AMR - Earnings call transcript Q2 2022 | Alpha Metallurgical Resources, Inc.

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Operator

Greetings, and welcome to the Alpha Metallurgical Resources Second Quarter 2022 Results Conference Call. [Operator Instructions] Please note this conference is being recorded. I will now turn the conference over to your host, Emily O'Quinn, Senior Vice President of Corporate Communications.

You may begin.

Emily O'Quinn

Thank you, Rob, and good morning, everyone.

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

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

David Stetson

everyone, for Good joined Emily. years joining the Alpha thank I six over morning, ago, Thanks, This team. us. and you

lastly, our very people rewarded. invest in while that years to there. our obstacles years, of debt this navigating about We accomplishments grow experienced would We knew loyalty of questioning will always about those have proud has you been Alpha years loyal, opportunity the we that heavy team given it goals was more base team, shareholder in be as CEO ago certainly come that of the stronger And as out our ever today team we I difficult. coming be hurdles. our do of assets before humbled our ordeals. have people had been as confident whether many and share We share our the more survive and during those to had on During net occasions, six Alpha my markets achieve to as tenure the essential by the And part and them. transparent of a and

actions Over the goals. to call past share quarters, take in loan balance our we've quarter clearly early earnings To paying and elimination. is the to with term let debt the those off fully in laid order that the June, is end, first This me the in we needed plans news our great second remaining completing out long-term accomplish

been you a us. top for know, has deleveraging priority As

Just debt year our a a to Andy by and over ago, out possibly laid plan XXXX. reduce eliminate

in decision and efficient transportation past bringing preparation nearly is our we three this of has frame balance experienced cycles executive start better to their it and management years for I taken as sheet, marks this and entire the of new EBITDA. in enabled only markets user-focused the time ahead our realized proud be to the of the to on back-to-back in chapter of adjusted transformed this a over short upgrades that the quarter, through with along flexible, of leadership million. and $XXX year, for record record us second Strategic performance sheet, as organization financial team, allowed the of balance more EBITDA well as seeing second as decisions to post new actions of tactical Jason The not with of aspects Andy the to expectations. company quarter, inevitable As infrastructure is of team be completion. believe this and our discipline our to approach to all is Couldn’t but able anyone's It more our the well withstand reflected a generating resilient strong mines well industry.

low both these over strands years. past short- been have our export of long-term shareholders Our in and

royalty. $XXX to Our share for that our increase million our to Board's program repurchase remain appreciation decision reflected

the and you with our that of progress for our cost of about complement markets' roughly future significant I to while a conversation sustainability and eliminate Production spent In not XX% and only of maintaining those but dedication with our shares provide vast shares Safe to a structure. base made of our call, competitive to our shares, spoke when debt, the previous we team we plan back million and issued began. our in have resource to began Alpha. Dan's marketing the Jason's outstanding long-term growth representing us $XXX with plan vision acquire We program with tasked would diverse demand approximately team aligning X.X million our buying earnings

well and to the In road execute efforts successful rate. base staffed Alpha customer focused from on that Dan allows live land. to of bridge critical of next our areas fully a years be both needs XX safety what environmental now. team running But execute in goals, vision to and company need a be current fully order always, begun the administratively. already not be Jason will map efforts legal, the with on stewardship Behind-the-scenes chapter long, our and to maintaining the and framework strategic our resources, to they've only support on and like we company expect Roger's we what generated As production to while stay these human Alpha

these leads the general networks. all counsel, to addition In support Roger

believe it organization deep goals. is Alpha how history. the the planning that succession and company the should person. ensure And well-run have to so than recent in leverage It term I single any the with equipped needed a the achieved within continually future. the the of much of are exactly is to in knowledge manage has leadership we all, step expertise up We trans near and for talent as advance cultivating engaged needs to been After team this company in larger company's the a

the robust fortunate disruption. and quarter I've reporting courageous Instead make the announcement in years, difficult best past could to most be we as by now Alpha lead thinking decision-making another informed that industry, easily build an management with and bright return to some we record value lead a some that I marketing execution, these I've Over navigated for team come. with is personal been believe financial, are team the surrounded can been a to of and operation hurdles company the and confidence especially strong a that debt-free my about that team time, to decades experienced program. knowing important Alpha decision future capital for retirement has flawless study.

