CTRA - Earnings call transcript Q1 2019 | Alpha Metallurgical Resources, Inc.

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Operator

Good morning. My name is Denise, and I’ll be your conference operator today. At this time, I would like to welcome everyone to the Contura Energy First Quarter 2019 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. you. Thank Instructions] [Operator President Relations, Vice your may conference. of Rotonen, you Investor begin Alex

Alex Rotonen

good everyone. Denise, morning, Thanks, and

Before let comments remarks statements, those and business we discussed. our financial and the during begin, and differ Q&A me actual remind results period, materially contain our performance relating may expected that to forward-looking you from prepared

Stanley, filing. For that first please our SEC answer them, the any Andy which to GAAP are and company’s performance. Andy. the also can quarter call Also the the regarding to earnings Mark Please refer our interim use statements Chief and are measures I’ll on Officer; and some here and documents on Manno. about over questions forward-looking Kevin information With their those on affect more of the Chief reconciliation factors Scott release and XXXX for Operating to that, Executive the today turn see Commercial our Contura’s Officer, Participating Kreutzer, Officers, operational non-GAAP Contura’s to measures. associated Eidson participating specific are co-Chief information call call of

Andy Eidson

share a well, a as Alex. to metrics metallurgical horizon newly project of of updated a with the like. some our Thanks, are And as then obtained everyone. calling Alex highlighting spend color for got participating. the the capital our around what then the our year-to-date about finally, the some refinancing color, first time want return And some about close the then near-term talking also details new morning, then market we’ve commitments a that relating to quarter some briefly And we’ll by of results, term through adopted perspective, leadership program. quarter up we’ll top loan. walk little guidance. deeper we’ll I’ll things on cover looking mentioned, commentary Thanks we’ve We performance. informational and see line has performance, Contura, first on recent start changes outline our environmental and and talk at Kevin from Stanley Good to dynamics few we’ll safety

financial from So generated of quarter income operations in highlights. and $X The for million. first total for of with million first in revenues million continuing net the $XX – $XXX the company EBITDA

quarter, of the of first million nearly same the than During we X quarter for of Met tons of accounted our an an shipped realization in year. shipments coal last tons total million $XXX. the average than coal, and nearly sales half over period more increase X more generated

when refers sold that in also, comes we and - Northern metallurgical metallurgical say instance, some mentioned Met out sold, coal and through met past, noting of segment, worth CAPP met up coal as rolled that - just is that some Thermal it’s the do that we’ve in CAPP coal coal we Now not the segment, as have to the all that Appalachia.

future of County, flexibility first Directors to commitments X-year for on company’s recently a terms B LIBOR restricted On company’s XXX X%. points while the while Xx facility term floor moment, has The West is coal a new new much our Board of unlimited in allocate we’ve loan just front, for leverage term capital loan with less. this is Virginia. Logan facility million metallurgical greater two payments LIBOR first-lien thereafter basis facility $XXX current term the refinancing replace a looking for this XXX of I’m rate interest facility. project plus the new obtained total to plus or the a expected years, greenlighted towards The grant allowing for the

is XX unlock believe the Branch million the Project tons $XX of investment approximately of high-quality, capital X.X to it the approximately cash as estimated referring as The a rate plant at will accommodate $XX met to coal. this tons to cost expected its over X improvements to coal in produce million to low million small million a and some it XXX,XXX run to annually Lynn make to of tons, per with to allow and the full million Bandmill $XX We’re preparation fully project reserve high-vol ton and XXX,XXX relatively overall, range. consisting incremental

low of naturally, the will met here So the going real down looking is but value bring the the additional nature at this this in portfolio. met will help of mine, entire forward, the a cash cost and boost very project, profile production cash be cost this it incremental overall

expect the project, the of updated. naturally, as second to we We quarter commence we’ll keep you developing And XXXX. production in continue

on I’ll now updates recent So activity. leadership over some cover Mark and Board to to turn it

