NRP - Earnings call transcript Q1 2020 | Natural Resource Partners L.P.

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Operator

Good morning, ladies and gentlemen. Thank you for standing by and welcome to the Natural Resource Partners L.P. first quarter 2020 earnings conference call. At this time, all participants are in listen-only mode. After the speakers' presentation, there will be a question-and-answer session. Instructions]. [Operator

like Sammis, conference ahead. Investor now speaker to turn Tiffany today, Relations. to will over the your I Please go

Tiffany Sammis

morning call the XXXX to available on a and Partners be Good quarter website. first replay Natural will conference being is Resource Today's our webcast and call. welcome

President are Vice Officer, President Coal. Chief Chris Kevin Zolas, me today and and Executive Joining Chief Craig, Craig Nunez, Operating Financial Officer of

statements. matters comments reason. forward-looking filings. today to and about We discussed forward-looking may include or NRP's risks Commission other obligation reflecting could no Form any statements that to views These revise These XX-K are our risks materially undertake results update our Exchange any forward-looking future NRP's Securities cause events. of for and publicly involve from in actual statements uncertainties and Some our differ

measures. Our non-GAAP comments include today also financial

most and can in press first reconciliations quarter to details our Additional comparable on the included are GAAP our found website. which measures release, directly be

that would market fundamentals. the particular detailed to or I like for lessee coal we remind or do outlook operations to any discuss intend not everyone

In questions Ciner ash our disclosures Resources' segment. addition, business regarding soda commentaries for refer I you and to specific public

Nunez, the like our would to Officer. Now, I President Operating call over Chief to turn and Craig

Craig Nunez

activities of and result and It that has are essential work the Thank Zooming. live, safe and your and all. of and telecommuting, interact and has you Tiffany. way importance those others. the tracing us us life the I are with we Good people with threatened. when industries and contact the of loved to our healthy. reminded changed ones morning hope you way COVID-XX people difficulties familiarized has It

as how us generation, I in generation responded after we of our to reminded challenge in was this in Americans, or those strong years come, look and to will this pride back since. hope come it's this any before say us to are come all importantly, as will everyone who Most they that with the that together. that

part. we, I to that pleased am announce are our doing at NRP,

operate remote government to CDC company continue guidelines, rules imposed and under protocols. We work

are business and employees safe Our partnership usual. is as the conducting

plans delegation should place, in them. Our of authorities and we succession management are need

financial conservative years the of team now debt paying and support in bank, our of work holders and hard our equity approach, are Our the recent off.

robust have and million of liquidity, million available consisting We borrowing $XXX $XXX of of capacity. cash

us free We cash parent flow flexibility of our XXXX, bonds continue great financial deal this until company manage mature significant to provides generate do pandemic. with and to all of not a which through

last million paid distributions. flow and months, million million $XXX paid the of non-cash before million of common debt, $XX of out off cash unitholders free XX over to impairments $XX We accounting $XX recorded common equity unitholder added

cushion, debt distributions flow period. paying our units, and is and which $XX preferred was cash remaining common cash amortizations private flow after the Our placement over our free million on the same

thermal of pandemic results, the NRP the steel, COVID-XX last not in the Falling first operators' production. various properties and cash our operations coal for prices impact and the a have have our electricity material our glass negatively are on did month. flow ahead. of demand for we idled impact over approaching lessees cost months While will believe metallurgical Nine declining on quarter

are have already While it's say having been and lessees characterized these as idlings temporary to tough that a have most our fair resumed operations, time.

fall. been flat global glass, has demand and in glass since hit a the approximately have prices by in soda used for The soda automobile declined significant XX% specifically ash drop manufacturing market ash

months with go us continued amortizing $XX last debt, to predict the negative we free which months. our by compared XX the events, company impacted significant safety cannot extent our in to realized positive usual will cushion our our the financial over will these paying ahead the cushion margin necessary includes Despite flow cash to when the that and be as operating buffer we liquidity we continue million which flow expect and to business While believe flexibility due. that, provide cash of generation do

announced common weeks As recent are month. have going consistent not That we we ago in strategy that financial that this aware, distribution have pay to unit decision paid the are with two you employed how been It years is that and would hope reinstating is feel August the that wait delever to distribution making to derisk situation the we out the months in before over plays decision. comfortable the will see my we the must COVID-XX we but coming partnership.

and I structure to structure. our business most have weather environment value solidify respects, uncertain but we and in our and completed on face recent many years continue the confident numerous transformative to well right-size generation, in capital pleased actions a enhance now am NRP and business, storm liquidity In the to build the unitholder delevering capital our plan multiyear positioned derisking by executing our of

results. turn to financial will I our to Chris over call And the cover with that,

