Alpha Metallurgical Resources Inc Aktie

Greetings, and welcome to the Alpha Metallurgical Resources Second Quarter 2026 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, Investor Relations and Communications. You may now begin.

Thank you, Rob, and good morning, everyone. Before we get started, let me remind you that during our prepared remarks, our comments regarding anticipated business and financial performance contain forward-looking statements, and actual results may differ materially from those discussed. For more information regarding forward-looking statements and some of the factors that can affect them, please refer to the company's second quarter 2026 earnings release and the associated SEC filing. Please also see those documents for information about our use of non-GAAP measures and their reconciliation to GAAP measures.

On the call today, I'm joined by Alpha's Chief Executive Officer, Andy Eidson; and Chief Financial Officer, Todd Munsey, who will provide prepared remarks. Also participating on the call are our President and Chief Operating Officer, Jason Whitehead; and our Chief Commercial Officer, Dan Horn. Following our prepared remarks, we will be available to answer questions. With that, I'll turn the call over to Andy.

Thanks, Emily. Good morning, everyone. Today, we released our definitive second quarter financial results, which included adjusted EBITDA of $25.6 million and 3.5 million tons shipped. We closed out the first half of 2026 with fewer tons shipped and higher costs than expected. Given our performance to date and our outlook for the rest of the year, we recently issued new guidance ranges for shipment volumes and cost of coal sales.

Looking at the cost first, we increased our midpoint of guidance by $7 per ton as compared to our early estimations. This increase is largely due to higher costs on supplies and materials, including diesel. As we communicated last quarter, the impact of the Iran war has resulted in dramatic fluctuations and significant increases to our diesel spend. Other mining supplies have also increased in cost. We're projecting the need to spread these elevated costs across slightly fewer tons overall for the year, and all of these factors are incorporated in our new cost guidance range of $103 to $107 per ton.

In terms of sales volumes, we brought down the midpoint of the guidance by 1 million tons for the year as compared to our initial expectations. Several factors informed our decision-making here, including continued met market weakness. The new range of 14.2 million to 15.4 million tons not only incorporates our lighter-than-usual shipment performance in the first half, but it also accounts for a reduced efficiency rate at DTA.

As we previously announced, one of the 2 stacker reclaimer machines at DTA sustained significant damage during a storm on June 14. High winds reached over 80 miles per hour during the weather event, resulting in significant harm to the machine. The team at DTA has been exceptional working diligently to safely and resourcefully keep as much coal moving through the terminal as possible while simultaneously working through various processes with third-party equipment providers, structural engineers and the terminal's insurance carrier.

DTA has also filed an insurance claim because of the storm damage. The plans for returning the terminal to full operational capacity hinge on many processes that are still underway, so we don't have a definitive time line to share just yet. We remain engaged in discussions with our partners at Core Natural Resources and DTA's leadership as appropriate to help advance those processes and gain clarity on the path ahead.

In the meantime, we're very pleased with their efforts to keep the coal moving and expect to be able to mitigate isolated delays in coal handling that will normally been accomplished by the damaged stacker reclaimer. Our new shipment guidance range, for example, contemplates a continuation of the currently reduced operational capacity at DTA. It also reflects our ability to utilize throughput availability at other East Coast terminals.

In summary, we're appreciative of DTA leadership and the way they have quickly established alternate workflows to maximize the terminal's capabilities under these unfortunate circumstances. We will provide updates as appropriate once longer-term plans are solidified. Our views on the met coal markets remain largely unchanged since last quarter as we continue to see weakness driven by sluggish global steel demand. The U.S. East Coast indexes have hardly moved. And in recent weeks, the Australian PLV has begun to retreat.

With its latest movement, the spread between Aussie PLV and U.S. East Coast low-vol has tightened with the PLV roughly 14% higher than U.S. East Coast low-vol as compared to about 23% higher when we announced first quarter earnings in May. The further $32 drop from U.S. East Coast low-vol down to U.S. East Coast High-Vol A sits at about 20% as compared to 22% a quarter ago. We continue to believe that this is unsustainable.

As I wrap up my prepared remarks, I want to congratulate several of our West Virginia operations on the recognition by the Holmes Safety Association. 13 of our mines, plants and docks were given awards for their outstanding performance in 2025. Additionally, our outstanding mine rescue teams have brought home top honors in numerous category competitions as well as overall championships at 2 mine rescue contests this summer. We're proud of your accomplishments and grateful for your commitment to this important work. I will now turn the call over to Todd for a review of our second quarter financial results.

Thanks, Andy. Adjusted EBITDA for the second quarter was $25.6 million, down from $30 million in the first quarter. We sold 3.5 million tons in Q2, down from 3.6 million tons in Q1. Met segment realizations decreased quarter-over-quarter with an average realization of $118.71 in the second quarter compared to $124.39 in the first quarter. Export met tons priced against Atlantic indices and other pricing mechanisms in the second quarter realized $109.08 per ton, while export coal priced on the Australian indices realized $143.82 per ton. These results are compared to realizations of $110.32 per ton and $144.95, respectively, in the first quarter.

Realization for our metallurgical sales in the second quarter was a total weighted average of $124.30 per ton, down from $128.40 per ton in Q1. Realizations in the incidental thermal portion of the Met segment increased to $79.36 per ton in the second quarter, up from $69.41 per ton in Q1. Cost of coal sales for our Met segment decreased to $103.07 per ton in Q2, down from $107.98 per ton in the first quarter. For the second quarter, SG&A, excluding noncash stock compensation and nonrecurring items increased to $13.7 million as compared to $13.5 million in the first quarter.

Moving to the balance sheet and cash flows. As of June 30, we had $307.6 million in unrestricted cash and $30.9 million in short-term investments as compared to $317.2 million of unrestricted cash and $49.6 million in short-term investments as of March 31. We had $184.3 million in unused availability under our ABL at the end of the second quarter, partially offset by a minimum required liquidity of $75 million. As of the end of June, Alpha had total liquidity of $447.8 million, down from $476.2 million at the end of March.

CapEx for the second quarter was $45.1 million, up from $40.7 million in Q1. Cash provided by operating activities was $39.9 million in the second quarter, up from $29 million in the first quarter. As of June 30, our ABL facility had no borrowings and $40.7 million of letters of credit outstanding. In terms of our committed position for 2026, at the midpoint of guidance, 70% of our metallurgical tonnage in the Met segment is committed and priced at an average price of $128.17. Another 30% of our met tonnage for the year is committed, but not yet priced.

The thermal byproduct portion of the Met segment is fully committed and priced at the midpoint of guidance at an average price of $75.94. From a market perspective, metallurgical coal markets were subdued in the second quarter. Continued uncertainty and volatility resulting from the war in Iran and broader global economic conditions influenced markets alongside persistently weak steel demand. The Australian PLV index increased from $236.80 per metric ton on April 1 to $243.50 on June 30.

The U.S. East Coast Low-Vol index dropped from $195 per metric ton in early April to $190 by the end of June. The U.S. East Coast High-Vol Index decreased from $159.50 per metric ton at the beginning of the quarter to $157 at the quarter's close. And the U.S. East Coast High-Vol B Index declined from $149.50 per metric ton to $147 at the end of the quarter. Since then, the Australian Premium Low-Vol Index has decreased to $214.30 per metric ton as of August 6, representing a drop of roughly 12% since quarter close.

The U.S. East Coast indices are stagnant with Low-Vol at $188 per ton, virtually flat to the quarter end level. The U.S. East Coast High-Vol A and High-Vol B indices are also largely unchanged from quarter close at $156 and $146.50 per ton, respectively, as of August 6. In the seaborne thermal market, the API 2 index was $117.80 per metric ton at the beginning of April, decreased to $115.65 at the end of June. Since then, the API 2 index is roughly flat at $115.75 as of August 6. With that, operator, we are now ready to open the call for questions.

[Operator Instructions] First question comes from Nick Giles with B. Riley Securities.

Maybe first, just on DTA. It sounds like there are still a fair few unknowns, but just curious how you might quantify the kind of optimization that you can achieve with just one stacker reclaimer? And how much of that optimization could we see show up in maybe 3Q versus further improvements in 4Q as kind of temporary fixes are installed, if you will?

Nick, it's Andy. Yes, I think the folks at Core did a pretty good job answering this question yesterday. And we'll -- our view is exactly the same. There's a lot of moving parts here up to and including insurance settlements and really engineering work if you've ever been to DTA and you just see the scale and the size of these machines and the amount of damage that is sustained. It's a pretty big undertaking to figure this out and try to optimize. So I can't give you any specifics. But again, I think our revised guidance covers what we believe we can accomplish.

Hopefully, there may be a little bit of upside to that, but a lot of it is going to depend on how quickly we can get just the logistics worked out and moving the damaged SR off of the current plot, moving it over to a yard where it can be disassembled and we can start to work on just clearing out the space so we can start moving pieces around. But the team down there has done a fantastic job handling the situation and keeping us as efficient as possible. But we are -- I mean, we are seeing some reduced efficiency and some throughput. But as I said, that's all reflected in our guidance for the rest of the year.

Understood. And sorry to stay on the topic. But just do you have any initial sense for if there was 100% utilization with both stacker reclaimers, kind of what utilization you could achieve with just one as we look out to 2027?

No. I mean that's an unanswerable question, Nick. We don't have any plans to contemplate it that way. We're devising those as we go. So yes, really, it's going to be a while before I could tell you that.