to board join a year as and beginning Xst, XXXX. directors as right decided on I've that time. and board that all CEO unanimously to later to of time at the So COW met The serve the last this formally director January of week Andy hand Andy. appointed the He will is

management out this take December chairman transition my cycle. prepare that role for I for XX, and industry taking directors on last Alpha the He over of we of into experienced, With I for board for now of serve to next over to of broader about higher through extremely and level some board, me transition. as Over step the have time, at the dedicated role over a the and As to the and which the and the I the XXXX, to confidence to Alpha. continuing turn I seamless been closely will plan will he of responsibility additional the vision in well tenure vision share cover to his a he company. the years, highly current year. Andy on call support CEO the details the will to away role going convey transition and shares solidify working our executive are. allows steps taken as thank that, CEO. few leader shareholders to want qualified. Andy I know increasingly intelligent, unwavering COE end my Andy step has of my for as have his complete is

Andy Eidson

Thanks, everyone. David, and morning good

that he’s Before serious turn the I moment seize seat want attest the impact can credit, I've failed has role and as to he will the we in achieved I to acknowledge the CEO. and we played. front-row started, Alpha’s work had a never to never take critical created a win ways. And setbacks David done greater the to face opportunity challenges a to I positive give to get even team and incredible to

on be what enough thank him he done. for this we and forever David As cannot has company,

act legacy our due is liabilities, foundation that our three efforts today's the This to window at that a what and mentioned, are created be he resilience, reducing accomplished After future. will exciting into load, to discipline, the entering successful David an weight I company nothing over like. foundation. and us honor without vision of short incredible, that of believe and into thing world-class next will more look this team but strategic propel that What things: phase paying significantly is announcements will has Alpha's two the team this and are vision an different unparalleled past new continue Alpha As point us even that debt the is previous years the brought debt It and the our same the the leadership that of will phase. off new members. primarily

tax board bringing and of has and President take has is the the new In great excel since after role, of named Todd CEO to I'm X. served departments in Vice at forward Executive and have company's tomorrow. Chief and him of over in earnings process today, Controller I Munsey a XXXX pleased into next the high-level and The call of the August to accounting addition Todd Officer, and to getting to PricewaterhouseCoopers. that the of Financial report prior Don possibility quarter. effective to as look start number duties to as we CFO the that selected board a transition, this roles our we role have SVT announced confidence

best part and Operating and year-end. to Alpha's all highlight super in to as In the addition him appointed this serve one the XXXX. as integral this of my January board We is. leadership effective X, will role. what Additionally at that opinion, has The excited more current position I he's industry, change an in Officer, that broader Jason on happen to organization for know Whitehead I'm take very President, Chief his operator to importantly, Jason want

the I strength David's of Alpha will board. turn Before retain team. executive I the of comments chairman to of echo guidance results, benefit want this quarter's the the about David's to width and the the of

in truly Jason, are be to best of to to opportunity company, lucky phenomenal humbled be is I on have and the the this team. very by and think part them Roger team. best-in-class, and lead this this couldn't industry, Alpha a I Dan the I'm prouder

look we in three that's record a I'm pleased that quarters to now at our achieved back-to-back back-to-back-to-back quarter row. to say in yet quarters, me, another -- Turning second results. excuse

million. million higher than $XXX in Our quarter's $XXX QX adjusted EBITDA XX% was adjusted in EBITDA first of

million X.X our quarter with sold we back Met tons volumes, Segment. million tons in coming of from the terms In second X.X

release, the in be we As tonnage created mentioned the crossover sold some press thermal market. volatility has into to opportunities thermal met for market

and have slightly result. for byproduct the advantage of piece our We increased shipment this the Met taken thermal opportunity Segment a as of tons

realization while indices Realizations weighted production $XXX.XX export expected, prior whole in for for of average quarter's as on per mechanisms were the priced pure continued comparison the per over in that of realized $XXX All the priced next an the continued the from $XXX off to couple to with in increase QX, Total Other compared on the $XXX to Australian quarter, other up average their tonnage second for of Export of lead over ton ton. ton. up pricing per and Atlantic QX downward met QX. As pressure in earlier expect indices ton business to realizations that improve against of quarter a tons $XXX see called for in $XX.XX category quarter-over-quarter flowing on per the indices with an our $XX.XX realized realizations export year, we XX% our in realized through quarter having the realizations our $XXX.XX quarters. highs coal

