Good afternoon. My name is Cole 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, which 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.

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 in 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 strategically exercising patience 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 exports 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 impact our own markets. This is because Chinese steel production predominantly relies on domestic coals and landlocked Mongolian coals, which typically do not affect the global seaborne met coal balance. Along with stable production from Australia, the USA, and Canada, these factors have created the lowest pricing environment for steelmaking coal since June 2021. Our primary index, the PLV FOB Australia, ended the third quarter at $186 per short ton, which was $26 lower than the end of the second quarter at $212 per short ton. During the month of September, the PLV FOB Australian Index established a low point for the year of $163 per short ton. Likewise, in September, the PLV CFR China Index also established its low point of the year at $177 per short ton. Similar declines were observed in second-tier indices, although both indices displayed different levels of volatility in relation to the PLV FOB Australia Index. We achieved a consolidated gross price realization of 93% in the third quarter, which was a function of product mix, geography, and trade rates. At these low prices, we believe that several producers of steelmaking coal have not only experienced significant margin erosion but may also have experienced realizations below their total cash costs, suggesting that the current pricing environment is not sustainable for extended periods. While we expect steelmaking coal prices to improve slightly in the fourth quarter, we believe the pricing environment will remain under pressure due to the persistent weakness in the global steel markets and delayed infrastructure spending in India. According to the World Steel Association's monthly report, global pig iron production decreased by 3.3% in the first nine months of 2024 compared to the prior year period. Pig iron production in China, which is the world's largest production region, fell by 4.6% for the same period. The rest of the world's pig iron production experienced a more modest decline of 0.5% for the first nine months of the year. India remains a bright spot with a growth rate of 3%, and is expected to continue growing with new blast furnace capacity coming online later this year. Several other regions also experienced positive growth for the period, such as Brazil and certain European countries. However, their gains were largely offset by declining production from Japan and South Korea. Now, let me turn back to our third quarter results. Our third quarter sales volume of 1.9 million short tons was 17.5% lower than the comparable quarter last year. As I said earlier, we're carefully managing spot opportunities and strategically exercising patience with certain geographies until the market improves. Our sales by geography in the third quarter breakdown as follows: 44% into Europe, 41% into Asia, and 15% into South America. The majority of the sales into Asia in the third quarter were to customers in Japan, China, and India. As we've previously noted, demand from the Asian steel producers has been growing resulting in higher sales to that geography, while sales from our traditional markets in Europe and South America remain lower, primarily due to weak spot market opportunities. Our spot volume was 23% in the third quarter 2024, which was primarily sold into the Asian market. This percentage was significantly lower than the reported amounts for the first and second quarters of this year as we carefully manage spot opportunities during this period of low steelmaking coal prices. For the full year, we expect our spot volume to range between 25% to 30% of total sales volume. Production volume in the third quarter was 1.9 million short tons compared to 2 million short tons in the same quarter of 2023, representing a 3.8% decrease. During the third quarter, we commenced continuous minor development of the first longwall panel at our world-class Blue Creek growth project, producing the first development tons of 39,000 short tons. Our coal inventory increased slightly to 915,000 short tons, which includes the Blue Creek development tons from 895,000 short tons at the end of the second quarter. During the third quarter, we spent $123 million on CapEx and mine development. Of that amount, CapEx spending totaled $116 million which included $94 million on the development of Blue Creek. Mine development spending on the Blue Creek project was $7 million during the third quarter 2024. Now that we have started developing the first longwall panel at Blue Creek, our mine development cost will continue to grow during the remainder of the year and until the longwall starts production, which we expect to occur in the second quarter 2026. Our Blue Creek growth project continues to make excellent progress. During the third quarter, we completed the installation and commissioning of the service cage, slope belt, slope car, and raw coal belt. The completion of these major components allowed us to begin development of the initial longwall panel with the first continuous monitoring unit. On the surface infrastructure components, we continue to make significant progress on the construction of the preparation plant, which is expected to be online in the middle of 2025. On the coal transportation components, good progress was made on the construction of the approximately 10-mile long clean coal belt structure, with the first mile nearly completed. Steady progress continued during the third quarter on the rail and barge loadouts as well. All of these components remain on schedule. In the near term, we're focusing on increasing our headcount at Blue Creek to start two additional continuous monitoring units in the fourth quarter. Currently, we're on track to meet those goals. We're very pleased that the development for the first longwall panel started on schedule during the third quarter as originally expected, and we’re on track to produce approximately 200,000 short tons of high vol A steelmaking coal in the second half of 2024. As we've said before, the development tons produced from the second half of this year to the first half of 2025 are expected to be sold in the second half of 2025 after the preparation plant comes online. Including the $94 million we invested during the third quarter of 2024, year-to-date development spending on Blue Creek totals $246 million. We expect to invest approximately $325 million to $375 million in 2024 on the project, inclusive of the $246 million already invested. For the entire project to date to the end of the third quarter 2024, we've invested a total of $612 million. We remain focused on tight capital spending discipline to ensure the project will be completed within our reset baseline cost estimate on the original schedule, including the longwall start-up in the second quarter 2026. We currently have sufficient liquidity on hand to complete the project within the baseline cost estimate. Blue Creek represents one of the last remaining untapped premium high-quality, high vol A coal reserves in the U.S. and we anticipate our coal will achieve premium prices. We expect incremental annualized production of 4.8 million short tons of premium high vol A steelmaking coal after the start-up of the longwall, which will enhance and strengthen our already strong global cost curve positioning and deliver incremental profit and cash flows. I'll now ask Dale to address our third quarter results in greater detail.

