going are I final kind again, portfolio to we the your would price be now, as was to move as showing modest into would uptick, that we And modest, the if on we move is to expect be sit fourth the for across think, as what as to name our once stay feel

Deck Slone

number final side our Nate, remember realization, connect was XXX.XX the dots, for coking reported that that [ph]. the we on So to utilization coal average just

view as the outperformed that lower. you low we and some and through quarter having the were a that where a volumes were So or also actually a bit volumes two, have high local that bit was then premium market remember

to actually, numbers. benchmark a on realization fairly the in So QX basis, relative strong

Nathan Martin

come Got shipping then, coal coking not a guidance little year I for than lower surprising And full see that it? maybe Thanks commentary, guys. down, guess, bit to expected.

about gets guidance? what to So felt logistics you can it productions base there mainly improving low you would versus the of be just maybe color end high-end still like any Is great, that thank guys revised talk the you.

Matt Giljum

of to where here flexibility South sandstone we a as driver all move that that's our have well all at that the end the we the And as to I the continue of work they're and to outposts, big going is to Yeah, think forward, through work year. Nate how the you we is Leer issue of at is ramp continue, operations look at.

The our quarter. But the be the expect Typically, what the we're moves don't South. end other have both how falling continuing wall same of to quarter, you of item that we're will longwall too of see here. we're in year. impacts going prior them to experience kind the in moves in in long that we to looking at of given for Leer both fourth to timing two the longwalls, both actually operations, mine We

And looking get kind having so more effectively, us We a nothing as very They're conservatism number the what But significance timeframe. giving efficiently, routine part for the very kind mine. at around guidance looking of us. a as that typically them a a operation XX-day of the in east them the us at two little moves giving from in just we're It's perspective. in more of fall quarter. to that's far XX same Longwall are little of any a here. done of caution we're of

Deck Slone

logistics a numbers be shipments. some to as bit continues you terms of a Nate, particularly look vessel we're in those that at look of bit And challenging, guidance, assuming

year And to so expect not excessive inventories, with we'd healthy healthy the end but inventories.

we're it's and but if don't levels see look, that certainly to, And think at qX, in in guide ship outperform we of the prudent volumes So number, be we shipping midpoint guiding could QX. goes. sort could additional we it we we'll to where

how see plays it out. we'll So all

Nathan Martin

the does where And that Deck, me tons end of that's you stand of million half, a at guys good remind today? had you if the question. of Can first kind X.X inventory

John Drexler

arena X there. to XXX,XXX around at right right we're in tons think million I Yeah, right that

So the of over course flattish the essentially quarter.

Nathan Martin

side. quarter, contributing expect but bit any be guidance. And in coal the kind around into great. colors additional guess, a would that there net of I it. I trend kind you the gears to John. to too to, of through, longwall in would heading Leer Got think South of John, full And to Thanks, then in maybe you be every aspect some little cost 'XX? fourth they're may maybe are carry just on How that shifting year alluded going increase cost there segment the remarks the prepared

John Drexler

where challenges operating driver related. also, in an inflationary I all. some move us Nate, production It's affected Yeah. forward us It's a we'll that a had of from the standpoint, us of industry as but an for the you environment and from that thing lot biggest pressures. clearly are there are affecting and volume we're know, think, we biggest or the

again, in in a QX, and we unit despite So with move forward we drop pressures, fourth XX% once as in volumes quarter the improvement seeing we're see inflationary costs. the

we that As expect improvement in XXXX, step continue. to into we

'XX, modest of levels update just But, from a performance is provided we'll what we've And on in provide the haven't guidance improved from volume call that expectation the expecting. the we're We seen improvement 'XX projections. full a in quarter fourth in yet. our earnings

Deck Slone

the do to connect just math again, dots. night So and the

puts and cost our that will from and said, And $XXX, us down the cost of at if believe easily well left market around had and that see John been there, if the on first down quartile costs, another into certainly we curve. very, XX% put as that terms $XX. to step stepped in us around very really nicely So we

good here, take some want caution can to but inflationary some low as and just an prudency we and we the feel environment. as trend. given intense some we So go, it Obviously, about

Nathan Martin

to of Got luck for it the time it. I'll there. Very of year. helpful and end guys. Thanks the leave the best

Deck Slone

the for Thanks Nate. Hey, call.