Mark Manno

everyone, And thanks, Andy. joining this us Thanks, morning. for

While weeks it’s in since our call, transpired has of been last time. less much six period short that than

have were at coal the of who terms we the Crutchfield, hired industry. the of here that to right experienced, First the a into feel one-year Board on Board lot its any position Subsequently, Since deep for his Contura’s a leaders accept Kevin in search just to to find reelected experience candidate don’t and bench for ability a CEO. updates and and with a recently foremost, Directors supported sector, appointed of opportunity permanent future. lead this commenced, well say to seasoned announced at firm and by company extremely resignation in feel to has CEO, our fortunate Andy we leadership another in me be conducted May Contura except confident the long-time all respective as search April a capable that Board share while conducts order material process Contura. the co-CEOs outside by XX I Andy time, and search shareholders the unified to the seriously and on X this interim take

and has returning in creating will a details in value on the capital morning’s a believed return this to what Andy continue Contura’s the discussed of and adopted our meaningful release, we’ve be Board bit. shareholders. earnings As program to to we the also focus sustainable discuss program

how safe have business. you and is operations national operations will than hear better at a national facility, better Year-to-date, from you focus rate is for April are incident the also the the year-to-date and us, continue linked inspector is national to average safety reportable rate tracking than total NFBL manage heard our especially we is And with violations The average on our our trending at day core roughly being strong. to value at Contura, at per average. period. our As

have proud across company’s While visits We pleased to annual period, and directly reclamation our with to We’ve the continue permitted corporate approximately and our XX.X% currently environmental safety behavior, our our environmental plans. eight an company’s work factors with responsible at we safety fulfill compliance; organization national corporate to alignment regarding we into And that we market environmental ensure stewardship, million better Shifting a made, improvement perform environmental performance metric conduct the commitment, planted continued partners all of won safety women goals XXXX. alignment we a improvements and for want and always continued compliance never between focus And to to the compliance bonus are part men training. as our discharges. Officer, employee mine ongoing rate In and just of Thanks X trees. points can business. awards frame on our our it but and strong improve will done, environmental give remain be overview. in we we our field, over to is I’ll To work in who the footprint. and committed obviously aspects the state you our since our our of now participating focus. are to to few Commercial Kevin of on performance, call. Stanley, turn operational continuous reclamation community the again summary, share I upon same obligation a at personnel Chief

Kevin Stanley

Mark. Thanks,

XXXX, the for growth quite second As been products, case met for the with supply modest coal, is while showing of always dynamics growth to minimal. market since globally, be higher-grade has been favorable the continue especially demand half

up met and Coast port last labor maintenance seaborne limiting are exports they with met through addition, year-over-year further and X.X% the down through East continued exports pace issues, struggle March. rail, supply. March year-to-date meager trailing also X.X%, are In Australian with to while exports Gulf only year’s U.S. a the

on India, primary production, With the other region XXXX, strong near-term. expected Steel this X.X% estimated continues supply production essentially in quarters, the estimated seeing, so while in by increase X.X% especially expected growth of U.S., year-to-date is March. strong demand to in XXXX, as production met steel X%. an accounts in XXXX XXXX several however, Asian over the albeit the serve XXXX. steel to steel the at be to America, to X% slowing growing continues growth we to in by X%. in in forecast X.X% slowdown experienced of X.X%, right one anticipated with the Conversely, in with limited the X.X% for where world’s demand Europe to at solid another Asia markets, China. The past crude global global steel well at hand, with XXXX, has near-term weak has to are growth new a been the driven far side for three online XXXX. respectively, a in declining balanced North has in catalyst the According production growth U.S. half by March in XXXX. driver is regard struggled and strong been growth is has experience World primarily demand, been year-to-date With due has the decline production crude American production modest production, flat has of limited accelerated very steel production Europe, months crude a feel growth the while first India key South market virtually the far at steel our nonexistent production growth to Association, X%. with which with China, an to flat through seen approximately been through come X.X% so year, to and Overall, before

