Q2 2026 Alpha Metallurgical Resources Inc Earnings Call

August 7, 2026

Speaker #1: Greetings and welcome to the Alpha Metallurgical Resources second quarter 2026 results conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation.

Operator: Greetings, and welcome to the Alpha Metallurgical Resources Q2 2026 results conference call. At this time, all participants are on a listen-only mode. A question-and-answer session will follow the formal presentation. 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.

Speaker #1: 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.

Speaker #1: You may now begin.

Speaker #2: 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.

Emily O'Quinn: Thank you, Rob. 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. 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 Q2 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.

Speaker #2: 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.

Speaker #2: 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 Etzen, and Chief Financial Officer, Todd Munsey, who will provide prepared remarks.

Speaker #2: 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.

Speaker #2: With that, I'll turn the call over to Andy.

Emily O'Quinn: With that, I'll turn the call over to Andy.

Speaker #3: Thanks, Emily. Good morning, everyone. Today we released our definitive second quarter financial results, which included adjusted EBITDA of 25.6 million dollars and 3.5 million ton shipped.

Andy Eidson: Thanks, Emily. Good morning, everyone. Today, we released our definitive Q2 financial results, which included adjusted EBITDA of $25.6 million and 3.5 million tons shipped. We closed out the H1 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 Ukraine war has resulted in dramatic fluctuations and significant increases to our diesel spend. Other mining supplies have also increased in cost.

Speaker #3: We closed out the first half of 2026 with fewer ton shipped and higher costs than expected, given our performance to date and our outlook for the rest of the year.

Speaker #3: We recently issued new guidance ranges for shipment volumes and cost to cold sales. Looking at the cost first, we increased our midpoint of guidance by $7 per ton as compared to our early estimations.

Speaker #3: This increase is largely due to higher costs on supplies of 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.

Speaker #3: 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.

Andy Eidson: We're projecting the need to spread these elevated costs across slightly fewer tons overall for the year. 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 H1, but it also accounts for a reduced efficiency rate at DTA. As we previously announced, one of the two stacker reclaimer machines at DTA sustained significant damage during a storm on 14 June. High winds reached over 80 mph during the weather event, resulting in significant harm to the machine.

Speaker #3: In terms of sales volumes, we brought down the midpoint of the guidance by a million tons for the year as compared to our initial expectations.

Speaker #3: Several factors informed our decision-making here, including continued net 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.

Speaker #3: As we previously announced, one of the two stacker reclaimer machines at DTA sustained significant damage during a storm on June 14th. High winds reached over 80 miles per hour during the weather event, resulting in significant harm to the machine.

Speaker #3: 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.

Andy Eidson: 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. We don't have a definitive timeline 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 would have been normally been accomplished by the damaged stacker reclaimer.

Speaker #3: 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 timeline to share just yet.

Speaker #3: 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.

Speaker #3: 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 have normally been accomplished by the damaged stacker reclaimer.

Speaker #3: Our new shipment guidance rates, for example, contemplate the continuation of the currently reduced operational capacity at DTA. It also reflects our ability to utilize throughput availability at other East Coast terminals.

Andy Eidson: Our new shipment guidance rates, 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 US East Coast indexes have hardly moved, and in recent weeks, the Australian PLV has begun to retreat.

Speaker #3: In summary, we are appreciative of DTA leadership and the way they have quickly established alternate workflows to maximize the terminal's capabilities under these unfortunate circumstances.

Speaker #3: 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.

Speaker #3: The US 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 US East Coast low vol has tightened, with the PLV roughly 14% higher than US East Coast low vol as compared to about 23% higher when we announced first quarter earnings in May.

Andy Eidson: With this latest movement, the spread between Aussie PLV and US East Coast low vol has tightened, with the PLV roughly 14% higher than US East Coast low vol, as compared to about 23% higher when we announced Q1 earnings in May. The further $32 drop from US East Coast low vol down to US 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 their 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 in two mine rescue contests this summer.

Speaker #3: The further $32 drop from US East Coast low vol down to US East Coast high vol A sits at about 20%, as compared to 22% a quarter ago.

Speaker #3: 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 their recognition by the Home Safety Association.

Speaker #3: 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 in two mine rescue contests this summer.

Speaker #3: 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 results.

Andy Eidson: 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 Q2 financial results.

Speaker #4: 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.

