Core Concept - The article discusses investment strategies focusing on identifying companies with strong potential for growth while avoiding those likely to decline, particularly in the context of the basic materials sector and the impact of the AI revolution. Group 1: Investment Strategies - The concept of avoiding poorly rated companies can lead to better investment returns, as evidenced by the performance of S&P 500 companies rated by Moody's in 2020 [3][10]. - Eric Fry's presentation emphasizes the importance of selecting stocks that are expected to rise while avoiding those that are likely to fall, particularly in an era characterized by rapid changes in the market [4][31]. Group 2: Basic Materials Sector Analysis - Tronox Holdings PLC (TROX) is highlighted as a key player in the titanium dioxide market, which is cyclical and dependent on demand from industries like automotive and construction [7][8]. - Despite current low trading prices for Tronox shares, there is optimism for recovery due to ongoing demand for titanium dioxide, supported by recent insider buying [9][12][13]. - The article contrasts Tronox with Alliance Resource Partners LP (ARLP), which is facing challenges due to high extraction costs in the coal industry and declining earnings [22][25][29]. Group 3: Market Trends and Future Outlook - The demand for lithium-ion batteries is expected to rise significantly due to advancements in AI technology and the shift from traditional energy sources [18][21]. - Albemarle Corp. is positioned to benefit from this trend, with a strong balance sheet and low-cost assets, while ARLP is likely to struggle against cheaper competitors and market dynamics [21][30].

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________________to________________ Commission File No.: 0-26823 ALLIANCE RESOURCE PARTNERS, L.P. (Exact name of registrant as specified in its charter) ...

Core Insights - Alliance Resource Partners, L.P. (ARLP) reported a resilient performance in Q2 2025 despite facing challenges such as lower coal pricing and decreased transportation revenues [1][8] - The company experienced a 7.7% year-over-year decline in total revenues, amounting to $547.5 million, primarily due to an 11.3% drop in average coal sales prices [1][8] - Net income for the quarter decreased to $59.4 million from $100.2 million in Q2 2024, influenced by lower revenues, increased depreciation, and a $25 million non-cash impairment on a battery materials equity investment [1] - Adjusted EBITDA was reported at $161.9 million, reflecting a 1.2% sequential increase [1][8] - The company updated its FY25 guidance, anticipating improved production at Tunnel Ridge and higher sales from the Illinois Basin, alongside cost efficiencies and strong contracted commitments [1] Revenue and Sales Performance - Total revenues for Q2 2025 were $547.5 million, down 7.7% year-over-year [1][8] - Average coal sales prices fell by 11.3%, contributing to the revenue decline [1] - Oil & Gas royalty volumes increased by 7.7% year-over-year, indicating a positive trend in this segment [8] Financial Metrics - Net income for Q2 2025 was $59.4 million, a significant decrease from $100.2 million in the same quarter of the previous year [1] - Adjusted EBITDA for the quarter was $161.9 million, showing a slight increase of 1.2% sequentially [1][8] - The company declared a quarterly cash distribution of $0.60 per unit [8] Future Outlook - Alliance Resource Partners added 17.4 million committed and priced tons for 2025-2029, enhancing long-term sales visibility [8] - The company remains optimistic about production improvements and cost efficiencies, which are expected to support its updated FY25 guidance [1]

Core Insights - Alliance Resource Partners, L.P. (NASDAQ: ARLP) is well-managed and has substantial cash reserves, but it has reached a critical turning point in its business strategy [1] Company Analysis - The company recognizes that merely selling coal to U.S. power plants is no longer a sustainable business model [1] - The focus of the research is primarily on small- to mid-cap companies, which are often overlooked by investors, while also occasionally analyzing large-cap companies for a broader market perspective [1]

