Good afternoon. My name is Cole [ph] and I will be your conference call operator today. At this time, I would like to welcome everyone to the Warrior Third Quarter 2024 Financial Results Conference Call. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. This call is being recorded and will be available for the replay on the company's website. I would like to turn the conference over to D'Andre Wright, Vice President of External Affairs and Communications. Please go ahead, sir.

Good afternoon and welcome everyone to Warrior’s third quarter 2024 earnings conference call. Before we begin, let me remind you that certain statements made during this call include statements relating to our expected future business and financial performance may be considered forward-looking statements according to the Private Securities Litigation Reform Act. Forward-looking statements, by their nature, address matters that are to different degrees uncertain. Those uncertainties, which are described in more detail in the company's annual and quarterly reports filed with the SEC, may cause our actual future results to be materially different from those expected in our forward-looking statements. We do not undertake to update our forward-looking statements whether as a result of new information, future events, or otherwise, except as may be required by law. For more information regarding forward-looking statements, please refer to the company's press releases and SEC filings. We will also be discussing certain non-GAAP financial measures which are defined and reconciled to comparable GAAP financial measures in our 2024 third quarter press release furnished to the SEC on Form 8-K which is also posted on our website. Additionally, we will be filing our Form 10-Q for the quarter ended September 30, 2024 with the SEC this afternoon. You can find additional information regarding the company on our website at www.warriormetcoal.com, which also includes the second quarter supplemental slide deck that was posted this afternoon. On the call with me today are Mr. Walt Scheller, Chief Executive Officer; and Mr. Dale Boyles, Chief Financial Officer. After our formal remarks, we will be happy to take any questions. With that, I'll now turn the call over to Walt. Walt?

Thanks, D'Andre. Hello, everyone. And thank you for taking the time to join us today to discuss our third quarter 2024 results. After my remarks, Dale will review our results and additional detail, and then you'll have the opportunity to ask questions. We’re pleased with our third quarter results despite weak global demand and high quality steelmaking coal prices reaching a 3-year low. While we wait for market conditions to improve, we are carefully managing spot opportunities, and are strategically exercising patients with certain geographies. Despite the external market factors impacting our results, the third quarter represented a significant and positive milestone for us, as we produced the first development tons from our world class Blue Creek growth project, on time and within budget. With our high quality asset base, highly flexible cost structure and a high performing workforce; we're well positioned to capitalize on improved global steel demand when the market turns. And at the same time, we're advancing the Blue Creek project completion with a rigorous focus on cost and execution. The third quarter turned out to be weaker than we had expected for our markets, primarily driven by a confluence of weaker demand, excess Chinese steel export into our customer’s markets, and ample supply of steelmaking coals. The reality of higher export volumes of lower cost Chinese steel has been a growing concern for some time impacting all steel producing regions across the world. As such, global steel prices have either extended their downward trend or remained at low values, challenging our customer’s margins. The consequences of excess Chinese steel also impacts our own markets. This is because Chinese steel production predominantly relies on domestic coals and landlocked Mongolian coals, which typically do not impact the global seaborne met coal balance. Along with stable production from Australia,…

Thanks, Walt. Despite the weaker global demand for steelmaking coal in the third quarter of 2024, we continue to deliver strong operational and financial performance by leveraging our high quality assets and strong operational competencies. For the third quarter of 2024, Warrior recorded net income on a GAAP basis of $42 million or $0.80 per diluted share, compared to net income of $85 million or $1.64 per diluted share in the same quarter of 2023. Non-GAAP adjusted net income for the third quarter, excluding the non-recurring business interruption expenses, was unchanged at $0.80 per diluted share. This compares to adjusted net income of $1.85 per diluted share in the same quarter of 2023. These decreases quarter-over-quarter were primarily driven by the 17.5% lower sales volume, and a 7% lower average net selling price. This reduced our cash margin per ton to $48 per short ton in the third quarter of 2024 from $70 per short ton in the same quarter of last year. We reported adjusted EBITDA of $79 million in the third quarter of 2024 compared to $146 million in the same quarter of last year. Our adjusted EBITDA margin was 24% in the third quarter of 2024 compared to 34% in the same quarter of last year. Our adjusted EBITDA margin per ton was $42 per short ton for the third quarter of 2024 as compared to $65 per short ton in the same quarter of last year. As I previously mentioned, these decreases quarter-over-quarter were primarily driven by the 17.5% lower sales volume, a 7% lower average net selling price, and slightly higher cost. Total revenues were $328 million in the third quarter of this year, compared to $423 million in the third quarter of 2023; this overall decrease of $96 million was primarily due to a…

