Company Overview - Arch Resources, Inc. is a leading producer of high-quality metallurgical products for the global steel industry, operating modern and efficient mines that set industry standards for safety and environmental stewardship [2] - CONSOL Energy Inc. is based in Canonsburg, Pennsylvania, and specializes in the production and export of high-Btu bituminous thermal coal and metallurgical coal, with significant operations in the Northern Appalachian Basin [3] - CONSOL's Pennsylvania Mining Complex has a production capacity of approximately 28.5 million tons of coal per year, and the company controls around 1.3 billion tons of coal reserves across major coal-producing basins in the eastern United States [3] Merger Announcement - Arch Resources and CONSOL Energy announced that stockholders of both companies approved all proposals related to their pending combination, which is expected to close on January 14, 2025 [1] - The combined entity will be renamed "Core Natural Resources, Inc." and will be headquartered in Canonsburg, Pennsylvania, with its common stock trading under the ticker symbol "CNR" starting January 15, 2025 [1]

Core Insights - Arch Biopartners Inc. has received provincial ethics approval for its Phase II trial of LSALT peptide aimed at preventing and treating cardiac surgery-associated acute kidney injury (CS-AKI) [1][3] - The trial will recruit a total of 240 patients across multiple sites, including Toronto General Hospital, St. Michael’s Hospital, University of Calgary Hospital, and five clinical sites in Turkey [2][3][4] - The primary objective of the trial is to assess the percentage of subjects experiencing acute kidney injury within seven days post cardiac surgery, following KDIGO criteria [4] Company Developments - Arch Biopartners has entered a one-year marketing and consulting contract with Outside The Box Capital Inc. to enhance awareness of the company’s news [10] - The company will pay $25,000 per month and grant 150,000 stock options with a strike price of $2.00 per share as part of the contract [11] - Arch Biopartners is focused on developing drugs targeting the dipeptidase-1 (DPEP1) inflammation pathway, with LSALT peptide being its lead candidate for preventing kidney injury [12] Clinical Context - CS-AKI is a common complication following on-pump cardiac surgeries, with a prevalence rate of up to 30%, leading to increased morbidity and mortality [8] - LSALT peptide aims to address the unmet medical need for therapeutic treatments to prevent AKI in patients undergoing cardiac surgery [6][12] - The drug has shown promise in pre-clinical models for preventing ischemia-reperfusion injury to the kidneys, providing a scientific basis for its use in the ongoing trial [7]

Group 1: Proposed Mergers - Universal Stainless & Alloy Products, Inc. is set to merge with Aperam for $45.00 per share in cash, resulting in Universal becoming a wholly owned subsidiary of Aperam [1] - Cyclo Therapeutics, Inc. will be acquired by Rafael Holdings, with Cyclo shares valued at $0.95 each [2] - Arch Resources, Inc. has a definitive agreement with CONSOL Energy Inc. for 1.326 shares of CONSOL common stock for each Arch stock, leading to Arch shareholders holding approximately 45% ownership in the combined company post-transaction [3] - The First of Long Island Corporation is merging with ConnectOne Bancorp, Inc. for 0.5175 shares of ConnectOne common stock for each share of Long Island common stock [3] Group 2: Shareholder Involvement - Kuehn Law is investigating potential claims related to the proposed mergers, focusing on whether the Boards acted to maximize shareholder value and disclosed material information [1] - Shareholders are encouraged to get involved to contribute to the integrity and fairness of financial markets, with Kuehn Law covering all case costs [4]

Core Viewpoint - Arch Resources reported a net loss of $6.2 million and an adjusted profit of $44.2 million for Q3 2024, indicating a year-over-year decline in revenues and profits [1]. Financial Performance - The company experienced a net loss of $6.2 million in Q3 2024 [1]. - Adjusted profits for the same period were reported at $44.2 million [1]. Company Overview - Arch Resources is recognized as one of the major coal miners in the United States, producing both thermal and metallurgical coal [1].