Financial Data and Key Metrics Changes - Total revenues for Q2 2025 were $547.5 million, down from $593.4 million in Q2 2024, primarily due to lower coal sales prices and transportation revenues, partially offset by higher coal sales volumes [4] - Average coal sales price per ton decreased by 11.3% year-over-year to $57.92, driven by the roll-off of higher-priced legacy contracts and a higher proportion of Illinois Basin tons [4] - Net income for Q2 2025 was $59.4 million, compared to $100.2 million in Q2 2024, reflecting variances in revenues and higher depreciation expenses [9] - Adjusted EBITDA for the quarter was $161.9 million, down 10.8% year-over-year but up 1.2% sequentially [10] Business Line Data and Key Metrics Changes - Coal production in Q2 2025 was 8.1 million tons, a 3.9% decrease compared to Q2 2024, while coal sales volumes increased by 6.8% to 8.4 million tons [4] - In the Illinois Basin, coal sales volumes increased by 15.2% year-over-year, driven by record shipments from Riverview and Hamilton mines [5] - Coal sales volumes in Appalachia decreased by 16.8% year-over-year due to challenging mining conditions at Tunnel Ridge [5][6] - Royalty segment revenues were $53.1 million, up 0.2% year-over-year, with oil and gas royalty volumes increasing by 7.7% [8] Market Data and Key Metrics Changes - Eastern utility inventories were 18% below the prior year, indicating a tightening market [18] - Year-to-date electricity generation in key Eastern regions was up over 18% compared to last year, driven by warmer temperatures and increased coal generation [18] - The company is seeing multiple domestic customer solicitations for long-term supply contracts, indicating strong demand for coal [11][12] Company Strategy and Development Direction - The company is optimistic about the long-term outlook due to supportive regulatory actions and strong domestic coal market fundamentals [18][21] - The company is increasing its volume guidance for the Illinois Basin to 25 to 25.75 million tons based on solid domestic demand [12] - The company is exploring opportunities in energy infrastructure related to data centers and evaluating investments in coal power plants [37] Management's Comments on Operating Environment and Future Outlook - Management noted that the current regulatory environment is the most favorable for coal in decades, with actions taken to support coal-fired power plants [21][22] - The company expects second-half results from Appalachia to improve following the completion of a longwall move at Tunnel Ridge [7] - Management expressed cautious optimism about growth opportunities in sales volumes next year, despite potential lower average coal sales prices [19] Other Important Information - The company generated free cash flow of $79 million after investing $65.3 million in coal operations [11] - The quarterly distribution rate was adjusted to $0.60 per unit, reflecting a strategic decision to strengthen the balance sheet and provide flexibility for growth opportunities [22][33] Q&A Session Summary Question: Can you provide more details on the $25 million investment for the acquisition of the Gavin Power plant? - The investment allows participation as an LP investor in a fund set up for the acquisition, which is expected to be accretive upon closing [28] Question: Can you clarify the board's decision to lower the distribution despite a strong outlook? - The adjustment aligns with a more sustainable operating margin and allows for additional cash flow to pursue growth opportunities [32][33] Question: What are the potential growth opportunities being considered? - The company is looking at investments in minerals, energy infrastructure for data centers, and potential acquisitions of coal plants [36][37] Question: How do you see the impact of the recent trade deal on guidance? - There is potential for increased manufacturing demand in the Eastern U.S., which could benefit coal demand [62] Question: How do you anticipate demand growth pacing? - Demand is expected to stabilize as utilities maintain inventory levels, correlating with coal purchases [67][70] Question: Has the decline in Chinese demand for seaborne coal impacted U.S. pricing? - Domestic pricing remains prioritized, but there are signs of improved pricing for exports, which could increase next year [75] Question: Will there be continued investments in royalty assets? - The company plans to invest in its royalty segment, primarily targeting the Permian and Delaware Basins [77]