However, the norms. still highs, even historic current strong significant with very are relative drop to pricing levels record from recent

quarter the elevated reflect half this first year. of from second environment Our pricing the results

the category costs and increased quarter $XXX.XX second service cost royalties levels in $XXX.XX. higher. the compared items as to to higher and noncash of Other coal taxes against As flat just QX under prior in nonrecurring QX. excluding million $XX the second million in of sales Cost of continue a first from result, the $XX Met SG&A, in All at period quarter. increased drive Segment sales to quarter comp remained $XX.X up to in

range This incentive of of a from our $XX compensation As is a million in against to result due a $XX.X from prior prior up budgeted are the $XX was $XX range to million million. metrics, SG&A quarter. million. outperformance increased to increasing million, of million guidance CapEx $XX get we up $XX.X to

out quarter amount of is under also repurchases cash was $XXX quarter-over-quarter with million sheet QX unrestricted We to a which in Total provided operating net activities during This term $XX.X $XXX.X QX of $XXX.X the Cash closed share Going balance our million million in million unused payment, and increased by million our and again flows. and increased level final remaining ABL. quarter. and availability of $XXX the liquidity end June. $XX to in million cash loan eliminated in second of $XXX.X second quarter. from million balance the to the on our

and additional XX% We're no the at average outstanding, business reduction XX, with borrowings of Met a price committed our of at ABL QX an in price midpoint tonnage in million significant our LCs of price our making committed Segment $XXX standing. net June $XX of credit of XXXX had from As letters under of progress for $XXX.XX. the million of in guidance

we're and other allocation efficiency To average resources. new of are net range for But ensure XXXX team M&A XX% concluded and against evaluated that midpoint we Another share that the fully guidance stakeholders average priced $XX.XX. back our our increased both careful price and program. space. our transactions $XX.XX. buying we've resources tonnage action has focused capital for continue last approach an our committed the fully at our the shares Thermal our strategy Since many purchasing value opportunistic best own approximate but byproduct of of development is of best of maximizes all in on And our at potential allows committed a end, call, yet even assets consideration, programmatic with management use portion 'XX course dollar to in the making not to using Segment committed Florida is this in of be Met categories repurchase for priced. progress and after been price our being the of the we our earnings at significant in will we've our to spent. made an

for authorization the reminder, a the $XXX is As in board million program.

common average share. we spent $XXX of or at stock roughly As of of of a total approximately half of $XXX Xth, August a X.X require authorization the volume-weighted million, to nearly price million shares per Alpha's

outstanding, exercises. have on Jason With we today, of As shares our operational will turn the I including impact approximately the XXX,XXX of XX.XX over approximately that, million not call to details for performance. some

Jason Whitehead

everyone. teams I'll Thanks, morning and another quarter. our Andy, start by outstanding on good congratulating

special our Safe What highlight to on in Alum also our the to of of terms our Mine will addition Marfork Production, that In the preparation positive quarter into ball the was everyday focus projects. want is several advancing feed Glen I plant. on

Alum keep and the obstacles took Glen Mine against mine's of to that I'm Our pleased teams this first chain to hard on have portfolio, worked incredibly plant a we in we development track, and supply progress excited year. last report this number various on to other upgrades announced making call We're our continue of mine into CapEx bring the late and projects June. and cut its

and Additionally, transportation we property dock purchase some coals. of future of the the for the West closed this on County, June. in believe at is we Crown optionality Canola facility a will Virginia, Hill river logistics of and barge This provide loading our end

pricing met Thermal hierarchy. markets highest higher an to the a jumped invasion with span especially on dices thermal effect its quality We Russian geopolitical historically and energy the what recent months. coal and been This including volatility coals, continue inverting the landscape. due in global even than volatile predictable factors, several has coal see to European Ukraine had the the in is coal of having have

some a are high-volatile regard. As way Alpha markets of has opportunities taken coals result, metallurgical their in and thermal coal this finding into advantage

