AMR - Earnings call transcript Q1 2021 | Alpha Metallurgical Resources, Inc.

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Operator

Good morning and welcome to the Alpha Metallurgical Resources First Quarter 2021 Results Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. Please note, this event is being recorded. I would now like to turn the conference over to Emily O'Quinn. ahead. go Please

Emily O'Quinn

and Jason everyone. Thank good you morning

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

those Jason the Stetson the Please our and and Officer Horn, Alpha’s to and to for For David. first the on Andy and the Chief Chairman documents more of quarter information also executive the affect use David Chief Dan of sales. can XXXX to over measures statements vice and turn Executive forward-looking that are regarding release associated GAAP company’s Financial I’ll Officer filings. Officer SEC them, see on some earnings are our With non-GAAP about Whitehead, and factors today please President call Participating participating information that, Eidson. measures. refer Operating and call of Also president reconciliation Chief call the their

David Stetson

a morning and call and you start from From their financial areas. today. Andy of goals progress and joining continued us each productive in quarter results details about to and quarter looking first hearing the drove were initiatives. been to between guidance, forward adjusted everyone to for for I'm in prolonged volumes market today discussing excellent at the net effects Had the of Jason, coming not thank I sales have cost solid those sales our by would the higher. our roughly the perspective, it tensions Good realizations quarter want respective in team to the Dan committing China, first on XXXX. and that QX another and realizations long-term of on mid-point on likely and quarter increase sell comparison have coal of was EBITDA for overall of in Australia million been with $XX quarter the sales our our

downward against you it low remaining that indices, behind aside around will year. ourselves have our seeking average if that for we we're the to that transition quarter indices the long and our is work the the newer the up. mines of of from equipment unusually our China, to while the occurred crews QX into well manage in pressure the per in a out opportunities Australian the position scenes proactively how of unwelcome lot unclear example, tons coal Australian Operationally, Australian and ton, remainder to on For ramping mining be set are been operations was $XX were sold realization

surface permit part approval Turkey plans go Jason, Workman will permit work few into announced West Creek more Republic A last received our we is it to ago, which of on us. the our mining expand reserves first under another foot. about this Virginia. project, in word that for mine, EPA positive consent another marking energy in milestone our Alpha for decree call, received subsidiary had Although obligations fulfilled been is our the our County, name details and the weeks Raleigh

this Alpha's year a the have communities the our we have project local held near see yet this to the early April. company we our are and important, the and firm don't we While benefits was approvals excited serve stockholders very permit date project on meeting are of the a reelected our many books steps, of our both From site. on end at annual I corporate another for of current perspective, about for board. governance stockholders Directors pleased project,

value. with shares company's the an important senior is reserved shareholder the step aligning to proposal long-term Additionally, incentive stockholders performance number of in a which increase of program, management the for overall creation approved

and details annual our results can AK the the found meeting filing. be of in Additional

Jason, half and Before outlook over want briefly touch I focused on the for areas. to XXXX our to summarize of I our the hand second call near term

As to peer percentage and the company of metallurgical year closer moving portfolio. our a know, transformational reducing dramatically us in play last you thermal was

mines Our equipment of CapEx new the expecting maintenance now ones. levels. operational, With low to this and nearing work us, minds behind older XX cost are our of near be are to workforce transition we new that and we're completion from the

establish and indices of mix. Dan into in with baseline shift pricing opportunities As tons our more from any markets where performance means new the his we've is to market settle it's our dynamics and team currently outlined time guidance. attractive. a maximizing This and much closely to away watching in portfolio strong Australian are depressed.

continue for levels seeking and I liquidity higher cash our later prevail down these call, plan in management. pricing overall will extended if any time. We to possible, there period and preservation Apple's opportunities on position remains pay Is liquidity, of to solid. financial Assuming emphasis the strengthen any, explain debt. we'll our be

to our the strategic color look on With Jason forward for to However, against been financial the I executing further pricing of the and remain unfold. on to business improvement company's opportunities I'll the that. as dynamics indices focused continue us turn ones a any Australia season We and call to operations. some functions allow as Atlantic core continued strong market over position. strengthen should we have additional

