Warrior Met Coal, Inc.

Good afternoon. My name is Michael, and I will be your conference call operator today. At this time, I would like to welcome everyone to the Warrior Third 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 for replay on the company's website. I would now like to turn the conference over to Brian Chippin, Chief Accounting Officer and Controller. Please go ahead.

Good afternoon and welcome everyone to Warrior's third 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 will also be discussing certain non-GAAP financial measures, which are defined and reconciled to comparable GAAP financial measures in our 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 third quarter ended September 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 third 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 thanks for taking the time to join us today to discuss our third quarter 2025 results. I'll start by providing an overview of the quarter before Dale reviews our results in additional detail. We're extremely excited to share that our third quarter presented an opportunity for Warrior to showcase its strength in a number of ways. From our strong financial performance to significant operational achievements, we've been driving success in the near term while continuing to improve our long-term position and prospects. We have an exciting future ahead of us, and this is a direct result of our unwavering commitment to operational excellence and the exceptional teamwork and dedication of our employees. First, from an operational achievement perspective, I'm thrilled to announce that in October, we started the Longwall operations at Blue Creek, which are approximately eight months ahead of schedule. This remarkable accomplishment underscores our team's exceptional execution and reflects our commitment to driving shareholder value with high-value strategic investments. Second, factoring in the earlier startup of Blue Creek Longwall, we now expect to produce approximately 1.8 million short tons of high-volume steelmaking coal from the Blue Creek mine, representing an additional 800,000 short tons this year, or an 80% increase over our initial 2025 guidance. As a result, we've raised our full-year 2025 production volume guidance by approximately 10%. Third, earlier this month, Warrior won the bidding in the federal coal lease sale of 58 million short tons of high-quality steelmaking coal reserves contiguous to our current operations. Subject to the finalization of a binding lease agreement with the Bureau of Land Management, this strategic opportunity is expected to enhance our long-term value proposition by bolstering our reserve base and extending the life of our core mining operations. I'll provide further details on these accomplishments in a few moments. From a financial performance perspective, we delivered a strong performance in the third quarter despite ongoing weak steelmaking market conditions. The combination of our high quality products and strong customer relationships supported by our variable cost model generated an impressive net income and adjusted EBITDA. We have confidence that our operational successes will continue to drive strong financial performance over the coming quarters. Turning back to Blue Creek, Let me provide you some additional details on this transformational growth project. Achieving a startup for Blue Creek's long-wall operations eight months earlier than our original timeline is almost unheard of in this industry. Our projects are usually delayed for years and many millions of dollars over budget, particularly in an inflationary environment. The success of our Blue Creek development was cumulative over the project timeline and a testament to our incredibly talented employees and partners It provided an opportunity for us to demonstrate the strength of our talented workforce and the performance-driven culture of our organization. I want to extend my sincere thanks to all Warrior employees and our partners for their hard work, dedication, and resilience to bring this project to fruition approximately eight months ahead of schedule while staying on budget. These accomplishments are a direct result of their efforts and continue to drive our success as we execute our long-term growth strategy. The Blue Creek Mine features world-class assets which incorporate the most modern and latest technology available in the mining industry. It was built with the scope and scale to accommodate more than 6 million short tons of annual production of high-quality steelmaking coal and the potential to be the lowest-cost mine in the world. In addition, these assets enable Warrior to scale up and expand in the future to a second low-wall operation if market requirements dictate such an increase in production. Our team's sense of urgency and high performance enabled us to accelerate the startup of Blue Creek Longwall for a second time. In October, we completed key infrastructure, including the installation of the overland clean coal belt, along with the remaining modules of the preparation plan, and made significant progress on the barge loadout and other key infrastructure components. Financially, we dedicated another $64 million of capital expenditures in the third quarter, and $171 million year-to-date on the Blue Creek project. That brings the total project-to-date capital expenditures to $888 million, which remains on budget. Our total project estimate remains unchanged, ranging from $995 million to $1.75 billion. Looking ahead, we will be laser-focused in the fourth quarter on ramping up longwall production and optimizing the performance of the underground and surface infrastructure. While the underground longwall operations have recently commenced, a significant amount of work remains to complete the project, which we expect will occur by the end of the first quarter in 2026. The remaining work includes completing the barge loadout, paving roads, completing storage and shop buildings, additional storage silos, and final