Warrior Met Coal, Inc.

Good afternoon. My name is Wyatt, and I will be your conference call operator today. At this time, I would like to welcome everyone to the Warrior Second Quarter 2025 Financial Results Conference Call. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question-and-answer session. This call is being recorded and will be available through replay on the company's website. I would like to turn the call over to Brian Chopin, Chief Accounting Officer and Controller. Please go ahead.

Good afternoon and welcome everyone to Warrior's second quarter 2025 earnings conference call. Before we begin, let me remind you that certain statements made during this call, including 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. These 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'll also be discussing certain non-GAAP financial measures, which are defined and reconciled to comparable GAAP financial measures in our second quarter press release, Furnished to the SEC on Form 8K, which is also posted on our website. Additionally, we will be filing our Form 10Q for the second quarter ended June 30th, 2025 with the SEC this afternoon. You can find additional information regarding the company on our website at www.warriormetcoal.com, which also includes a second quarter supplemental slide deck that was posted this afternoon. Today on the call with me are Mr. Walt Scheller, Chief Executive Officer, and Mr. Dale Boyles, Chief Financial Officer. After our formal remarks, we will be happy to answer any questions. With that, I will now turn the call over to Walt.

Thanks, Brian. Hello, everyone, and thank you for taking the time to join us today to discuss our second quarter 2025 results. After my remarks, Dale will review our results in additional detail, and then you'll have the opportunity to ask questions. I'm pleased that we delivered strong operational results, maintained positive cash margins, and generated positive operating cash flows during the second quarter. These outcomes reflect the strength of our cost discipline the flexibility of our variable cost structure, and the resilience of our team in managing volatile market conditions. I'm also excited to announce the acceleration of the Blue Creek Longwall startup to early first quarter, 2026. During the second quarter, we achieved the first commercial sales of steelmaking coal from Blue Creek, which was one quarter ahead of schedule. We also achieved other critical milestones in the development of the mine that allowed us to accelerate the long-wall startup. More about this in a few moments. Our markets remained under significant pressure this quarter, extending the weakness that has been firmly set for the past several quarters. The drivers underlying the weakness are the same, excess Chinese steel exports, lackluster global steel demand, and a well-supplied steelmaking coal market. First, exports of low-priced Chinese steel are up over 9% for the first five months of the year compared to 2024, which was already a record year for Chinese steel exports. Second, with the exception of India, forecasted global demand for steel has been revised downwards as a result of trade uncertainty and tepid global economic activity. And third, the seaborne steelmaking coal markets remained under pressure due to strong supply, especially in the second tier segment, as demonstrated by strong Chinese domestic steelmaking coal production and the slowdown in Chinese imports. Pricing for our segment was also impacted by the continued resale of previously sold cargoes, as well as healthy inventory levels across most of the global supply chain. The continued market weakness which I just described, resulted in average premium lowball steelmaking coal index prices declining 24% compared to the second quarter last year and declining 33% year over year through June. Our primary index, the PLB FOB Australia, stayed above the low points observed during the first quarter of 2025 and averaged $167 per short ton. which is nearly the same as the first quarter this year. Contrary to PLV FOB Australia pricing, the main second-tier indices, which are the Australian LVHCC and US HVA price indices, both established their year-to-date low points in the second quarter and averaged $131 and $154 per short-ton, respectively. The relative price of the LV HCC index price compared to the PLV index continues to be a major story, with values significantly lower than historical values. The relative price for the second quarter averaged 78%, which was well below the 88% average for the past three and a half years, and reached a multi-year low point of 76% during the second quarter. In addition, the PLV CFR China recorded a new low price point near the end of June of $143 per short-term, while averaging $151 per short-term for the second quarter. The arbitrage between the Australian FOB and China's CFR indices remained closed for almost the entire quarter on the backdrop of extremely low Chinese domestic pricing. This fact, combined with a retaliatory tariff by China on U.S. imports, made for sales from the US into China, uneconomical, and therefore, we've not sold any volume into China this year. We achieved a gross price realization of 80% for the second quarter, which was a function of relative index pricing, product mix, geography, tariffs, and trade rates. This result was lower than our annual target