Revenue and Sales Performance - For the three months ended September 30, 2024, coal sales revenue was approximately $617.9 million, a decrease of $126.7 million or 17.0% compared to the same period in 2023[115]. - Tons sold during the same period decreased by approximately 3.0 million tons, or 15.5%, totaling 16,214 tons[115]. - Revenues from coal sales in the first nine months of 2024 were $1,906,840 thousand, down $464,986 thousand, or 19.6%, from $2,371,826 thousand in the same period of 2023[124]. - Total GAAP revenues for the consolidated company were $617.90 million for the three months ended September 30, 2024, compared to $744.60 million in the same period of 2023[144]. - The company reported total GAAP revenues of $1.91 billion for the nine months ended September 30, 2024, compared to $2.37 billion in the same period of 2023[146]. Coal Market Conditions - Metallurgical coal sales decreased by approximately $70.9 million primarily due to decreased pricing[115]. - Thermal coal sales decreased by approximately $55.8 million due to reduced sales volume to domestic utility customers[115]. - Domestic thermal coal consumption was pressured by low power demand, low natural gas prices, and increased renewable generation, leading to elevated utility coal stockpiles[113]. - The global metallurgical coal market is experiencing softness due to oversupply and economic constraints, particularly in Europe and the Americas[106]. - The availability of discounted Russian coal in Asian markets is expected to continue, impacting competition in the coal market[107]. Costs and Expenses - Cost of sales for Q3 2024 decreased by approximately $38.3 million, or 6.4%, compared to Q3 2023, primarily due to reduced sales sensitive costs and lower repairs and supplies costs[117]. - Total costs, expenses, and other for the first nine months of 2024 were $1,849,265 thousand, a decrease of $112,693 thousand compared to the same period in 2023[126]. - Selling, general, and administrative expenses decreased by approximately $4.4 million in the first nine months of 2024 compared to the same period in 2023, mainly due to reduced compensation costs[129]. - The company recorded $6.6 million in severance costs related to a voluntary separation plan accepted by approximately 140 employees in the Thermal Segment during Q3 2024[121]. - Non-service related pension and postretirement benefit credits decreased by $4,596 thousand in the first nine months of 2024 compared to the same period in 2023[133]. Merger and Financial Transactions - The proposed merger with CONSOL Energy Inc. involves an all-stock transaction where each share of Arch common stock will convert into 1.326 shares of CONSOL common stock[105]. - Merger-related costs of $7,002 thousand were recorded in Q3 2024 following the Merger Agreement entered on August 20, 2024[120]. - The total long-term debt increased by $20 million under the Term Loan during the first three months of 2024, with no other material changes to contractual obligations reported[165]. Cash Flow and Liquidity - Cash provided by operating activities decreased by approximately $241.5 million to $212.4 million for the nine months ended September 30, 2024, compared to $453.8 million in the prior year[167]. - Cash used in investing activities increased by approximately $15.2 million, primarily due to increased capital expenditures and net short-term investment activity[168]. - Cash used in financing activities declined by $241.4 million, driven by a reduction in dividends paid by approximately $114.8 million and a decrease in share repurchases of $91.2 million[169]. - The company ended the first nine months of 2024 with cash, cash equivalents, and short-term investments of $255.9 million, and total liquidity of $359.8 million[159]. - The company expects to maintain minimum liquidity levels of approximately $250 million to $300 million, primarily held in cash[159]. Production and Sales Commitments - Planned production levels at thermal operations are aligned with existing sales commitments, with a focus on maximizing export opportunities[114]. - The Company has metallurgical coal sales commitments for 2024, including 1.5 million tons of North America priced coking coal at $157.04 per ton and 5.2 million tons of seaborne priced coking coal at $140.68 per ton[173]. Segment Performance - Adjusted EBITDA for the Metallurgical segment decreased to $54.17 million for the three months ended September 30, 2024, down from $128.32 million in the same period of 2023, a decline of $74.16 million[137]. - Adjusted EBITDA for the Thermal segment decreased for the three months ended September 30, 2024, due to decreased tons sold and increased cash cost per ton sold[141]. - For the nine months ended September 30, 2024, the Metallurgical segment sold 6.77 million tons, down from 6.96 million tons in the same period of 2023, a decrease of 196,000 tons[138]. - The total tons sold for the nine months ended September 30, 2024, were 6,766 for metallurgical coal and 37,662 for thermal coal, compared to 6,962 and 50,104 respectively in the same period of 2023, indicating a decline in thermal coal sales[152][153]. Taxation - The effective tax rate for Q3 2024 was 50.8%, significantly higher than the U.S. federal statutory rate of 21%, primarily due to the income tax benefit for excess percentage depletion[123]. - The company experienced a net loss of $887 thousand from the provision for income taxes in the first nine months of 2024, a decrease of $67,726 thousand compared to a benefit of $66,839 thousand in 2023[134].