will surface in We fourth Similar producing while thermal quarter our the cleaning Black have sheet. we resume up ARO we're QX on markets, QX on will continue and year. to for million balance mine. and the will coal seating through surface where of the this, the near and have for These produce republic both High-Vol the X.X place legacy final deep reclamation two that production thermal production thermal market increased also of the B we Castle commitments servicing of The year permits on permits mind position to and this mine, radically incremental our grading life on next high tons our XXXX permits the nearly take Slabcamp end mine. for changing in economics BTU thermal at reserve

developed. been being this have Formerly year, are tons resource plans idle planned and to mine identified more

expected quarter now first Our last year. next thermal mine is operate the to pure-play into of

to tons million X.X we've slightly of tons a on tons. by XXX,XXX million XXX,XXX a X for guidance previous the the our total As moved tons to million XX.X range XXXX. guidance for million of We from end Met either tons of our XX.X product result, buy to range. to tons increased guidance X.X incidental a This between thermal the range to increases shipment new also million tons Segment

up today. compliance, financial again record able collective I that to I on highlight the safety, efficient back-to-back-to-back of want our we quarters. their remarks, wrap and have wouldn't and results focus to my post fueled Alpha's we like be daily production, reliable Before Without environmental efforts announced have employees

production the employees annualized XXXX important incentivize in $XXX invest we've and to to over have now I company's million we financial hand and the employees our form goals. wage and additional employer is of the safety, bonuses. sales distinction by success, of and with strive offerings, when the the an call some our efforts. of We in are Since success basis, maintain in Our our that workforce critically on toward performance Dan benefits and our an on the will and our to for Alpha employees additional strong beginning to invested therefore, information possible. increases, continually our we markets choice, believe sharing expanded continued incentive environmental, and

Daniel Horn

Thanks, good Jason, morning and everyone.

coal the new in the weakening of pool. pricing movement a trade resulting concerns, Ukraine, inefficiencies inflation and a as war regularities mentioned, have the to from influenced globe. recession across global invasion the and and peers pricing created all typical Russian and shift Russia of roll the response variety Jason well flows markets in the as all balance Greater to As We're factors. continue ongoing economies, between hierarchy

down in regarding steel premium the April at a has days. with $XXX to demand Industrial quarter. historical meaningful On ones markets of they earlier $XXX per ton PLV per Alpha the After concerning significantly averages, Xst to where represent roughly from drop still things, second they 'XX. retreating global dropped side quarter, end logo continue highs $XXX their drop are indices recent caused metric indices ton early. further relative on in ton metallurgical metric at the levels to to considered of strong soften these record metric per started to index the the from

ton East the at end East June at around per A $XXX the production. the being down steel East declined per $XXX down from start the and metric quarter B economic the per We of $XXX to metric metric $XXX quarter ton of ton $XXX $XXX steel over is the index now metric start of from one those high-vol metric industry proved metric $XXX came Coast comparison, ton. closed down world order ton down of metric now roughly a to a index Coast course $XXX the to per ton to to of per per to per understand several the quarter to second high-vol As Coast declined steel Correspondingly, ton. per the low-vol index around health U.S. and now the $XXX.XX with metric indicators at is quarter associations ton. all

about about with decline markets, European in a their year-ago the Before compared represented analysis key production steel XXXX represented of we to crude the to XXXX June XX% go regions office period, against to compared is decline decreased levels. Among posting reports, humongocrude year-ago all steel June levels. X% production as

about down rate. compared South American that American North X% decreased production June XXXX, while as here, by production X.X% against into year to was

coals over which challenging Moving to energy an whole pre-pandemic thermal certain in Europe, premium in to price caused coals created has the market. thermal cooking and higher command words market a further some crisis markets, The norms.