Thanks, Dale. We continue to expect our markets to improve over the next quarter or two, hopefully above cost curve economics, although we believe pricing may remain below averages we've seen in recent years. Improvements in demand are expected to come mainly from India and a few select countries. China's recently announced stimulus package and actions are notable, but we're cautious in judging their potential to boost demand in our markets, and we'll need time to analyze the total impact. Overall, we expect steelmaking coal supply to be somewhat tighter in the last quarter of this year as the market feels the full impact of losing the growth in our supply, and as Australia enters it’s typical wet season. In conclusion, despite near-term challenges, we're on track to continue to deliver strong operational and financial performance by leveraging our high quality assets, strong balance sheet and best-in-class operations. With that, we'd like to open the call up for questions. Operator?

[Operator Instructions] And our first question today will come from Lucas Pipes with B. Riley Securities.

Thank you very much, operator. Good afternoon, everyone, and good to hear about all the progress at Blue Creek, and also your solid realizations during the quarter. My first question is on the commercial side. And Walt and Dale, if I heard you right, spot exposure was 23% in Q3 and you're still looking at kind of 25% to 30% in 2024. And I wondered, first, could you comment on the Q4 outlook in terms of spot pricing? And then, more broadly, as you compete in Asia for business with Europe, Latin America still on the softer side; what are some of the competitive dynamics as you kind of price or look to put in place term business? Is it against the -- is it on the basis of the Australian PLV, high vol A discounts to that of any sorts? Would appreciate any thoughts you might be able to share. Thank you.

Lucas, as we look out into Q4 and our spot expectations, what we're doing is, as we’ve said a couple times, is that we're really carefully watching exactly where the market is and what type of market is, whether it's CFR or FOB. And, you know, the majority -- vast majority of Asian spot sales are CFR; so we're monitoring that very carefully. And while we could move more tons, we're going to be pretty careful about when and where we decide to move them, because that -- I think that turn business in Asia outside of the term business -- we have term business in Japan, but in -- as you look into China and others, term business is kind of difficult to come by at reasonable pricing. So, right now we're just being very careful about what we commit to and making sure that we're protecting what we think are outstanding assets and outstanding coal qualities until the market is able to recognize that value.

Walt, this is super helpful. So on my numbers, you came in at about 90% realization in Q3 versus PLV. Is that a reasonable assumption for Q4 given your discipline on the score?

I think you have to be really careful with it. As we've said before, we projected that we'd be in the mid-80s to 90s, and I think when you see us up in the 90s where we were, it's a reflection of a falling market. And I think we have to keep that in mind. If the market stays flat, I would expect the number to be a little lower than that 93% [ph]; I could be wrong, hopefully. And if the market goes up, I would expect that number to drop more considerably because remember, that all trails by about a month. So, it's kind of -- it's kind of difficult to really predict exactly where that'll end up, but be careful with that 93% [ph] because this is a falling market.

That's helpful. I'll turn over to the cost side. If I understood, Dale write in his prepared remarks, he mentioned kind of variable costs on the transportation side. One, could you speak to the sensitivity in transportation to changes in the price? And has all of that benefit kind of flown through at this point or could there be more bearable cost adjustments on transportation in Q4? Would appreciate your thoughts on that. Thank you.

Yes. We -- you know, transportation now resets on a one month lag, Lucas, not a three month like we used to have. So there is a little bit to be gained, maybe possibly in the fourth quarter but I don't see it as significant, depending on the volumes. But there could be a little upside on transportation in the fourth quarter.

And more broadly, on the cost side for Q4, any major moving besides that transportation? Thank you for that color. Any other moving pieces to keep in mind for Q4 on the cost side?

There shouldn't be. We've had a couple of longwall moves in the third quarter. Again, we've managed to get those moves down to zero day or minimal moves. And also the amount of those sections, conditions get a little tougher; so we're out of that. So I don't see any major cost impacts in the fourth quarter, positive or negative.

Walt and Dale, I appreciate all your color, and keep up the good work.

And our next question will come from Nathan Martin with The Benchmark Company.

Thanks, operator. Good afternoon, Walt. Good afternoon, Dale. Maybe just following up on one of Lucas's questions. Clearly, like you guys said, markets kind of remaining depressed, you mentioned exercising some patience with sales, which I think is prudent. But how should we think about this impacting your opportunity to ship coal here in the fourth quarter? Could you anticipate maybe fourth quarter shipments actually being down sequentially, if demand doesn't improve?

I don't believe so. I think we should be -- from where we expected for the fourth quarter, you have to remember, again, as we said, we have fewer operating days. And I think -- as we look at the fourth quarter, our expectations land right in the heart of our full year guidance.

