Arch Resources, Inc. (NYSE:ARCH) Q1 2024 Earnings Conference Call April 25, 2024 10:00 AM ET Company Participants Deck Slone - SVP, Strategy Paul Lang - CEO John Drexler - COO Matthew Giljum - CFO Conference Call Participants Lucas Pipes - B. Riley Securities Nathan Martin - Benchmark Company Katja Jancic - BMO Capital Markets Michael Dudas - Vertical Research Operator Good morning, ladies and gentlemen, and welcome to the Arch Resources Incorporated First Quarter 2024 Earnings Call Conference Call. [Operat ...

Arch Resources (ARCH) came out with quarterly earnings of $2.98 per share, beating the Zacks Consensus Estimate of $2.79 per share. This compares to earnings of $10.02 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 6.81%. A quarter ago, it was expected that this coal producer would post earnings of $6.90 per share when it actually produced earnings of $6.07, delivering a surprise of -12.03%.Over the last four quarters, the co ...

Exhibit 99.1 NEWS RELEASE Investor Relations 314/994-2916 FOR IMMEDIATE RELEASE Arch Resources Reports First Quarter 2024 Results Achieves net income of $56.0 million and adjusted EBITDA of $102.9 million Declares a quarterly cash dividend of $20.7 million, or $1.11 per share Reduces diluted share count by an incremental 3 percent during the quarter ST. LOUIS, April 25, 2024 – Arch Resources, Inc. (NYSE: ARCH) today reported net income of $56.0 million, or $2.98 per diluted share, in the first quarter of 20 ...

Arch Resources (ARCH) is scheduled to release first-quarter 2024 results on Apr 25, before market open. The company delivered a negative earnings surprise of 12% in the last reported quarter.Let’s discuss the factors that are likely to be reflected in the upcoming quarterly results.Factors to ConsiderShipments from Arch Resources' Powder River Basin operations are expected to remain robust during the quarter, contributing to the company's overall performance.West Elk is likely to have continued to generate ...

The past couple of weeks have been increasingly volatile for U.S. equities markets. The Nasdaq fell 3.55% last week, while the S&P500 had fallen 3.05%. On the one hand, U.S. equities have likely reached a short-term peak, as trading multiples have become stretched. Yet on the other hand, U.S. Federal Reserve officials and Fed Chairman Jerome Powell are sending disappointing signals. Rates are likely to be higher for longer since inflation has shown little signs of coming down in recent months. These two con ...

Core Viewpoint - The market anticipates Arch Resources (ARCH) will report a significant year-over-year decline in earnings due to lower revenues, with the upcoming earnings report expected on April 25, 2024 [1][2]. Financial Expectations - The consensus estimate for Arch Resources' quarterly earnings is $2.79 per share, reflecting a year-over-year decrease of 72.2% [2]. - Expected revenues for the quarter are $551 million, which is a decline of 36.7% compared to the same quarter last year [2]. Estimate Revisions - Over the past 30 days, the consensus EPS estimate has been revised down by 69.6%, indicating a reassessment by analysts [2]. - The Most Accurate Estimate for Arch Resources aligns with the Zacks Consensus Estimate, resulting in an Earnings ESP of 0% [5]. Earnings Surprise Prediction - The Zacks Earnings ESP model suggests that a positive Earnings ESP is a strong predictor of an earnings beat, especially when combined with a favorable Zacks Rank [4]. - Arch Resources currently holds a Zacks Rank of 5, indicating a strong sell, which complicates the prediction of an earnings beat [5][6]. Historical Performance - In the last reported quarter, Arch Resources was expected to post earnings of $6.90 per share but only achieved $6.07, resulting in a surprise of -12.03% [7]. - Over the last four quarters, the company has only beaten consensus EPS estimates once [7]. Conclusion - Arch Resources does not appear to be a compelling candidate for an earnings beat based on current estimates and historical performance, suggesting investors should consider other factors before making investment decisions [8].