this of This ton is XX. at where pronounced, quarter market, next rose metric on close come metric seaborne as $XXX most quarter June the in around down second back $XXX per on started $XXX API hover the at to metric the per X Looking has to April tons. per Xst ton

production, the central down in products. capitalize from prices price short XX,XXX point, comparison incremental markets out receiving And to has the into interest in coal advantage tons. sell are some we continue CSX feet Jason on current environment. to slowing a around consistent oil As we been $XXX steel Despite opportunities as take to on tonnage per said, of our

about negotiations calendar our season together is While levels commitments. net the of this I'm finish the quite recent off strong from logical to averages. the great to year. coal pricing beginning the all-time has year, relative for optimistic significantly well start XXXX and earlier saw upcoming putting we Alpha strong a are get highs we coming historic the declined domestic to still positioned XXXX process

end we are now the improved We I the back a want supply. section and performance the our their service more Dave. operating the within generally Beginning practices challenges our note transportation to Q&A the moving into partners, Before labor rail solved second and a a overnight, to of resulted was lumpy year we reliable of as that at our effort in see improvement for call create the address to to pre-pandemic partners our times grateful understand establish the to the cooperations work over Alpha certain regarding providers. of I new call, service rail be on are toward frame. move continues turn issues from quarter. positive railroads levels the cannot will and fully of labor but complex benchmark significantly

David Stetson

service And that on and Southern rail the call thank Norfolk we to operator, I the CSX ready partnerships. quarters. questions. want those Dan's To work for their past improve comment both now open We to to with appreciate for over follow are

Operator

Thank Securities. time, Pipes Instructions] from with Please Lucas comes B. be a proceed you. first session. At Our your with conducting question-and-answer this we'll [Operator question Riley question.

Lucas Pipes

Good quarter, a Todd, Thank free. everyone being your David, on and Jason retirement, strong morning you on debt and congratulations I to also you promotion. operator. on and much, want well-deserved congratulate very Andy, congratulations your

a want the So lot's versus really this meta. to is and turn I market terrific to and here, see. going thermal really the well seen my to on first question we've inversion

taking where appreciate limits year. are I maybe when you of the You're your thoughts. What coal a more this you how next have switching advantage head, up? year, you. So it and frame would maybe this the into to Thank go market? could that thermal X-year tons

David Stetson

months not coal. haven't to as by of Yes, lately. Hi they the it is affect along. these capitals a that answer, a But constraints Alpha’s looking FS, come been coal the There's of opportunities particularly several way, sizing that's in the where of are thermal into lot we're Lucas. at we're And in probably but -- for read things the Thanks in market do doing of question all that question. of for selling just utilities, used years. the some a some several here, lot already, matter the Europe you've go could some resyncing what the I'm we've

technical as to us, move that's that that DTA be should but we issues started -- the handy expect by additional what some us, logistic overcome strong. to well I as use have can again, of market -- the DTA there some for platform thermal for met over. are as we comes still So start some I'll saying and to a issues in

We in have and a customers they are still group great of the market.

to including interest. continue discussions. still interest talk still get remain to we Asia, China, We from them have We We globally.

see can we you're your So number, suppose going answers opportunities market add into a like. thousand of I the every does there's several looking the some But hundred plenty if that thermal market. months for the something can easily out thermal more question. Hopefully, thermal forward shift have tons to we we coming still of coal ton but in limitations. if the Not market there,

Lucas Pipes

was that number? an annual on that And basis

David Stetson

I year tons we're it. don't thermal. X already of mean, roughly I a doing know about million

So we would adjacent from. we'd increases, But honestly be add adding that. number some that production to I don't to that with something have

Lucas Pipes

Okay. And you a market you for in the this season versus that's sales bit Dan, XXXX. mentioned coal Metco approaching contract bit -- export a Obviously, elaborate how for has here think I helpful. met softened on you're environment? internationally. Can domestic

a take to the markets. have allow you more sheet in may balance debt-free international that You risk

So a few think would deviation and placement sense could any as might cross currency there appreciate thoughts your if how make from… you be

David Stetson

across budget the portfolio of Dan four this XXXX, we'll comment process I'll that board and can up our David. clean a where our we're is look Lucas, it make of in is. meets. But right for middle the

a board, I'm like right we've look We've at -- that strong are that the for exploring existing got great Alpha, you domestic, have As approach -- to still reasons, international. in going Asia. relationships our Dan at the with and historically internationally. This have us, developed, already we've will also And We around of that mentioned, with if we we've then speaking domestically been also customers domestically, be lot we're XX% sweet the But across both detail always. new historically markets do some call spot. on a of XX% products, going interest fundamental internationally. that's we quality, not to we're great a and like But season again, diversity, public but both great into we our on. go lot

we believe the be profile. as like. see We we made decision markets. see that what will will the our that fit enter domestic So within We we pricing

advantage We And growing every well. as obviously take international will we It's it. our quarter. have side of then

be So November you in clean call, the we'll our come that comments. net to try want updated on that information coming to up some have was the a Dan, in certainly, And my probably do of we decision side. will a months. how out