range of 85% to 90%, primarily due to three things. First, the LV HCC index price relative to the PLV index price has widened, as I previously mentioned. Second, we sold a higher mix of high vol A product versus premium low vol product. And third, the higher high vol A volume has been sold primarily into the Pacific Basin on a CFR basis and net of freight costs. According to the World Skills Association monthly report, Global pig iron production decreased by 1.3% for the first six months of 2025, as compared to the prior year period. Pig iron production in China, which is the world's largest production region, decreased by 0.8% for the same period. The rest of the world's pig iron production experienced a decline of 2.3% for the first six months of 2025. India remains a bright spot with a growth rate of 7.1% and is expected to continue growing with new blast furnace capacity expected to come online this year. Now let me turn to our second quarter results in detail. Our strong sales volume was driven by the first commercial sales from our Blue Creek mine occurring earlier than anticipated. Our second quarter sales volume was 2.2 million short tons compared to 2.1 million in last year's same quarter. representing a 6% increase. We sold 239,000 tons of Blue Creek Development steelmaking coal during the second quarter, which is a quarter earlier than anticipated and already included in our annual volume guidance. The Blue Creek tons were contractual volumes sold primarily into Asia. Our sales by geography for the second quarter break down as follows. 52% into Asia, 37% into Europe, and 11% into South America. The second quarter marks the first time in our history where sales into Asia were greater than 50% of total sales volume and did not include any sales into China. Our spot volume is 4% for the second quarter of 2025, which is primarily sold into Europe. For the full year, our spot volume is expected to be approximately 15% or less of total sales volume. Production volume in the second quarter of 2025 was 2.3 million short tons compared to 2.2 million in the same quarter of last year, representing a 6% increase. Our existing mines continued to perform well, and the continuous miner units at our Blue Creek mine produced 348,000 short tons during the second quarter and drove the overall increase in production volume. Our coal inventory levels remained consistent at 1.1 million tons at the end of the second quarter compared to the end of the first quarter of 2025. During the second quarter, we spent $94 million on CAPEX and mine development. Of that amount, CAPEX spending totaled $75 million. Mine development costs for Blue Creek Project were $19 million during the second quarter and continued to be below budget as we focused on cost control. As we ramp up operations toward the Longwall startup, we expect our Blue Creek mine development costs to increase in the second half of 2025. Apart from the $52 million in Blue Creek capital expenditures, we tightly manage our capital expenditures at the existing mines to $23 million. Now let me provide you with an exciting update on our transformational Blue Creek growth project, which is ahead of schedule and on budget. The project team continued to make excellent progress during the second quarter with overall development and achieved certain milestones earlier than planned. If you'll allow me a moment to give our team credit, that is unheard of with large-scale projects in this industry. As a result of those achievements, we've accelerated the lone wolf startup at Blue Creek to early first quarter 2026. As previously mentioned, we achieved another milestone in the development of Blue Creek by selling 239,000 tons of steelmaking coal during the second quarter. These were the first commercial sales from this project and were also ahead of schedule. This marks a critical inflection point in the development of this premier asset, representing the beginning of a transition from capital investment to revenue generation. The development of the first longwall panel during the second quarter produced 348,000 short tons of steelmaking coal and remain on track to produce 1 million short tons for the full year 2025. We are pleased with the progress thus far in the development and effective management of costs. We've received the final delivery of the remaining longwall shields during the second quarter, which are already to be set up underground in the next few months. In addition, our recruiting and hiring efforts for this new mine continue to be on track. We also continued to make excellent progress as we completed the installation of the truck dump, rail loadout, and module A of the preparation plant, which allowed us the ability to send the first loads of skill making coal to the port of Mobile for our first shipments to customers. We continue to ramp modules B and C at the preparation plant with the full commissioning expected in the fourth quarter of this year. We strategically invested another $52 million of capital expenditures in the second quarter and $107 million year-to-date in the Blue Creek development. That brings the total project capital expenditures to date to $823 million, which remains on budget. Our baseline total project estimate remains unchanged, ranging from $995 million to $1,075,000,000. I'll now ask Dale to address our second quarter results in greater detail. Thanks, Walt.