Chris Zolas

Thank you good and Craig everyone. morning

income. the XXXX, first the of $X.XX unit and per respectively. million flow diluted operating were and first During from we quarter of $XX million and $XX earnings generated Basic unit, net operations common per of continuing cash quarter $X.XX unit per for

These operating in XXXX. quarter segment year a primarily to compared million and for coal generated were cash of to metallurgical Our market of quarter, weaker a as flow resulted in global decline royalty net first $XX $XX demand during results of due coal. prior lower income the steel million the that

in and quarter for both As compared a period. volumes the XXXX first the prices of result, lower were metallurgical to year coal prior sales

XX% approximately of coal during the of royalty made coal revenue In terms total our XX% volumes first XXXX. of our quarter of mix, coal and coal royalty our sales royalty approximately sales metallurgical up

Energy in to Foresight to with restructuring to also I its our lessee, pre-petition entered despite for continues filing, that agreements Prior its note like lenders to largest Foresight into would XXXX. bankruptcy process. its bankruptcy support operate filing March

will plan. effect of We support do In a restructuring operations. certain Foresight its not of condition their including addition, our to Foresight adverse financial amended amendments contracts counterparties, results NRP, believe of material key the our with agreements with or other to

and bankruptcy Mining complexes. Foresight Hillsboro announced continue filings, to Camp, its Sugar operate intention Williamson In to its the

idling of Foresight's the announced recommenced its filings longwall mine. announce they production While mine, Foresight at that also low-cost Macoupin Hillsboro the

adverse receive expect we from that by the increased the benefits production at Macoupin from will offset will of Hillsboro idling partially mine the impacts be We the mine.

at With implemented the that emerge Court. by and and said, restructuring operate from Foresight's to profitably COVID-XX impacted will we ultimately this that currently be plan, ability will to thermal approved pandemic. bankruptcy and time, being for Foresight's proposed, by as can't demand continue be be coal weakened Bankruptcy certain global And the bankruptcy

soda demand Net the income $X this Ciner cannot by believe results, driven global in started And uncertain duration time. a while will extent of downward international million negative business see international the pricing resulted form in impact segment, is the and Moving quarter highly on confidence of adverse the have have the at will The slowing predicted of prior COVID-XX sold. Wyoming on quarters. not and compared decreased first subsequent it and be lower lower impact with to pressure. first quarter ash second did material it we volumes ash. to effect impact pricing demand COVID-XX to our which a that end its and quarter to on operations demand soda towards

We first year prior the $XX to received quarter million quarter. of Ciner in XXXX $X million of during cash distributions Wyoming from

Ciner They partner early the during previous As to multiyear discussed project. and this capacity to reduce on calls, our decided the managing earnings develop for to of project. fund phases XXXX plans distributions a Wyoming expansion continue execute

Wyoming expected we receive COVID-XX from to Ciner to pandemic, the annual completed. Prior of to is $XX approximately the $XX until project million cash distributions million

time receive the distributions from However, we unable Ciner Ciner ultimate we will predict are may to on impact Wyoming. at the have business that Wyoming's this or future COVID-XX

the expense we was in our $X they on million on quarter due in company Our to the months. the flow of as year due the and cash refinanced of prior existing declined financing primarily while first QX of in $XX prior bonds. XXXX payments compared quarter corporate over X.XXX% million lower of of we and million the segment higher due a QX to to last second result repaid QX our primarily the costs were prior XX.X% XXXX. payments quarter, quarter, to year are interest debt parent bonds due XX on Operating in our and $XX that have compared QX bonds timing Interest interest

fourth In quarterly a quarter February, unit paid the a we XXXX. cash of distribution distribution to our and per million $X.XX common quarterly with to to respect unitholders $X.X preferred unitholders of our

visibility quarterly preferred focused the on until $X.XX by cash almost and one-half mentioned earlier, due of suspended and the things remain distribution. in with unprecedented decision more conserve global million $X.X However, our a business the This on and or clear caused distribution unit XXXX near and intermediate to into impact first environment. the term, $X.X uncertain cash NRP with as will to exists have of the quarter million of million uncertainty in in-kind in We that COVID-XX liquidity financial common Craig control we respect enables priority industry pay unit pandemic. we this protecting can our we those the

questions. call the I for the back will that, operator with And over turn

Operator

Instructions]. [Operator

fist comes Please Company. line Benchmark question ahead. Levin with Your go the from Mark of