Daniel Horn

issue quick up, as mentioned it I our market than well, I when last we ago take the started yes, I some market previous we calls past. contracts think down. guess you -- had in slowing and year a that the on David. companies, long-term other what that more export about said signed moving will companies a to year, the I other

a in no on is the doesn't contracts. the there's if new business of So because necessarily mean part previous low bigger shipping lot deals always just a you're market

our previous million tons shipped there. in the you'll numbers see So We X quarter.

part on earlier. for down, side, take the thermal the little then want volumes regard So mentioned goodness looking due volume remain until Alpha of And exception opportunities absolutely the They're for but we're next to -- has a any with don't met, as still weeks. Certainly, to But the on domestic at come strong. industry I the we're least that. we're not working few I sakes. to even the the RFPs

in on So comment it's we to see there. expect detail to any what really too early

Lucas Pipes

frame you your still improvement, XX% how or I that's at final David, Could color. on today funnel? the the that very than I'll versus if is room service today perspective. all? hear. appreciate an rail you for better one for one Thank side the you it at the much for Is up and is ask improvement to And for great now. mentioned there

David Stetson

I side. letters. We They are before people this may Earlier under logistics were conversations. experiencing setting. were have Surface partners prefer more industry. partners lot a the a said. our company reemphasize what our experiencing But having Transportation You on came a the public brought just a the in simply they our of versus writing strengthening. in setting private have we as were We labor issues, just can private Board, same with conversations to as road I year,

we so appreciate day. to ability improvement ramp logistics with better doing We side. certainly Southern. appreciate and closer try they've you're significant And on every Norfolk We've that, both what their CSX Dan, the to They're on up. seen done. But

So any insight have for... might you

Daniel Horn

the at new changes team, that shout going readouts I'm well. and we the Jason's for case reacting team Well, logistics and changing give I think a real, react people way things I'll just preplant, of the to changes. and of one railroad there saw shout-out add we the team, several the as changes in quickly coming do my these to out the to with when were to some the

quarter the a of world it we is So we part here means stepping to and to things and due do respond bit more up we different or last in is the transportation -- successful Sunday had in I too. whatever, we're a in we're think on change side, the train to the the a of business. everyone realizing the on that That reason

Lucas Pipes

good Gentlemen, of continued and again That's very hear. congratulations luck. to best

David Stetson

Lucas. Thanks,

Operator

The Benchmark next your from Nathan Our Please proceed with question question. Company. Martin with is

Nathan Martin

appreciate I comments, make related comments this morning good I all the for team. to I'll congrats Jason. made your the Hi, increased I'll guidance start by congrats extending through year. sure Maybe being what's results, the and thermal Lucas' all on the business caught just sounded But and Slabcamp the quarter. want everything. It on behind with to transitions guys, first I like go the there was

X.X was us Republic give Mine, it Met back to correctly, can are bringing going And I thermal I the mentioned you still also maybe all rundown. the of segment? hear all Surface was. piece you where then it million more at think tons did tons flowing through? I that think If Is that the be with is those that Segment? other one Or the

Jason Whitehead

both. to answer question latter the think I your is probably

more times with a resources are as about talking been economic. Slabcamp. been The It's year. for considered So -- start much me were we've it bonds that But the market depleting. been once now let shift,

where small to on mine them is. sections So cost therefore, we're market to a mine to and at able good bolt the relatively the

correct. hear did you So me

maybe to But life. and We the Slabcamp mostly quarter. operate end very the expect mine first of mining the again, through we're into

subject move are accordingly. adjust we're and things change, but to ready to So

Other but segment. sorry, would I'm but year, inactive in hit incidental start be permits, be markets. into me All Met will Slabcamp are, this So -- Met Segment, the then be I all of would questions? million X.X to thermal they thermal be of quarter Does sold they'd the available it's tons currently answer but they that tons. the upwards did to mine your surface permits that and Segment, And right would in the that the hear fourth in you the plan these republic And we guess,

Nathan Martin

caught with Jason, the I think correctly that's mention I no, Yes, Black other one if you maybe perfect. did Castle?