Jason Whitehead

David morning everyone. and Thanks good

into activities XXXX. mining expand ultimately the first remediation process involvement, fork community, prior to are an our the and will the in half Before Greek tons Walkman said information been the has necessary approvals It receive there Wharton pleased details mine of reclamation provide sustainability state mentioned, efforts. the These mining which complex. awards another and cleanup. reclaimed. it David team output I for working. side, reserve to commence was some four first the permit performance, operator, is largest founded base two has we're on in Virginia long benefits our additional the quarter an permitting won Creek our the steps by about incorporating some could but or foot, from fork XXXX I expected of million Creek with the responsible land want before Turkey to Turkey Republic land, our article surface as EPA a mining not by leaving the operation, the our designated into Creek a Wortman numerous mined history the as two West and to of of to eventually future and had approval mine abandoned It for was existing Collins taxpayers columns The and for the foot three, go for about NPDS permit provide Alpha's energy ultimately

similarities legacy impoundment activities part remediate agreed called suggest, permit, as which columns mining Portman XXX for our eventual we Wartman which Creek or of with slurry name XX,XXX because highwall. as Turkey of our active Ridge. impoundment many of However, acres department Creek, elimination the to its on to long eliminate clip to permitted our mentioned of the the I can the roughly XX The to long parking foot similar has area feet prelaw miles, permit, also includes Ridge operated is drawn

Turkey is and occurred referred that to act, what law, be to for and land will today the visually prior still I'd it yield to new as For the and may amendments a that XXXX and in pre control reclamation aesthetic the land benefits. often the this much added project local has with prior the smacker provided mining includes foot This that to which surface mined term of briefly the mine passage mining standard, been this, mining like to SMACRA Ridge. surface place to refers SMACRA. familiar a number governed. explain And in is over project the those previously operator environmental which the communities. XXXX not been our means, by held of And result, like Part permitted not is strict prior higher of post again have law was expected its a is a Raleigh as long rules appealing by time. County as few surface to another who land

land. in reclaim, and will native land already process aesthetic do in not Turkey do mining we're saw of this we with to excited significant opportunity trees involved about we requirement was a the plant what permit, providing and question this proposed to on revegetate land environmental improve In benefits XXX approximately connection Our the with prelaw acres foot while to another opportunity as work. attaining good

wall to approximately that through removed Additionally, I uplift sediment permitted the pile described Turkey provide of load foot project areas. Granich is retrieving expected be to the just receiving beyond of hobble several pre-law will from local the annualized times X,XXX reclamation aquatic streams area,

who and provide the take this back environmental we requirements economic impacts local of around continued surrounding with seek beyond our in as in pride responsible regulatory areas go create operators addition to will above the our the addition, project in the compliance to communities to opportunities to operations. benefits specifically work, In to great region, and to give mining

example long foot reclamation expect be Turkey We a list at of award work in alpha. to winning another

roof quarter some factors. for isn't relative the expectations. million operation directly will $X in absenteeism. the of guidance. quarter, for for we'll hundred things what doesn't though We in positive important that this and capabilities with our and the fuel an do. higher And miners were despite for over get higher COVID opinion, In that for commentary line the even materials to support faced like and expected the year, tax quarter, provide over mining my This our it's be results related in the per related to paid company some negative recognition of opportunities than employment to the diesel roughly extend addition as well, the is impact pricing on that the West coal sales a costs Virginia, in included we We to isn't project, part which results enough

largely some We of the half the move factors we resolved expect second into persist quarter, the as year. but these of second into to

unexpected. not Although

new offline influenced move expected by remaining minds by that the XX flow the cop months I employees was the mentioned continues for be our we three this Matt planned new Low-Cost factor call, into last we March. into as transition cost expect didn't to where our to second minds. of end those our the complete within the equipment took minds. to quarter. met successfully met. of fully and quarter quarter end we in XX to But from the the Another transition And

the financials. around cost complex minds, Andy details the I'll our continuous sections to our provided on additional for online completed section calls, the of updates transformation week, call of as on ramped some the last has we addition up update I've with as third and on operations come have Matt that Atlanta and band-aid turn monitor branch. With final over new the and to prior Speaking