Financial Data and Key Metrics Changes - The third quarter marked a significant transition for the company, with expectations for long-term value creation and growth driven by a merger with CONSOL Energy and operational transitions in metallurgical longwall mines [6][7] - The company declared a fixed dividend of $0.25 per share, totaling $4.6 million, payable on November 26 [8] - Production volumes were depressed due to throttled back operations in the metallurgical segment, leading to slightly higher normal operating costs [10] Business Line Data and Key Metrics Changes - The thermal segment saw a significant turnaround during Q3, benefiting from improved performance in the Powder River Basin operations due to cost-cutting measures and better alignment between stripping activities and sales volumes [12] - The West Elk mine operated well, although results were dampened by lower realizations related to legacy contracts, most of which will expire at the end of the year [12][13] - The metallurgical segment is expected to see a significant step-up in performance in the coming year, particularly with the roll-off of low-priced contracts and the transition to thicker, lower-cost reserves [13] Market Data and Key Metrics Changes - Global coking coal markets are believed to be closer to balance than current pricing suggests, with supply constraints and increased Chinese seaborne imports of coking coal [15][16] - The high-rank seaborne thermal market appears tight, benefiting from years of investment in new and replacement supply [17] Company Strategy and Development Direction - The merger with CONSOL Energy is expected to create a global industry leader, enhancing operational platforms and expanding logistics and export capabilities [21][24] - The company aims to unlock significant synergies from the merger, with projected annual cost savings of $110 million to $140 million [22][23] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the operational transitions and the potential for improved performance in Q4, despite challenges faced in Q3 [43][44] - The company anticipates a positive step change in execution from operations after the completion of the longwall moves [11][44] - Management noted that the supply side in Appalachia is under pressure, which could lead to a reduction in production from smaller mines [61][63] Other Important Information - The merger is expected to close in Q1 2025, with stockholder votes pending [20] - The company is focused on capturing synergies in logistics, marketing, and procurement post-merger [23] Q&A Session Summary Question: Update on contracts for 2025 and pricing expectations - Management indicated that they have committed about 0.5 million tons at a price just under $150, with expectations that North American business could decrease significantly [27][28] - For West Elk, legacy contracts rolling off are expected to be replaced with prices as much as $30 higher [31] Question: Thoughts on High-Vol A markets and pricing - Management acknowledged that the High-Vol A market is somewhat soft but not far from balance, with significant appetite for their products in Asia [34][36] Question: Expectations for Q4 performance - Management expects Q4 performance to be similar to Q3, with potential for improvement as operations ramp up [44][45] Question: Role of thermal assets in the merger - West Elk is seen as a key player in the high-quality seaborne thermal business, while the future of the Powder River Basin operations remains uncertain [46][47] Question: Supply side stress in Appalachia - Management noted that labor pressures have diminished and supply availability is improving, indicating a potential supply pullback in the market [60][62]