Jason Whitehead

be most through that the continue and we is will but Castle Segment I the fuzzy, I would And quarter. it's bucket. in large of my Yes. the smaller XXX,XXX we that thought in the be thermal maybe but Met volumes. not been the year but mentioned estimate other incidental And somewhere Black but that XX,XXX that would would second from earnings memory between tons, call, have last amounts releasing on in

Nathan Martin

other That's very the sticking a for you. Got thermal side. then with on cost helpful, it. second Thank And maybe Jason.

$XX. second getting cost mine foresee $XX $XX spoke if you Is guys cost below You the that increasing half has in Obviously, What end life do Slabcamp half that's of that just the to to guidance ton. there, case? you of done maintained the about? extremely first well of the kind the a

Jason Whitehead

Yes.

work, mine expect think has you Andy add. spread be There'll And being closeup recovery there. nailed an see there. tons, of I and type bit it let I'll he to anything if a and type fewer probably to comment increase work across

Andy Eidson

that's it. No nailed it, Jason,

Nathan Martin

all Great. on then cash shifting high-level the side. Appreciate a those question guys. maybe to return And just

raised guys regular morning. your slightly dividend this You

nearly looks of buybacks preference completing been has it $XXX clear Your so share program, that like. million half far,

M&A, in might minimum you. things pointed that like Thank be out to then cash whether of all are that any keep? returns cash, you've priorities would Now shareholder or levels uses business about with debt, thinking like that? your cash you liquidity you How for paid earlier, investing other what you are off the going forward? essentially those the organically balancing guys And

David Stetson

Yes. a Nate, is this question. David. broad That's

down as let drill to. high and can want So you much start as me level we

calls, stated our off. on priority was previous As we paying debt earnings our

we that checked box. So

twofold: was for other loyalty one, our their these priority and Our to balances shareholders years. past over to increase other was the cash reward

quarter, So our than last we to earlier it program we earnings increased million. commenced $XXX the

spent we've that have the has spent, been of to XX% heard as market. earlier, approximately We

perspective, our from cash investment. forward. So We it's we're Therefore, increase good as going We'll are undervalued. program. believe to shares our continue a for move we repurchase balances our continue our our place to share

we battled to know opportunities our mentioned, in M&A in tone but Abel. the Andy some side As

the we years, project. through XX quarter, show the went next capital mine in you base. the purpose We constantly a as evaluating we large XX-year -- know, But have recall bringing what We're not mining simply you base, we need production. we have new a large that we in and any So that currently reserve previous of on plan diverse also do play. that reserve over

On some mines opportunities the make constantly hand, to with we're bolt mines. other increases and/or efficient either evaluating on incremental production existing and more replace

to strong continue repurchase. I'll We're provide our So build deviating future commentary. from to my you to where We're our share going our perspective, where continue balances return is let do share program that and via strategy. to we're is, a other not from cash additional any Andy, going

Andy Eidson

Yes.

it hits that think I David. all,

like The do Nathan million in we that with was not I for that minimum liquidity that's while really cash a levels. hard and other broadly rule, to liquidity target. you of think or not And range to at $XXX there's question, speaking, $XXX minimum and much hit to, us somewhere a total million side look fast

including based anything as course, ABL mix, on an else the in be ABL volatile as could where that are. markets Of

on liquidity. always the can't provide rely to $XXX of ABL you So million roughly

thinking on need the bit be over we that full cycle. little probably to So less a

year. huge target. We don't want guide. and we're million to So any we've XXXX, material And also we'll decent have cycle at probably as require think will markets got mentioned, through forward. be been of really the naturally as most that what can good the wax do inform as has It somewhere do a going But we're of should in at past the that that markets in $XXX plan will what said I We're we've of we going that And XX-year any million to is in kind looking be our plans. the things of certainly the to that couple from our and projects deviation the next once. for now, those of going really we such And range bit experiencing and capital case. for budget David a projects wane. that $XXX calls,

Nathan Martin

and comments, Got it. second those the information best it guys. luck leave there. Thank Appreciate of for for I'll the you half. time

Andy Eidson

Thanks, Nathan.