Understood. No, fair enough. Maybe just switching gears on the cost side. Costs are obviously impacted from DTA and from the kind of higher diesel prices as well. But are there any areas where you're seeing relief or any kind of further efforts that you can do operationally just to drive costs lower?

Yes, we are. I mean, right now, it's more just looking at the portfolio. And obviously, the guidance reduction was looking at whether it's something as simple as schedule changes versus surface mines are easier to ramp up or ramp down based on the situation. So we're continuing to look through that and see what tons are most at risk. And it's not always just about cost. It's about margin. That's the number that we're worried about.

So if you've got a low-cost mine that is achieving a very low realization, and it needs to be at risk rather than something that's higher cost but achieves higher margins. So we continue to go through that and evaluate the portfolio to see what other actions that could be taken. And of course, Jason and his team always have a couple of tricks up their sleeve as far as identifying efficiencies or areas where costs can be taken out. So we'll just let that develop as the rest of the year moves on.

[Operator Instructions] Our next question comes from Nathan Martin with The Benchmark Company.

I was hoping we could get your thoughts on shipping cadence for the balance of the year. What gets you to the high or the low end of your new guidance? And then how long does the shipment guidance assume the damaged DTA stacker reclaimer remains out of commission?

Well, by the way, I'll take those in reverse order. Obviously, our guidance runs through the end of the year. So that's the assumption. And as far as the cadence, I would -- I mean, if you take just the pro rata for the back half of the year and look at our typical seasonal trends between Q3 and Q4, I think that would probably apply. And there's been a little bit of back and forth that timing could get us. We are in concert with this market, we're seeing some of our customers pushing back on some cargoes. So that could flip a boat from one quarter into the next. But I think generally speaking, our seasonal trend will probably still apply just at a lower overall rate.

Appreciate that, Andy. That's helpful. And then maybe a question for Dan. I noticed in your updated committed and priced table, the domestic tonnage declined, I think, to 3.8 million from 4.1 million previously. First, I was just hoping to get some color on that.

Yes, Nate, this is Dan. The domestic piece, we had some customers that had some optionality built in there are some options they can declare or not declare. They were -- some of those were not declared. But generally speaking, we're shipping more or less what we thought. That happens most every year. There's some optionality built into our domestic contracts that as the year progresses, they either nominate them or don't nominate them. And this year, they didn't nominate them. So that's the main reason.

Got it, Dan. That makes sense. Appreciate that. And then while I have you, it looks like you guys still have about 30% of your Met tons that are committed but still unpriced. How should we think about the quality mix of what you guys have left to sell for the year and which markets you expect those committed tons to move into?

Well, Nate, it's all of the above, frankly. They're going to -- some are going to go to Aussie. I would apply the same percentages that we've already stated in there to those tons, too. They tend to be some to Europe, some to Asia and the domestic. That ratio doesn't -- I don't expect it would change a lot. There's not a lot of spot opportunities. We don't have a whole lot, as you can see from our committed and uncommitted, we don't have a whole lot of spot tons left anyway. So they're going to ship under the term contracts to the known markets.

Our next question comes from Matthew Key with Texas Capital Securities.

I just have a quick one on the macro just regarding High-Vol A pricing. What do you think needs to happen to get some momentum there? Do you think this is mostly just a supply-driven story? I mean we just see some volume get taken offline? And also, is that something that you would be considering kind of as we get to 2027 if the market doesn't improve kind of from these levels?

Yes. I'll let Dan throw in his thoughts on the gory details. But generally speaking, I don't know that this is -- yes, the supply has grown a bit. We have seen some tons coming off through the first half of the year from some of the smaller producers, particularly in Central Appalachia. But it still seems like this is a demand story until the global economy kicks into gear. That's going to be the point of inflection, I don't think anyone can cut enough production at this point to get pricing where it needs to be.

So -- but that being said, we always look at our portfolio, the cuts that have been made, the schedule changes, those kinds of things have been focused on the lower rank coals, the High-Vol Bs particularly and some High-Vol As where appropriate. But Dan, your thoughts on the market.

Yes. I mean, I think Andy nailed it pretty well. Everyone knew there was going to be High-Vol supply coming on. But at the same time, everybody expected the steel market globally to be stronger than it is today. And that a normal seaborne coal market would have absorbed those High-Vol tons. There's something like 500,000, maybe probably a little more of new High-Vol tons that are being produced each month that weren't being produced a year or 2 ago. And those 3 or 4 or 5 vessels per month are finding homes in the spot market at low realizations in Asia, largely by the -- being sold by the longwall mines.

We've stayed away from most of those low-priced opportunities. We sell into our better markets. And frankly, some of our higher BTU High-Vol B tons we were moving into the thermal market at basically the same realizations. We're taking advantage of an improved thermal market to move some tons as well. So wasn't a surprise that the supply would be increasing. I guess a bit of a surprise is that the global economy is a little weaker and particularly due to the steel exports out of China, they continue to hurt our markets in South America and around the world with cheaper imported steel. We need our customers to produce more steel, frankly.

Got it. And just kind of a follow-up on that. Are there any kind of additional levers that you could pull to adjust your sales mix at all, like maybe to a slightly heavier weighting in Low-Vol versus High-Vol A or any other kind of adjustments you could do there?

Yes, Matthew, I guess you're my straight man. We have a new mine coming online, Wildcat that is in production now and be ramping up over the course of Q3 and Q4. And absolutely, our mix will shift into more low vol. We've had that on our drawing board now for a couple of years, and it's finally rolling out. So short answer is yes.

We have an additional question from Nick.

I just wanted to ask about domestic negotiations, which I assume are underway. I mean U.S. prices have been weaker year-on-year, but I imagine that we're kind of getting close enough to the cost curve that maybe there's some resilience there. So just curious if you had any comments on that thus far.

Not particularly, Nick, at this point. I mean everything said is correct. We've -- the price -- the domestic prices have gone down in the last couple of years. So if you take a look at our customers, the years they're having, they're producing steel and selling it at some pretty high numbers this year. And we hope that we'll participate in some of that uplift in the market next year.

And maybe just on that point on the Low-Vol side, I mean, do you see any material change in mix that you would be willing to send domestic versus preserving the optionality for just kind of the better Low-Vol prices in the seaborne market?

Not particularly. I think we'll -- as we wade into the negotiations, we'll see where the customers' interests are, where they align and where they don't. We really don't have a fixed number of all, let's sell this much high vol, this much low vol. We have a new mine that we're interested in shipping some of that to customers, obviously. But no, I don't -- I think we'll -- we have to hear from the customers and hear what their requirements are first. So it's really premature to get into what that mix will look like.

I will add -- let me just add that -- I'll just add that the demand seems to be good with as many blast furnaces in North America are running, the demand for coke should be pretty good this year, and therefore, the demand for coking coal should be good. So we would expect probably in that kind of environment, they'll use more low vol in their mixes to produce higher quality coke in shorter coking times. That's typically what happens in these years.

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

Well, thank you all for your interest in Alpha and for joining our call this morning. We hope you all have a great weekend. Talk to you next quarter.

This concludes today's conference. You may disconnect your lines at this time. And we thank you for your participation.

Greetings. Welcome to the Alpha Metallurgical Resources First Quarter 2026 Results Conference Call.

[Operator Instructions] Please note that this conference is being recorded.

I will now turn the conference over to your host, Emily O'Quinn, Senior Vice President, Investor Relations and Communications. You may now begin.

Thank you, Rob, and good morning, everyone. Before we get started, let me remind you that during our prepared remarks, our comments regarding anticipated business and financial performance contain forward-looking statements, and actual results may differ materially from those discussed. For more information regarding forward-looking statements and some of the factors that can affect them, please refer to the company's first quarter 2026 earnings release and the associated SEC filings. Please also see those documents for information about our use of non-GAAP measures and their reconciliation to GAAP measures.

On the call today, I am joined by Alpha's Chief Executive Officer, Andy Eidson; and Chief Financial Officer, Todd Munsey, who will provide prepared remarks. Also participating on the call are our President and Chief Operating Officer, Jason Whitehead; and our Chief Commercial Officer, Dan Horn. Following our prepared remarks, we will be available to answer questions.

With that, I'll turn the call over to Andy.

Thanks, Emily, and good morning, everyone. Today, we released our definitive first quarter financial results, which included adjusted EBITDA of $30 million and 3.6 million tons shipped. Back in February on our last earnings call, we shared our expectation of a slower first quarter of production and shipments as compared to ratable guidance and the rest of the year. We also communicated that costs would likely be higher than usual due to those reduced volumes. The development of war-related inflationary impacts on diesel and other supplies was not included in our projections but this put additional pressure on our cost of coal sales, which came in at $108 for the quarter.

While we have no way of knowing when the Iran conflict will end, we believe the war-related inflationary prospects are temporary. Given this and since we expect improved operational performance in both coal volumes and cost of coal sales for the balance of 2026, we believe it is still possible to finish the year within the top end of our existing cost guidance range of $95 to $101 per ton. However, if the Iranian conflict and its resulting inflationary impacts persist, we will likely adjust our cost guidance upward.

Our realizations improved quarter-over-quarter, largely due to increases in the low-vol indexes that occurred in recent months due to supply-related issues from flooding in Australia. However, there are historically unusual divergences within the indexes that have either persisted or gotten more pronounced in recent weeks. Within low-vol pricing, the Australian PLV is currently $45 per metric ton higher or 23% more than the U.S. East Coast low-vol index. And of particular importance to us and our portfolio, there is a further $36 per ton gap down from the U.S. East Coast low-vol to the U.S. East Coast high-vol A, another difference of 23%.