Group 1: Mid-Cap Stocks Overview - Mid-cap stocks offer a balance between stability and growth potential, making them attractive in uncertain market conditions [1] - Large-cap stocks provide stability for conservative investors, while small-cap stocks carry high volatility risks [1] Group 2: Valvoline (VVV) - Valvoline operates vehicle service centers and retail stores, primarily offering oil-change services, which may seem unexciting [2] - Despite a lackluster performance last fiscal year, analysts project significant growth for the current fiscal year, with revenue expected to reach $1.63 billion, a 13.2% increase from $1.44 billion [3] Group 3: Semtech (SMTC) - Semtech specializes in semiconductors, focusing on analog and mixed-signal products relevant to data centers and enterprise networks [5] - Analysts rate Semtech as a strong buy with an average price target of $38.31, anticipating sales to rise to $1.03 billion in the next fiscal year from $868.76 million [6] Group 4: Arch Resources (ARCH) - Arch Resources operates in the coking coal specialty, producing metallurgical products, and may benefit from rising electricity demand [7] - Despite a poor performance last fiscal year, analysts project a strong buy with a price target of $182, influenced by the power crisis [8] Group 5: Essential Utilities (WTRG) - Essential Utilities operates regulated utilities providing water, wastewater, and natural gas services, benefiting from a natural monopoly [9] - Analysts rate WTRG as a strong buy with a price target of $41.50, projecting earnings per share of $1.98 on revenue of $2.36 billion for the current fiscal year [10] Group 6: Wix (WIX) - Wix operates a cloud-based web development platform, benefiting from the rise of the gig economy [11] - Analysts rate Wix as a buy with an average price target of $157.29, projecting EPS of $4.84 on revenue of $1.75 billion for the current fiscal year [12] Group 7: Six Flags (SIX) - Six Flags is a popular theme park operator, facing challenges post-pandemic but could benefit from renewed interest in travel [13] - Analysts rate Six Flags as a strong buy with a price target of $29.63, projecting EPS of $1.79 and revenue of $1.51 billion for the current fiscal year [14] Group 8: Marriott Vacations (VAC) - Marriott Vacations develops and manages vacation ownership products, with potential upside if travel demand recovers [15] - Analysts rate VAC as a moderate buy with a price target of $109.57, projecting revenue of $4.8 billion for the current fiscal year, a 51.7% increase from $3.17 billion last year [16]

ST. LOUIS, March 19, 2024 /PRNewswire/ -- Arch Resources, Inc. (NYSE: ARCH) today announced that George J. Schuller Jr., a highly regarded mining industry executive with decades of senior operational leadership experience, has joined the company as senior vice president and chief operating officer, effective immediately.  "We are extremely pleased that George has agreed to join the Arch team in this pivotal capacity and view him as a perfect fit with our sustainability-focused and results-driven culture," s ...

Core Viewpoint - Arch Resources is one of the largest coal mining companies in the U.S., with a significant portion of its adjusted EBITDA derived from the metallurgical coal segment, which trades at a premium compared to thermal coal [3][5]. Q4-23 Result - In Q4-23, Arch reported adjusted EBITDA of $180.0 million, up from $126.3 million in Q3-23, and net income of $114.9 million, compared to $73.7 million in the prior quarter, driven by a rebound in met coal sales prices and reduced operating expenses [8]. - The met segment saw a margin increase of $28 per ton, or 52%, compared to the previous quarter [8]. Annual Performance - For the full year 2023, adjusted EBITDA was $714.0 million, down from a record $1,260.4 million in 2022, while discretionary cash flow was a healthy $459.3 million [10]. - Arch has focused on buying back convertibles and warrants, with plans to decrease the basic share count moving forward [10][11]. 2024 Guidance - The company expects a slight decrease in sales volume and a significant drop in margins for the thermal segment in 2024, with adjusted EBITDA contribution likely below $50 million [13]. - The met segment is also expected to see a slight decline in sales volume, but operating costs are projected to remain flat year-over-year, indicating a relatively strong year for Arch despite thermal segment weaknesses [15]. Index Inclusion - Arch is set to join the S&P SmallCap 600 index effective March 18, with U.S. ETFs owning approximately 4 million shares, or 22% of the company, prior to the announcement [18]. - An estimated 1.5 million to 2 million shares are expected to be purchased by U.S. ETFs in the coming months, providing a substantial near-term tailwind [20]. Conclusion - The latest quarterly results align with expectations, with the thermal segment's contribution to the bottom line being historically low [21]. - Arch maintains a net cash position of $178 million and is committed to returning 100% of free cash flow to shareholders, with lower operating costs providing better downside protection compared to peers [23].

