Alpha Metallurgical Resources, Inc. (NYSE:AMR) Q3 2024 Earnings Call Transcript

Alpha Metallurgical Resources, Inc. (NYSE:AMR) Q3 2024 Earnings Call Transcript November 1, 2024

Alpha Metallurgical Resources, Inc. misses on earnings expectations. Reported EPS is $0.2906 EPS, expectations were $1.03.

Operator: Greetings, and welcome to the Alpha Metallurgical Resources Third Quarter 2024 Results Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. Please note this conference is being recorded. I will now turn the conference over to your host, Emily O’Quinn, Senior Vice President, Investor Relations and Communications. You may now begin.

Emily O’Quinn: Thank you, Rob, and good morning, everyone. Before we get started, let me remind you that during our prepared remarks, our comments regarding anticipated business and financial performance contain forward-looking statements, and actual results may differ materially from those discussed. For more information regarding forward-looking statements and some of the factors that can affect them, please refer to the company’s third quarter 2024 earnings release and the associated SEC filing. Please also see those documents for information about our use of non-GAAP measures and their reconciliation to GAAP measures. Participating on the call today are Alpha’s Chief Executive Officer, Andy Eidson; and our President and Chief Operating Officer, Jason Whitehead. Additionally, also participating on the call are Todd Munsey, our Chief Financial Officer; and Dan Horn, our Chief Commercial Officer. With that, I will turn the call over to Andy.

Andy Eidson: Thanks, Emily, and good morning everyone. Following our prerelease a couple of weeks ago, we distributed our definitive third quarter results this morning, which include adjusted EBITDA of $49 million and 4.1 million tons shipped in the quarter. Our results for the quarter were negatively impacted by decreased coal processing and soft market conditions as well as some challenging geology and weather related issues that weighed our productivity and consequently our costs. As we continue our focus on reducing costs during this market downturn, we’ve made some small but meaningful changes to our production expectations, which are reflected in our guidance assumptions for next year. In general, these actions include reducing some Saturday and evening production shifts and removing sections in certain mine locations to better match production and qualities to demand, while also being mindful of our cost profile as compared to the current coal markets.

In addition to these kinds of changes that are normal responses to changing market conditions, we’re also in the process of ramping down at our high wall Checkmate Powellton mine, moving toward a hot idle status before the end of this year. The Chess Processing Plant, also known as Elk Run, will also idle once the Checkmate production ceases. This is the only mine or complex within the Alpha footprint that’s being idle due to the current market conditions. With Checkmate being our newest mine, it was still in ramp up mode, which means costs were still meaningfully higher than what we would have expected to see at full productive capacity. High wall indexes have dropped by roughly a third since development began a year ago at Checkmate, making the mine uneconomic in present market conditions.

We’re also conscious of the current high wall market, which is looking imbalanced and oversupplied at the moment. Taking a mine offline is a decision we never take lightly because it obviously impacts employees and their jobs. However, after issuing a warn [ph] notice to Checkmate employees in early October, we’ve been successful in transferring many of our Checkmate employees into other open positions within the company, allowing us to retain their expertise while staffing critical vacancies at other locations. In recent weeks, we’ve concluded our annual budgeting process, which produced our 2025 expectations, including the guidance we issued this morning. At the midpoint, you’ll see that we expect to ship 16.7 million tons of coal next year, or about 400,000 tons less than this year’s guidance midpoint.

Q&A Session

Our 2025 domestic commitments also compare similarly, with 3.7 million tons committed, or 22% of our overall sales book for next year, at an average price of $152.51, which is about $8 lower year-over-year, on a similar relative volume. Especially given the increasingly challenging market conditions we’ve experienced, I’m pleased that we were able to lock in a volume that allows us to plan for a portion of our 2025 cash flows as we look for opportunities to capture upside in the export market. As we’ve discussed in detail in recent calls, the management team remains focused on our liquidity position and protecting our ability to continue weathering this period of lower prices. Between July 1 and the end of the third quarter, our total liquidity increased by $150 million, or 42%.