mentioned what with nicely we time. coal April quite Contura? been up equation pricing has for X to very expect So for does environment well met balanced, the As quite call, the this for And year. of all supply-demand some we strong hold our the remainder mean pricing for on the

in from signaling December Aussie are the level. slight only current In futures price $XXX backwardation fact, the met XXXX, a plus a $XXX low-vol

of Atlantic bode well A met XXXX. U.S. maintaining a should For reference, the of remainder the for This export-proficient suppliers our also level is high-vol north for $XXX.

unpriced, and strong fundamentals, well. In but that aggressive trying limiting specifically are demand near-term, committed continue the we add together of spot aggressive they European And American XX% continue XX% very where in said markets on become as a and previously, market, will in in books. we XXXX us, buyers to summary, America midpoint and region. see move a Europe. of guidance. South the quite our to quarter. behavior America, largely and that exhibiting behaving both in as feel our another expected that committed competition do I’ll positions the their we important for of areas, experienced challenges, market market segment, they to South about at opportunities very we unfortunately, priced Finally, that traders and for aggressive in markets so belief bit the good more our met supply with couple our expect these to more tonnages with landing pricing certain off long The color South are Met position the Despite forcing geographic side is mainly contracted the first It are

exception call that, have markets with end well I’ll opportunities, the of for performed And negatively the With back market Turkey, to continue tariffs over Andy. impact to the turn where us.

Andy Eidson

to referenced Kevin. program first capital quarter now and then our earlier. stated, below the going we’ll guidance spend I hit Thanks, get results want first Simply some the through results time were into and update, quarter expectations. our return

units Thermal. on previously As and met sales lower-than-anticipated costs across both region coal we’ve CAPP also resultantly operational volume and mentioned, Met the some high

quarter And the prior to stated EBITDA was adjusted compared CAPP of $XX $XXX first quarter quarter. XXXX. million a with ton first that by realizations in driven year lower we very decrease in million $XXX per is mainly strong As a $XX the at earlier, ton compared

year, pricing of the above recall, quarter we that where a QX into $XX of the were bit ton about for you and was down XXXX. growing was As in beginning a but it up

ton, the a Met In in our approximately just year-ago $XX a - addition, over CAPP costs $XX were up period. ton from

- sure into the was That Met and an So some costs; with make issues the EBITDA of the happened at up, I just complex. digging There the we really issues three into about talk primary those moment. are meat approximately what a of want driver. costs get to impact but $XX Marfork quarter. the smaller were Beginning main during due really first explain. CAPP were issues of There to primarily other in places, that on million. some Marfork production at had We’ll details off,

approximately last those But America, pricing million. of an we volumes tariffs seasonality We behaviors the so we call, as Secondly, were that have with resulted in our compete to quarter. areas slightly expectations. the XXX,XXX not and as on impact such we’ve challenge and in earnings our when overcoming of as the South tons that met $XX also, about higher in elected the then behaviors just additional expectation ran higher mentioned Turkey, for mentioned, did into Kevin below

– was mammoth was has App of mines That shortfall. to at Slabcamp, complex. by Central challenges. caused million one were there our high. costs some also It EBITDA contributed predominantly another pretty $XX the That the our infrastructure Finally,

EBITDA items, be considered that three with what can detail where from ended kind those of which a of those, would an approximately gets of up perspective, we million. we’ll normalized So to more moment, get $XXX you just again, – combined a we EBITDA into in more

cutting So and detail the Several Met factors - Marfork. that More tons geology clean mines challenging driven a on basically some had in CAPP lower-than-anticipated that’s three but We foot per areas bridge conditions. the on, situation. primary going producing just items. was were driver and really by

slightly mine effective. quarter, these as relocating more started do issues appropriate be approach, the them the plans apparent the us, and think utilized is and areas. pursue by that we this to to it became tweaking we to address mine During sections will believe higher We

going to We see improved forward. expect performance

did earnings was allocation the price, fair a the Another of is time year-end to mark books costs it the because the merger. inventory, we adjustment call, coal related discussed for this well. of inventory value That purchase This that Alpha also accounting - was as the Met inventory factor is Alpha’s to issue on impacting costs CAPP to market. by purchase and noncash an price impact related just year-end requirements, at