The U.S. East Coast spread from low-vol to high-vol A is likely related to how oversupplied the market for high-vol has become with additional tons recently brought to market in an already weak environment. We continually evaluate the productive capacity of our portfolio alongside the needs of the market, both in the near future and from a longer-term perspective. And we're watching to see if either of those index spreads tighten to a more normalized level or if the divergence persists.

Across the organization, our employees are working hard to maintain safe, efficient operations despite the external headwinds we're facing. Within the first quarter, many Alpha teams received third-party recognition for exceptional work in the areas of operational safety, mine rescue, environmental stewardship and reclamation. I commend each of our team members who make positive contributions to their work every day.

Our sales team also tackled a difficult challenge by successfully planning for and mitigating the potential disruption of a 4-week outage in March at Dominion Terminal Associates. They diligently work to keep as much Alpha coal moving as possible, both before and after the downtime by strategically utilizing our Hampton Roads terminal capacity beyond DTA. We're grateful to all of our partners for helping us overcome these challenges, and we're especially appreciative of the DTA team for their work to accomplish so many equipment maintenance tasks and upgrades in such a short time.

With that, I will turn the call over to Todd for a review of our first quarter financial results.

Thanks, Andy. Adjusted EBITDA for the first quarter was $30 million, up from $28.5 million in the fourth quarter of 2025. We sold 3.6 million tons in Q1, down from 3.8 million tons in Q4. Met segment realizations increased quarter-over-quarter with an average realization of $124.39 in the first quarter, up from $115.31 in Q4.

Export met tons priced against Atlantic indices and other pricing mechanisms in the first quarter realized $110.32 per ton, while export coal priced on Australian indices realized $144.95 per ton. These results are compared to realizations of $106.13 per ton and $114.96, respectively, in the fourth quarter. Realization for our metallurgical sales in the first quarter was a total weighted average of $128.40 per ton, up from $118.10 per ton in Q4. Realizations in the incidental thermal portion of the Met segment decreased to $69.41 per ton in the first quarter, down from $77.80 per ton in Q4.

Cost of coal sales for our Met segment increased to $107.98 per ton in Q1, up from $101.43 per ton in the fourth quarter. Alongside lower productive volumes for the quarter, higher diesel and other supply and repair costs were the primary drivers of the quarter-over-quarter cost increase. For the first quarter, SG&A, excluding noncash stock compensation and nonrecurring items increased to $13.5 million as compared to $10.9 million in the fourth quarter.

Moving to the balance sheet and cash flows. As of March 31, we had $317.2 million in unrestricted cash and $49.6 million in short-term investments as compared to $366 million of unrestricted cash and $49.6 million in short-term investments as of December 31. We had $184.3 million in unused availability under our ABL at the end of the first quarter, partially offset by a minimum required liquidity of $75 million. As of the end of March, Alpha had total liquidity of $476.2 million, down from $524.3 million at the end of December.

CapEx for the first quarter was $40.7 million, up from $29 million in Q4. Cash provided by operating activities was $29 million in the first quarter, up from $19 million in the fourth quarter. As of March 31, our ABL facility had no borrowings and $40.7 million of letters of credit outstanding.

In terms of our committed position for 2026, at the midpoint of guidance, 48% of our metallurgical tonnage in the Met segment is committed and priced at an average price of $132.37. Another 43% of our Met tonnage for the year is committed but not yet priced. The thermal byproduct portion of the Met segment is fully committed and priced at the midpoint of guidance at an average price of $74.53.

From a market perspective, geopolitical and weather-related supply issues influenced metallurgical coal markets in the first quarter of 2026, with the war in Iran causing increased volatility in the energy sector. While not directly linked to war-related electricity generation and power concerns, metallurgical coal markets also moved during the quarter with modest increases across the met quality -- met coal quality spectrum.

Of the 4 indices Alpha closely monitors, the Australian Premium Low Vol Index represents the largest quarterly increase of 8.6%. The Aussie PLV index increased from $218 per metric ton on January 2 to $236.8 per metric ton on March 31, 2026. The U.S. East Coast low-vol index rose from $185 per metric ton in early January to $195 per metric ton by the end of March. The U.S. East Coast High-Vol A Index increased from $150.50 per metric ton at the beginning of the quarter to $159.50 per metric ton at the quarter's close. And the U.S. East Coast High-Vol B Index increased from $144.20 per metric ton to $149.50 per metric ton at the end of the quarter.

Since then, the Australian PLV index has increased to $239.80 per metric ton as of May 7, while the U.S. East Coast low-vol is at $195 per ton, exactly the same as at quarter end. The U.S. East Coast High-Vol A and High-Vol B indices are also largely unchanged from quarter close at $159 and $149 per ton, respectively, as of May 7.

In the seaborne thermal market, the API 2 index was $95.05 per metric ton at the beginning of January and increased to $125.75 per metric ton at the end of March. Since then, the API 2 index has dropped to $111.15 per metric ton as of May 7.

With that, operator, we are now ready to open the call for questions.

[Operator Instructions] Our first question comes from Nick Giles with B. Riley.

Obviously, some higher costs in 1Q and some of it or a lot of it outside of your control. I was just hoping to get some more color on just kind of cost cadence starting here in 2Q, just with diesel prices remaining elevated here and now, how much of that cost pressure kind of carries over into 2Q? And what should we really be roughly penciling in for the quarter?

Nick, this is Andy. I don't want to guide too early because we are only partway through the quarter. I think diesel contributed couple of dollars a ton of the cost pressure. Of course, that was just really a late February, March impact. So it's looking like we'll see a full quarter's impact of it. So you could see a little bit more than that. And also the piece that -- that's the direct diesel cost. The piece that you don't see that's buried is diesel impacts the delivery cost of pretty much everything that we buy. And so you're going to see the indirect portion of that coming through supplies and maintenance, which we've also seen a step up there as well.

So we do expect just from increased productive activity during the quarter compared to the first quarter, we should see some of that cost getting spread over more tons, particularly our fixed cost spread. So I do expect it to be coming down from Q1 but it's a little bit too early to tell the quantum on that.

Understood. That's still helpful, Andy. And maybe on the other side, realizations moved up. It's nice to see. Just was curious on -- are there any opportunities to shift more tons to kind of an Aussie-linked basis? How much -- what kind of incremental opportunities are you seeing in South Asia, maybe as Australian supply, especially for higher quality met remains tight?

Nick, this is Dan. I think the short answer is yes to that to the extent that we have some medium vol and low-vol coals that we can place into the Asian markets. The landscape for high-vol coals into Asia is pretty tough right now. You're essentially matching the lowest price the competitor throws out that day. So even if it's linked to the Aussie index, it's discounted pretty heavily. So we're pretty selective on which -- it's not so much about the indexes. Obviously, it's about the ultimate price and the netback to our coal mines. So we're -- but I think there is some upside as demand increases and if the Aussie production for the higher-quality coals remains a little bit short, there are opportunities.

Understood. No, I appreciate that, Dan. And maybe a last one for me is just -- what are you seeing in Central App in terms of some of your competitors out there? Have there been any incremental cuts in recent months? Are you seeing any production that could come back? Just an update more broadly on kind of the surrounding production areas would be helpful.

Yes. Nick, I'll take this first, and then I'll ask Dan to jump in if he's got anything additional. We obviously have seen some tons coming offline in the past really earlier in Q1 but as the quarter has gone on, it's been some smaller incremental batches. I don't think it's anything that's terribly needle moving thus far. I think the quantum has been less than what's required to fill some of the gaps in the supply and demand situation.

Dan, any thoughts on that?

No, I think you said it well, Andy. I mean if you look at today versus where we were a couple of years ago, there's probably something like 11 million tons of new longwall, high-vol production that's in the marketplace. And the round numbers of how many tons have come out of Central App is probably 1 million, 2 million, somewhere in that range. So still a pretty good imbalance. Again, demand is down globally. I also point -- you have to point out that the global demand for these high-vol coals is something less than it was a couple of years ago, too. So as demand improves, that will help somewhat with the rebalancing.

Our next question comes from Nathan Martin with the Benchmark Company.

I think it would be helpful maybe to get some thoughts on shipping cadence for the balance of the year. I think, Andy, you said you expect 2Q to improve for the reasons we already talked about. Does that get made up mainly in 2Q? Or do you kind of expect those tons to be spread out in subsequent quarters?

Nate, yes, I would expect because normally, we have a bit of a bell curve during a regular year where Q1 and Q4 are going to be your lightest quarters, Q2 and Q3 and through the summer, you have your best shipments. I think it will probably look similar to that this year. I do think most of the makeup where it happens will happen in the middle 2 quarters and then we'll probably start tailing off a little bit as we get to the end of the year with the holidays and that kind of stuff. So I think that's probably -- it's going to look like a normal year. It's just a little bit steeper curve from Q1 into Q2 and Q3.

Okay. Helpful, Andy. I appreciate that. And then maybe, Dan, obviously, freight rates elevated post the start of the conflict in the Middle East. I believe you guys have traditionally sold very little based on the CFR prices. Is that still true? And then I guess the spot market, maybe a little bit quiet. You just mentioned high-vol especially. What do you think needs to happen for things to pick up there?