Todd Munsey: Thanks, Andy. Adjusted EBITDA for the Q2 was $25.6 million, down from $30 million in the Q1. 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 Q2, compared to $124.39 in the Q1. Export met tons priced against Atlantic indices and other pricing mechanisms in the Q2 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 Q1. Realization for our metallurgical sales in the Q2 was a total weighted average of $124.30 per ton, down from $128.40 per ton in Q1.

Speaker #4: 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.

Speaker #4: These results are compared to realizations of $110.32 per ton and $144.95 per ton, 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.

Speaker #4: 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.

Todd Munsey: Realizations in the incidental thermal portion of the met segment increased to $79.36 per ton in Q2, 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 Q1. For Q2, SG&A, excluding non-cash stock compensation and non-recurring items, increased to $13.7 million as compared to $13.5 million in Q1. Moving to the balance sheet and cash flows, as of 30 June, 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 31 March. We had $184.3 million in unused availability under our ABL at the end of Q2, partially offset by a minimum required liquidity of $75 million.

Speaker #4: 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 non-cash stock compensation and non-recurring items, increased to 13.7 million dollars as compared to 13.5 million dollars in the first quarter.

Speaker #4: Moving to the balance sheet and cash flows, as of June 30th, we had $307.6 million in unrestricted cash and $30.9 million in short-term investments.

Speaker #4: As compared to $317.2 million of unrestricted cash and $49.6 million in short-term investments, as of March 31st. 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.

Speaker #4: 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.

Todd Munsey: As of 30 June, Alpha had total liquidity of $447.8 million, down from $476.2 million at 31 March. CapEx for Q2 was $45.1 million, up from $40.7 million in Q1. Cash provided by operating activities was $39.9 million in Q2, up from $29 million in Q1. As of 30 June, 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.

Speaker #4: Cash provided by operating activities was $39.9 million in the second quarter, up from $29 million in the first quarter. As of June 30th, our ABL facility had no borrowings and $40.7 million of letters of credit outstanding.

Speaker #4: In terms of our committed position for 2026 at the midpoint of guidance, 70% of our metallurgical tonnage in the met segment is committed in priced at an average price of $128.17.

Speaker #4: 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 in priced at the midpoint of guidance at an average price of $75.94.

Speaker #4: 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.

Todd Munsey: From a market perspective, metallurgical coal markets were subdued in Q2. Continued uncertainty and volatility resulting from the war in Ukraine and broader global economic conditions influenced markets alongside persistently weak steel demand. The Australian PLV index increased from $236.80 per metric ton on 1 April to $243.50 on 30 June. The US East Coast low vol index dropped from $195 per metric ton in early April to $190 by the end of June. The US 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. The US East Coast high vol B index declined from $149.50 per metric ton to $147 at the end of the quarter.

Speaker #4: 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.

Speaker #4: The US 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.

Speaker #4: And the US 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 6th, representing a drop of roughly 12% since quarter close.

Todd Munsey: Since then, the Australian premium low vol index has decreased to $214.30 per metric ton as of 6 August, representing a drop of roughly 12% since quarter close. The US East Coast indices are stagnant with low vol at $188 per ton, virtually flat to the quarter end level. The US 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 6 August. In the seaborne thermal market, the API2 index was $117.80 per metric ton at the beginning of April, decreased to $115.65 at the end of June. Since then, the API2 index is roughly flat at $115.75 as of 6 August. With that, operator, we are now ready to open the call for questions.

Speaker #4: The US East Coast indices are stagnant with low vol at $188 per ton, virtually flat to the quarter-end level. The US 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 6th.

Speaker #4: In the seaborne thermal market, the EPI-2 index was $117.80 per metric ton at the beginning of April and decreased to $115.65 at the end of June.

Speaker #4: Since then, the EPI-2 index has been roughly flat at $115.75 as of August 6th. With that, operator, we are now ready to open the call for questions.

Speaker #2: Thank you. At this time, we'll be conducting a question and answer session. If you'd like to ask a question, please press star 1 on your telephone keypad.

Operator: Thank you. At this time, we'll be conducting a question and answer session. If you'd like to ask a question, please press star one on your telephone keypad. One moment please, while we poll for questions. Our first question comes from Nick Giles with B. Riley Securities. Your line is now live.

Speaker #2: One moment, please, while we pull for questions. Our first question comes from Nick Giles with B. Reilly Securities. Your line is now live.