Mark Levin

hope Great. well Thanks safe. are you I much. and staying guys doing very

all? about cushion does environment quick will we that as that how question debt? How it if Does in flow comment in guys the which change turning think have, uses or down relates impact or at hold how you cash much liquidity cash versus the your a you cash to Just about impact negative. paying the

Craig Nunez

that liquidity Mark. at doesn't beauty wants. This of long cash at add The flow is runway go position and have that change negative. we with negative cash on flow Craig. first the Chris cushion And I liquidity we could could he our the stab all. significantly we is let take that will if anything a cushion that that have. fund that It very

change gives -- so a us view. it it doesn't our So

I We in down in would said are like to prepared distribution to common continue the pay reinstate we debt. remarks, the as August. to And going

macro just things do. how in over play the out next However, before need we see we months to of couple the environment

you that? do have comment Chris, on any

Chris Zolas

No.

all points I think the hit there. you key

Mark Levin

do are of idea as have the since And a there can through, you idlings mean guidance, Great. into change we you guys on is To are looking had side production? to your here maybe you are working on visibility a mentioned think we I XQ, what but prices up guess properties, nine thinking which at going general change of from middle I we midway step quarter. you it, met but or specific. through here should have Not returned. you without I directionally, some just answer for Obviously almost sitting the sitting in of the seeing or a that extent way about perspective, are kind the second the what most had or our of least royalty shows being see coal just volume we a can in be step we which expect

Craig Nunez

I has well if a month occurred will at Mark, to for in take And help let that the the of comment then Kevin Sure. as the comments. receive it. with will payments that and that end we swing try previous a you month. mind I he further Keep at production

May don't other really can and end operators. coal talking until into have business, from glean until April of the we example, what we than our have end in visibility visibility, don't into we So March April with of for the our

liquidity. a for what's fair it's to react I that noticeable to us we that of number this in that if flow are to our with business is see would that's of was it that occur that's say also ability on regarding significant happening, generation nothing see March, doesn't cash production usual, as and as know that going But properties decline to free gives were at don't enough, how to collecting have occurred, in the be know to we And continue. resumption and don't the say, did prove we to starting a the also a a reserves concern our but is given certainly April, we magnitude decline I operations expect that that continue have decline. cash that operating we starting I we point

Kevin, comments? So do any you have other

Kevin Craig

of summary into good seeing a far so QX. here that's think I are Craig, we what the No.

Mark Levin

are or it. you you metrics would things your see, confidence to about distribution looking to What there or Got the are comment certain certain are give back And August, for ? exactly you looking that Craig what to specifically resume?

Craig Nunez

ash that's side side We want well. cash as both flows. happens soda see trend with in to what our cash from trend And the in and the flows coal

somewhat are are exactly respect is the we begin businesses, to we what more just to to hoping with of to next the if things is the We the the couple of how both up And or come months, duration know that. the COVID-XX. in are on is back seeing in stabilize the somewhat be trough impact have early we deep long -- don't and we are again, going don't be. how innings those that going to of going And we into visibility will in business,

We medical are watch certainly side. the the we but at not numbers experts medical

demand So new of just are wheelhouse. thing pricing. say happens ash infections what targets and I inside interested have because firm to that on not see we of can't that's or to type any But that soda our number global we

and thermal side if month we into and see the reopening interested to are the into see American to what this U.S. on volumes economy. of June and We and July met later as get pricing the happens

other China to and plans we We positive do doing again how see that And proceed if we thing. doing and reopen. closing spiking and about are fashion, a accordingly this get what continues more Britain on Various a month want be good same down see Great and coal optimistic of back ash play distribution. We feel If will cases is reopening us how Germany is thing. that suddenly the have hand, hopefully to not we out. the of Europe in up, and plays course, demand economies the of is road out. are ahead pricing the parts to that seen and announcing the relatively can with those will to a result. continues respond soda everything are will same

Mark Levin

Well, appreciate sense. this greatly. morning. perfect time I makes the That

Craig Nunez

questions, Thanks your Mark. for

Operator

And remarks. back at closing turn call over will for there are to no further this the questions presenters the time. I

Craig Nunez

a deliver for thank value NRP. participating and somewhat time. Thank safe you and you interesting operator for our be a thank everyone support work your and in to is It's you to and yet and all time of we continue will unique, stakeholders. for This call our very attempt tragic

thank Have that, healthy. Stay participating. for a day. with So and you good safe

Operator

This concludes call. conference today's

You may now disconnect.

Natural Resource Partners (NRP) 11 May 202020 Q1 Earnings call transcript