And so through the it rather flows a as than that P&L, market a full with cost comes inventory cost. production

than cost the also, the us you’ve guidance issue plans at quarter. a that $X at due in performance ton more impacted back did do cost by coal original a have Marfork, by needed just moment, we to the a And So to orders cost some issues quality, acquire had we of that approximately implemented We additional contribute particular. about required during pressure to $X been the ton. to in And our us continued production our update to year-end. so fill planned. But that in purchased hit from Marfork get cost expect the levels guidance been similar seen will further

confident working are we and issue, remediated temporary be through that a it, by will year-end. is this it So and we’re

additional Met, in inventory that continued cost CAPP impact of issue, over just so have Met end so production, cost - particular forward. production at CAPP value a capacity The fair impact Also, quarter, mentioned, from have was particular no to - Thermal CAPP the fully some the was by should impact the at $X - - there the Slabcamp value issue in $X about as segment impact March, added impact a That Thermal at - first only adjustment quarter. was full majority is productive inventory should mine structure. Slabcamp in CAPP adjustment the to mine. resumed ton it negatively inventory $X.X elevating of Basically, million just second on the On fair no QX, a was, that in the we going and about note the infrastructure similar Thermal of was it per Mammoth - ton of end was during impacted resolved. costs mine so cost issues. related the And at running now mid-April, that side little CAPP a was quarter. minimal the This that. depleted to adjustment, the the a half CAPP during Thermal

assured, that this we the had for issues in issues, cost our quarters But but and resources Obviously, been clearly, and has track. area quarter. on par, believe back quickly been and and be appropriate impacted in were several focus distributed locations of negatively the up it to to So in will a we quarters. this management we’re addressed the costs address to time and think we wasn’t continue future be team those as adequately significant performance to they’ve

So were the essentially year, - the the quarter. Hitting still March. quarter our segment, had both for will we one generated It Trading Met spoken but We’ll Logistics, actually despite Met, to segment, - we’ve our T&L, million a a approximately million next mine very third breakeven. that during generated moves and We other I have challenges two in other EBITDA couple have more EBITDA, the a we our operations, good [indiscernible] cost two of than while $XX quarter. segments, had longwall in business the perspective. it of and would of the CAPP – not CAPP or Thermal a years from did another continue thermal about, longwall note one $XX do in Met-related move. much have

were the productive during So mine quarter. the right the move, very costs was longwall inclusive the and of around expectation,

did well. it So very

total including as well million $XXX in Moving of in the company investments, total $XXX for million cash of cash. approximately in had quarter, At long-term and end the the to $XXX cash, – restricted as deposits a unrestricted liquidity. million million $XXX

and unrestricted which our million ABL, under liquidity, inclusive cash availability at of total is quarter-end. was $XXX Our

receivable million Looking by cash, was flows the of at was production increase shifts million of AR naturally about the receipts. balance roughly the was $XX sales use timing Working the total by function going during of quarter. about with the naturally, Cash and and lot of half driven And provided was cash between the capital the to main accounts lower inventory A numbers. inventory. in split operations $XX quarter. the on in sheet,

sales are we the of expected these the in year both and QX. cash as realized along reverse So into up were back as make not to moves that