Core Insights - Arch Resources, Inc. reported third-quarter 2024 earnings per share (EPS) of 41 cents, missing the Zacks Consensus Estimate of $1.38 by 70.3% and declining from $3.91 in the same quarter last year [1] - Total revenues were $617.9 million, exceeding the Zacks Consensus Estimate of $536 million by 15.3%, but down 17% from $744.6 million in the year-ago quarter [2] Segment Performance - In the Metallurgical segment, Arch sold 2.4 million tons of coal, an increase of 4.3% year-over-year, with cash margins at $21.74 per ton compared to $54.7 in the prior-year quarter [3] - In the Thermal segment, the company sold 13.8 million tons of coal, a decrease of 17.9% year-over-year, with cash margins at 86 cents per ton compared to $1.34 in the prior-year period [3] Operational Highlights - During the third quarter, Arch faced a three-week outage of the ship loader at Curtis Bay Terminal, which reduced coking coal shipments by approximately 200,000 tons [4] - The company paid down $5.1 million in debt, ending the quarter with a net cash position of $127.7 million [4] Strategic Moves - Arch announced plans to merge with CONSOL Energy Inc., aiming to create a leading global player in seaborne metallurgical and high-rank thermal coal markets, with expected annual cost savings and synergies of $110 million to $140 million [5] - The merger is anticipated to close by the end of the first quarter of 2025, pending customary closing conditions and stockholder approval [5] Financial Position - As of September 30, 2024, cash and cash equivalents and short-term investments totaled $219.6 million, down from $287.8 million as of December 31, 2023 [6] - Cash provided by operating activities in the first nine months of 2024 was $212.4 million, compared to $453.8 million in the same period last year [6] Market Position - Arch Resources currently holds a Zacks Rank of 5 (Strong Sell) [7]

Core Viewpoint - Arch Resources reported quarterly earnings of $0.41 per share, significantly missing the Zacks Consensus Estimate of $1.38 per share, and down from $3.91 per share a year ago, indicating a -70.29% earnings surprise [1] Financial Performance - The company posted revenues of $617.9 million for the quarter ended September 2024, exceeding the Zacks Consensus Estimate by 15.28%, but down from $744.6 million year-over-year [2] - Over the last four quarters, Arch Resources has surpassed consensus revenue estimates four times, but has only exceeded EPS estimates once [2] Stock Performance - Arch Resources shares have declined approximately 14.3% since the beginning of the year, contrasting with the S&P 500's gain of 19.8% [3] - The stock currently holds a Zacks Rank 5 (Strong Sell), indicating expectations of underperformance in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $1.92 on revenues of $547 million, and for the current fiscal year, it is $7.84 on revenues of $2.37 billion [7] - The trend for earnings estimate revisions ahead of the earnings release was unfavorable, which may impact future stock performance [6] Industry Context - The coal industry, to which Arch Resources belongs, is currently ranked in the bottom 41% of over 250 Zacks industries, suggesting a challenging environment for stock performance [8]