Speaker #5: Yeah. Thanks, operator. Hey, good morning, guys. Maybe first just on DTA. It sounds like there's still a fair few unknowns, but just curious how you might quantify the kind of optimization that you can achieve with just one stack of 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 Giles: Yeah, thanks operator. Hey, good morning, guys. Maybe first just on DTA, it sounds like there are still a fair few unknowns. 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 Q3 versus further improvements in Q4 as kind of temporary fixes are installed, if you will?

Speaker #3: Hey, Nick. It's Andy. Good morning. Yeah, I think the folks at Core did a pretty good job answering this question yesterday, and our view is exactly the same.

Andy Eidson: Hey, Nick, it's Andy. Good morning. Yeah, I think the folks at Core did a pretty good job answering this question yesterday. 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 it sustained, it's a pretty big undertaking to figure this out and try to optimize. I can't give you any specifics. Again, I think our revised guidance covers what we believe we can accomplish.

Speaker #3: 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 it sustained, it's a pretty big undertaking to figure this out and try to optimize.

Speaker #3: 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's going to depend on how quickly we can get just the logistics worked out and move the damaged SR off of the current plot, move it over to a yard where it can be disassembled, and we can start the work on just clearing out the space so we can start moving pieces around.

Andy Eidson: Hopefully, there may be a little bit of upside to that. A lot of it's 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 the work on just clearing out the space so we can start moving pieces around. The team down there has done a fantastic job handling the situation and keeping us as efficient as possible. We are seeing some reduced efficiency and some throughput. As I said, that's all reflected in our guidance for the rest of the year.

Speaker #3: 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.

Speaker #3: But as I said, that's all reflected in our guidance for the rest of the year.

Speaker #5: Understood. Thanks for that, Andy. And sorry to stay on the topic, but just do you have any initial sense for if there was 100% utilization with both stack of reclaimers, kind of what utilization you could achieve, which is one as we look out to 2027?

Nick Giles: Understood. No, thanks for that, Andy. Sorry to stay on the topic, just, do you have any initial sense for if there was 100% utilization with both stack reclaimers, what utilization you could achieve with just one as we look out to 2027?

Speaker #3: 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.

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

Speaker #3: So yeah, really it's going to be a while before I could tell you that.

Speaker #5: 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?

Nick Giles: Understood. No, fair enough. Maybe just switching gears on the cost side. Costs are obviously impacted from DTA and from the higher diesel prices as well. 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?

Speaker #3: Yeah, 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, which are easier to ramp up or ramp down based on the situation.

Andy Eidson: Yeah, we are. Right now it's more of 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. We're continuing to look through that and see what tons are most at risk. It's not always just about cost, it's about margin. That's the number that we're worried about. If you've got a low-cost mine that is achieving a very low realization, then it needs to be at risk rather than something that's higher cost but achieves higher margin. We continue to go through that and evaluate the portfolio to see what other actions that could be taken.

Speaker #3: So we're continuing to look through that and see which tons are most at risk. And it's not always just about cost—it's about margin.

Speaker #3: 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, then it needs to be at risk rather than something that's higher cost but achieves higher margins.

Speaker #3: So we continue to go through that and evaluate the portfolio to see what other actions that could be taken. And of course, Jason is his team always have a couple of tricks up their sleeve as far as identifying efficiencies or areas where costs can be taken out.

Andy Eidson: 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. We'll just let that develop as the rest of the year moves on.

Speaker #3: So, we'll just let that develop as the rest of the year moves on.

Speaker #5: Understood. Okay. We'll turn it over, but appreciate the update.

Nick Giles: Understood. Okay. Well, I'll turn it over, appreciate the update.

Speaker #3: Appreciate you.

Andy Eidson: Appreciate you.

Speaker #2: As a reminder, if you'd like to ask a question, please press star 1 on your telephone keypad. One moment, please, while we pull for questions.

Operator: As a reminder, if you'd like to ask a question, please press star one on your telephone keypad. One moment please, while we poll for questions. Our next question comes from Nathan Martin with The Benchmark Company. Please proceed with your question.

Speaker #2: Our next question comes from Nathan Martin with The Benchmark Company. Please proceed with your question.

Speaker #5: Hey, thanks, operator. Good morning, everyone. Typically, 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?

Nathan Martin: Thanks, operator. Good morning, everyone. If 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? How long does the shipment guidance assume the damaged DTA stacker reclaimer remains out of commission?