David Stetson

Thank Nate. you,

Operator

Our is next your Cowen. question. with Everett Jonathan from with Please proceed question

Jonathan Everett

remaining promotions. a on the Hi, as My morning, one good congrats new bit on cadence shipments quarter, touch everybody two the is, the first the little with of of quarters? the maybe you well as from everyone, can

David Stetson

I here think, Jon, it's sitting today.

changes. see I big don't I think is that of any part

We our have of committed. a amount book fair

with would have are customers. out we schedules we're level. this in pro to We talk to what shipping say QX find about I rata starting the at seaborne their -- Typically, start But just point, our mid-August.

from yet, number of expect to some I them in whether We're met will. though. there's of still determined. Now I times thermal the a be with market. those customers convert head coal don't is some multiple discussions thermal in to my have in

to going So on that. come we're

Jonathan Everett

Understood.

can And until and dead of maybe Or expect decrease be terms fourth a related, here we in But we guess here. gradual somewhat sorry the from of peak Okay. beating to quarter quarter? year? it's the the revenue, I'm I a expect to horse the can quarter-over-quarter second

Andy Eidson

futures sitting Jonathan, on and realizations it's least rest was based Andy. through doesn't pointing the very, at high year, the Yes, the actual to where I it now, mean, looks high appear the water. think downlink contango QX. in QX year, are be into it I is right while a overall just watermark next as of the QX to to compared it QX But looks it's of like bit very curve of and still going yes, going there's like and be and

Jonathan Everett

that SG&A on just there one really there? census sense. items is then more cop? all my are Or guidance, increase in in other makes composed of end. I in That And of the noticed embedded Yes.

Andy Eidson

just our LTIP it's combination on Yes, of impacts a compensation. and coming cash from primary impact multiple But is Jonathan. incentive items, the program

first half programs. the year drives the in of outperformance the naturally, bonus So

And so we're just adjusting the that. accrual for

getting where quarter. the down over of up depending but come the it first goes, super bit Now may pricing back that's a the the caught half us the half year, based on extraordinary on just extraordinary little second on

Jonathan Everett

my last Got Okay. just And one. it.

are how terms expectations? half Or you how of you looking the -- year? terms are what at guys of seeing in your second of inflation are the In in labor,

Jason Whitehead

So I'll that. grab let Andy

haven't cost We our on guidance changed that.

Andy Eidson

enhancements, obviously of of employment our But and into coal folks the the put we've obviously some don't happy productivity costs a is to anything think always these costs productivity places finding Jason find keep industry. prepared it's productive specific our to No, seeing offset things. struggle, some a maintain to and that to We're there's team I couple save of reduce to can of we some But battle -- of the exits all some baked the from Jason's But far and cost try remarks, in if as I labor amount his what and just want into on think you're from seeing add mentioned specific anything inflation. Jason, impact labor that's you as additional in to to additional markets. elsewhere the system cost some there's point the that improvements

Jason Whitehead

in stay rest I I as competitive we'll we've, the you range and think done necessary said, to stay year. that No, of believe think we've Andy, be the mentioned, we've through Andy said able what's I to the

Jonathan Everett

Got it. you again. Thank and congrats

Jason Whitehead

Thank you.

Operator

for reached remarks. I call the end the to will now David and question turn closing over session. have Stetson answer of We the

David Stetson

only thank close tell much for my board the everybody, that the my one directors humbled these today. to minds obviously, other work call with my reiterate appreciation we'll can't us. the want and the you our past that really With six joining the in to people again and loyalty. phenomenal, getting has years. I I And for executive support every Thank each company. thank the us you, I day and appreciate on not once but so lead and been our of them over you parts appreciate for and of in to of to it. that, for team our six being being call. for want day Alpha I support We shareholders team much years of past

Operator

conference. This concludes today's

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

Alpha Metallurgical Resources (AMR) 9 Aug 222022 Q2 Earnings call transcript