The additional cash on the balance sheet allows us to fund the capital needs of our existing portfolio, while continuing to invest in important projects like the Kingston Wildcat Mine, formerly known as Kingston Sewell, which is our new low-low mine in development. Jason will talk more about Wildcat in a moment. Despite the difficult circumstances we’re currently seeing in steel demand and Metco pricing, I remain optimistic about Alpha’s long-term prospects. Mines like Kingston Wildcat are an exciting complement and quality enhancement to our existing portfolio. The Alpha team continues to operate safely and responsibly, even in the face of challenging conditions. October has gotten the fourth quarter off to a good start, so we hope to keep that momentum and finish this year strong.

Our strong balance sheet and lack of long-term debt provide greater flexibility to manage the business in periods of market weakness. We remain focused on safety and efficiency as we monitor the market for opportunities. So with that, I’ll turn the call over to Todd for additional information about our quarterly financial results.

Todd Munsey: Thanks, Andy. Adjusted EBITDA for the third quarter was $49 million, down from $116 million in Q2. We sold 4.1 million tons in Q3, compared to 4.6 million in the second quarter. Met segment realizations decreased quarter-over-quarter with an average third quarter realization of $132.76 compared to $141.86 for the second quarter. Export Met tons priced against Atlantic indices and other pricing mechanisms in the third quarter realized $129.31 per ton while export coal priced on Australian indices realized $128.61. These are compared to realizations of $135.47 per ton and $153.52 respectively in the second quarter. The Q3 realization for our metallurgical sales was a total weighted average of $136.35 per ton, down from $145.94 per ton in the prior quarter.

Realizations in the incidental thermal portion of the Met segment increased to $76.33 per ton in the third quarter, as compared to $75.82 per ton in the second quarter. Cost of coal sales for our Met segment increased to $114.27 per ton in the third quarter, up from $109.31 per ton in Q2. The primary driver of the cost increase was reduced productivity quarter-over-quarter. SG&A, excluding non-cash stock compensation and non-recurring items, decreased to $13.4 million in the third quarter as compared to $14.2 million in Q2. CapEx for the quarter was $31.5 million, down from $61.1 million in Q2. Moving to the balance sheet and cash flows, as of September 30, 2024, we had $484.6 million in unrestricted cash, an increase of $148.5 million, or roughly 44% from our June 30 unrestricted cash figure of $336.1 million.

We had $97.5 million in unused availability under our ABL at the end of the quarter, partially offset by a minimum required liquidity of $75 million. As of the end of September, Alpha had total liquidity of $507 million, up from $356.7 million at the end of the second quarter. Cash provided by operating activities was $189.5 million in the third quarter, up from $138.1 million in Q2. The third quarter cash flows were positively impacted by a decrease in working capital of $144.5 million. As of September 30, our ABL facility had no borrowings and $57.5 million of letters of credit outstanding, down slightly from $59.4 million in the prior quarter. In terms of our committed position for 2024, at the midpoint of guidance, 86% of our metallurgical tonnage in the Met segment is committed and priced at an average price of $152.42.

Another 14% of our Met tonnage for the year is committed but not yet priced. The thermal byproduct portion of the Met segment is fully committed and priced at the midpoint of guidance at an average price of $75.97. Due to the continued softness in the Met coal markets, we did not repurchase any shares in the third quarter under the company’s share buyback program. As of October 31, the number of common stock shares outstanding was approximately $13 million. The remaining stock buyback program authorization permits approximately $400 million in additional repurchases, contingent on cash flow levels and market conditions. We have repurchased a total of 6.6 million shares under the existing plan at an average price of $165.74. Looking ahead to next year, we issued 2025 guidance this morning.