Financial Data and Key Metrics Changes - Total revenues for Q2 2025 were $547.5 million, down from $593.4 million in Q2 2024, primarily due to lower coal sales prices and transportation revenues, partially offset by higher coal sales volumes [4] - Average coal sales price per ton decreased by 11.3% year-over-year to $57.92, driven by the roll-off of higher-priced legacy contracts and a higher proportion of Illinois Basin tons [4] - Net income for Q2 2025 was $59.4 million, compared to $100.2 million in Q2 2024, reflecting variances in revenues and higher depreciation expenses [9] - Adjusted EBITDA for the quarter was $161.9 million, down 10.8% year-over-year but up 1.2% sequentially [10] Business Line Data and Key Metrics Changes - Coal production in Q2 2025 was 8.1 million tons, a decrease of 3.9% compared to Q2 2024, while coal sales volumes increased by 6.8% to 8.4 million tons [4] - In the Illinois Basin, coal sales volumes increased by 15.2% year-over-year, driven by record shipments from Riverview and Hamilton mines [5] - Coal sales volumes in Appalachia decreased by 16.8% year-over-year due to challenging mining conditions at Tunnel Ridge [5] - Segment adjusted EBITDA expense per ton sold for coal operations was $41.27, a decrease of 9% year-over-year [6] Market Data and Key Metrics Changes - Total coal inventory at the end of Q2 2025 was 1.2 million tons, down 200,000 tons from the previous quarter [5] - Year-to-date electricity generation in key Eastern regions was up over 18% compared to last year, with utility inventories 18% below the prior year [18] - The domestic coal market is showing strong fundamentals, driven by increased demand for electricity and natural gas prices remaining elevated [18] Company Strategy and Development Direction - The company is optimistic about long-term growth opportunities, having committed an additional 17.4 million tons for delivery from 2025 to 2029 [12] - The company is increasing its volume guidance for the Illinois Basin to 25 to 25.75 million tons based on solid domestic demand [12] - The company is focused on maintaining margins through cost savings and is exploring investments in high-quality basins for oil and gas royalties [20][76] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the domestic coal market, citing supportive actions from the current administration and increased demand from AI data centers and manufacturing [18][21] - The company anticipates improved results from Appalachia in the second half of 2025 following the completion of a longwall move at Tunnel Ridge [5] - Management noted that the current regulatory environment is the most favorable for coal in decades, which is expected to support demand [23] Other Important Information - The company generated free cash flow of $79 million after investing $65.3 million in coal operations [11] - The quarterly distribution rate was adjusted to $0.60 per unit, reflecting a strategic decision to strengthen the balance sheet and provide financial flexibility for growth opportunities [22][32] Q&A Session Summary Question: Can you provide more details on the $25 million investment for the acquisition of the Gavin Power plant? - The investment was made to participate as a limited partner in a fund set up to acquire the Gavin Power plant, which is expected to be accretive upon closing [28] Question: What is the rationale behind the distribution cut despite a strong outlook for domestic coal? - The distribution was adjusted to align with a more sustainable operating margin and to provide flexibility for growth opportunities, not due to declining fortunes [32] Question: What growth opportunities are being considered? - The company is exploring investments in minerals, energy infrastructure for data centers, and potential acquisitions of coal plants [36] Question: How many customers will benefit from the recent legislation? - The legislation is expected to help utilities maintain and operate fossil fuel plants, which could stabilize and potentially increase demand for coal [40] Question: What is the outlook for coal pricing given the decline in Chinese demand for seaborne coal? - Domestic pricing remains prioritized, and there are signs of improved pricing for exports, which could lead to higher export tonnage next year [74] Question: Will there be continued investments in royalty assets? - The company plans to invest in its royalty segment, primarily targeting the Permian and Delaware Basins, with a goal of over $100 million in investments annually [76]

Exhibit 99.1 PRESS RELEASE FOR IMMEDIATE RELEASE ALLIANCE RESOURCE PARTNERS, L.P. Reports Second Quarter Financial and Operating Results; Declares Quarterly Cash Distribution of $0.60 Per Unit; and Updates 2025 Guidance 2025 Quarter Highlights TULSA, OKLAHOMA, July 28, 2025 — Alliance Resource Partners, L.P. (NASDAQ: ARLP) ("ARLP" or the "Partnership") today reported financial and operating results for the three and six months ended June 30, 2025 (the "2025 Quarter" and "2025 Period," respectively). This re ...

The Zacks Coal industry is facing significant headwinds as the use of coal in U.S. thermal power plants continues to decline. In 2025, demand is projected to weaken further due to the planned retirement of coal-fired units and the growing shift toward renewable energy sources for electricity generation. The ongoing energy transition, marked by utility operators systematically phasing out coal assets, continues to pressure the industry. As a result, coal production volumes are decreasing. Coal export volumes ...