Yes, on the freight, you're correct. Most of our business is FOB vessel. To the extent we do some chartering, we've seen freight increases, pick a number, 40%-ish increase in the freight rates. To the extent that coal travels halfway around the world to South Asia and places like that, yes, that's a pretty significant hit. And the impact of that is some of that freight will be shared between the buyer and the seller. It's not necessarily all passed over, particularly on new business. If you're chasing new spot business, the freight is absolutely a factor as opposed to a term contract where you've got a set price. In that instance, the freight responsibility shifts to the buyer.

The second question, what has to happen? As I mentioned to Nick, I think we have to see some demand improvement and some continued supply discipline. It's -- we're more oversupplied than we've seen in a while. We've seen it before in the marketplace. But at this moment in time, it's a pretty significant hill to climb for most of the U.S. producers here.

Okay. Got it. And then maybe the 3.1 million tons of export you guys have committed and priced export met, can you give us an idea of that mix by quality?

It's primarily high-vols and mid-vols with a little low vol thrown in there, Nate. I don't have -- we don't give an exact breakdown. I'll point out kind of to your question on the shipping cadence, too, as Wildcat mine, our low-vol mine ramps during the year, that mix will include -- we expect to see more low-vol going into that mix. I can't quantify it any more than that, but our long-term strategy was to put more of the high-rank, higher-quality coke strength coals into our portfolio. So that should continue this year and next.

That actually bridges me to the last question I had. Could we kind of get an update on Kingston Wildcat, maybe from Jason, I guess. I mean, it seems like those tons coming online maybe with an -- excuse me, an opportune timing just given the wide relativities we're seeing between premium low vol and high volume.

Sure. So the Wildcat mine is -- I'm pleased to announce that they are on coal, and there are tons coming out of the mine. They're still in the development phases, but we actually plan for that to conclude here in the Q2 and Q3 and Q4, we actually see a ramp in the production coming out of the mine.

Our next question comes from Matthew Key with Texas Capital Securities.

Kind of piggybacking off of the diesel discussions. I was wondering if you could provide a sensitivity to diesel pricing that we could use as a general rule of thumb moving forward?

That's a tough one, Matt, as far as knowing that off the top of my head. I'm looking at Todd right now to see if he's got some viewpoints on that.

Yes, Matt. In a typical year, we use about 22 million, 23 million gallons of diesel. And so if you think about the balance of the year with the movement we've had in diesel prices, to the point Andy made earlier, the diesel we use, we expect that to be a couple of bucks influence on the cost. But then there's also the surcharges and whatnot that will flow through from transportation-related costs. So hopefully, that helps a little bit as you think about the balance of the year. I mean, obviously, we all hope that issue goes away. But if not, that's kind of how we think about it.

No, that's helpful. And I was wondering if there's anything that the company could do to manage some of these inflationary cost pressures. Like do you currently do any diesel hedging? Or would that be something you'd consider in the future?

Yes. We've actually -- historically, we've done some -- not necessarily diesel hedging but buying forwards through our diesel providers go ahead and lock in pricing around budget time. We've done that some of the past 3, 4 years. Most of the time, it's actually gone upside down on us. This year, of course, happens to be the one where we choose not to do those forwards because back in August and September of last year, we could have seen this coming. But it is something that we're discussing actively simply because the world seems to be getting more and more politically volatile and to a degree where maybe it may just require locking in as many of your inputs as possible whenever you have the opportunity just because things do seem to be changing at a pace that's faster than the world can actually keep up with.

Our next question comes from Chris LaFemina with Jefferies.

It's Chris LaFemina from Jefferies here. Just wanted to go back to the market. So we're all kind of waiting for the high-vol discounts to narrow. And this has been an issue for quite a long time. And now we have iron ore prices are rising. You have obviously energy prices globally rising, premium low-vol met coal price has strengthened pretty materially. Global steel markets appear to be okay but the high-vol discount is widening. And I'm wondering if there's something else going -- I mean, I understand the point about there being quite a bit of high-vol supply that's gone online, but I would have thought of anything that would have brought the premium low-vol price down rather than just result in a wider spread. So is there anything else going on in that market that is more kind of structurally problematic? Or is this purely a short-term cyclical issue that we should expect to resolve? And if it's a cyclical issue, why hasn't it resolved yet? It's been going on for again, an extended period of time and the spreads have been kind of wider than we've ever seen and doesn't seem to be reversing at all. So yes, just trying to figure out what's going on there.

Chris, this is Dan. I'll try to unpack that a little bit. We don't -- the PLV is its own creature. It's an index that follows primarily Australian coals. We use it -- we link our higher quality low vols and medium vols to that index. We do believe that the U.S. East Coast low-vol index is too far below the Aussie index. When there's a shortage of Australian PLV, we get phone calls about -- and we -- when I say we U.S. producers that produce low vol, ship our coal to replace that PLV. So we believe that the gap between East Coast low-vol and PLV is too wide, to your point, it is. The high-vol coals are used differently. They don't contribute to the coke strength. They're used for plastic properties and arguably at times just as a cheap filler. They move differently, but they've been depressed.

And again, I think that's more of the supply -- just old-fashioned supply-demand working on that. Buyers are trying -- obviously, when they see the potential for low price or big discounts, they'll adjust their blends to try to buy more of that. I think they'll run into the freight issue, the ocean freight issue that those tons of coal that have to go halfway around the world at a high freight number, they're not going to travel well if they're low-value coals. I wouldn't lump that all together the way you did. I think you kind of have to break that apart.

Yes. And Chris, this is Andy. If I could add one more piece to that. The differential between East Coast high-vol A and East Coast low-vol is somewhat of a recent phenomenon. If you go back to the first of 2025, that differential was only $5. And now it's climbed to $38. And so I do think that's pretty directly attributable to all the new tonnage that's come online, both in Northern Appalachia and in Alabama, just hitting a market that is having trouble absorbing it.

Yes. I mean, I guess I was thinking -- I would have assumed that there'd be -- coal is a very actively traded commodity by commodity traders globally. I would have assumed that the traders would have stepped in, and kind of capitalize on that arbitrage opportunity and that hasn't really happened. So I was wondering if there was something else going on there. But your answer is very helpful. I appreciate it.

We have a follow-up question from Nick Giles with B. Riley.

Just wanted to ask more broadly, the -- we had the presidential memorandum Section 303 a few weeks back in April. And I wanted to ask if this has really translated to your business or if you could expect to see any benefit or funding from these actions by the administration. I think maybe some of this is more related to the thermal side. They call out baseload power generation explicitly, but even export terminals are mentioned. So could DTA, for instance, be a candidate for some sort of government support?

Yes. That -- so that one is still developing as with most of these executive orders and other proclamations going back into last fall. A lot of the details are still developing real time. And so we are involved to a high degree with the federal government on a couple of different -- evaluating the different programs, seeing what's out there. I don't know -- from what we've seen thus far, it does seem that it's mostly thermal-focused. There are some smaller areas where there may be some benefit. But as of yet, I don't think we're seeing anything that's hugely material to what we're doing right now. Fingers crossed that some of it translates to a bigger benefit on the met side of the house, but I'm not sure we've seen anything in that regard yet.

We have reached the end of the question-and-answer session. I would now turn the call over to Andy Eidson for closing remarks.

Yes. We appreciate everyone joining us this morning for the earnings call, and we hope everyone has a great weekend. Thank you.

This concludes today's conference. You may disconnect your lines at this time, and we thank you for your participation.

Greetings, and welcome to the Alpha Metallurgical Resources Fourth Quarter 2025 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, Investor Relations and Communications. You may now begin.

Thank you, Rob, and good morning, everyone. Before we get started, let me remind you that during our prepared remarks, our comments regarding anticipated business and financial performance contain forward-looking statements, and actual results may differ materially from those discussed. For more information regarding forward-looking statements and some of the factors that can affect them, please refer to the company's fourth quarter 2025 earnings release and the associated SEC filing. Please also see these documents for information about our use of non-GAAP measures and their reconciliation to GAAP measures.

Participating on the call today are Alpha's Chief Executive Officer, Andy Eidson; and our President and Chief Operating Officer, Jason Whitehead. Also participating on the call are Todd Munsey, our Chief Financial Officer; and Dan Horn, our Chief Commercial Officer.

With that, I will turn the call over to Andy.

Thanks, Emily, and good morning, everyone. Today, we released our definitive fourth quarter financial results, which include adjusted EBITDA of $28.5 million and 3.8 million tons shipped. This closes out a year that presented a number of challenges and continued market weakness. However, 2025 was also a year of markedly improved cost performance across the company and resilience in the face of difficult circumstances.

Now in 2026, we look to build on that perseverance and continue improving. Since our last earnings call, we issued 2026 guidance and announced 3.6 million tons in sales commitments to domestic customers. We have since added another 500,000 contracted tons, bringing Alpha's domestic commitments to a total of 4.1 million tons for the year at an average price of $136.30, especially in volatile times like these, having a solid base of committed tons to North American customers supports cash flow planning and business needs since the rest of the sales book is subject to market risk, which carries uncertainty.

As we stated in our preliminary announcement and again today, the recent upward movement in coal markets has been largely concentrated within the Australian Premium Low Vol index. Much of the shift was due to supply-related issues resulting from flooding that occurred in Queensland in December and January, meaning the impacts were likely isolated and temporary. This conclusion is further supported by the significant divergence between the Aussie indexes and those priced on the U.S. East Coast as well as the [ trend ] lower in recent weeks.