Andy Eidson

be they'd from that strong Jason. It another in year. last terms quarter quarter of performance generation was improving alpha Dodge materially Thanks for cost fourth

volume, net the in some Now leading well that we'll improved said terms. EBITDA X.X of increased QX, as tons resulted XX% to about million strong fourth of receivables XX% the that then $XX.X We'll significant decrease realizations segment quarter later in improving quarter, three, that the sales over met into increased our to XX, segment realization, in in for million. and a bit, during coal pricing bit talk $XXX revenue as increase evolving little quarter cash X.X the from dig resulting increase million of average substantially volume are in volumes little a with balances. And was met a adjusted non million a to percent fourth stronger customer shipment

our in improvement strong which to quarter per XX% segment increased ton. saw also XX over margins, quarter $XX met We

from increased sales quarter, of the Our much or in $XX of issues our the infrastructure costs in maintenance time. to $XX.X and non-recurring and near declined other and pricing coal due $XX.X of mentioned in roof X quarter came comparison sales to now per the up saw on Jason coal all sales any price taught nearly performance time higher million. $X supplies the to a related $XX.X excellent comp and back $XX of the support fourth steel we're to half And met God's, of outstanding improved development we as with quarter with to cost cost picked dollar compared royalties past of were realizations the XX many segment as sales severance mentioned, in cap QX to items pretty months other commodities cost spot SGNA to has effectively we as the, kind cost taxes first levels of cost dot in roughly over quarter excluding are that complete down by XXXX of Matt up driven substantially rise XX. declining, work, two as to about well along first mining non-cash fuel of million related with quarters diesel in been record-setting our with line first XX million Newmont ex cost quarter coal at another to the Jason so few and

quarter impacted for in began collections result normalize, $XX in increase to swimming, our was Recently, and accounts million sheet in cash ended coming of levels quarter year to quarter have payable. fourth the our Inventory our the with not million activities increase on operating in for $XX of are we offset million basically million unrestricted Now cashews ADL and end. periods. the availability collections, we and aforementioned that's the cash accounts capital over $XX the million in by receivable the million $XXX cash flows. expect liquidity a from where was approximately by which first in seen $XX million for unchanged specifically We remained balance total for $XX working partially $XX

as mentioned a customer However, sales I at in XX% outstanding. day about seen we earlier, increase we terms, when have look

mix, it's also at of had remaining that due terms letters of levels. of extension is impacting just our end negotiations, some to the that's of outstanding AR quarter credit due to but of Facility no of payment and Some general ABL million borrowings. $XXX the in customer

wanted items cash us in Before I to positively that highlight our go will guidance, XXXX. through two impact I related

and estimates based minimum rescue act. next on required is contributions provisions the for one plan our impact pension a five First the And new the years. updated American We've for recent reduction of item reduction $XX through in to this $XX to contributions $XX that of for XXXX. contributions XXXX basically is a overall million $XX year the from and down million million year an the million

for of The discussed the tax course, quite is that carryback a NOL while. we've second item refund

plan, back half in and this track uncertainty marketplace Australian and still given in certain of effects due to COVID of global the continued strangeness are locations expect million this moving year, that on American don't things we on to and $XX Now. according approximately to expectations embassies to coast talk as to I receive North related in the the I I the the refund about the details to the of to remain wanted the confirm it guidance mostly to just want too indices. our again, East to our year. for continue does believe much, touch but parsley important unchanged. the it's

per we to XX% to So additional $XX million in segment a is expect and of be level, million segment and as XX price be the consisting segments two, average one-time tons I'd for said, $XX million to range met tied portion on the within still to mid a million all And non-cash FTNA XX. for $X.X coal of med item at a committed pricing committed dollars guidance, XXXX expected top to On the level, XX with various the indices, range to an ship mid-point and of of XX thermal other an to with based the comp we of one-to-one portion only in of and million Meg the by-product $XX.X tons all price at cost between the expenses. segments and million the $XX mat XX% average half priced $XX $XX.X range thermal process, and the $X.X X,XXX at in fully our near million committed $XXX thermal our of excluding committed to an operations other per $XX locked met forecast time. $XX of a million with XX tons an XX of all regarding and million million segment being at pure XX cost the of in maintenance side, $XX.X incidental pounds ton other price we're $XX and XX is to we'll $XX of be anticipated stock at to CapEx XX%