We around common some and amortization were million perspective, changes repurchased we guidance. Those $X based made of $X share just we making results, are a to debt [indiscernible] XXXX also on the over related million, a So on quarterly our cost particularly from of to shares. equity settlements

tons to We’re with segment, board. still XX.X million the met - we’re CAPP segment. X.X shipment tons million NAPP T&L Thermal our to committed We average million million as Met committed between the sales of CAPP - From of X.X being looking to in comfortable tons X XX% expect X.X - million the coal, at CAPP XX.X arrangements price at a on $XXX.XX. of of and and X.X still Met million million across million an tons X.X position,

have in ton. then are little productive - guidance over of our a ton the of committed CAPP about over $XX. still some at open $XX per And NAPP, We price for an priced we average at just committed, Thermal, midpoint XX% do fully range

from range we $XX a a NAPP to $XX $XX. costs $XX range increasing cost of at of of sales our $XX are ton, to up to to $XX maintaining - CAPP We’re but Met a operating

required prudent believe our blending some the coal challenge and continued mentioned, bridge with use that as the gap coal this Marfork and meeting orders, the the of the we remediate issues sales is needed we Given conservative also guidance time. complex, at and the being production on for purchased to to time at

by we - be just the our of same and earlier, year that I guidance mathematically, the Thermal again, makes as that sense. to the ranges So is the increasing back this approach, is the in main quarter start original mentioned CAPP there. And guidance $XX effectively original again, $XX. returning the gravitating toward to expectation just we’re cost the to being production In Mammoth is cost where rest to the reflective levels. range was of guidance And first of it higher contributor year-end. Slabcamp,

XXXX. mentioned So be it’s earlier, that million Well, through math there. Project, just CapEx to the Branch as Lynn running approximately expected is the $XX in

million, our $XXX of comfortable still We’re to we’re changing not CapEx range million $XXX CapEx. with so

capital described refinance anonymous restriction I’ll to received, on B and expand So a and earlier return Based our that to program our from on the last earnings was to our remarks today, held finish lot and capital program simplify loan time what compared attention obviously, my we management return tied on call. to we therein. of the able were announced the Naturally, program. and Board, term commitments more

restrictions Now more freedom, therefore, we have and longer no apply. the

lot a and have We freedom flexibility. more

have repurchases for return Our both of share factors. applicable flexibility of or a currently capital place leadership dividends a $XXX to prospects law the Contura’s a now improve and and performance the excited Decisions expectations, returns ability to In discretion amount was to the return there. confident believe be rest the We that take Global team lot transition, June. program to into adopted the been other really our million to of future have when subject will addressed, up will at quarter will the that are positive. vastly shareholders in Bank to and Board thereof, faith of below a Board. total, appropriate Industrials in in On return program And Board been ongoing time the of The year. value Cost about Deutsche right form very the of company Summit participating remain Chicago some in this combination which for really, our to has actions this naturally we’ll you to being the we the outreach return market the and continue front, shareholders. despite naturally shareholders. capital management appropriate will an to company. capital in closing, early and our we’re and taken to plans sure be be we provides to continue and Materials by discretion and conditions place to in run be and capital of or I’m challenges determined in investor of a during and

being everyone, call today. the thanks, again, So on for

So to operator, questions. line ready open the we’re for

Operator

[Operator Instructions] Your from Pipes first FBR. Lucas question Riley comes B. with

Your open. is line

Lucas Pipes

Hey, Good everyone. morning

like I’d here. try go So to a through focus bit on I’ll first, to, QX. little

down I this items were XXX,XXX the you the was – sales, of million. sold? Marfork, portfolio, your in Maybe the back not of $XX million; $XX kind into produced those of tons lower the to tons, discrete kind not of XXX,XXX on behind think what of performance kind and just terms broke $XX and million; expectations kind of Mammoth Or production. lower of so across sales, lacked this also stroke then

Andy Eidson

in capital. sales Yes. did way we But We that did coal, shortfall, did the statement. behind able all curve naturally, of put It’s wasn’t the to of the we bit to little impact flow the access at – the Marfork a placed we the both, book produce and the be Lucas. was need blend inventory because, that We quality. because working us cash that some to production issues