Okay. Well, I appreciate that. So if I say right middle of full year guidance of sales, right, that would be 7.8 million tons. Is that what you're talking about for the full year?

Yes, yes. That would put us -- say fourth quarter could be very similar, maybe slightly -- just slightly below the third quarter.

Yes, that's what I was thinking, Dale. So, it looks like if you're flat, you get to about 7.9 [ph]. Okay, that's very helpful. Appreciate that, guys. And then, maybe just coming back to the 3Q gross price realization, the 93% [ph] -- I know asked about that last quarter. Obviously, Lucas just touched on that as well. But maybe from just the pure math of it, and -- you know, another several investors are out there that maybe appreciate a walk through there. So when people are trying to calculate the average net price for -- really, any given quarter; A) what's the best time period to use so that we can get to that -- your 93% number you guys talked about?

Well, we just take the averages of the of the PL -- what our realization is of the PLV during that period, right. And that's really the simple math about it. You have to take out the demurrage and all those things in our average net selling price; so that's really -- it's that simple, really.

And you're really looking at, for -- for instance, for the fourth quarter you're really looking at coal pricing from September, October, November; not October, November, December, because of the one month lag. So, you really need to go back to September pricing, October pricing and November pricing to figure out where we're likely to be.

Okay. And I think that might be some of the issues, like -- if I looked at it again, the one month lag, let's say, well, for 3Q, right? So we're looking at, instead of the normal calendar we're looking at June, July, August. I end up with a FOB Australian premium level price about $230 [ph], and it's difficult to get to that 93% realization. Maybe some of it is backing out the demurrage [ph] pieces. I don't know if there's any other things you want to add right now or we can just take it offline?

All right. Yes, let’s take it offline.

Okay, appreciate that. And then, maybe just one final question on the cost side. You guys have said previously the full year 2024 cost per ton guidance range of $125 to $135 assumes roughly a $250 to $260 per metric ton off-sea premium lowball price. Given where markets are today, call it, $200 to $204; could you give us an idea of what cost per ton might look like at that price?

Well, I think we would be in the lower end of that range. If you look on a year-to-date basis, we're at $127. And if you look at the average selling price $198; convert that to metric, then you're looking at an 88% net realization of that versus the $250. So that's why I'm saying we're riding the line today. But if fourth quarter pricing is lower, our cost hopefully will be lower in the fourth quarter. Now, it depends on the volumes, right; the volume impact. So -- but we should be -- you know, if pricing stays lower and we don't have any upticks from here, we should be in that lower end of the range.

Okay. So you still think it's probably in the lower the end of the range; they'll not -- not possibly below pricing [indiscernible]?

It’s possible. It depends then because you're going to have your volume impact, right? So if we cut that volume significantly, that could have an impact on it.

Yes, it makes sense; lower denominator. Okay, perfect. Guys, appreciate the time. And best of luck in the fourth quarter.

[Operator Instructions] Our next question will come from Katja Jancic with BMO Capital Markets.

Hi, thank you for taking my questions. I know next year, second half of next year you're going to start shipping or selling the Blue Creek volume. Are you already in conversations with customers about that volume?

Yes, we are.

And -- what are the conversations? Are you going to be contracting that already or it's going to be more on the spot side?

I think it will be the expectation of contract. I mean, these are going to be -- again, it's a new coal mine, everyone is going to want to see how it works in their coke ovens. So, we're going to be shipping that off to customers to try a couple of holes, or a full cargo of -- but -- you know, we'll be placing that coal with various customers to give them a first try at it.

And then this year, I think you mentioned you're going to be hiring about 250 people or you're on track to hire 250. Looking to next year, how much -- how many more people do you need to hire?

I think next year for Blue Creek we're probably going to be in -- I -- we're still doing the budgeting process, but the 100-range I would say, something like that. I don't know for sure but for some reason that -- I just feel like that's going to be -- that's going to be around the number. But again, we're in the budgeting process right now; so I don't -- really don't have. That's just a…

Yes, just a swag right there. I mean, yes, it may be a little more than that but we need to finalize the budget for next year.

And then, has it started to assume that some of that will put some pressure on the cost side, at least in the first half of the year?

No, not until you sell some of that coal; all that will go to mine development.

Okay, perfect. Thank you so much.

And at this time, there are no further questions. I would like to turn the call back over to Mr. Scheller for any closing remarks.

That concludes our call this afternoon. Thank you, again, for joining us today. We appreciate your interest in Warrior.

Thank you. And that does conclude today's conference. Thank you all for participating. And at this time, you may now disconnect your lines.