We expect to ship between 15 million and 16 million tons of metallurgical coal, as well as between 1 million and 1.4 million tons of thermal coal by-product. Together, this brings total anticipated shipment guidance to a range of 16.0 million to 17.4 million tons. For 2024, cost of coal sales we are guiding to a range of $103 to $108 per ton. Selling general and administrative costs are expected to be between $53 million and $59 million next year, excluding nonrecurring expenses and noncash stock compensation, a reduction of approximately 11% as compared to 2024’s guidance range. Idle operations expense is anticipated to be between $18 million and $28 million. We expect net cash interest income of $2 million to $10 million and depreciation, depletion, and amortization of $165 million to $185 million.

Capital expenditures for 2025 are expected to be between $152 million and $182 million, which includes sustaining maintenance capital, investments in mine development for the Kingston Wildcat Mine, and some carryover from 2024 due to timing and availability of supplies and contract labor. We also anticipate capital contributions to equity affiliates in a range of $44 million to $54 million, which includes both cash needed for normal operations of the DTA facility, as well as amounts expected to be spent in 2025 related to infrastructure and facility upgrades at the port. Lastly, the company expects a cash tax rate of between 0% to 5% next year. In terms of our committed and priced position for 2025, our metallurgical tonnage at the midpoint of guidance is 24% committed at an average price of $152.51 with another 35% committed and unpriced.

The incidental thermal tonnage of the midpoint of guidance is already 96% committed at an average price of $79.90. The remaining 4% at the midpoint of incidental thermal guidance is uncommitted. I’ll now turn the call over to Jason to provide an update on operations.

Jason Whitehead: Thanks, Todd. Good morning, everyone. In our guidance for next year, we’re projecting cost of coal sales in a range of $103 to $108 per ton. The midpoint of which is $7.50 lower than the midpoint of our current 2024 guidance range of $110 to $116. Roughly two-thirds of this reduction is expected to be realized through reduced purchase coal cost through both the lower-than-expected volumes and the lower pricing environment that we’re experiencing. We also believe that we will realize savings of a little more than $2 per ton in 2025 through improved pricing on supplies and maintenance such as diesel fuel, steel, roof support, and a reduction in third-party mining services expenses. Those items, along with anticipated lower sales-related expenses, are the primary drivers behind the decrease in cost guidance year-over-year.

We’ve discussed in the past Alpha’s investments in our manufacturing and rebuild facilities on several previous calls. We’ve grown our capabilities over the last few years, and when third-party and OEM manufacturers were diminishing and often unavailable, it allowed us to maintain our fleet in a condition that is set to weather market declines. It’s these investments that have helped shore up our mining fleet into a healthy state that allows us to scale back investments here in the near-term without negatively impacting safety or productivity. Moving to our CapEx guidance for next year, you also see we’ve reduced our expectations around sustaining maintenance CapEx to roughly $7 per ton at the midpoint of volume guidance as opposed to the $10 per ton rule of thumb that we’ve most recently been using.

Again, this is due to the exceptional health of the AMR fleet and is backed up by a flattening, in some cases reversal of inflationary pressure on materials and supplies as compared to the last couple of years. At the midpoint of shipment guidance, we’re expecting to sell 16.7 million tons next year, which at $7 per ton corresponds to about $117 million in sustaining maintenance CapEx for our existing portfolio of mines. The other two categories, development and rollover CapEx, are largely devoted to our Kingston Wildcat mine. At the midpoint of guidance, we expect to spend around $40 million of development CapEx and another approximately $10 million in carryover from this year, almost all of which will go to Wildcat. As a reminder, this is the mine we’ve been working on in Fayette County, West Virginia, which was previously named Kingston Sewell after the name of the coal seam [ph].

It will be part of our mid-West Virginia surface region as our teams progressed on the preparatory groundwork for this mine, they decided to rename the mine Wildcat in appreciation for its location, our ties to the community, and the rich local history of Pax, West Virginia, where the Wildcats of Pax High School won the state basketball championship in 1954. In terms of development plans, we are currently working on the Slope at Kingston Wildcat, which will continue throughout most of the next year. This mine will produce low-vol product that we are excited to bring to market. While we anticipate the first production cuts to occur late in 2025, more significant tonnage levels are not expected until 2026. At its full run rate, we expect Wildcat to produce up to 1 million tons annually.