Speaker #5: And then how long does the shipment guidance assume the damage DTA stack or reclaimer remains out of commission?

Speaker #3: Well, good morning, Nick, 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.

Andy Eidson: Well, good morning, Nate, 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. As far as the cadence, if you take just the pro rata for H2 and look at our typical seasonal trends between Q3 and Q4, I think that would probably apply. 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. I think generally speaking, our seasonal trend will probably still apply, just at a lower overall rate.

Speaker #3: 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.

Speaker #3: 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.

Speaker #3: 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 as at a lower overall rate.

Speaker #5: Appreciate that, Andy. That's helpful. And then maybe a question for Dan. I noticed in your updated committed and price table, the domestic tonnage decline I think to 3.8 million from 4.1 million previously.

Nathan Martin: Appreciate that, Andy. That's helpful. 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.

Speaker #5: First, I'm just hoping to get some color on that.

Speaker #4: Yeah, Nick. This is Dan. The domestic piece, we had some customers that had some optionality built in there, some options they can declare or not declare.

Dan Horn: Yeah, Nate. This is Dan. The domestic piece, we had some customers that had some optionality built in there, some options they can declare or not declare. Some of those were not declared. 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. This year they didn't nominate them. That's the main reason.

Speaker #4: 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.

Speaker #4: As the year progresses, they either dominate them or don't nominate them, and this year they didn't nominate them. So that's the main reason.

Speaker #5: Got it, Dan. That makes sense. Appreciate that. And then while I have you, looks like you guys still have about 30% of your met tons that are committed, but still unpriced.

Nathan Martin: Got it, Dan. That makes sense. Appreciate that. While I have you, looks like you guys still have about 30% of your met tons that are committed, but they're still unpriced. How should we think about the quality mix of what you guys have left to sell for the year and which markets do you expect those committed tons to move into?

Speaker #5: 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?

Speaker #4: Well, Nick, it's all of the above, frankly. They're some are going to go to Aussie. I would apply the same percentages that we've already stated in there to those tons too.

Dan Horn: Well, Nate, it's all of the above, frankly. 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. As you can see from our committed uncommitted, we don't have a whole lot of spot tons left anyway. They're going to ship under the term contracts to the known markets.

Speaker #4: 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.

Speaker #4: We don't have a whole lot as you can see from our committed uncommitted. We don't have a whole lot of spot tons left anyway.

Speaker #4: So they're going to ship under the term contracts to the known markets.

Speaker #5: All right. Appreciate that. I'll go ahead and pass it on, guys. Thank you for the time, and good luck going forward.

Nathan Martin: All right. Appreciate that. I'll go ahead and pass it on, guys. Thank you for the time and good luck going forward.

Speaker #3: Thanks. Appreciate it.

Andy Eidson: Thanks. Appreciate it.

Speaker #2: Our next question comes from Matthew Key with Texas Capital Securities. Please proceed with your question.

Andy Eidson: Our next question comes from Matthew Key with Texas Capital Securities. Please proceed with your question.

Operator: Our next question comes from Matthew Key with Texas Capital Securities. Please proceed with your question.

Speaker #6: Good morning. And thanks for taking my questions. 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?

Matthew Key: Good morning, and thanks for taking my questions. 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 and we need to see some volume get taken offline? Also, is that something that you would be considering as we get to 2027 if the market doesn't improve from these levels?

Speaker #6: Do you think this is mostly just a supply-driven story? We need to 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 from these levels?

Speaker #3: Yeah, I'll let Dan throw in his thoughts on the gory details, but generally speaking, I don't know that this is—yeah, the supply has grown a bit.

Andy Eidson: Yeah. I'll let Dan throw in his thoughts on the gory details, but generally speaking, I don't know that this is, the supply has grown a bit. We have seen some tons coming off through H1 from some of the smaller producers, particularly in Central Appalachia. 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. 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. Dan, your thoughts on the market?

Speaker #3: 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.

Speaker #3: 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 the 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 calls.

Speaker #3: The high-vol bees particularly and some high-vol A's where appropriate. But Dan, your thoughts on the market?

Speaker #4: Yeah. 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.

Dan Horn: Yeah. 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 two ago. Those three or four or five vessels per month are finding homes in the spot market at low realizations in Asia, largely being sold by the longwall mines. We've stayed away from most of those low-priced opportunities. We've settled into our better markets and frankly, some of our higher BTU high vol B tons were moving into the thermal market at basically the same realizations.