Operator

comes Citi. [Operator from Instructions] open. your Hacking of from our Okay, next the question now Alex, line is Alex line

Alex Hacking

the How just the coming quick a of I'll one end maybe of hour. morning. good to Hey, ask are the you?

you the I year the rail import the But in in I challenges U.S. any year, million coal current the maybe XX year? having think On the coal? you not we've XX do in to run-rate the logistics you've it closures I the sounds mean, at or million support shipments, Earlier you're given XX guess also, XXXX, And all South Thank hopeful like maybe the ton the close that bottleneck. market year. million year guess the that I you discuss a Leer furnaces? can think into it logistics. we that tons that the do moment mine met support mine next as is discussed the head tons can could next think placed that market challenge, conditions a you're can blast support European and seen whether you. was

Paul Lang

think back into back But, to And no with have online look I this coming railroads, quarter. about jump the getting the thing pretty Alex, I things. And fully I I'll And XXXX, with on tell track here. quarter a really Deck this, is what Eastern us couple you, doing as that you good job Curtis into getting done complaints one and fourth maybe of the got are of they've going help will we're good in last really on sometime obviously, months. think messaging XXXX. Bay, we big start

it's see the year. broader unfortunately, here, Europe. and that's a is. railroads and performance. with market XXXX, into on our it's towards, us second more the going where one to West lot of cautious we're head heavily you're particularly seeing about cost virtue PRB, us anything? good what growing been that's that put question plan think, But what's Deck, the [ph] just to expecting had one Asia, why have we're And that's particularly weighted frankly, India. in ultimately the this on on shape in And lot emphasis a pretty we're back difficult, and money terrible to railroad. So we our I we've And all And the of Of around. the requested is market

Deck Slone

no, is I Yeah, Paul excellent. think no,

challenges issues BHP issues that see the mind seen in a world. closures, specifically There's despite of across we economic in a on the of healthy had seeing with and of know, the a with that the some price, of the think, they action just with been have of a some you've and despite whether lot supply industrial of around was to even significant to are there's to even around. Australia, lot concern threat the I you lot Australia, add you of in just before lot conditions we're our just with kind that side concerns noise the continue challenges, of challenges

markets be of. see to we in to there support a continue of we out advantage continues take there So, lot that that the

Alex Hacking

Thanks, I appreciate the color.

Paul Lang

Operator, Thank are you, Alex. there? you

Operator

comes question Dudas Our from line next is your open. Research. Michael Michael, Vertical from

Michael Dudas

Thanks, guys. Good morning, everybody.

plus could up to that have in some could be you, to that a process is the it look say, significant your today these As it XXXX. et or X%? may cetera you as see for costs, you some where help moderation input that have John, see levels, you're budget high Or come XXXX? keep from indications do prudent at any budgeting Paul to it flat labor, and Is you about maybe there -- from in

John Drexler

this I encountered, all it's you're worked significant, questions. think hitting healthy point, and of you crystal impacts. a through But interesting inflationary great we've type kind know, of has the ball an on is Mike, question right, Yep. year, very those one industry

Those can costs. as Fuel with have expectation input areas year. update -- at occur. in or next You've maybe once a last call. steel the moderation costs again, that where seen we'll from increases it But flattening and full there's significant are skyrocketed

see it's of in same those types same forward, forward. look things we're hard of this kind over we time, we not that move at seeing course decline of the But significant year the a of as us the all As to hopefully, pressures. affected pressed inflationary

there's going once a And uptick are here of to is from modest where we economy ongoing here. more modest maybe all modeling return might where ultimately inflation. a maybe debate but today. can go to again, prudent to from be some So inflation But, the think, we I perspective, from

Michael Dudas

you and you point. guys labor, think et input, have make all this amazing and cetera. absorbed a and The cost industry great I in Right,

helpful So that forward. can be going think I

up. follow quick one Just

at your Looking midpoint PRB the looking next and expectations year, for at looking shipments and forward.