– were we producing so And the coal.

we to put – coal needed out we because have of to we wasn’t the on producing able blend weren’t that that appropriate it. will Marfork the access of Some be able coal in just to orders were we didn’t

of So a a it two-pronged – issue. multiple was kind

Lucas Pipes

Okay.

the it in kind look I results QX? I your coal of the company-produced think was kind tons, on when during at what then of see there. – this press your didn’t and us So of attachment you can tons. assume tons breaks tell release were shows sold I down I included what and But also on morning, it to purchase kind in tons it met operations of

Andy Eidson

so – from the the front have prep through the in Lucas, our it’s truly isn’t actually goes and – without coal me, raw, coal coming from it basically that blends plant, reserves. only produces it because purchased that our not not that part Yes. is coal with about number don’t I coming in as it – captive it our of

that our productive I rolls in so I have front the at moment. it And don’t think… into breakout I’m afraid, of do And me number.

Mark Manno

about it’s tons, in believe neighborhood. that XXX,XXX I

Lucas Pipes

XXX,XXX tons about purchased? So were

Andy Eidson

right. That’s

Lucas Pipes

the And quarter? inventory then is the amount what of you during that built

Andy Eidson

In tons?

Lucas Pipes

tons, yes. In

Kevin Stanley

think to on we’ll I We Lucas. handy. have that, to you have it don’t get back

Andy Eidson

have the tons don’t dollars, the in of us. front just Yes,

Lucas Pipes

no get be that that. kind into of then guidance the Whenever problem – on And great. Yes. would then you full met – for can And how year back, go ton Central to tons on you just figure? in on Do coal XX.X sense much be a the for side, to XX.X that million would million. have purchased App included the on that

Andy Eidson

think in running internal I estimates somewhere our that XXX,XXX to Overall, per so tons had us the XXX,XXX-ton quarter, XXX,XXX-ton probably about zip code.

pressure the than cost our from it because it own what can to And so produce does for more you’re coal would it mines. XXX,XXX some cost more paying was budgeted, you create see when we tons bring captive in than

Lucas Pipes

it. Got

So in the model, tons, XX% purchased margin on to the were if to let’s say, code? XX% right zip be I a that would

Andy Eidson

That’s quality. depend I it probably will mean, on the fair.

about more sweeteners. quality the our Sometimes, for you’re coal buying

Sometimes, the got for and you’re we’ve the bulk, coal the sweeteners. more buying

is just margin across guess not board. to but the your vary, a going probably bad So that’s

Lucas Pipes

Got it, got it.

maybe final show the as kind color That’s you to Okay. to on helpful. started to a us then And obviously more with Could big of bit quarter. those when a little share a issues question Marfork, impact given importance you’ve Marfork a seems then the did that color work more appreciate just the segment. met When to the Would And started coal plan. bit mentioned to commence? little on up? mine have revise you

Andy Eidson

Yes.

streaming we the obviously, We plans, we we the I apparent low of had production to keep – clean in basically where is think to thicker trending mines. quarter coal, temporary were areas coming a numbers we issue in where out watch room probably tons costs [indiscernible] And determine a the needed this daily you’re When per noticed mine the a mapping lower. run point that to where will higher. so mining mid-quarter Production the faster. clean on consistently consistently was per-foot But – an those of geologic at tons clean we it revisit you’re close issues mine, issue. at it of and became saw mine foot, temporary of trend it it became react going tons pretty foot and has get into per mines that areas. on your we’re the could time, end more vacillate. to reorient probably once look low the more and that This isn’t deposit into to was

those but you’ve really of don’t one not it’s of a been a that coal a that problem, It’s just to you geologic thinness issue. issues issue have So temporary in cost enough you issue. for where more got know – it’s a information know a you’ve while until

we yes, through reorient digging plants the the mines. And that. been mine we will have it So a of little – now adjusted, the and part time better of take but a bit quarter as spent

We and But the to structure by redeploy in. we’re we we’re of in be. that be will we’re in to that very need cost fourth equipment back coal the planned some to to have where back need get thickness we underground we confident quarter,

Lucas Pipes

Got it.

