Warrior Met Coal, Inc.

Good afternoon. My name is Drew, and I will be your conference operator today. At this time, I would like to welcome everyone to the Warrior Second Quarter 2026 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 replay on the company's website. I would now 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 2026 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, and our second 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 June 30th, 2026 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'll 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 2026 results. I'll start by providing an overview of the quarter before Dale reviews our results in additional detail. The second quarter marked a key inflection point as we clearly realized the incremental earnings and cash flow contributions of Blue Creek. We believe there's even more value to be realized as we work towards Blue Creek's full potential. This inflection point was characterized by significant margin expansion and generation of more than $103 million of free cash flow, which came as a result of record sales volumes, improved pricing, and a lower cost profile. These results brought free cash flow to a positive $11 million at the midpoint of the year. Now with Blue Creek operational and our development spending complete, we've entered into the next phase of Warrior's growth, which is focused on free cash flow generation, balance sheet strength, and stockholder returns over the long term. Looking at our markets more broadly, the second quarter of 2026 was characterized by the pockets of normalization of supply conditions following the rather related disruptions observed earlier in the year. Despite these fluctuations, steel fundamentals remained relatively unchanged. The tragic mining incident in China in late May briefly tightened sentiment around domestic coke and coal availability and resulted in additional safety inspections and higher domestic coke and coal and coke prices. The impact of this sentiment shift was material and was clearly observed with the reopening of the arbitrage between the China CFR and Australian FOB indices, which had remained predominantly closed for over a year. Demand from India continued to be resilient, but weak steel margins, subdued Chinese buying activity and the continued pressure from Chinese steel exports prevented the broader market from developing stronger momentum. In Europe, we continue to see the expected benefits of protectionist measures materializing, but the recovery remains uneven and is not strong enough to offset weakness in other regions. Rate rates and their corresponding demurrage rates remained materially above their recent averages and as a result had a negative impact on our average net selling price. The World Steel Association reported recently the global pig iron production declined during the first six months of 2026 by 1.9% as compared to the same period last year. India continued to show growth with a 2.7% increase year over year, while China remained the primary source of weakness as the country continues to grapple with soft internal demand and weak steel margins. This regional split remains consistent with the broader market narrative, with resilient demand in India and parts of Asia offset by continued softness in China and an uneven recovery across developed markets. Our primary index, the PLV FOB Australia, remained well above the levels observed during most of 2025 and was relatively stable for the second quarter of 2026 as compared to the first quarter. The index price averaged $216 per ton and was 29% or $49 per ton higher than the second quarter 2025. For the main secondary indices, the Australian LVHCC index and the CFR India LVHCC index prices increased in the second quarter of this year compared to the second quarter of last year to an average of $170 and $191 per short ton respectively. The Australian LDHCC index price was $40 per ton, or 30% higher than the second quarter of last year. And the CFR India LDHCC index price was $46 per ton, or 32% higher than the second quarter of 2025. As a result, the relativity of the Australian LVHCC index price to the Australian POV index price increased from 78% for the second quarter 2025 to 79% for the second quarter 2026. In contrast to the Australian LVHCC and CFR India index prices, the average US East Coast HVA index price decreased $11 per ton or 7% in the second quarter this year from the second quarter of last year and averaged $143 per short time. As a result, the relativity decreased from 92% for the second quarter of 2025 to 66% for the second quarter of 2026. We continue to see a meaningful discount to the POV price each of the last five consecutive quarters in the Atlantic Basin to the point where it has temporarily become more profitable to sell into the Pacific Basin despite the higher freight rates, although we don't expect this to continue once the US East Coast HVA relativities return to normal levels. We achieved a gross price realization of 66% for the second quarter this year compared to 80% in the second quarter of 2025. Our lower gross price realizations were driven by a combination of factors. First, our average Maine pricing indices for the PLV and LVHCC in the Pacific Basin have increased year-over-year for the second quarter, while the East Coast HVAA index decreased in the Atlantic Basin. Second, freight rates to Asia, primarily India, were about $13 per ton, or 37%, higher in the second quarter of 2026 than last year's second quarter, and reduced our gross price realization. Third, gross price realizations were lowered due to a 21% higher mix of high vol A products sold in the second quarter of this year. As production from Blue Creek continues to increase, we expect our sales volume mix to become more weighted toward high vol A products in the Pacific Basin destinations over time. This shift, along with the abnormally depressed second tier relativities, is expected to naturally lower our gross price realizations. Despite this, we expect the increased weighing toward high-volume products to drive margin expansion to the impact of the low-cost profile of Blue Creek on lowering our cash cost of sales. Turning back to our financial results, for the first consecutive quarter, Warrior achieved record high quarterly sales volume in the second quarter of 3.7 million short-tons compared to 2.2 million in the same quarter of 2025. This represents a 65% increase primarily due to the additional sales volume from the Blue Creek mine. Our second quarter sales volume mix was 66% of high ball A and 34% of premium low ball. Our sales by geography for the second quarter break down as follows. 50% into Asia, 35% into Europe, and 14% in South America. Our spot volume was 13% for the second quarter of 2026. Sales volumes into the Pacific Basin were 50% this quarter compared to 52% in the second quarter of 2025. Production volume in the second quarter of 2026 was 3.3 million short tons compared to 2.3 million in the same quarter of last year, representing a 45% increase. This increase reflects a significant contribution of Blue Creek. Our coal inventory levels decreased to 1.4 million short tons at the end of June this year, compared to 1.9 million tons at the end of March 2026. We expect to continue driving our excess inventory downwards over the remainder of the year to maximize sales volume, profitability, and free cash flow. I'll now ask Dale to address our second quarter results in greater detail.