Additionally, growing oversupply of high vol coal seems to be contributing to the widening spread between low-vol and the high-vol A and B coals. Given our usual quality mix, if the current pricing environment for high-vol persists, it would likely exert downward pressure on our realizations for the year. In light of these supply-related forces, we continue to look for durable improvements to global steel demand as the catalyst needed to improve met markets across the quality spectrum in a sustainable way. All of this is important market context as we look at what's ahead for 2026.

While the high-vol market remains crowded on the supply side with incremental tons coming from Alabama and Northern Appalachia, we're looking forward to completing development at the Kingston Wildcat low-vol mine, which Jason has additional detail to share about shortly. As always, we're going to do everything we can to mine coal safely and efficiently, and our sales team will aim to maximize the value of every pound of coal that we mine. However, we're also clear-eyed about the persistent market weakness, especially with regard to high-vol and are maintaining our focus on a strong balance sheet and safe, efficient operations as a recipe for success in these challenging times.

I will now turn the call over to Todd for additional information on our fourth quarter financial results.

Thanks, Andy. Adjusted EBITDA for the fourth quarter was $28.5 million, down from $41.7 million in the third quarter. We sold 3.8 million tons in Q4, down from 3.9 million tons in the third quarter. Met segment realizations increased quarter-over-quarter with an average realization of $115.31 in Q4, up from $114.94 in the third quarter. Export met tons priced against Atlantic indices and other pricing mechanisms in the fourth quarter realized $106.13 per ton, while export coal priced on Australian indices realized $114.96 per ton.

These results are compared to realizations of $107.25 per ton and $106.39, respectively, in the third quarter. The realization for our metallurgical sales in Q4 was a total weighted average of $118.10 per ton, up from $117.62 per ton in Q3. Realizations in the incidental thermal portion of the Met segment decreased to $77.80 per ton in Q4, down from $81.64 per ton in the third quarter. Cost of coal sales for our Met segment increased to $101.43 per ton in the fourth quarter, up from $97.27 per ton in Q3. Lower coal volumes in the fourth quarter, along with the reduction in coal inventory value were the primary drivers of the increase.

SG&A, excluding noncash stock compensation and nonrecurring items, decreased to $10.9 million for the fourth quarter as compared to $13.2 million in the third quarter. Reduced professional services spend and lower labor costs were the primary contributors to the reduction. Moving to the balance sheet and cash flows. As of December 31, we had $366 million in unrestricted cash and $49.6 million in short-term investments as compared to $408.5 million of unrestricted cash and $49.4 million in short-term investments as of September 30. We had $183.7 million in unused availability under our ABL at the end of the fourth quarter, partially offset by a minimum required liquidity of $75 million.

As of the end of December, Alpha had total liquidity of $524.3 million, down from $568.5 million at the end of September. CapEx for the quarter was $29 million, up from $25.1 million in Q3. Cash provided by operating activities was $19 million in Q4, down from $50.6 million in the third quarter. As of December 31, our ABL facility had no borrowings and $41.3 million of letters of credit outstanding. In terms of our committed position for 2026, at the midpoint of guidance, 37% of our metallurgical tonnage in the Met segment is committed and priced at an average price of $134.02. Another 53% of our met tonnage for the year is committed but not yet priced. The thermal byproduct portion of the Met segment is 77% committed and priced at the midpoint of guidance at an average price of $73.17.

I will now turn the call over to Jason to provide an update on operations.

Thanks, Todd, and good morning, everyone. At the end of each calendar year, we evaluate every Alpha operation against a set of criteria to determine the David J. Stetson best-in-class awards. These winning teams meet or exceed certain thresholds, measuring their safety, environmental stewardship and efficiency throughout the year. I'm pleased to congratulate our Bandmill prep Plant and Marmet River Dock on their selection as 2025 best-in-class winners. We appreciate all the hard work and daily attention to detail that contributes to these successful operations.

I want to also recognize the good work accomplished at the remaining mines in our operating portfolio. Even though 2025 was a challenging year, our teams came together to overcome obstacles and continue pushing each other to be better. That drive for continuous improvement is inherent in our culture of safe production. Turning to our new low-vol mine, Kingston Wildcat. I want to remind everyone that in September of 2025, our Wildcat slope intercepted the Sewell coal seam. Since then, we've continued to make progress in underground development production while installing key infrastructure in and around the mine and the Mammoth preparation plant.

At Wildcat, the two-mile power line and tap construction is complete and the mine is now on its permanent utility power. The stockpile reclaim tunnel and raw coal railroad loadout are complete and the overland belts that serve the load out from the mine stockpile are expected to wrap up in Q2. The mine ventilation shafts have both been bored and the lining and ventilation work continues. At Mammoth, the railcar offloaders are complete and functioning and the raw coal transfer belts that report from the rail to the plant are also complete. We're forging ahead as planned, and we currently expect to produce roughly 500,000 tons from the mine this calendar year as we ramp up Wildcat's full productivity capacity, which we believe is nearly 1 million tons per year.

With that, I'll now turn the call over to Dan for some details on the market.

Thanks, Jason, and good morning, everyone. As Andy mentioned, supply-related issues, including the December and January flooding in Queensland, Australia, impacted metallurgical markets in recent months. Due to constraints on Australian met coal supply, a divergence between the Australian-linked indices and the U.S. East Coast markets significantly expanded with spreads also widening between the premium grade low-vol coal and high-vol coals.

Despite these supply-related shifts in the indices, the global metallurgical coal markets are still structurally influenced by steel demand, which is linked to economic conditions, policy decisions, geopolitical tensions, tariffs and ongoing trade negotiations, all of which could impact met coal pricing. Metallurgical coal markets experienced varied movements across the indices during the fourth quarter of 2025. Of the 4 indices that Alpha closely monitors, the Australian Premium Low Vol index represents the largest jump, an increase of 14.6%.

The Australian Premium Low Vol index increased from $190.20 per metric ton on October 1 to $218 per metric ton on December 31. The U.S. East Coast Low Vol index rose from $177 in October to $185 per metric ton by the end of December, an increase of 4.5%. U.S. East Coast Low Vol averaged roughly $178 over the course of the fourth quarter. By contrast, the U.S. East Coast High-Vol A index was effectively flat during the quarter, dropping slightly to $150.50 per metric ton at the end of the year, and the U.S. East Coast High-Vol B index was similarly flat, ending the quarter at $144.20 per metric ton.

Since the quarter close, all 4 indices have increased, although to very different degrees. The Australian PLV has increased to $237 per metric ton as of February 26, a 9% increase, while the U.S. East Coast Low Vol index was $196 per metric ton, an increase of 6%. High-Vol A and High-Vol B indices measured $159 and $149 per ton, respectively, as of the same date. In the seaborne thermal market, the API2 index was $94.55 per metric ton as of October 1 and increased to $96.90 per metric ton on December 31. And since then, the API2 has increased to $106.75 per metric ton as of February 26.

Turning to logistics. Dominion Terminal Associates will undertake a 4-week planned outage beginning in March, during which portions of the terminal will be unusable while significant equipment upgrades occur. Similar to past outages, DTA management has carefully planned the order of events so as to disrupt operations as minimally as possible. Our team within Alpha has also been planning for this downtime, and we do not anticipate any material negative impacts from the outage. Rather, we look forward to these important terminal upgrades to strengthen our shipping capabilities for the future.

With that, operator, we are now ready to open the call for questions.

[Operator Instructions] Our first question comes from Nick Giles with B. Riley Securities.

I appreciate the update this morning. Maybe my first one is more of a clarifying nature. Could you just help us understand your mix within your domestic tonnage versus more seaborne-based tons? I'm really just trying to kind of better capture your sensitivity on the low vol side with your uncommitted tons.

Yes, Nick, this is Dan. On the domestic -- I don't give you exact numbers. But on the domestic side, probably half of our domestic volume was high vol, the other half of it would be low and medium vol. And then on the seaborne side, we have some of our existing low-vol production available to sell into the seaborne market. And then when the Wildcat mine ramps up, that's 0.5 million tons or so of low vol that would be available for that market as well.

Perfect. Dan, it's really helpful. I appreciate it. Maybe my second question was just on the cost side and how should we kind of think about cost cadence over the course of the year? I know volumes will be slightly lower here in Q1, which is pretty typical. So just any kind of incremental color you can give us on cost progression as the year goes on?

Nick, it's Andy. I'll hit it at a high level, and Jason can add any detail he would like to. But Q1, as we mentioned, we had some weather impacts, and it's going to be a slightly lower productive cadence for the quarter. So that will lead to elevated costs. Second and third quarters are typically when we're all systems go. Fourth quarters typically, same issue as the first. You may have a little bit of weather, but you've got miners vacation and holidays that tend to bring down our output just a bit.

So usually, it's kind of a barbell. First and fourth will be your higher cost quarters, in the middle, you do a little bit better. Although this fourth quarter of '25 was, I think, an exceptional quarter from a cost perspective. So it just depends on how that works out. But typically, that's been the trend.

Got it. Maybe one more, if I could, and I can jump back in the queue. But Dan, would just be great to get some more color on the broader market. How are you seeing things in kind of more traditional markets like Europe or South America? And do you think that any upcoming recovery is really dependent on incremental demand from South Asia? Or do you think there will be other important contributors as well?