Okay.

now. will So over much. I Thank turn appreciate all the for you color. I very

Andy Eidson

Thank you, Lucas.

Operator

Global. Seaport with Levin Mark from comes question next Your

Your open. line is

Mark Levin

Hey, Andy, you? how are

Andy Eidson

are Hey, you doing? Mark, how

Mark Levin

well. Doing well, thank Doing you.

Okay.

looking number few a of forward. a in just on questions. issues said I So more focus QX, wanted Look, to the I

be So QX. we’re there’ll if in halfway QX. And through it, understand moves I longwall no

going with in sounds the like to have little a in to Marfork bit deal of you’re issue QX. won’t QX, but You have Mammoth it

the QX here it’s a in quarter, of too second So that QX leap of reasonable you this levels assume to point? would is EBITDA that I in sit of assume meaningfully the above would be middle or at from as perspective, much kind

Andy Eidson

but into I on-budget don’t the think deeply guide want too to quarter, been sales we more mean, of trend. have I

be. a large, And But the in and so code there’s coming so it’s mid-April, in move, little of in it’s zip where into an issue of So more be bit likely. remediated thus to shape. less you that of From Marfork an of issue will, issue not quarter, really quarter this over Slabcamp a cost the bear will is mentioned, was far. perspective, going the it [indiscernible] it needs by couple cost additional next this it. quarters as good costs to longwall

So don’t too quarter first quarter. during this you but a to look want lot the being relative quarter. is second I different much, should care of pretty guide the taken of to

Mark Levin

the And Great. yet tons the that Met tons the not maybe that what priced in the terms tons side, of then quality like? of just on look – those been Okay. have

Andy Eidson

mix the into a is not enough international. consistent think and it’s they still to commitments I it’s left It’s a a initially of But little guided to it far. majority higher-quality and those split. typically, bit high-vol – not materially our we’re spectrum. A all all the blend It’s the between for pretty to on pretty be do like domestic, processed B. And tend make a tons. pushing more similar the were vast difference high-vol I what domestic of we’ve mean, international

mix I remaining So you’ll think see the product year. pretty throughout consistent

Mark Levin

gave guys on cost it cash quarterly better so are a maybe met that again, least cost, But you reasonable assume Okay. at I skipping just the Got to in half Is that Just reasonable. I’m then high bit the for it. that here. and coal And – improvement QX, little the expectations cash get QX costs coal we back over and metric you year a idea is met place – coming your get more was know what of based watermark full for back second. trying all to on preliminary in to guidance. of then year, meaningful based an comments? will the the cadence the

Andy Eidson

at just you if to guidance that to again, guidance year-end. $XX our of – assumptions And by closer QX we Obviously, now it, expect midpoint correct. of math be the if $XX. kind some absolutely and original can you $XX, with off is of That’s make the starting cost, Yes. look

the trajectory You can see kind expecting quarters. over the we’re of on costs few next

Mark Levin

it. Got

And be I on either the Okay. it through – strategy returned, cash with dividends, was the mentioned capital of had return Board then contemplating would Kevin I buybacks know debt last that to believe the program. regard was excess the the or XX% repurchases. whereby free a call

in – there, or toward the this refinancing, the buybacks you have – of would have there I terms – way a special point you you this with approach million. a Is million? or you $XXX a tell, So million from $XXX leaning can the is otherwise come you dividends, guess what morning, guys either out and at $XXX now now the Board