Financial Data and Key Metrics Changes - The company achieved adjusted EBITDA of $180 million in Q4 2023, with a sequential increase of nearly 40% in operating cash flow to $182 million from Q3 levels [5][25]. - Discretionary cash flow for the quarter was $127 million, contributing to a cash position increase of $107 million, ending the quarter with cash and short-term investments of $321 million [5][26]. - The total capital returned to shareholders since the re-launch of the capital return program exceeded $1.2 billion, with a quarterly cash dividend of $32 million or $1.65 per share [5][7]. Business Line Data and Key Metrics Changes - In the metallurgical segment, the average cash cost was reduced by more than $10 per ton, or over 10% compared to Q3, with a nearly 25% improvement in average coking coal realization [6][15]. - The thermal segment saw a return to form, with West Elk achieving its highest quarterly production level of around 1.1 million tons, while the Powder River Basin (PRB) operations contributed solidly despite market challenges [14][19]. Market Data and Key Metrics Changes - The price for High-Vol A coking coal on the U.S. East Coast was assessed at $262 per metric ton, while the Australian Premium Low-Vol index was trading at $53 per metric ton, creating an arbitrage opportunity for U.S. volumes in the Asian market [9][10]. - Australian coking coal exports declined nearly 6% in 2023 compared to 2022, contributing to a constrained supply environment that supports coking coal prices [11][12]. Company Strategy and Development Direction - The company aims to enhance shareholder returns by evolving towards a heavier share repurchase model while maintaining a strong financial position [12][30]. - The focus remains on operational excellence, increasing penetration in Asian markets, and advancing sustainability projects, with expectations of continued productivity improvements in 2024 [12][22]. Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the coking coal market, citing constrained supply and ongoing regulatory pressures as supportive factors for pricing [11][12]. - The company anticipates a modestly less than ratable shipping schedule for Q1 2024 due to weather-related disruptions and maintenance requirements, but expects to make up for this later in the year [17][18]. Other Important Information - The company achieved a total loss time incident rate of 0.55 incidents per 200,000 hours worked, significantly better than the industry average, and received zero environmental violations under SMCRA [23][24]. - The Leer operation became the first U.S. mine to achieve Level A verification under the globally recognized sustainable mining framework [24]. Q&A Session Summary Question: Can you walk us through the met coal guide for 2024? - Management is comfortable with the guidance of 8.8 million tons for 2024, expecting continued ramp-up at Leer South and operational improvements across the portfolio [33][34]. Question: What is the expected mix between West Elk and PRB for thermal coal? - West Elk is expected to produce around 4 million tons in 2024, while the PRB will contribute the remainder, with commitments in place for approximately 50 million tons of PRB coal [36][38]. Question: How much did West Elk contribute in 2023? - West Elk produced 3 million tons in 2023, with expectations for a significant increase in 2024, maintaining a solid cash flow contribution [48][49]. Question: What are the expectations for met coal pricing and the impact of new supply? - The company does not view the current pricing issues as a result of new supply but rather as a function of market conditions and believes the market remains well supported [74][76]. Question: Can you provide details on the decision to build cash during Q4? - The decision to increase cash reserves was a strategic move to maintain financial flexibility and prepare for potential market pullbacks, allowing for opportunistic share repurchases [65][67].