Atlas Energy Solutions Inc.

Greetings and welcome to Atlas Energy Solutions fourth quarter and year-end 2024 financial and operational results conference call. At this time, all participants are on a listen-only mode. A question and answer session will follow the formal presentation. If anyone requires operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Kyle Turlington, Vice President, Investor Relations. Thank you. You may begin.

Hello, and welcome to the Atlas Energy Solutions Conference call and webcast for the fourth quarter of 2024. With us today are Bud Brigham, Executive Chair, John Turner, President and CEO, Blake McCarthy, CFO, and Chris Schola, COO. Bud, John, Blake, and Chris will be sharing their comments on the company's operational and financial performance for the fourth quarter of 2024, after which we will open the call for Q&A. Before we begin our prepared remarks, I would like to remind everyone that this call will include forward-looking statements as defined under the U.S. securities laws. Such statements are based on the current information and management expectations as of this statement and are not guarantees of future performance. Forward-looking statements involve certain risks, uncertainties, and assumptions that are difficult to predict. As such, our actual outcomes and results could differ materially. You can learn more about these risks In the annual report on Form 10-K, we filed with the SEC on February 27, 2024, our quarterly reports on Form 10-Q, and current reports on Form 8-K and other SEC filings. You should not place undue reliance on forward-looking statements, and we undertake no obligation to update these forward-looking statements. We will also make reference to certain non-GAAP financial measures, such as adjusted EBITDA, adjusted free cash flow, and other operating metrics and statistics. You will find the gap reconciliation comments and calculations in yesterday's press release. With that said, I will turn the call over to John Turner.

Thank you, Kyle. And thanks to everyone for joining us today to discuss our full year and fourth quarter 2024 operational and financial results. 2025 is set to be a transformational year for Atlas, and we have come out of the box at a full sprint. On January 12th, we announced our first commercial delivery off the Dune Express. Our team is now focused on ramping our volumes, working towards our goal of full effective utilization by mid-year, if not sooner. Additionally, on January 24th, we announced that we had delivered 100 loads of propane, utilizing our first two robo trucks, which are semi-trucks equipped with a self-driving system enabled through our partnership with Kodiak Robotics. By the end of this month, We expect the number to have grown to approximately 300 loads. I want to take a minute to look back to Atlas's IPO in March of 2023 and demonstrate how much has changed since that time. At the time of our IPO, the Dune Express was just a 42 mile right of way. Today, we're making commercial deliveries off the second longest conveyor ever built. We encountered quite a few eye rolls when we said we were going to bring autonomous driving technology to the oil fields of West Texas and New Mexico. Today, Atlas is now running the world's first commercial driverless delivery operation and will soon be doing autonomous deliveries off the Dune Express. The concept of multi-trailer operation was viewed as a novelty. Today, we are doing multi-trailer deliveries off the Dune Express, delivering 70 to 100 tons per driver versus over-the-road deliveries of approximately 24 tons. Back in March of 2023, Atlas' annual productive capacity stood at around 11 million tons with no wet sand offering, and we were running only 11 last-mile crews that delivered just 20% of our total sales volumes. Today, our productive capacity is nearly 2.5 times larger with the largest wet sand offering in the Permian, and our logistics operation is currently running 26 crews delivering more than 80% of our total sales volumes. Since our IPO, we have also completed two transformational acquisitions that have expanded our solutions offering while enhancing our cash flow generation. Finally, at the time of the IPO, we kept reinforcing that shareholder returns and, critically, return of capital to shareholders were core to Atlas' corporate DNA. On February 19th, we announced a 4% increase to our quarterly dividend from $0.24 a share to $0.25 a share, which represents a 67% increase from our initial dividend of $0.15 a share. We talked a big game during our IPO, and while we have certainly had some bumps in the road, we have delivered on those promises. I could not be prouder of what our team has accomplished and the milestones we have achieved, but this is only the beginning for Atlas. Yesterday, we closed on the acquisition of Moser Energy Systems, our platform investment into the distributed power market. With its large fleet of natural gas-powered reciprocating generators, the Moser platform provides us with a new avenue of growth into a rapidly expanding market. Moser also provides a greater degree of cash flow durability by adding significant exposure to the more stable production phase of the OFS value chain. As discussed on our call on January 27th, we currently plan to grow Mosher's fleet from its current size of 212 megawatts to approximately 310 megawatts by the end of 2026. Customer reception to the Mosher acquisition has been very positive, to say the least, reinforcing our initial investment thesis. As we work through the integration process, if this customer interest begins to translate into hard contracts, We have ample room to accelerate the growth of this platform. To our new team members joining us from Mosier, welcome aboard. It's going to be a fun ride. Turning back to our profit and logistics business, the Permian profit market is beginning to show early signs of the healing we have been looking for. Spot stand prices fell to cyclical lows during the fourth quarter, driven by reduced customer demand related to seasonal slowdown and competitors throwing out desperation Hail Mary pricing during the RFP season. Coming into the RFP season with the imminent commercial deployment of the Dune Express, we armed our sales force with the objective to go out there and seize the volumes with our best customers. However, we certainly were not willing to contract our volumes at the desperation pricing thrown out there by our more distressed competitors. Fortunately, the key customers we have been targeting recognized that outsourcing their sand and supply and delivery to distressed providers just to save a few bucks per ton is a recipe for disaster. Instead, we are seeing customers choose to commit 100% of their 2025 sand volumes to Atlas, their partner of choice in profit and supply and logistics. They correctly identified that they can rely on Atlas to eliminate the operational headache that sand can represent in the oil field, and when things do go wrong, we will break our backs making things right, which is why we enter the year in a highly contracted position that we expect to grow over the coming weeks. This is the turn of the year and with the great hope of large RFP volume wins on distant memory for many of our competitors, we have seen much more rational behavior on the pricing front. The combination of the seasonal recovery and completion activity and recent production issues across the industry due to extremely cold weather led to a spike in spot prices over the last few weeks. While spot prices have since moderated, we don't expect them to return to lows of the fourth quarter anytime soon. Additionally, As some of the more disadvantaged mines continue to struggle with underutilization, we are actively watching for supply attrition in the market. Consequently, we are reasonably bullish about a gradual return to normalcy in sand pricing, although at this point, we don't expect that until late in the year. With that, I will now turn the call over to Chris Scholl to provide more detail around the commission at Zunexpress and our exciting leap into driverless deliveries.