I guess the steel market globally is still pretty weak. There's no -- with the exception of the U.S. and even the U.S., the volumes aren't there. The steel pricing here in our markets are good, but the volumes probably could be better. There's still some blast furnaces that could ramp up here. In the Atlantic Basin, though, yes, I think we see probably a little more optimism than we had the last couple of years in Europe, South America that the effect of the global trade wars is starting to sink in and different governments are beginning to take some action that we think will benefit met coal exports to those markets. Asia remains kind of tough. It's a tough -- even in the best times, it's a very competitive market. When the Australians are producing well, we have that to compete with. And of course, Andy mentioned the increased production. We're seeing more competition on the high-vol coal. So I hope that answers your question.

[Operator Instructions] Our next question comes from Nathan Martin with The Benchmark Company.

I'm thinking about total liquidity over $500 million at year-end, nice cushion over your minimum target of $250 million to $300 million. Obviously, market was quite weak last year. Maybe things are at least seemingly moving in a positive direction in the last few months. I guess, Andy, maybe it would be great to get your thoughts on what you see as the best uses for Alpha's cash at this stage?

Yes. Nate, good to hear from you. That's a great question. I mean, particularly in markets like this where we are dealing with such volatility. The question still goes back to how sustainable is the recent bump in the POV and when do we start seeing a collapse of the massive margin that's built between Atlantic Basin and the Australian pricing because, again, we've got a good portion that goes on Aussie pricing, but the vast majority of our coal is going on Atlantic Basin, which has remained relatively depressed for a while now.

So we think that having that buffer, that liquidity is very good just to keep the balance sheet strong. We are still utilizing some of that cash for the share buyback, keep that moving along at a measured pace. And we remain hanging around the hoop on all kinds of different opportunities that may arise. I mean, as usual, I like to kind of be cagey around any M&A comments, but there are some things available out there. Some of them are attractive, some of them may be not. But we continue to keep our eyes open, and we'll look at literally anything that comes across the desk to see if there's a way that we can add value to the enterprise without bringing extra risk to what we've already built.

That's very helpful, Andy. Next question, I guess, around the cost side of the business. You guys put your guidance out originally in December. I know usually you kind of assume forward curve for your price within that guidance. I mean that's probably improved about $10 or so since then. So any thoughts on what net price range you're assuming in that guidance? And then you talked as well about the 45X tax credit. What kind of benefit does that represent in your guidance range?

Yes. I'll answer the first part of that, and I'll let Todd cover the 45X piece. Yes, our guidance when we put it out in December was, of course, as it is every year, it's informed mostly by the strip for the following year, which was a bit lower than where we've actually landed in January and February. So that is contributing to higher sales-related costs rolling through Q1. And so that would contribute to something above the upper end of our guidance, likely for Q1. We do think that, that will normalize. The trend typically winds off a little bit. We get into the "shoulder season" rolling into the second quarter. So I think our cost guidance is still pretty solid, even though coming out of the gate, we'll probably be a little bit above that. Todd, 45X impact.

Yes. I think, Nate, the range we gave out previously, I think if you look at the midpoint of our volume, you'll get around, call it, circa $2 per ton benefit, maybe a little bit more. I mean it's a new calculation. We're still working through what qualifying costs mean. But as we work through the year, we'll get more precision around that. But I would say a good way to think about that is it's around $2 a ton.

Great. Makes sense, guys. And then just maybe one more. I appreciate seeing the tonnage now for committed and price volume. I don't really remember seeing that before. And Andy, you mentioned adding, I think, roughly 0.5 million tons of domestic commitments since last guidance, only a small decrease in average price there. As we look at what's open, do you guys think there's any more opportunity for domestic sales out there? Or do you expect the rest of your open tons to go export?

Yes, Nate, I think it's fair to assume most -- all of them will go export. If the aforementioned blast furnaces would ramp up and our customers need to produce a little more coke here in North America, they might come out and do a little more shopping. But I think largely, that domestic market is put to bed. So the answer would be they'll go seaborne.

Our next question comes from Nick Giles with B. Riley Securities.

Andy, I just found your comments interesting there around the M&A piece. And I just wanted to clarify that would you only be looking at met opportunities? Or just given some of the kind of constructive thermal dynamics going on, would you be willing to look at thermal coal as well?

Yes. I don't know that anything is off the table necessarily. Look, we're a met coal company, and that's kind of strategically where we made our move. We made that move for some obvious reasons as we exited a couple of our largest thermal assets that didn't quite fit what we were wanting to accomplish. But the world changes. So again, when I say we'll kind of look at anything, we really will, but it does have to fit certain categories. And those categories are not necessarily related to the fundamental nature of what the asset is, but it's more around guarding against unnecessary risk and also seeing upside to make the juice worth the squeeze, so to speak.

Makes sense. I appreciate that. Maybe one last one, if I could. Just anything from a U.S. supply perspective that you've seen over the past few months? I mean, I know that we've heard rumblings of some smaller operations curtailing over the past year. And so curious if you have any updates on that front and whether you think there's really that much more supply that could come offline or if those that are still able to operate today might be in a better position from a balance sheet perspective and kind of the higher cost players are probably out of the market at this time?

Yes, it's always hard to tell because particularly with smaller producers, we don't have a lot of visibility into how strong their balance sheets are. But we've all seen even in the past couple of 3 weeks, we've seen some furloughs of operations that are going into care and maintenance, could be prepping for sale, could be doing any number of things, but those mines are not currently producing in Central Appalachia. So if you kind of add up those numbers, you get to 1 million, 1.5 million, maybe 2 million tons of potential annual production that is coming offline. For Central App, that's a decent number globally, it's not necessarily a needle mover.

So -- and that doesn't take into account the ramp-ups of other mines that are out there. And again, when we look at Alabama and Northern Appalachia, there's a lot of -- those mines haven't hit their -- they've not hit their stride yet. So there's potential for even more tons to come online. So at this point, it still feels like there's probably some folks out there, the smaller producers that at this market level, these prices probably will continue producing for much longer. But I don't know that it is enough to hit critical mass and make a material impact to the market.

Got it. Understood. And I'll sneak in one more, if I could. I think maybe just another high-level question around pricing. I think when investors look at prices on paper, I think really realizations in the market can be a very different story. So do you think there's maybe a better way that pricing could be reflected, whether for users of coal or investors? Or are there any improvements out there that could kind of add transparency, if you will?

Well, let me ask you a clarifying question. Are you talking about the presentation of the indexes or the derivation of the indexes or how we all individually refer to our realizations because I think there's a couple of things -- sorry, go ahead.

I mean just on the indices, yes.

Dan is much better positioned to hop up on his bully pulpit and talk about the indices. I think he's been waiting for this one for a while, so I'll let him go.

Yes, the indices, we sell coal into truly around the world using 5, 6, 7, 8 different indices. The buyers largely dictate which indices you use. In Asia, the Asian buyers prefer to use the Aussie link -- the Aussie indices. In the Atlantic Basin, they use the U.S. East Coast indices. And I've said on this call before, in a good market, in a strong market, a seller's market, we can sell at a premium to those indices. And in a weaker market, we sell at a discount to those indices. When I started in this business, we did fixed price for a year, and we did 3- and 5-year contracts. A lot of the coal that we sell. We still have contracts, but we sell more and more a vessel at a time.

And that's largely driven by the way the Asian customers prefer to buy the coal. And so it's a challenge for us to say the least. And I always say the ton of coal at Hampton Roads doesn't know where it's going. And we, I guess, feel that our coal can be undervalued at times. People refer to the spread between High-Vol A and Low Vol, for example, in that relativity. I'm not a disciple of that, frankly. The coal -- each coal has its own value and has its own drivers. So I guess there could be -- the answer is, could there be a better way? Possibly. But the customers largely dictate how we sell our coal.

Our next question comes from Matthew Key with Texas Capital.

Most of my questions have been addressed, but I will ask a quick one just on the macro. We obviously get some announcements on the U.S. tariffs recently. While it sounds like those will be replaced by other means. Does that impact the macro thesis on met coal at all in your view? Or is it kind of just a continuation?

I think the challenge here, Matthew -- good to talk to you, by the way. I think the challenge here is the constant state of flux in the tariff structures. I think it's got a lot of buyers, a lot of people who could be doing infrastructure projects or big buildings or any kind of development that could require a lot of steel. I think it's got a lot of people sitting on their hands waiting to see where things fall out before they make big moves. And that degree of lethargy is part of the problem when you look at this market, just not a lot of -- not enough volume flowing in any discernible direction and being able to predict where that goes. So I think a lot of folks are continuing to wait and see where it lands so they can really derive the cost of whatever projects they're wanting to do. And that leaves us -- we're the tail end of the cycle for that, and that leaves us in a state of uncertainty.

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

We appreciate everyone's time this morning. Thank you for joining us, and we hope everyone has a great weekend.

This concludes today's conference. You may disconnect your lines at this time, and we thank you for your participation.

Greetings. Welcome to the Alpha Metallurgical Resources Third Quarter 2025 Results Conference Call. [Operator Instructions] Please note this conference is being recorded.

I would now like to turn the conference over to your host, Emily O'Quinn, Senior Vice President, Investor Relations and Communications. You may now begin.

Thank you, Rob, and good morning, everyone. Before we get started, let me remind you that during our prepared remarks, our comments regarding anticipated business and financial performance contain forward-looking statements, and actual results may differ materially from those discussed. For more information regarding forward-looking statements and some of the factors that can affect them, please refer to the company's third quarter 2025 earnings release and the associated SEC filing. Please also see these documents for information about our use of non-GAAP measures and their reconciliation to GAAP measures. .

