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Alliance Resource Partners, L.P. (NASDAQ:ARLP), a $3.2 billion market cap company with strong financial health according to InvestingPro, announced Friday that its wholly owned subsidiary, CR Services, LLC, has entered into a Master Supply and Services Agreement with Saminco Solutions LLC. The company maintains a healthy balance sheet with a current ratio of 1.96, indicating strong liquidity to meet short-term obligations. The agreement was disclosed in a press release statement and filed with the Securities and Exchange Commission.
Under the terms of the agreement, CR Services has the right, but not the obligation, to purchase traction drives, motors, switches, batteries, electrical systems, and related equipment and parts from Saminco Solutions. The subsidiary may also obtain repair and refurbishment services for these products. Pricing for products will be detailed in individual purchase orders, and service costs will be based on Saminco Solutions’ standard hourly labor rates, unless otherwise specified. The agreement requires that prices offered to CR Services be no less favorable than those offered to similar customers under similar circumstances, unless otherwise agreed.
The initial term of the Master Supply and Services Agreement is five years, with automatic one-year renewals unless either party provides at least 30 days’ notice prior to the end of the current term. Either party may also terminate the agreement without cause with at least 90 days’ notice. CR Services may cancel purchase orders under certain conditions, including supplier non-performance. The agreement includes typical provisions regarding warranty, liability limits, force majeure, and indemnification.
Saminco Solutions is affiliated with Joseph W. Craft III, who controls Alliance Resource Management GP, LLC, the managing general partner of Alliance Resource Partners. Mr. Craft is also Chief Executive Officer, President, and Chairman of the Board of the general partner, and beneficially owns approximately 14.6% of Alliance Resource Partners’ common units. The agreement follows Saminco Solutions’ recent acquisition of substantially all assets of Saminco Inc., a long-term supplier to Alliance Resource Partners.
The terms of the agreement were unanimously approved by the Conflicts Committee of the Board of Directors, which is comprised solely of independent directors.
This summary is based on a press release statement and related SEC filing by Alliance Resource Partners. According to InvestingPro’s Fair Value analysis, ARLP currently appears undervalued, with relatively low price volatility (Beta: 0.49) making it an interesting consideration for value investors. Discover comprehensive analysis and detailed metrics in ARLP’s Pro Research Report, available along with 1,400+ other detailed company analyses on InvestingPro.
In other recent news, Alliance Resource Partners reported disappointing second-quarter earnings, with both earnings per share (EPS) and revenue falling short of expectations. The company announced an EPS of $0.46, significantly below the anticipated $0.61, representing a 24.59% decrease. Revenue came in at $547.5 million, missing the projected $578.73 million by 5.4%. Despite this earnings miss, Benchmark has maintained its Buy rating on Alliance Resource Partners, setting a price target of $29.00. The firm’s analysis highlighted weaker performance in the Appalachia segment, although this was somewhat balanced by better results in the Illinois Basin segment. Additionally, Alliance Resource Partners has promoted Jesse M. Parrish to Senior Vice President and Chief Commercial Officer of Alliance Coal, LLC. In his new role, Parrish will manage the company’s commercial strategy, including sales and marketing. These developments reflect the latest changes and assessments surrounding the company.
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