Financial Performance - Total revenues for Q1 2025 decreased by 17.1% to $540.5 million compared to $651.7 million in Q1 2024, primarily due to reduced coal sales volumes and prices [110]. - Coal sales dropped to $468.5 million in Q1 2025 from $561.9 million in Q1 2024, with a decrease of 10.4% in tons sold [112]. - Net income attributable to the company for Q1 2025 was $74.0 million, or $0.57 per unit, down from $158.1 million, or $1.21 per unit, in Q1 2024, reflecting lower revenues and a decrease in the fair value of digital assets [115]. - Segment Adjusted EBITDA decreased by $80.1 million to $180.5 million in Q1 2025 from $260.6 million in Q1 2024 [116]. - Cash provided by operating activities was $145.7 million for Q1 2025, down from $209.7 million in Q1 2024, mainly due to decreased net income and unfavorable working capital changes [133]. Production and Sales - Tons produced in Q1 2025 were 8,457, a decrease of 7.2% from 9,114 tons in Q1 2024 [109]. - Tons sold in Illinois Basin Coal Operations decreased by 6.1% to 6,042 in Q1 2025 compared to 6,437 in Q1 2024 [120]. - Average coal sales price per ton in Appalachia decreased by 8.5% compared to Q1 2024, reflecting lower export price realizations [121]. Expenses - Labor and benefit expenses per ton produced increased by 5.9% to $13.23 in Q1 2025 from $12.49 in Q1 2024 [113]. - Material and supplies expenses per ton produced decreased by 9.2% to $13.51 in Q1 2025 from $14.88 in Q1 2024 [117]. - Segment Adjusted EBITDA Expense for Illinois Basin decreased by 9.9% to $210.0 million in Q1 2025 from $233.1 million in Q1 2024 [120]. - Appalachia Coal Operations Segment Adjusted EBITDA fell 79.0% to $15.6 million in Q1 2025 from $74.2 million in Q1 2024, driven by a 29.3% decrease in coal sales to $135.3 million [121]. - Oil & Gas Royalties Segment Adjusted EBITDA decreased to $29.9 million in Q1 2025 from $31.4 million in Q1 2024, attributed to a 2.0% reduction in oil & gas royalty volumes [123]. Investments and Capital Expenditures - The company committed to invest up to $25.0 million in Gavin Generation Holdings A, LP, representing a 5.0% interest [107]. - Total capital expenditures for 2025 are estimated to be in the range of $285.0 million to $320.0 million, with average annual maintenance capital expenditures projected at approximately $7.28 per ton produced [137]. - Net cash used in investing activities decreased to $93.1 million in Q1 2025 from $120.5 million in Q1 2024, primarily due to reduced capital expenditures [134]. Financing Activities - Net cash used in financing activities increased to $108.3 million in Q1 2025 from $15.0 million in Q1 2024, mainly due to decreased borrowings under the securitization facility [136]. - The company has $80.6 million remaining authorized for unit repurchases as of March 31, 2025, with no units repurchased during Q1 2025 [132]. - The company anticipates having sufficient cash flow to meet 2025 cash requirements, with cash and cash equivalents projected at $81.3 million as of March 31, 2025 [137]. Risk Factors - The company is exposed to commodity price risks due to significant long-term coal sales contracts, which are subject to price adjustment provisions [142]. - The company's results are highly dependent on the prices received for coal, oil, and natural gas, with a significant decline in oil and gas prices potentially impacting royalty revenues [145]. - Credit risk is primarily with domestic electric power generators and reputable global brokerage firms, with measures in place to evaluate and monitor customer creditworthiness [147]. - The company does not have material exposure to currency exchange-rate risks, as almost all transactions are denominated in U.S. dollars [148]. - Borrowings under the Revolving Credit Facility and Securitization Facility are at variable rates, exposing the company to interest rate risks [149]. - The company projects significant long-term cash requirements, which may necessitate incurring debt or seeking additional equity capital [137]. - The availability and cost of additional capital will depend on market conditions, the market price of common units, and the company's financial condition [137].

Core Insights - Alliance Resource Partners, L.P. (ARLP) reported a resilient performance in Q1 2025 despite lower coal sales volumes and pricing, with total revenues decreasing by 17.1% year-over-year to $540.5 million [1][8] - Net income for the quarter fell to $74.0 million compared to $158.1 million in Q1 2024, primarily due to lower revenues and a decrease in the fair value of digital assets, although operating expenses were reduced [1][8] - Adjusted EBITDA increased by 29.0% sequentially to $159.9 million, indicating operational efficiency [1][8] - ARLP updated its FY25 guidance, expecting higher domestic sales volumes and operational cost efficiencies to support margins despite ongoing pricing pressures [1][8] Revenue and Financial Performance - Total revenue for Q1 2025 was $540.5 million, a decrease of 17.1% year-over-year [1][8] - Net income decreased to $74.0 million from $158.1 million in Q1 2024 [1][8] - Adjusted EBITDA for the quarter was $159.9 million, reflecting a 29.0% increase sequentially [1][8] Sales and Commitments - Coal sales volumes declined by 10.4% year-over-year, but over 96% of expected coal sales volumes for 2025 are committed and priced [1][8] - The company added 17.7 million tons of contract commitments for the period from 2025 to 2028 [8]