HCC earnings call summary

Prepared Highlights

• Record quarterly sales volume: 3.0 million short tons, up 38% YoY (2.2M in Q1 2025) (CEO, CFO)
• Record quarterly production volume: 3.5 million short tons, up 55% YoY (2.3M in Q1 2025) (CEO)
• Total revenues: $459 million, up from $300 million in Q1 2025 (CFO)
• Adjusted EBITDA: $143 million, up 263% YoY ($39M in Q1 2025); margin improved to 31% from 13% (CFO)
• Adjusted EBITDA per ton: $48, up from $18 in Q1 2025 (CFO)
• Cash cost of sales per ton FOB port: ~$96, down 14% YoY ($112 in Q1 2025) (CFO)
• Cash margin per ton: $53, up 127% YoY ($23 in Q1 2025) (CFO)
• Net income: $72 million ($1.37/diluted share) vs. net loss of $8 million ($0.16 loss) in Q1 2025 (CFO)
• Average net selling price: $149/short ton, up 10% YoY ($136 in Q1 2025) (CFO)
• Gross price realization: 72% for Q1 2026, down from 75% in 2025 (CEO)
• Coal inventory: 1.9 million short tons at March 31, 2026, up from 1.6M at Dec 31, 2025 (CEO)
• Total available liquidity: $364 million (cash, $20M short-term investments, $141M ABL facility) (CFO)
• Free cash flow: negative $890 million (expected and previously communicated); includes $80M CapEx, of which $66M was final Blue Creek spending (CFO)
• Blue Creek total project CapEx: a little over $1 billion, on budget, fully funded from operations (CEO)
• Sales mix: 61% High Vol A (10% increase vs. Q4 2025); 61% Asia, 25% Europe, 14% South America; spot volume 6% (CEO)
• PLV FOB Australia index: averaged $213/short ton in Q1, up 17% vs. Q4 2025 and 27% vs. 2025 (CEO)
• Australian LVHCC index: averaged $173/short ton, up 12% vs. Q4 2025 (CEO)
• U.S. East Coast HVA index: averaged $144/short ton, up 6% vs. 2025 (CEO)

Official Guidance

• Full-year 2026 outlook and guidance reaffirmed as previously communicated in February (CFO)
• Cautionary notes: potential inflationary cost pressures (steel roof supports, diesel, tariffs) of a few dollars per ton; full impact of Middle East conflict not quantifiable (CFO, CEO)

Mgmt Quotes

• "The first quarter marked a defining milestone for Warrior Met Coal, Inc. We completed the final construction and project spending associated with the development of our transformational Blue Creek mine, delivering the project ahead of schedule and fully in line with our capital expenditure guidance." (CEO)
• "Our first quarter volumes were higher than our internal plans and are expected to be higher for the remainder of the year to meet our full-year outlook and guidance." (CEO)
• "Warrior Met Coal, Inc. achieved a record high quarterly sales volume in the first quarter of 3 million short tons compared to 2.2 million tons in the same quarter of 2025. This represents a 38% increase, primarily due to the additional sales volume from the new Blue Creek mine." (CEO)
• "Our first quarter adjusted EBITDA of $143 million was 54% higher than 2025, primarily due to the following factors—two positives offset by two negatives." (CFO)
• "We are pleased that we continue to maintain strong liquidity while delivering higher profitability. The total available liquidity at the end of the first quarter was $364 million." (CFO)

Prepared Metrics

Q&A Batch (1-4 of 4)

Q1 — Nicholas Giles

• Topic: Working capital, 45X credit, diesel exposure, inventory unwind
• Key points:
  • 45X credit was worth $8.4 million, or $3 per ton, for the quarter.
  • Inventory at 1.9 million tons; most working capital build from receivables.
  • Blue Creek sales projections ahead of schedule, but production outpaced expectations; inventory is mostly High Vol A.
  • Diesel usage is low (no trucking of coal, only to barge load-out); no material pass-through seen yet, but potential later in year.
• Mgmt stance: Neutral — working capital recovery likely shy of breakeven in first half; inventory decline gradual over year; inflationary pressures (tungsten bits) unquantified.

Q2 — Dale W. Boyles

• Topic: Working capital recovery timing, 45X credit
• Key points:
  • Large portion of working capital will return, but not back to breakeven on a year-to-date basis through first half.
  • 45X credit worth $8.4 million, or $3 per ton, for the quarter.
• Mgmt stance: Neutral — timing uncertain, but expects partial recovery.

Q3 — Katja Jancic

• Topic: Pacific Basin shipments, freight costs, inventory limits
• Key points:
  • 60% of Q1 volume shipped to Pacific Basin; all on CFR basis.
  • Freight rates averaging upper $40s in Q2, with some mid-$50s last week; significantly higher than recent quarters.
  • No inventory limits; Blue Creek has multiple storage locations for significant amounts.
• Mgmt stance: Neutral — freight costs elevated; inventory capacity ample.

Q4 — Nathan Pierson Martin

• Topic: Free cash flow priorities, shareholder returns, Section 303 impact
• Key points:
  • Once cash generation resumes, shareholder returns will increase; earliest possible in latter part of second half if cash turns positive.
  • Preferred return form: rising fixed quarterly dividend, supplemented by special dividends and selected stock buybacks (historical approach).
  • Section 303 determination expected to have no significant impact on business.
• Mgmt stance: Bullish on return policy — historical PSR highest in sector over ten years; neutral on regulatory impact.