million to We $XX expect and between million. $XX be

be zero guidance $XX tax interest cash a and cash XX DD, we $XXX and guidances XX our rate have and at million to between expect We X%. million to one to

for I'll some the it to markets. over Horn. Dan coal on So turn commentary

Dan Horn

everyone. Thanks, Andy. morning, And good

and done dynamics the market As primary fourth the shipments overall able effects to indices realizations on coal those how strong priced. were job their go contract David and I'm quarter, the and group experiencing team will the very XXXX, mentioned negative times types to earlier, quarter quarter sales we Australian because our in and XX.X domestic selling are well despite depending positive the they're from first different against distinctly of the our rest sure from companies destinations, on right comments improve were a aware of XXXX, the I the step-down prices commend you're market whole now, for of are the let

mitigating record provide a context for year. of last the ball the circumstances East two Australia coast some Australia and the which recently S I between to a Obviously over the these effect I want CFR uniqueness couple even low China's indices our the the brought can surrounding a greater additional largest pricing between impact $XX expectations spread of the seen much over and on weeks U of example, difference the entire of as of and embassies swing industry. has as the For Australian alpha and ton of a disparity reached throughout challenges. indices, show the had remainder And ripple $XXX. would on approach versus And against China in fob her be the

that than indices, the are receive customer to I thinking into welder rest but a based our of any around of block. realizations bit provide on can much or shipments course, little contract continue get Australian specifics, the I won't often Of our color

sold. priced mix, indices. were contract not our Atlantic was for all obligations. North at the attractive quarter optimize we fulfilling capitalize as on $XX committed to funds much earlier, we first our Dave mentioned on is remain more pricing, looking realizations which export always, of ways It as Therefore, fact, to In to our osculating were currently

capacity case with And will world U in demand were of steel of to over the cap which the of few that China mindful Mexico. been Some are we've Europe, year. advantage. XX% American pricing, steel advantage a Certain indices is enhance bill countries XXXX with tight negotiated in approaching passed, not the the taken next but roughly And expect numbers, may the challenges. and that look over China. line short be growth also X% year, with I'm a growing with in utilization the this the North for steel sorry, see shot, and confidence XX.X to sales of from year, also supply respectively. stealing is the growth at continues year world should further impacted side their as steel Atlantic S projects, opportunity that high into job market And were remains Australian growth taken way is the which world experiencing also remains stimulus nearly outlook of code, with is when solid grades mill someone's crude significant the any we've XX.X% which year sign unsurprisingly which around good percent domestic destinations year, basin activity the more the statistics period in export X.X% be and primary and production XXXX for on we've make also office but run with X.X% than you this least in positive dangerously XX.X% association one in locations at showing economic possible steel growth steel upward in March situations global to global trend us

as market now. the There's the We are commanding tonnages China additional for of with attachment lack evolve opportunities well. about dynamics most certainly to Australia tensions the cautiously no optimistic right

of continue our importance perspective, was necessary, the coal customer supplier capabilities, our in diversified these in to some of to enjoy to what sales all the States, have exactly which our from in is proceeds I will we and when and of which the largest as do. metals videos However, kinds optionality adjust proud bases and qualities market the the highlight and in additional most diversity United ability we

I prepared the for think that operator. that wraps quarter remarks up our

the ready we're questions. up to I open line for think

Operator

Okay.

Benchmark . will from question to two, ahead. from Then Company. now answer We go [Operator session begin Please comes our any questions Instructions] ask Nathan the question first and Martin the

Nathan Martin

little the good just but bit you comments, on quarter. some gave into guys. side morning Congrats export Dan, first I the a dig us great wanted Hey, to more. just

read customers from in wave cuts now. to their your just India, market what customers of there? think of update us major obviously production you're I one shortage a I give potential that guys with you from mills announced and that their right disruption related the export oxygen major one steel the think an Can hearing I due of pandemic. bad pretty COVID your dealing

just any then thoughts there, So ?