electrical installations, along with the usual assortment of final project details. The accelerated Blue Creek longwall startup enables us to increase our guidance from total company production and sales volumes for 2025, as you will have seen in our earnings release. We've raised our Blue Creek production volume by 80%, from 1 million short tons to 1.8 million tons. We expect to sell approximately 2 thirds of the Blue Creek production, or approximately 1.2 million tons in 2025. This increase in production from Blue Creek raises our four-year outlook for production volume by approximately 10% at the midpoint of the range. This startup marks another critical inflection point in the development of this world-class asset, representing the start of transition from capital investment to free cash flow generation. Turning to another growth opportunity, we learned in September that we were the successful bidder in a federal coal lease sale administered by the Bureau of Land Management. Once we enter into this lease, the acquisition will expand our footprint strategically. with the addition of an estimated 58 million short tons of high-quality steelmaking coal reserves. These reserves are adjacent to existing infrastructure, which will allow for efficient integration into our current operations and capital planning. Also, this acquisition will allow for access to additional reserves that can further the life of both Mine 4 and Blue Creek. The total bid for the leases was approximately $47 million, which will be paid over five years. We appreciate the Bureau of Land Management's efficient review, the support of the Alabama federal delegation, and our local and state government officials in advancing this process. We also appreciate the Department of Interior Secretary Doug Burgum and the entire Trump administration for their support of mining on federal lands. While there are several regulatory and administrative steps that remain before Warrior finalizes the lease agreements with the Bureau of Land Management, we are actively engaged with the relevant agencies to ensure timely progress and compliance with all requirements. We expect this process will be completed shortly after the end of the government shutdown. Now let's turn to the steel and steelmaking coal markets during the third quarter, which provided the backdrop for our strong operational and financial results. Our markets faced headwinds from increased Chinese steel exports, subdued global demand, and oversupplied seaborne steelmaking coal markets. Our team's focus and resilience enabled us to achieve record quarterly sales volume. The drivers underlying the weakness are the same as they have been for some time. First, exports of low-price Chinese steel are up over 10% for the first nine months of the year compared to 2024, which was already a record year for Chinese steel exports. Second, with the exception of India, lackluster global steel demand continued because of trade uncertainty and tepid global economic activity. And third, the seaboard steelmaking coal markets remained under pressure due to strong supply as demonstrated by strong Chinese domestic steelmaking coal production and a slowdown in Chinese imports. While there have been discussions in China of anti-involution and coal production controls combined with mine safety checks and shutdowns, those actions have fallen short in reality, while trade tensions continue to weigh heavily on global market sentiment. In addition, the European Union recently announced plans to protect the EU steel sector from the unfair impacts of global steel overcapacity by limiting import volumes and doubling the level of tariffs to 50%. These actions could lead to a recovery of steelmaking coal demand from Europe in the long term, but we do not anticipate a recovery anytime soon. Likewise, the steelmaking coal market remains oversupplied, as demonstrated by the prolonged period of weak pricing. According to the World Steel Association Monthly Report, global pig iron production decreased by 1.5% for the first nine 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 1.1% for the same period. The rest of the world's pig iron production experienced a decline of 2.5% for the first nine months of 2025. India remains a bright spot with a growth rate of 7% and is expected to continue growing with new blast furnace capacity expected to come online in the next year. Our strong sales volume was primarily driven by high contractual demand from our customers combined with the strong performance of our existing mines and the additional commercial sales from our Blue Creek mine. This combination enabled Warrior to achieve a record high quarterly sales volume in the third quarter of 2.4 million short tons compared to $1.9 million in last year's same quarter, representing a 27% increase. We sold 378,000 tons of Blue Creek Development steelmaking coal during the third quarter, which were contractual volumes sold primarily into Asia. Our sales by geography for the third quarter break down as follows. 43% into Europe, 38% into Asia, and 18% into South America. Our spot volume was 11% for the third quarter of 2025, which was primarily sold into Europe. For the full year, our spot volume is expected to be approximately 10% to 15% of total sales volume. Production volume in the third quarter of 2025 was 2.2 million short-tons, compared to 1.9 million in the same quarter of last year, representing a 17% increase. Our existing mines continued to perform well The continuous miner units at our Blue Creek mine produced 175,000 short tons during the third quarter, adding to the overall increase in production volume. Blue Creek production was lower than the second quarter as more time was spent on construction and development work for the longevity of the mine and the startup of the long wall. Our coal inventory levels decreased slightly to 1.1 million tons at the end of September compared to the end of June this year. I'll now ask Dale to address our third quarter results in greater detail.