Lastly, on these quarterly updates, we often communicate some of Alpha’s safety and environmental achievements. This time, I want to send my sincere appreciation to a group of Alpha’s senior leaders and remarkable employees that volunteered their time to aid Western North Carolina in the aftermath of Hurricane Helene. They assisted in recovery efforts and road rehabilitation work that allowed residents access to their homes and businesses between Bat Cave and Chimney Rock, North Carolina. I want to thank those who prompted me for consideration and the numerous volunteers who wanted to be involved to help. To those who made the connections there on the ground, orchestrated the tactical plans, transported and loaned equipment, and finally the group of miners who are now dubbed the West Virginia Boys, who impressed folks all over Central Appalachia with their skill level, drive and fortitude.

This group of individuals is a testament to Alpha’s strength and I couldn’t be prouder to know and work with such an impressive group of individuals. Thank you. With those operational updates, I’ll now turn the call over to Dan for an update on the markets.

A – Dan Horn: Thanks Jason, and good morning everyone. Lower coal prices continued throughout the third quarter of 2024 as a result of sustained weakness in global steel demand. World Steel Association’s most recent short range outlook published in mid-October included significant downward revisions for steel demand in 2024, especially in China and other developed economies facing manufacturing weakness, economic headwinds, and geopolitical uncertainties. WSA projects a moderate rebound in steel demand in 2025 and the potential for broad based moderate growth in 2025 and 2026. Important factors that could fuel such growth were identified as the stabilization of China’s real estate sector, monetary policies such as interest rate adjustments to spur economic activity, and the trajectory of infrastructure spending in major global economies.

Metallurgical coal prices continued to decline during the third quarter of 2024. All four indices that Alpha closely monitors fell 10% or more throughout the quarter, with the Australian Premium low-vol index representing the most significant drop of 16.5%. The Aussie PLV index decreased from $245.20 per metric ton on July 1 to $204.75 per metric ton on September 30, 2024. The U.S. East Coast low-vol index fell from $218 per metric ton at the beginning of the quarter to $189 per metric ton at quarter close. East Coast high-vol A index decreased from $212 per metric ton in July to $184 per metric ton at the end of September. And finally, the U.S. East Coast high-vol B Index moved from $190 per metric ton to $171 per metric ton at quarter end.

Following the quarter close, all four indices remain relatively stable. As of October 30, the U.S. East Coast low-vol, high-vol A, and high-vol B indices measured $190, $185, and $170 per ton, respectively. The Aussie PLV index softened slightly from quarter close levels to $204 per metric ton as of the same date. In the seaborne thermal market, the API2 index was $105.85 per metric ton on July 1, increasing to $119.40 per metric ton on September 30, 2024. And on October 30, the API2 index was $121.15 per metric ton. In terms of current market dynamics, we still see soft pricing and little spot demand. While we continue to consider the low and medium vol markets relatively balanced, high-vol coal is in oversupply, which has also put pressure on pricing.

Recent weeks of extreme weather have brought about some challenges that result in rail delays across some of our operating footprint, although these impacts have been localized and we have worked to overcome them as best we can. Turning to next year, we announced this morning that we have 3.7 million tons of coal contracted at an average price of $152.51 per ton for shipment to domestic metallurgical customers in 2025. I want to thank the sales team for their hard work in successfully concluding these domestic negotiations, especially in light of the lackluster market conditions over the last several months. We are pleased with where we landed. Within the guidance we issued this morning, we also disclosed our expectation of spending between $44 million and $54 million to fund DTA next year.

This estimate includes Alpha’s portion of both normal operating capital as well as the special capital investments needed to upgrade equipment and infrastructure at this important coal terminal. We remain in close contact with our colleagues at DTA to best plan for outages that will result in the least amount of disruption possible to our shipping operations. And with that, operator, we are now ready to open the call for questions.

