February 26, 2024 - Alpha Metallurgical Resources, Inc. (NYSE: AMR), a leading U.S. supplier of metallurgical products for the steel industry, today reported financial results for the fourth quarter and full year ending December 31, 2023.

"Our fourth quarter results reflect a team effort to finish the year strong, and I'm pleased to report we were successful in that endeavor," said Andy Eidson, Alpha's chief executive officer. "Building on this positive momentum, Alpha completed the year having generated over a billion dollars in 2023 Adjusted EBITDA and having invested more than a billion dollars into our share repurchase program since its inception. We did all of this while maintaining better-than-national-average safety and environmental compliance performance and continuing to provide first class service to our customers."

Financial Performance

Alpha reported net income of $176.0 million, or $12.88 per diluted share, for the fourth quarter 2023, as compared to net income of $93.8 million, or $6.65 per diluted share, in the third quarter.

For the fourth quarter, total Adjusted EBITDA was $266.3 million, compared to $153.9 million in the third quarter.

Coal Revenues

Alpha's Met segment cost of coal sales increased to an average of $119.00 per ton in the fourth quarter, compared to $109.95 per ton in the third quarter of 2023. The increase was primarily driven by higher sales-related costs and purchased coal costs, both of which were impacted by higher coal indices during the quarter, as well as higher labor costs. Cost of coal sales for the All Other category improved to $60.07 per ton in the fourth quarter, compared to $84.73 per ton in the third quarter.

Liquidity and Capital Resources

Cash provided by operating activities in the fourth quarter increased to $199.4 million as compared to $157.2 million in the third quarter 2023. Capital expenditures for the fourth quarter were $61.5 million compared to $54.7 million for the third quarter.

As of December 31, 2023, the company had total liquidity of $287.3 million, including cash and cash equivalents of $268.2 million and $94.1 million of unused availability under the ABL, partially offset by a minimum required liquidity of $75.0 million as required by the ABL. As of December 31, 2023, the company had no borrowings and $60.9 million in letters of credit outstanding under the ABL. Total long-term debt, including the current portion of long-term debt as of December 31, 2023, was $10.4 million and consisted primarily of equipment financing obligations.

Share Repurchase Program

As previously announced, Alpha's board of directors authorized a share repurchase program allowing for the expenditure of up to $1.5 billion for the repurchase of the company's common stock. As of February 19, 2024, the company has acquired approximately 6.6 million shares of common stock at a cost of approximately $1.1 billion, or approximately $164.87 per share. The number of common stock shares outstanding as of February 19, 2024 was 12,994,558, which includes the impact of 220,067 net shares issued in December 2023 and January 2024. The shares issued in these periods resulted from vestings of previously granted equity awards under the company's incentive plans. The outstanding share count does not include the potentially dilutive effect of unvested equity awards.

The timing and amount of share repurchases will continue to be determined by the company's management based on its evaluation of market conditions, the trading price of the stock, applicable legal requirements, compliance with the provisions of the company's debt agreements, and other factors.

Composition of Alpha's Board of Directors & 2024 Annual Meeting

Per the company's corporate governance guidelines, director candidates may not stand for election beyond the age of 75 years. Having reached this age limit, Michael J. Quillen and Albert E. Ferrara, Jr. will not stand for election at the 2024 annual meeting of stockholders and will leave the board, effective before market open on Monday, February 26, 2024, after significant tenures. Mr. Ferrara, the company's longest-serving director, has served on the board since the company's formation in July 2016, while Mr. Quillen, who founded predecessor company Alpha Natural Resources in 2002, has served since November 2020. In addition, Elizabeth A. Fessenden, a director since February 2021, has elected to step down from the board, effective before market open on February 26, 2024. None of these departures is a result of disagreements with the company. In connection with these departures, the board has determined to reduce its size from nine directors to seven, effective February 26, 2024.

Additionally, a new director, Shelly Lombard, has been appointed to join the board, effective at market close on February 26, 2024. Ms. Lombard is a financial expert bringing over 35 years of experience in finance on Wall Street and analyzing investments. She has served on a number of publicly traded company boards, including as chair of several audit committees.

"We cannot thank Mike, Al and Liz enough for their service to Alpha and the wisdom they've brought to our boardroom," said David Stetson, board chairman. "Together, the board, management and broader Alpha workforce have achieved incredible success over the last few years. Mike, Al and Liz are to be commended for their involvement in these accomplishments. As we look ahead, we are excited to welcome Shelly to the board. With her deep finance background and market experience, I am confident she will be a valuable contributor."

Ms. Lombard has been appointed, effective upon joining the board, as chair of the audit committee.

Mr. Gorzynski has been appointed lead independent director, effective February 26, 2024.

Alpha announced the company's director nominees for the 2024 annual meeting of stockholders: Joanna Baker de Neufville, Kenneth S. Courtis, Andy Eidson, Michael Gorzynski, Shelly Lombard, Danny Smith and David J. Stetson.

The board of directors has scheduled the annual meeting for May 2, 2024.

Operational and Performance Update

As previously announced, due to the 2023 closure of Alpha's last thermal mine, the company expects all of its 2024 financial activity to be reported within the Met segment. This change is reflected in the following guidance table.

As of February 14, 2024, at the midpoint of guidance, Alpha has committed and priced approximately 35% of its metallurgical coal at an average price of $171.33 per ton and 100% of thermal coal at an average expected price of $77.14 per ton.

To see the full results with financial figures included, click here.