Financial Performance - Arch Resources reported a net loss of $6.2 million, or $0.34 per diluted share, in Q3 2024, compared to a net income of $73.7 million, or $3.91 per diluted share, in Q3 2023[1]. - Adjusted EBITDA for Q3 2024 was $44.2 million, down from $126.3 million in the same quarter last year[1]. - Revenues for the three months ended September 30, 2024, totaled $617.9 million, a decrease from $744.6 million in the prior-year quarter[1]. - Revenues for Q3 2024 were $617.9 million, a decrease of 17% from $744.6 million in Q3 2023[13]. - Net loss for Q3 2024 was $6.2 million, compared to a net income of $73.7 million in Q3 2023[13]. - Adjusted EBITDA for Q3 2024 was $44.2 million, down from $126.3 million in Q3 2023, representing a decline of 65%[13]. - The company reported a basic loss per share of $0.34 for Q3 2024, compared to earnings of $4.05 per share in Q3 2023[13]. - The company reported a net loss of $6,221,000 for the quarter, contrasting with a net income of $73,691,000 in the prior year[34]. - Segment adjusted EBITDA from coal operations was $67,014,000, down from $151,695,000 year-over-year[34]. Operational Highlights - The company managed to ship 2.1 million tons of coking coal despite a three-week outage of the shiploader at Curtis Bay Terminal, which reduced shipments by an estimated 200,000 tons[2]. - The thermal segment returned to profitability in Q3 2024, supported by improved performance from Powder River Basin operations[5]. - Arch generated cash provided by operating activities of $24.9 million in Q3, with a working capital build of $18.2 million[6]. - Total segment cash margin for metallurgical coal was $53.1 million, down from $128.3 million in the same quarter last year[21]. - The company reported a total of 2.4 million tons sold for metallurgical coal, an increase from 2.3 million tons in the same quarter last year[21]. - Total tons sold in the quarter were 19,177, with a significant increase in thermal coal sales compared to the previous quarter[26][30]. Cash and Investments - Arch has deployed over $1.3 billion under its capital return program since February 2022, including $736 million in dividends[7]. - The company ended Q3 2024 with $255.9 million in cash and short-term investments, resulting in a net cash position of $127.7 million[6]. - Cash and cash equivalents decreased to $219.6 million from $287.8 million at the end of 2023[14]. - Cash and cash equivalents at the end of the period were $220,695, up from $184,197 at the end of September 2023[16]. - The company issued a term loan due in 2025 amounting to $20,000 during the quarter[16]. Debt and Liabilities - Long-term debt was eliminated, with current maturities of debt increasing to $126.9 million from $35.3 million at the end of 2023[14]. - Total liabilities decreased to $926.9 million from $1 billion at the end of 2023[14]. - Total debt, excluding debt issuance costs, decreased to $128,220 from $142,106 as of December 31, 2023[19]. Dividends - Arch declared a fixed quarterly cash dividend of $0.25 per share, amounting to a total payment of $4.6 million, payable on November 26, 2024[2]. - The company declared dividends of $0.25 per common share, down from $3.97 in the same quarter last year[13]. Merger and Future Outlook - The merger with CONSOL Energy is expected to close by the end of Q1 2025, with projected annual cost savings and synergies of $110 million to $140 million[9]. - The company incurred merger-related costs of $7,002,000 and severance costs of $6,649,000 during the quarter[34].

Core Insights - Arch Resources, Inc. reported a net loss of $6.2 million, or $0.34 per diluted share, in Q3 2024, a significant decline from a net income of $73.7 million, or $3.91 per diluted share, in Q3 2023 [1][3] - The company achieved a milestone in its pending merger with CONSOL Energy, receiving all necessary international approvals and managing through operational challenges [2][8] - Arch declared a fixed quarterly cash dividend of $0.25 per share, totaling $4.6 million, payable on November 26, 2024 [2][7] Financial Performance - Revenues for Q3 2024 were $617.9 million, down from $744.6 million in the same quarter of the previous year [1][13] - Adjusted EBITDA for Q3 2024 was $44.2 million, compared to $126.3 million in Q3 2023 [1][20] - The thermal segment returned to profitability, aided by improved performance in the Powder River Basin operations [5] Operational Highlights - The company managed through a three-week outage of the shiploader at Curtis Bay Terminal, which reduced coking coal shipments by approximately 200,000 tons [2][4] - Arch is transitioning the Leer South mine to enhance operational execution in 2025, with expectations for improved performance beginning mid-Q4 2024 [2][4] - The metallurgical marketing and logistics team faced challenges but continued to position the company for long-term value creation [2][3] Merger Update - The merger with CONSOL Energy is expected to close by the end of Q1 2025, pending customary closing conditions and stockholder approvals [8][9] - Projected benefits of the merger include cost savings of $110 million to $140 million annually and enhanced operational capabilities [8][9] Cash Flow and Debt Management - Arch generated cash provided by operating activities of $24.9 million in Q3 2024, with a working capital build of $18.2 million [6] - The company paid down $5.1 million in debt, ending Q3 with $255.9 million in cash and short-term investments, resulting in a net cash position of $127.7 million [6][19]