Participating on the call today are Alpha's Chief Executive Officer, Andy Eidson; and our President and Chief Operating Officer, Jason Whitehead. Also participating on the call are Todd Munsey, our Chief Financial Officer; and Dan Horn, our Chief Commercial Officer.

With that, I will turn the call over to Andy.

Thanks, Emily, and good morning, everyone. This morning, we announced our financial results for the third quarter, which include adjusted EBITDA of $41.7 million and 3.9 million tons shipped. It was another good quarter for our team. Similar to Q2, the highlight of the period is the outstanding performance on cost of coal sales. For the second quarter, we missed a sub-$100 level [indiscernible] of only $0.07. In Q3, we were able to save almost another $3 off the prior quarter level, coming in at $97.27 per ton. We're proud to have posted the best cost of coal sales performance for the company since 2021 and back-to-back [ orders ]. Our focus remains on finishing the year strong by continuing to safely keep costs in line. Our cost discipline is especially important as we continue navigating the current stage of the market cycle as metallurgical coal indexes reflect softness in the market environment. Broadly, the indexes of [indiscernible] on current levels for several months with oscillated pockets of volatility. The underlying economic conditions informing steel demand around the globe remain vulnerable to uncertainty and lackluster economic growth expectations. Against this backdrop, we're in the process of planning for 2026, putting together budgets and anticipating what we believe could be another challenging year for the coal industry. At the same time, we remain in discussions with our North American customers about domestic sales commitments for next year. With those conversations and budget planning still in progress, we're not quite yet ready to issue guidance for 2026. Once domestic negotiations conclude and we have greater visibility into the coming year, we will share additional information about our expectations and guidance. Until then, we will keep working hard to manage costs, operate safely and effectively and finish 2025 on a strong note.

I'll now turn the call over to Todd for additional information on our third quarter financial results.

Thanks, Andy. Adjusted EBITDA for the third quarter was $41.7 million, down from $46.1 million in the second quarter. We sold 3.9 million tons in Q3, same amount Met segment realizations decreased quarter-over-quarter and average realization of $114.94 in the third quarter, down from $119.43 in Q2. Export met tons priced against Atlantic indices and other pricing mechanisms in the third quarter realized $107.25 per ton, while export coal priced on [indiscernible] indices realized $106.39 per ton. These results are compared to realizations of $113.82 per ton and $109.75, respectively, in the second quarter. The realization of our metallurgical sales in Q3 was a total weighted average of $117.62 per ton, down from $122.84 per ton in Q2. Realizations in the incidental thermal portion of the met segment increased to $81.64 per ton in Q3 as compared to $78.01 per ton in the second quarter. .

Cost of coal sales for our met segment decreased to $97.27 per ton in the third quarter, down from [ $100.06 ] per ton in Q2.

G&A, excluding noncash stock compensation and nonrecurring items increased to $13.2 million for the third quarter as compared to $11.9 million in the second quarter. CapEx For the quarter was $25.1 million, down $34.6 million in Q2.

Moving to the balance sheet and cash flows. As of September 30, 2025, we had $408.5 million in unrestricted cash and $49.4 million in short-term investments as compared to $449 million of unrestricted cash as of June 30.

We had $185.5 million in unused availability under our ABL facility end of the third quarter, partially offset by a minimum required liquidity of $75 million. As of the end of September, Alpha liquidity of $568.5 million, up from $556.9 million at the end of June.

Cash provided by operating activities was $50.6 million in Q3, down from $53.2 million in the second quarter. As of September 30, our ABL facility had no borrowings and $39.5 million of letters of credit outstanding.

With additional visibility into remaining payments for the year, we are lowering our capital contributions to equity affiliates guidance to a range of $35 million to $41 million, down from the prior range of $44 million to $54 million. In terms of our committed position for 2025, at the midpoint of guidance, 85% of our metallurgical tonnage in the met segment is committed and priced at an average price of $122.57. Another 13% of our met tonnage for the year is committed, but not yet priced. The thermal byproduct portion of the met segment is fully committed and priced at the midpoint of guidance at an average price of $80.27.

I I will now turn the call over to Jason to provide an update on operations.

Thanks, Todd, and good morning, everyone. Last quarter, I spoke to the cost reduction efforts carried out in Q2 being twofold, a 10% increase over Q1 in tons per man hour that lowered labor and other fixed costs, and the team is achieving these efficiency gains while reducing supply and maintenance expenses. I'm pleased to report on the operations team's continued success in managing costs and increasing tons per man hour again by another 2%. Q3 marks the second quarter in a row of record quarterly cost performance since 2021 at [ $97.27 ] per ton. In addition to the very positive cost performance by operations in the quarter, I'm pleased to report strong progress on our new [ Lowball ] Mine, Kingston Wildcat. The slug development is complete and has intercepted the coal seam. We are now in development production, working our way toward the areas where we will install ventilation shafts and dewatering shaft. While we plan to short tag this cotal, this raw coal to our Mammoth facility to leverage our existing preparation plant. We've also been working hard at building out the supporting infrastructures of the Wildcat mine loading and offloading infrastructure to help move the coal where it needs to go. Development production will continue through the rest of the year, and we expect to ramp up to a full annual run rate of roughly 1 million tons sometime within the 2026 calendar year.

Lastly, I'd like to congratulate our Virginia teams on some recent outstanding safety and environmental achievements. First, the Virginia Department of Energy Coal Mine Safety Awards, and those were awarded to Paramount [indiscernible] 41, the McCore preparation plant, both 88 strip and 88 strips highwall miner, the long branch surface mine in Highwall Miner and our Three Forks high well miner.

On the environmental side, the met Coal Producers Association awarded our Toms Creek preparation plant, the Best Active Prep Plan Award, and our Stone coal mine was awarded best for reclaimed underground mine.

Congrats again to all those involved in the safe and hard work that's behind these accomplishments.

With that, I'll now turn the call over to Dan for some details on the market.

Thanks, Jason. Good morning, everyone. As steel demand remains subdued, metallurgical coal markets experienced slight fluctuations during the third quarter but have been largely range bound over the prior 6-month period. The global economic outlook continues to be clouded with uncertainties around policy changes, geopolitical unrest, tariffs and ongoing trade negotiations and shifting trade policies. Future steel demand and metallurgical pricing will also be impacted by these factors. Of the 4 indices that Alpha closely monitors, the Australian premium Low Vol Index represented the most significant move during the quarter an increase of 9.6%. The Australian PLV Index rose from $173.50 per metric ton on July 1 to $190.20 per metric ton on September 30. The [indiscernible] East Coast well [indiscernible] Index increased from $174 per metric ton at the beginning of the quarter to $177 per metric ton a quarter close. .

The East Coast High-Vol A Index fell from $159 per metric ton in July to $15.50 per metric ton at the end of September. And finally, the U.S. East Coast to decreased from $147 per metric ton to $144.50 per metric ton at quarter end.

Since the quarter closed, all 3 U.S. indices have either remained flat or trended downward while the Australian PLV has increased to $196.50 as of November 4. U.S. East Coast Low Vol Index was $177 while High-Vol A and High-Vol B indices measured $150 and $140 per ton, respectively, as of the same date.

In the seaborne thermal market, the API 2 index was $107.95 per metric ton as of July 1 and decreased to $95.40 per metric ton on September 30, since then, the API 2 has increased to $100.7 per metric ton as of November 4.

Turning to logistics. We have been working alongside officials at CSX and to understand the implications of a train derailment that occurred on October 25. While the train was not carrying Alpha's cargo, the derailment occurred on an important line used to access Dominion terminal associates where the majority of our our exports originate. Our team members have notified customers of potential for impacts depending on how quickly the railroad can reinstate service. In the meantime, we continue to fulfill shipments from our stockpile at DTA and we're actively investigating alternative opportunities that could help keep our coal moving on its way to customers if the outage would extend for a prolonged period of time. We remain in close contact with the railroad and their teams and we look forward to the rail line being fully operational in the coming days.

Lastly, we are still engaged in discussions about the sale of coal to North American customers in 2026. Given the ongoing nature of these negotiations, I do not have any additional details about the volume or pricing that will make up Alpha's domestic sales book for next year. However, after these negotiations conclude, we will share more information about our domestic commitments and guidance expectations for the coming year, as we typically do.

Operator, we are now ready to open the call for questions.

[Operator Instructions] My first question comes from Nick Giles with B. Riley Securities.

Andy, Jason, you and the team have done a really impressive job of cutting costs during this down cycle. And we know there will be a modest incremental benefit from 45x in the new year. But my question is, ultimately, how should we think about the sustainability of some of these cuts? There's sales sensitive components on the way up. But just would appreciate any additional perspective on how productivity could shift if prices really start to move here?

Nick, this is Andy. I'll let Jason have the bulk of this one. But I mean, generally speaking, you're right, there's going to be some volatility quarter-to-quarter, obviously going into Q4 when you have vacation periods, that usually creates a little bit of chaos around cost and production. But I mean, that's usually baked into expectation. But I would just pause for a moment to again congratulate the operations team. Jason and his crew have done an amazing job over the past several quarters, continually ratcheting those costs down while maintaining our safe production mantra above all important to us. So exceptional work there. Jason, any comments on...