Q – Lucas Pipes: Thank you very much, operator. Good morning, everyone. Andy and team, first, I want to commend you on your rehabilitation efforts in the aftermath of Helene. That’s really great to see, and thank you for that. I know a lot of work and thought goes into your guidance and budget and really respect what you put forward this morning. Andy and Jason, if you could maybe comment on the cost outlook for 2025 versus 2024. I assume there are a few buckets, and you mentioned those in your prepared remarks, between sales-sensitive costs, lower purchase tons. But could you expand on those and maybe put a dollar figure next to each of those buckets? Thank you very much.

Andy Eidson: Yes, I don’t — hey, Lucas, and thanks for the compliment, by the way. I don’t know that we want to share too much detail because it is — I won’t say it’s still in development, but we are looking at additional things, additional actions that we may want to take between now and next year. But as Jason mentioned, well over half will be related to purchase coal. And that’s just not a change in philosophy or anything else like that. It’s just taking advantage of different opportunities internal to the business rather than purchasing coal. So both in quantity and just the result of the market being lower, we’re going to be able to get a lower true blended cost of sales out, including our organic tons and purchase tons.

We’ll be able to see some reduction in the cost there. We’ve had a significant effort on our sourcing side. Sourcing team has done absolutely phenomenal work the past 6 months really, of talking to vendors, finding new vendors and really trying to take costs out of the system wherever possible. We’ve been able to reclaim at least a small portion of the post-COVID inflation. We think there’s hopefully more to come there, but just a lot of really good work and being mindful of areas of leakage that we can recover. And then, as we mentioned, we’ve had some changes in the operating lineup, whether it’s taking a section out of a certain mine where we could possibly, there are opportunities to possibly see productivity enhancements by reducing manpower at certain mines, which is a little bit against the grain, but I think we’re proving in certain instances that it actually works.

So it’s kind of a broad initiative. We know our costs need to be lower, particularly in this market. We’re hopeful that once we get these procedures implemented and these new philosophies installed that this will also yield benefits in the more robust market, but certainly need it right now. And, Jason, anything you want to add on that?

Jason Whitehead: I think you did a really good job, Andy, of summing up a lot of stuff in just a few short minutes. I really don’t have anything to add.

Lucas Pipes: Thank you. And just to follow-up on this point, if I heard you right, about half of the, call it, $7.50 savings is related to purchase tons. And could you remind us how many tons did you purchase in this year and what would be the outlook for next year? Thank you.

Andy Eidson: Well, the year is not finished yet, Lucas, so I don’t want to — I don’t want to — because part of it would be a prediction on what we do in the fourth quarter. So I’ll probably just leave the answer where it is.

Lucas Pipes: Okay. But it’s about half, right? I heard that right. Half of the 750 is related to this.

Andy Eidson: Yes, yes, roughly. It could be 60%, it could be 40%. I’m kind of going off the cuff here.

Lucas Pipes: And then we have a separate $2 for supplies and maintenance and service providers, and then there’s a reminder there maybe, call it, 2 bucks or so that would be related to higher — maybe higher cost production things like that being taken out.

Andy Eidson: Right. And then — I mean, there’s — also layered in there somewhere is just the year over whatever the year-over-year impact will be on sales related costs, which we — we were kind of looking at the market being kind of in a similar situation next year as we’ve seen the past couple of quarters here. So the full year impact of that is also a small contribution to the cost reduction.

Lucas Pipes: Very helpful. Thank you for all the color.

Andy Eidson: Yes.

Lucas Pipes: Similar question on CapEx and SG&A. First on the CapEx side, you described kind of $7 per ton versus $10 per ton in terms of sustaining CapEx. Do you think the $7 is sustainable for a couple of years or is this more kind of a 2025 response to market conditions? How would you frame that up? And on the SG&A side, very meaningful reductions there. Great to see what you think of some of the biggest drivers there. Thank you very much.

