|
Signature Sponsor
November 1, 2024 - Alpha Metallurgical Resources, Inc. (NYSE: AMR), a leading U.S. supplier of metallurgical products for the steel industry, has reported financial results for the third quarter ending September 30, 2024. "Our third quarter results reflect the softness of metallurgical coal markets, which is driven by weak global steel demand," said Andy Eidson, Alpha's chief executive officer. "A slowdown in manufacturing activity, increased economic headwinds, and geopolitical uncertainties across the world have exerted downward pressure on steel demand, which impacts met coal demand and pricing. Despite these external factors, we continue to focus internally on safely running our operations and working to protect our business with a strong balance sheet. This means we have been taking a close look at our costs across the board and making some changes to help the organization withstand this period of lower revenue generation." Eidson continued: "Looking ahead to 2025, we are issuing guidance for next year and announcing our domestic sales commitments, which include 3.7 million tons contracted at an average price of $152.51 per ton. We are pleased with our committed tonnage for 2025, especially in light of the challenging market dynamics that served as a backdrop to this negotiation season, and we will seek opportunities to capture potential upside in the export market if the metallurgical markets rebound and begin to move higher." Financial Performance Alpha reported net income of $3.8 million, or $0.29 per diluted share, for the third quarter 2024, as compared to net income of $58.9 million, or $4.49 per diluted share, in the second quarter. Total Adjusted EBITDA was $49.0 million for the third quarter, compared to $116.0 million in the second quarter. Coal Revenues Alpha's Met segment cost of coal sales increased to an average of $114.27 per ton in the third quarter, compared to $109.31 per ton in the second quarter. The increase in costs for the third quarter is primarily related to reduced productivity quarter-over-quarter. Liquidity and Capital Resources Cash provided by operating activities in the third quarter increased to $189.5 million as compared to $138.1 million in the second quarter. The third quarter cash flows were positively impacted by a decrease in working capital of $144.5 million. The primary drivers of the working capital release were a reduction to accounts receivable and inventory. Capital expenditures for the third quarter were $31.5 million compared to $61.1 million for the second quarter. As of September 30, 2024, the company had total liquidity of $507.0 million, including cash and cash equivalents of $484.6 million and $97.5 million of unused availability under the ABL, partially offset by a minimum required liquidity of $75.0 million as required by the ABL. Total liquidity increased by $150.3 million relative to the second quarter. As of September 30, 2024, the company had no borrowings and $57.5 million in letters of credit outstanding under the ABL. Total long-term debt, including the current portion of long-term debt as of September 30, 2024, was $6.7 million. 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 October 31, 2024, the company has acquired approximately 6.6 million shares of common stock at a cost of approximately $1.1 billion, or approximately $165.74 per share. The number of common stock shares outstanding as of October 31, 2024 was 13,016,010. 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. 2025 Domestics Sales Commitments Alpha has committed approximately 3.7 million tons of metallurgical coal to domestic customers for shipment in the 2025 calendar year at an average price of $152.51 per ton. Issuance of 2025 Operational Guidance The company is issuing operational guidance for the 2025 calendar year. For sales volumes, Alpha expects to ship between 15.0 million and 16.0 million metallurgical tons in 2025 as well as another 1.0 million to 1.4 million tons of incidental thermal coal, bringing total 2025 shipment expectations to a range of 16.0 million to 17.4 million tons for the year. Alpha expects its 2025 cost of coal sales to be between $103.00 and $108.00 per ton. The guidance range for selling, general and administrative (SG&A) costs is $53 million to $59 million in 2025, excluding non-recurring expenses and non-cash stock compensation. Idle operations expense is expected to be between $18 million and $28 million. The company anticipates 2025 net cash interest income of $2 million to $10 million, and depreciation, depletion and amortization of $165 million to $185 million. The company expects capital expenditures in the range of $152 million to $182 million, which includes sustaining maintenance capital as well as development capital to continue progress on its Kingston Wildcat (formerly named Kingston Sewell) mine. 2025 contributions to equity affiliates are expected in the range of $44 million to $54 million, which include planned capital investments in Dominion Terminal Associates. The guidance range for cash contributions includes both cash contributions for normal operations of the facility as well as Alpha's 2025 share of the investments in DTA's facility upgrade program. The company expects a tax rate of between 0% and 5% for calendar year 2025. 2024 Performance Update As of October 23, 2024, for the 2024 calendar year, Alpha has committed and priced approximately 86% of its metallurgical coal for 2024 at an average price of $152.42 per ton and 100% of thermal coal for the year at an average expected price of $75.97 per ton. Conference Call The company plans to hold a conference call regarding its third quarter results on November 1, 2024, at 10:00 a.m. Eastern time. The conference call will be available live on the investor section of the company's website at https://alphametresources.com/investors. Analysts who would like to participate in the conference call should dial 877-407-0832 (domestic toll-free) or 201-689-8433 (international) approximately 15 minutes prior to start time. About Alpha Metallurgical Resources Alpha Metallurgical Resources (NYSE: AMR) is a Tennessee-based mining company with operations across Virginia and West Virginia. With customers across the globe, high-quality reserves and significant port capacity, Alpha reliably supplies metallurgical products to the steel industry. For more information, visit www.AlphaMetResources.com. To see the full results with financial figures included, click here. |
|