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 costs. 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 $73 million decrease in sales volume, combined with a $23 million decrease due to the lower average net selling prices plus lower demurrage and other charges. As Walt noted earlier in his comments, the decrease in sales volume was primarily driven by our selectivity with spot sales and our patience in waiting for market conditions to improve in the near term. Demurrage and other charges were $3 million lower compared to the third quarter of 2023, and resulted in an average net selling price of $172 per short ton in the third quarter of 2024 compared to $185 per short ton in the same quarter of last year. Cash cost of sales in the third quarter of 2024 was $230 million or 72% of mining revenues compared to $259 million or 62% of mining revenues in the third quarter of 2023. Of the $29 million decrease in cash cost of sales, $45 million of the decrease was primarily driven by the 17.5% decrease in sales volumes, and lower variable transportation royalty cost. These decreases were partially offset by $16 million of higher production costs for employee wages and incentives, associated with a higher headcount and higher supply and maintenance costs. Cash cost of sales per short ton, FOB port, was approximately $123 in the third quarter this year compared to $115 in the third quarter of 2023. Although higher than last year's third quarter, our third quarter cash cost per ton this year was similar to the second quarter of this year, and is running slightly below the midpoint of our full year guidance. Cash cost per ton remains on track for the full year and in line with our average net selling price year-to-date. As a reminder, when we established guidance for the full year of 2024 back in February, we included additional costs for hiring approximately 250 people and operating the mines at a higher capacity rate after the labor strike ended in the first half of 2023. Our cash cost of production for the third quarter 2024 was 66% of our total cash cost per short ton compared to 62% in the same quarter last year. Overall, transportation and royalty costs were 34% of our cash cost of sales per short ton in the third quarter this year on lower average net selling prices, compared to 38% in the same quarter last year. As a result of the lower average net selling price and changes in our cash cost, our cash margin per short ton was $48 in the third quarter this year compared to $70 in the same quarter of last year. SG&A expenses were about $11 million or 3.5% of total revenues in the third quarter of 2024, and were slightly higher than the third quarter of last year of 2.6%; this is primarily due to an increase in employee-related compensation expenses. Interest income earned on our cash investments was lower in the third quarter of this year, primarily due to lower average cash balances and lower rates of return. Our interest expense was lower primarily due to the early retirement of debt in September of 2023 and the capitalization of interest related to the development of Blue Creek. Our low effective tax rate continues to reflect an income tax benefit for depletion expense in foreign derived intangible income. Turning to cash flow. During the third quarter of 2024, free cash flow was a negative $61 million; this was the result of cash flows generated by operating activities of $62 million plus cash used for capital expenditures and mine development at $123 million. During the third quarter, we invested approximately $50 million of cash into longer duration fixed income securities where maturity is greater than 12 months in advance of the Federal Reserve lowering interest rates. These amounts are reflected in the balance sheet as long-term investments and are considered a part of our total liquidity. Our total available liquidity at the end of the third quarter of 2024 was $746 million and consisted of cash and cash equivalents of $583 million, long-term investments of $50 million, and $114 million available under ABL facility. Now, let's turn to our outlook and guidance for the full year 2024. After another strong quarter of operational and financial performance, despite weak demand and pricing in the global markets, we have reaffirmed our outlook and guidance for the full year as outlined in our earnings release. While we are trending toward the midpoint and higher end of our guidance ranges on volumes, we remain cautious, especially on spot opportunities until market conditions improve. Also, as a reminder, the fourth quarter contains more holidays and fewer available production days.