Andy Eidson

accurate. some our They’ll don’t the the think situation yourself we that like to closed dictates we to mean, report start peers, I as get us to whenever as is compared ready to movements. Lucas decision. problem But want smart who undervalued facility naturally, we I mean make on Yes. Board’s after – when evaluate guys we – have and look we’re being to and

to there’s accretive kind And logically, more But what different to you where out figure Board think, shares on and that on see things and I then really closed, these the so think and current – perspective. this not would the probably get head. change do in at anything we – argue it’s if Again, make should it numbers, like when at that, reevaluate saying end probably where that’s the Naturally, can sense. between of will we the math repurchasing people will than now can have up. based a Board’s the to levels. deal most look going that’s I instances hard But

Mark Levin

XXXX? to any there or from impact it, here seem Lynn you? of have But my question this modeling to mentioned, – May. Branch But – XXXX in that? last got flattish trying project obviously, you no – it out-years in think capital CapEx we’re sitting about perspective, it, as I Then related to and Meaning, any Got be in with change reasonable incremental associated is when I any modeling maybe there’s it. would kind a to you CapEx and does XXXX. you’re think this in got the preliminarily, CapEx on realize And

Andy Eidson

guidance of keep and additional development XXXX million so Well, some [indiscernible] mind, $XX both included in for new… growth capital, for

Mark Levin

right. That’s right. That’s right, Yes. that’s

Andy Eidson

we’re be spent expect next Lynn to even Branch. on to the number pretty remaining a capital number. up year, We so that capital the Alpha already would come includes down certainly inflated at Coming mine,

Mark Levin

Got it.

Okay. Great. Appreciate the time this morning.

Andy Eidson

Thank you, Mark.

Operator

[Operator Instructions].

Scott Your with Schier Clarksons. next question comes from

Your line open. is

Scott Schier

Good everyone. morning

Andy Eidson

Hey, Scott.

Scott Schier

in how can you XXXX quarter I second color XXXX? on can talk you Lynn going any here? I Can ramp-up Branch, into think we many the a I about production the bit going tons give you we’re on XXXX. how If then in of first should little and think mentioned to know stay expect about

Andy Eidson

– I as be mines, adding continuously we’ll as Yes. do gets we’ll out. sections sections development, mean, most monitored and continuously with mine monitored start developed the – we’ll

I coming then full and next tons at a XXXX. that mine, somewhere think be rate looking tons, run XXX,XXX XXX,XXX we’ll in out probably around year, for of we’re

So code. at X.X-ish we’ll the zip be

So year, we’ll year. half get next little basically a under half-year production a

Scott Schier

Okay. Great. will That’s be very you expert think? then or helpful. domestic that And focused, do

Andy Eidson

vol – coal, go quality High coal, ash. a actually It’s a of quality It’s Vol can it, kind on sulfur, of kind a it’s but low a hybrid of B+, to low closer probably it us This is call gives flexibility. a, from it either. an A/B. lot it’s It’s so excellent perspective, very

Scott Schier

of with Okay. products you That’s of one kind last some will helpful. guys? And for thinking Or other then very a new you product that that have? the Are integrate you that one. be will that,

Andy Eidson

probably product. and what is do produce. making do blend like customer like finding don’t particular we’ll than to blend. their necessarily just the specifically we rather a Again, marketing We we to continue I hit think take we what specs wants, we’ll which best, them what

a So customers. to gives lot this – again, this flexibility hit multiple of the us requirements from

Scott Schier

questions. Thank for taking Okay, you great. helpful. my very That’s

Andy Eidson

welcome, very You’re Scott.

Operator

questions. There are further no

call at time, for co-CEO, over closing. Mark this to back so Manno, And turn I the

Mark Manno

time interest Again, your rest the Thank a in morning of your day. thank on your you, call. for you. Contura Have and great this everyone,

Operator

This concludes call. today’s conference

now disconnect. may You

Alpha Metallurgical Resources (AMR) 15 May 192019 Q1 Earnings call transcript