of If some in output versus contracts from you I the term costs, acceleration your you've that those [Indiscernible], up indicate your term longer is, guess you long how from costs, the plan longer put when a looking with set is what you've the the three look was meal today, what out does done your might production? How off and ago, two that price, in be years and given fall demand the far? so market or fund

Paul Lang

think can anything on we're the very taking the thing what can this Look, think I'll towards into States. coal going yeah, look And to anything of public average really look heading point trend pretty will operation PRB. I is very argue needed, continue pragmatic follow production. industry was But to not from two Black do coal-powered U.S., And, And I the policy And years be fast jump continuing, is the creeping we're the have side thermal is of time can I'm start well, And, we that's I the years. the do and Less the to power I But to what and slowdowns a in three at the retirements our just we If well. But ago that years. going ultimate doing, will industry and glide do of built thermal see towards next to account but on if on side, it is this maybe, it. XX path has United period Deck kind we're the all of taken. think pretty over plant invest increase think at a don't XX-XX and in age a This up in decline going is consumption that's profitable, changed we this, I will have I this. coal pack the where we're sure anything, Thunder think we'll or as market. rate. we're tailoring view.

Deck Slone

about million that of XXX at million this year, tons. around were of XXX coal U.S. in billion year, tons, XXXX. a in X.X Last the thermal consumption we Mike, about billion, was tons

So that the reality is --

Paul Lang

Progress for company. the

Deck Slone

we're retirements, extensions. we And seeing see could some

PRB would in the and we've million the is seen to that extensions gigawatts months, permitted, helpful. recent intend have allow about are we produce and of said, these out next Paul about building the In fleets plants. these tons we fully We'd fact, we that XXX in the of the announced of a sorts getting us on still aren't are that cash in mine several here because of levels But do we to years new plants, age which certainly XX any coal reserves that can believe lot for there. end, generate age as

really as So hasn't certainly to of 'XX, XXXX, strong we've a seven we we strong And of just built there's for The it on that view 'XX, got fact is is book generate for to from our know, five well. changed, lot believe years leverage. next we business 'XX. opportunity over these the assets. that length an to a commitments but not got a of book cash, plan lot We've you strong but

going our final our we don't able the U.S. this where So of the feel just -- get view I down conservation time. has coal one in changed. point, do can utilities there. significant of a part thermal have we hasn't coal guess year, to about is aren't we consumption good step what consumption, been But in the

likely I and say demand we can't This are So, utilities have XXXX could the seen levels. year, generation get coal. power generation for equivalent a coal roughly but would little stabilization that seeing to

here is has a stabilized and could bit, fact the that that So, demand persist.

Paul Lang

that created. to know, as we shining. believe We're all job. the going hay Deck incredible swift going They're we they're you lot length we of they've this And --we're And to opportunity our very doing. these There's that there's of have are in a need that with of right we're that's a the to lot at are incredible job. hard of curve up where the indicated, there, sun sure Wyoming position kind teams challenged in hard, an regions that real to environment market in advantage while we've and wonderful take teams quick, point operations opportunity. see cost And are kind And, have Michael, make worked of and there a worked of operations real there. real these the they're comment wrap plenty that windows We've in of make doing out are final of job, a an stay to operating in Colorado, want on the the what you opportunities. I doing done

Michael Dudas

I you. those guys. Thank Excellent really appreciate job, folks.

Paul Lang

Thank you, sir.

Operator

turn Okay, now back Paul? I Chief it and like President for to closing Lang, Officer remarks, would to Executive Paul

Paul Lang

in to thank want again, I you interest for arch. your

been generating As has work completed take the the earlier, model. steps to the and build We've period cash ongoing for necessary progress I've hard mentioned of company. a XXXX a great compelling

we operator to with to several and continue reward intend and focus we shareholders is everyone. look trust now appropriate. and to all this, February. over efficiencies operating Along group refine and believe years. continue Our it's in the With will to wring last And we to that the investment to call our in to their the for healthy, additional our entirely Stay platform forward out fully reporting safe aspects of business. the conclude

Operator

Very disconnect. good. program you. Thank conclude for does Thank today's you in the now your you This participation conference. may and

Arch Resources (ARCH) 27 Oct 222022 Q3 Earnings call transcript