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 its 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.

And our first question today will come from Lucas Pipes with B. Riley Securities.

Thank you very much, operator. Good afternoon, everyone. It's great to hear about all the progress at Blue Creek and your solid results during the quarter. My first question is about the commercial side. Walt and Dale, if I heard you correctly, spot exposure was 23% in Q3, and you're anticipating around 25% to 30% in 2024. Could you share your outlook for Q4 regarding spot pricing? Additionally, as you compete in Asia for business with Europe, while Latin America is still on the softer side, what are some of the competitive dynamics regarding pricing or establishing term business? Is this based on the Australian PLV, or are there discounts for high vol A? I would appreciate any insights you can provide. Thank you.

Lucas, as we approach Q4 and our expectations for the spot market, we are carefully monitoring the market conditions, whether they are CFR or FOB. Most of the Asian spot sales are CFR, so we are paying close attention to that. While we have the capacity to move more tons, we will be cautious about when and where we choose to do so. The term business in Asia, aside from our term agreements in Japan, is challenging in China and other regions due to pricing issues. Currently, we are being prudent about our commitments, ensuring we protect our valuable assets and coal quality until the market can acknowledge their worth.

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%; 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 difficult to really predict exactly where that'll end up, but be careful with that 93% because this is a falling market.

That's helpful. I'll turn over to the cost side. If I understood, Dale right 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. Transportation now resets on a one-month lag instead of three months like it used to. There may be a slight benefit in the fourth quarter, but I don't expect it to be significant, depending on the volumes. However, there could be some upside in transportation during the fourth quarter.

And more broadly, on the cost side for Q4, any major moving besides that transportation? Thank you for that color.

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.

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 where we expected for the fourth quarter. You have to remember that we have fewer operating days. As we look at the fourth quarter, our expectations align closely with 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, that would suggest that the fourth quarter could be quite similar to the third quarter, possibly just a bit lower.

Yes, that's what I was thinking, Dale. It seems that if you're flat, you get to about 7.9. That's very helpful, I appreciate that. Now, going back to the 3Q gross price realization of 93%, I know that was mentioned last quarter and Lucas touched on it as well. But from a purely mathematical perspective, some investors might benefit from a clearer explanation. When calculating the average net price for any given quarter, what's the ideal time period to use to arrive at the 93% number you discussed?

We simply take the averages of the PL and look at our realization of the PLV during that period. It's really just straightforward math. You need to exclude things like demurrage when calculating our average net selling price. It really is that simple.

And you're really looking at, 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. I think some of the issues could be related to the one-month lag. For the third quarter, instead of the usual calendar, we're considering June, July, and August. This leads to a FOB Australian premium level price of about $230, and achieving that 93% realization is challenging. Perhaps it involves excluding the demurrage costs. I’m not sure if there’s anything else you would like to add right now, or if we should discuss it later.

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?

I believe we would be at the lower end of that range. Year-to-date, we’re at $127. The average selling price is $198, which translates to an 88% net realization against the $250 target. This is why I say we're currently at a critical point. However, if fourth quarter pricing decreases, we anticipate our costs will also decrease. This will depend on volumes, but if pricing remains low without increases, we should stay at the lower end of the range.

Okay. So you still think it's probably in the lower end of the range; not possibly below pricing?

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.

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.

What discussions are you having? Will you be securing contracts for that already, or will it be more on a spot basis?

I believe there will be expectations around the contract. Since this is a new coal mine, everyone will want to see how it performs in their coke ovens. We will be sending it to customers to test a few samples or a full shipment, allowing various customers to have an initial experience with the coal.

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 many more people do you need to hire?

I think next year for Blue Creek we're probably going to be in the 100-range. I don't know for sure, but I just feel like that's going to be around the number. Again, we're in the budgeting process right now, so I really don't have a definitive answer.

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.