No, I mean, that's right, Andy. I will say that I think Well, number one, there's always -- we always run a risk of unforeseen problems that could occur, whether it's us or any of our competitors. But generally speaking I think the mines are in a better place than they were maybe earlier in the year. We had planned development projects that were going on that are now behind us. So we still -- we have the problems with vacation shutdowns and things like that, that we always see in the fourth quarter. But we're hopeful to all offset a lot of that because the mines are just performing better, but it was playing that way. .

My next question was, I understand that you aren't able to offer much additional color on next year's domestic contracts. But if we were to look back at prior years, is there any precedent that could inform us on how much you may flex those volumes? Or are there any year-over-year changes where domestic contracts were changed in excess of 1 million tons?

Yes, Nick, this is Dan. Every year is different. I don't know A lot of it is in the our customers. There -- the steel industry in North America is not running at full capacity or at least the blast fartisegment. So coking coal demand will go with the hot metal production. It's a little erratic. We talk to our customers, the steel pricing is good, but the volumes aren't quite there. The automotive sector in particular. So the demand could -- will shift because of that. I would guess it's going to be similar to last year. You have some new supply entrants in the market on the supply side that might try to take some market share. And again, this is nothing new, this happens every year. So I can't really comment on a 1 million-ton swing that seems like a lot. But until we're through the negotiations, I really can't say any more than that.

Yes. And I would say, generally speaking, I'm looking at Dan to either not or take me under the table if I got this wrong. But if you look back at our history, going back to, I guess, post-merger in 2019, we've been as low as low 3s and as high as 4 and change in that time period. So I think that's kind of the band that we will stay range-bound in and then the details will come out as we put those together, there could be smaller piece of the business that come in closer to the end of the year. But hopefully, in the next couple, 3 weeks, we'll have -- we'll have more information to share on the bulk of what the book will look like.

Understood. And then maybe 1 more, if I could. Some of your years have come out and talked about rare earth opportunities. This has mostly occurred in the PRB, but it seems like there could be some opportunities to process some waste material at [indiscernible] plants, things of that nature. Is this just something you've looked into at all? Or is it really less relevant just given your operations are centralized in the East?

Yes. I mean rares, it is the it's the shiny object at the moment. It's kind of the Wild West as far as project announcement and evaluations. We actually have done work going back to 2014, looking at some of these items. And it's been kind of a scattershot approach over the past decade. We've not really done a lot with it. But I mean we are spending some time and a little bit of money, a very little bit of money looking at these opportunities. There are some areas we've probably got as far as in the hundreds of areas to be sampled. I mean, we're not under any illusion that any of this is going to drive any material economic impact simply because, again, we just don't know what we don't know. But it is good to take an inventory of what we have and then also know what we don't have. So we'll spend some -- a little bit of time on that in the next couple of quarters and see what we have. But again, we're pretty happy mining metallurgical coal and if something else pops up, that will be great, but that's really not our strategic intent at this moment.

Our next question comes from Nathan Martin with the Benchmark Company.

Congrats as well on the continued cost per ton progress there. Maybe first 1 for Dan. Dan, you talked about the derailment on CSX's line. Is there an ETA for the full reopening of that line? And then -- how much more inventory do you guys have left on the ground at DTA to serve customer contracts?

Yes. Well, actually, the good news is we learned this morning that the first trains have moved through that area. So we expect this to be a relatively short duration. There's a whole lot of empty railcars on 1 side of the derailment and a whole lot of loaded coal cars on the other side. So it will take some amount of time to get some fluidity on the system there. We have coal on the ground. We were able to continue loading vessels, move some things around. We're the only shipper that could ship out of all 3 of the [ Hampton Roads ] coal terminal. So we took advantage of that, and our team did a nice job. So it's -- as far as the inventory number, we had sufficient tons to load the customers that we had to and just kind of kept things moving along.

Okay. Perfect. Good to hear. Maybe just coming back real quickly to the domestic negotiations. Again, I appreciate those are ongoing. Just curious, if fixed-price contracts can't be agreed upon on the normal, call it, 3 million to 4 million tons you guys have highlighted, would things just move to spot negotiations at that point? Just trying to think about a situation where -- this has dragged on that long meeting the negotiations with the domestic customers. Just to be curious to your thoughts.

Yes. Generally, Nate, the domestic customers all want to do fixed price year contracts. So there's not a lot of spot activity in that market. So no, I -- spot activity usually only occurs when there's an interruption at a mine or perhaps a ramp-up that they didn't foresee in coke production. But generally, it's fixed price and the volumes are pretty well known across the board.

Got it. Yes. I mean, just to clarify, I think you said, Dan, I've just never seen it drag out this long. So I was just curious. But it sounds like that regardless, you'll get some fixed price contracts done at some point.

Yes, agreed. It took -- I've been doing this a long time. We sort of started the process in July and now it's November. That is in my experience, it's a long time. But there's -- the steel industry has got some uncertainty to some new acquisitions and some of the steel plants around the U.S. have been idled. And so it's -- I think our customers have their hands full, too.

Got it. Maybe just 1 final question. Pricing is getting a bit of a lift recently as you guys highlighted, but market conditions do remain largely challenged. We also expect new met coal supply or some restart of supply to potentially come online, I guess, over the next few quarters here. So how does Alpha kind of expect to navigate these market conditions going forward?

Well, new mines come online and old mines go offline. It's not new. So we'll navigate it. We're watching it closely. We like to think we're the supplier of choice for a lot of the customers. We we do what we do pretty well, and we'll have to deal with the market forces as they are, but we're not afraid of the competition.

[Operator Instructions] Our next question comes from Matthew Key with [ Bank Texas Capital ].

One of the big teams in the met coal market has been -- that spread between the U.S. East Coast, High Vol A, High Vol B versus the Australian benchmark. I was wondering if you could provide any color on the major factors drive in that spread and whether you would expect it to continue into 2026?

Yes, Matt, this is Dan. I know a lot of people focus on that spread. I don't necessarily find it particularly relevant. We don't -- we track them both, but the relativities between the 2 are driven by obviously supply and demand. So the Aussie production has been okay this year, not great. I don't really not answer that. We don't track that relativity exactly. Obviously, if you have excess supply, it will put pressure on the indices. What we're more and more hoping for and expecting is some increase in demand in '26, perhaps in Europe or some other markets. And that will affect the spread, too. We see a little more demand. Asia is -- a lot of the PLB this mine in Australia goes to markets like India and the increasing demand in India should pull on that supply pretty hard. And Hopefully, that will improve the indices as well. .

Got it. And I was wondering if you could provide any color on CapEx expectations in 2026. Any major growth gap or carryover capital that we should be thinking about into next year?

No. I mean we're not quite ready to delve into 26 yet. I think numbers are pretty well. They've stopped moving. But the only project that we have ongoing is, as Jason was giving an update on [indiscernible] mine, which we began to work on last year. There will be some additional capital spend next year to wrap that up. And I think we've talked about that publicly. The total project was roughly $80-ish million and half of that was spent this year. There'll probably be another $40 million-ish to wrap that project up next year to get it up to full production. But everything else will probably be kind of a standard course, but we'll get those more precise numbers out to you hopefully in the coming weeks.

Oyou're next question is from Nick Giles with B. Riley Securities.

Just looking at your cash balance, you have $400 million today, a pretty nice cushion there. Just wanted to ask about how you're thinking about M&A opportunities. I think back to the tuck-in of Maxim rebuild. So curious if there's opportunities in your supply chain and then just how you're looking at some of the smaller operations out there, whether those are becoming more and less attractive?

Yes. I mean we have to we have to obviously tread carefully and soberly. Job 1 is always, as we've said for years, protect a franchise, maintain this as much of a cash cushion as we can during these more difficult markets, which we do think is going to be continue to be a protracted situation through next year, at least it feels like. We are interested in things like maximum manufacturing, maximum transportation. These things that bring more control and cost reduction in-house. Those are a little bit more challenging to track down because they have to make sense and there have to be synergies where we're not just picking up something that we don't necessarily know how to do. But there are opportunities out there, and we continue to look at those and evaluate those M&A right now, pretty tough in this landscape because again, cash burns a consideration. Are the assets burning cash and how do you view accretion from a -- whether it's EBITDA net income or cash flow, how do you evaluate and view those in this kind of a market? It's pretty tough. There are some opportunities, some small ones that will kick around, but it's really hard to imagine much at this very second. That's hugely material and executable. .

I appreciate that. And 1 more and I promise I'll let you go. I just wanted to ask about safety procedures in this current environment. I mean you never get as much credit when it's good and you certainly do when it's bad. So in this government shutdown, it seems like [indiscernible] is also shut down. So how are you approaching safety? And is this [indiscernible] shutdown really having any impact on your operations?

Well, I would say this about MSHA, the shutdown, portions of MSHA shut down. The enforcement is still quite active. October, in particular, we've had a lot of bench activity at the mine. So they're still very much engaged. So from that perspective, we're not -- we're seeing no impact from, I guess, less enforcement and less monitoring of safety. And naturally, that's transactions don't drive our safety performance. We drive our safety performance, and we've had a couple of blips early in the quarter of safety performance that we weren't terribly pleased with. The team has really responded and recovered September was the best safety month we've had this year and maybe, gosh, going back years, it was an excellent month. October has been very good as well. So again, outside forces don't drive our safety we do, and I think we're in a really good spot right now.

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

Well, thanks again, everyone, for joining us today. We appreciate your interest in Alpha, and we hope you all have a great rest of the day.

This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.