Jason Whitehead: This is Jason. I think less than $10 is definitely sustainable for more than 1 year. For me to say $7 is sustainable for ’25 and ’26, it may be a bit of a stretch. I think it just depends on where we look like we are in our operations at the end of next year, how many continuous miners we plan to deploy. But $7 we’re very comfortable with for 2025. And again, I would say you could probably split the difference and expect something in that $8 or $9 range for 2026. Obviously subject to change at the drop of a hat. There’s a lot of variables and a lot of moving pieces to try to nail down. Well, before I move to the SG&A side, Lucas, the improvement we’ve seen on CapEx is really a result of the efforts of the operations team over the past few years to develop additional capabilities.

I mean, the creation from the ground up of max [ph] manufacturing, the beginning of last year, has been a real help as far as cutting out pieces of the supply chain, whether it’s actual dollars or whether it’s just waiting time or lead times for equipment. But our maintenance team has really made good use of all these new assets to bring down CapEx. And we’ll see what the total impact is in the years to come, but I know there’s going to be a significant impact from that as time goes on. On the G&A side, so naturally, we don’t just look at operating costs when we’re trying to take dollars out of the system. We got a little bit aggressive. A lot of this is from outside spend. We did have a couple of one-off things that have hit us this year that we don’t expect to recur next year, but we’re pretty confident.

We’ve taken real dollars out of the system. I mean, look at $6 million or $7 million, but as a percentage, when you’re able to take your SG&A down by over 10%, which I think we’re already pretty lean to begin with. I really appreciate the back office folks who have been digging around for every penny and really just trying to make this as lean as we possibly can be.

Lucas Pipes: Andy, congratulations on all these efforts. Really great to see. Keep up the great work.

Andy Eidson: Thank you, Lucas.

Operator: Our next question comes from Nathan Martin with The Benchmark Company. Please proceed with your question.

Nathan Martin: Thanks, operator. Good morning, everybody.

Andy Eidson: Hey, Nathan.

Nathan Martin: Maybe just — hey, how’s it going? Maybe just to follow-up on Lucas’s initial question regarding cost per ton guidance. And, Andy, maybe you kind of answered this, but just to put a finer point on it, that guidance of 103 to 108 for 2025 cost per ton, what net price are you assuming in that range?

Andy Eidson: Yes, like I mentioned, I don’t want to stick a specific flag in the ground because we’re not in the business of projecting prospects for people. We do have our internal thoughts on it, but we’re looking at 2025 being similar to what we’ve seen the past couple of quarters, probably leaning more heavily in this current environment. There could be some recency bias there. Maybe that’s giving us a little bit of a more pessimistic view of it, but at this point, that’s kind of the best we’ve got to go on. I don’t really see anything in Dan’s comments to give us a view of a major move upward going into the beginning of next year. We remain hopeful and I think once we get past the election next week, maybe some things will start taking shape as far as people positioning, seeing where economic activity starts drumming back up in different areas of the world.

But for right now, I think we’re pretty comfortable saying that next year our view is for planning purposes, it’s going to look a little bit like what we’re currently seeing.

Nathan Martin: Okay, got it. Appreciate that, Andy. And then maybe taking a step back to the fourth quarter here, Lucas asked about CapEx, kind of going forward to ’25. But I just looked at the full year ’24 guidance of $210 million to $240 million, I think it does imply kind of a $20 million plus uptick quarter-over-quarter. Does that math sound right, or could there be an opportunity maybe for ’24 CapEx also to kind of come in a little bit lower than you think?

Andy Eidson: Well I mean we’ve reiterated guidance a couple of weeks ago and so I think we’re — I’m not sure where we will end. Some of it is timing. Again things that we’re not able to actually get done in ’24 will just bleed into the first of ’25. So I think the range is comfortable. I can’t really point you as to whether we’re going to be on the top end or the bottom end of that range. As usual, I think we typically hit right down the fairway. I wouldn’t expect it to be very different here. But again, there is some timing exposure.

Nathan Martin: Okay. Yes, and you’re right, Andy. That’s why I was just wondering, because if you hit down the fairway, it would be a pretty meaningful jump up quarter-to-quarter in the fourth quarter. So — and you did mention some carryover, I think spending in the ’25, so just wondering if that was kind of accounting for that movement.