Dan Horn

anything We We morning the it specific haven't yet. the did a ports. We're watching touch to with moment. this of we're at our Nothing report over majeure staying force about I there. in customers heard something closely. see at one

Nathan Martin

those and Got Dan. The into then to big was feet some over all give CFR, park and mentioned higher China, that in know, you imports it. moved of if could GFR you basin Australian assuming $XX net that you've and China Atlantic know, the And demand there much morning, us market, guys times another are maybe ship then an coal could coal this shift does you that you backs. jump coal how from we Thanks this be idea weekend market? of ban placed China to and extent year, in if that China continue you on India,

Dan Horn

it's not the would indices. customers other basin we Yeah, those There we what index sell that we prices I Thomas indexed are that to anywhere would India is the that can, think Nate, the only to it's see also intend can, I we to Atlantic say index. into well, anywhere ship in we markets. are Aussie say and I Aussie

this with so are to our China. three mind vessels off tenders roll such those times be, and So year. marked We far times China as will in contracts those ship and

but many the don't have in future. I know, number, a number to near think specific give a you the you imagine shipping, you in that I can more, future, I know, So the, in

Nathan Martin

Okay.

So that? good you since have guys then available for tons as if point could then advantage take contract some a your while, you some, do of

Dan Horn

Yes.

at said, times pretty can I these the some days. Well, to we a We've optionality some low-vol we As we've and of all react different quickly that new book operation maintain onto our got that's sought our after move pretty lot producing. coming in calls. additional got from coupler minds

So we have you know, we have some optionality we can play with.

Nathan Martin

maybe That's transportation great. know you of at you And things. kind how on God, has? then I services look maybe listening the the comment rails quite been know, been and as as can good side that, rates that, it's your of rail to I not it's, on and would school and helps your that competitive. still pricing keep ultimate people based destination your service real, export poke is

Dan Horn

CMC it's of they'd large, seeing like hitting service obviously we've shipments, at I'd delays. not our the I the is let's have a plants export, that. customers They're times. challenging challenges services to service Coke getting and by to they're say, improvement Yeah, we're their been hard, or The our see And are real some domestic perhaps running but of the I cold some but times domestic I rail all had see. and will say

David Stetson

service bring that disruptions the I more with, over met seen know And with feeling made increase in stats. perspective. you've crews to for David of is we've and the cautiously to And the more effort ninth. I'm fork allowing a and last CSX that the optimistic be on staffing CSX this in, a huge has in, both going service past are some in from their, and Nate, this, corrected.

past. both in direction. essence the certainly optimistic that We're, are, it challenging has cautious, been So so in the well, CSX right much moving are we're

Nathan Martin

at Congratulations. That's things, great. surprised given frack. then for Great and the cost to in made are how guys move just full the fantastic cause another of bucks year was result came I the you other at side little hear in thermal the quarter a low over, David guidance. XX finally that

of that number? lower there in quarter that those is four that to or they towards going one anything, a So that kind costs time is their costs throw and down did time year that try

Andy Eidson

I We'd had the Nate, but point, itself the, geology the performance over on is. kind anything it a we're again, it the the operations that just Andy. Hey, all has hold throughout deliver with good guidance that quarter. it's see and over replicate underground where depends maintaining it there just, you continued time things I of one don't since mean, this we'll the just love on and think team as and rest we again. to of know, across where But excellent just to year, just gardens board was

Nathan Martin

take That's your you for time and and guys all perfect. Thank that information care.

Operator

Then Pipes Please next Again, from Riley [Operator one, Lucas the question from comes Instructions] the securities. go ahead.