Speaker #4: And 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 two ago.

Speaker #4: And those three or four or five vessels per month are finding homes in the spot market at low realizations in Asia. Largely by the being sold by the long-haul mines.

Speaker #4: We've stayed away from most of those low-priced opportunities. We've sell into our better markets and frankly, some of our higher BTU, high-vol B tons were moving into the thermal market.

Speaker #4: It basically the same realizations. We're taking advantage of an improved thermal market to move some tons as well. So it wasn't a surprise that the supply would be increasing.

Dan Horn: We're taking advantage of an improved thermal market to move some tons as well. It 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.

Speaker #4: I guess a bit of a surprise is that the global economy is a little weaker, particularly due to the steel exports out of China that continue to hurt our markets in South America and around the world with cheaper imported steel.

Speaker #4: We need our customers to produce more steel, frankly.

Speaker #6: Got it. And just kind of as a follow-up on that, are there any additional levers that you could pull to adjust your sales mix at all?

Matthew Key: Got it. Just kind of on 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 weight in low vol versus US East Coast high vol A or any other kind of adjustments you could do there?

Speaker #6: Maybe to a slightly heavier weight in and low-vol versus high-vol A or any other kind of adjustments you could do there?

Speaker #4: Yeah, 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.

Dan Horn: Yeah, Matthew, I guess you're my straight man. We have a new mine coming online, Wildcat, that is in production now and will 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. The short answer is yes.

Speaker #4: 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.

Speaker #4: So short answer is yes.

Speaker #6: All right, well, thank you for your time, and best of luck.

Matthew Key: All right. Well, thank you for your time and best of luck.

Speaker #3: Thanks. Appreciate you.

Dan Horn: Thanks. Appreciate you.

Speaker #2: We have an additional question from Nick Giles. Please proceed with your question.

Dan Horn: We have an additional question from Nick Giles. Please proceed with your question.

Operator: We have an additional question from Nick Giles. Please proceed with your question.

Speaker #7: Yeah. Thanks for taking my follow-up. I just wanted to ask about domestic negotiations which I assume are underway. I mean, US 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.

Nick Giles: Yeah. Thanks for taking my follow-up. 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. Just curious if you had any comments on that thus far.

Speaker #7: So just curious if you had any comments on that thus far.

Speaker #4: Not particularly. Nick, at this point, I mean, everything you said is correct. We've the domestic prices have gone down the last couple of years.

Dan Horn: Not particularly, Nick, at this point. I mean, everything you said is correct. The domestic prices have gone down in the last couple of years. 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.

Speaker #4: Should 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.

Speaker #4: And we hope that we'll participate in some of that uplift in the market next year.

Speaker #7: 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?

Nick Giles: Maybe just on that point on the low vol side, 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?

Dan Horn: Not particularly. I think 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, Oh, 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 think we have to hear from the customers and hear what their requirements are first. It's really premature to get into what that mix would look like. I'll just add that the demand seems to be good. With as many blast furnaces in North America that are running, the demand for coke should be pretty good this year, and therefore, the demand for coking coal should be good.

Speaker #4: Not particularly. I think 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, "Oh, let's sell this much high-vol, this much—" we're interested in shipping some of that to customers, obviously, but no. I think we have to hear from the customers and hear what their requirements are first.

Speaker #4: So it's really premature to get into what that mix would look like. I will add, let me just add that I'll just add that the demand seems to be good.

Speaker #4: With as many blast furnaces in North America that are running, the demand for coke should be pretty good this year. And therefore, the demand for coke and coal should be good.

Speaker #4: So we would expect probably in that kind of environment, they'll use more low-vol in their mixes to produce higher-quality coke, shorter coking times. That's typically what happens in these years.

Dan Horn: 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.

Speaker #7: Understood. That's helpful context. Well, we'll stay tuned there and thanks again, guys.

Nick Giles: Understood. That's helpful context. We'll stay tuned there, and thanks again, guys.

Speaker #3: Thank you.

Dan Horn: Thank you.

Speaker #2: We have reached the end of the question-and-answer session. I will now turn the call over to Andy Edson for closing remarks.

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

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

Speaker #3: Well, thank you all for your interest in Alpha, for joining our call this morning. We hope you all have a great weekend. Talk to you next quarter.

Andy Eidson: 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.

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

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

Q2 2026 Alpha Metallurgical Resources Inc Earnings Call

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