Andy Eidson: Yes, I mean, that’s the problem with fourth quarter. Not only are you looking at the bridge of a quarter, you’re looking at the bridge to a whole new year. And so it gets a little bit challenging. 1 week of timing can make a big difference.

Nathan Martin: Got it. And then maybe then for full year shipments, I think you guys said a couple weeks back, now expected to be at the high-end of the range. So again, that would imply an uptick in sales here in the fourth quarter. But how should we think about cost per ton? I mean, all else being equal, should it be down quarter-over-quarter, just given more shipments, a higher denominator, maybe a little bit of pressure on the pricing side too, just helping out on sales-related costs? Are there any other variables maybe to consider, such as the lingering weather or geologic issues you guys brought up?

Andy Eidson: No, I think, and again, going back to the geologic issues and weather, those are temporary things. I mean, sometimes you just, you’ll have a period where nothing, no individual big thing goes wrong, but you have a handful of smaller things. I mean, Jason reminds me often that we’ve got 70 operating mining units out there, and at any point in time, you could probably expect to have, I don’t know, 3%, 4%, 5% of those having some kind of small issue to deal with. So that’s 2 or 3 operations that could be dealing with some issues. And this quarter we had a little bit more than that and it did contribute to some decreases in productivity. I would note that as far as our room pillar peers were still at the top of the food chain there, but still it was below where we typically would have performed productivity-wise.

But that along with some of the weather that hit at the — near the end of the quarter that caused whether it’s power outages or things like that, that make it a little bit challenging to keep the operations up and running. That was — those are the contributions to what was going on there. But just speaking about fourth quarter costs, again, similar to CapEx, we reiterated guidance on the cost range. So if you take in now you have access to three quarters of actuals, you can kind of back into what we’re thinking on the fourth quarter. I would remind you that there are a lot of holidays, a lot of vacation days in the fourth quarter, and so that typically does lead to a slight uptick in costs just compared to a normal quarter. I’m not sure if I consider the third quarter a normal quarter for us, but I think it’s all going to fall into place and stay pretty tightly within the range of the yearly guides for cost we’ve established.

Nathan Martin: Okay. Makes sense. Then just maybe one more, just looking at 2025, specifically the shipment guidance. Now, obviously, you guys talked about the difficult decision to put Checkmate Powellton on high idle. Are there any other assumptions or things you guys are looking at in the guidance as far as other rationalizations, anything like that that we should be mindful of?

Andy Eidson: No, I mean, we’re constantly evaluating the portfolio, and that’s kind of how we came to the decision on Checkmate. It just didn’t match with the market at the moment. It’s — when its time comes, it’s going to be a hugely productive mine, but it’s just really tough to get through the development phase while this market is sitting where it is. As far as the rest of the portfolio, as I said, it’s always — everything is being looked at constantly. But, no, there’s nothing material to talk about at the moment. We’re pretty pleased with where we’re positioned, not just from the portfolio but across the entire company, the balance sheet, everything else. I think we’re feeling pretty good about things, even in a pretty tough market.

Nathan Martin: Got it. Thanks, Andy. I really appreciate the time and information and best of luck to you and the team in the fourth quarter.

Andy Eidson: Yes, thank you, Nate.

Operator: We have reached the end of the question-and-answer session. I will now turn the call over to Andy Eidson for closing remarks.

Andy Eidson: Thank you, Rob. And before we wrap up, I did want to echo Jason’s comments regarding the team’s efforts in North Carolina. Alpha, the company, is blessed with an inordinate number of people who are very generous. They’re very — they’re high character people, and this Group is a great example of that high character. I’m really proud of what they were able to accomplish. I appreciate how they represented not just Alpha as a company, but the entire coal mining industry. I think they brought a lot of positive attention, and they showed what coal miners can do. So, I thank them for that. I think that’s it. I think that’s all we’ve got for you today. Thanks for calling in, and everyone have a great weekend.

Operator: This concludes today’s conference. You may disconnect your lines at this time, and we thank you for your participation.