Lucas Pipes

And think time. the on XX XX at at per first guidance per morning, side year Hey, medical then XX% good to I when about sold hone for and I everyone. the $XX well. of Good pricing job you kind QX, water. wanted as on the ton, in your

of the here. helpful bridge should QX what but Thank think So super a higher of doing? about the can you committed help us kind of kind to be kind between we QX, spot Where really market QX is tons in you. would plus

Andy Eidson

terms In of, yeah.

question I things because going Dan we're to far disconnect it's, as of different usual with next answer As mentioned. don't as you lot between of compared the customer QX. on indices or to markets tough analysis to trying the asked want that far quarters, now, breach multivariate dealing how attempt the the probably such that's right kind as we're as about because got as We've going on couple over of participating thinking a the mix as that a of isn't really mix much even regional to that out. to in do. QX Well,

them how kind can moved. those, markets to you take the thoughts So of and apply those have

going the a and one unfortunately coast going direction index know, the, East all the You direction. better

it. maybe not you know, again, halfway to when You similar QX to back but that don't through too to want gets a I even know, early the we're average guide outcome, really

stop visibility have I'll, I something don't yet. non-answer I'll stop give a just, rambling So we I want ton even you of my to there. just that just and, don't and into

Lucas Pipes

it I'll, assessment? No, are we Okay. the that. call percent one for lower the Australian appreciate East on versus that coast medical this model XX% us I follow of off ask assessments the side. up unpriced What on

Andy Eidson

XX across and well, butter every like in know apply. of front would, I mean, put to don't just I met but PLV don't that know, me it afraid priced of And and would we've that like, historically seen at our we peanut number of are priced have committed times committed that let have between this. percentage it index. does been of XX% Ozzy me breakdown, I export probably apply off I the whether committed. our, I'm moment, or guess call can it you the spread unpriced, it's that that

you that going that, when those of percent of be it probably So POV. tied indexes to that's know, call future is to in ish the XX Right.

Lucas Pipes

then And will predominantly volume it. Got high index. a should XX%, for high the use remaining be we

Andy Eidson

know, being it the And, you into, as as it but we fall think issue, things all the then you being there. a all will things off. things play If was mean, and probably of right place being things discussed. now, here I are again, I forced out. shifting or moving the around do can is how stand But things that's run mentioned trouble they the And with unpriced equal, are, stuff committed. different know, Missouri ton they you cargoes that's those priced know, again, equal, Yeah. and being

Lucas Pipes

job. cost Thank much November, then it. to maintain was to, the in pressures I back in you believe helpful. all think you side. I terrific positive good and prices And that. out much call Through issued job That's you. diesel world And initially way, inflationary in obviously much, higher this release, changed when you so guidance Thank Got now And on QX commodity mentioned the around. much, has through, a it's a followup the may. for very Good, in but very

to risk you points. labor cost where about side material extent pressure what appreciate your with from see when the pressure fill thoughts raw the think So upside today It's we'd position the expectations? you your cost

Andy Eidson

think raw increases first just, materials costs. mean, I salvo I of in seen we're we've the

there's more I think no to come. doubt there's

done pressures I we that. the we'll we nice budget increases really deal we do into, guides to begin materials job as I with. some think, is did and raw I what into is. presented what it move, have And, inflationary think mean, guys a and with

So like expected. penny some But out mean minimal that? playing anything penny thus found as as the have Jason, than gods diesel mostly it's that's to hitting on far of we've that's we, really probably certain just I which but any, items we for mass impact every I you'd in is was a steel and add probably on most, sectors Andy and something on right, expected I think fuel think or half the far critical probably is ton in up the that's if it. across to a point a country, for specifics, side do are a exposure like labor other a industry I most pressures, as seeing potential the just the that know, of of, you No, think, you all seen things but the that's offset actually surcharges those is Smaller, dollar labor earlier order that. smaller comparison? like of

Lucas Pipes

best of very That's the I Continue all helpful. right. details. appreciate really luck. All

Andy Eidson

to or want XX errata. comments And In to to Thanks, XX, a rather up, CapEx turn one a is misspoke of our my hour, correction Lucas. I actually it. make I it I The before range I appreciate on to guidance. than hundred. XX over David wrap didn't

lower little mid-points so I stated So bit than a David. initially

David Stetson

I everyone's jumping want, and alpha everybody we you. Thank thanks. appreciate wish we today. everybody a and appreciate week. wonderful day call support the a wonderful Well, We on of

Operator

today's concluded. attending for you conference now is presentation. The Thank

disconnect. now may You

Alpha Metallurgical Resources (AMR) 10 May 212021 Q1 Earnings call transcript