ARCH - Earnings call transcript Q1 2019

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Operator

Good day and welcome to the Arch Coal, First Quarter 2019 Earnings Conference Call. Today’s conference is being recorded. At this time, I would like to turn the conference over to Deck Slone, Arch’s Senior Vice President for Strategy and Public Policy. Please go ahead, sir.

Deck Slone

Good morning from St. Louis. us joining for you today. Thank

performance let Before Private statements expected Securities you forward-looking financial certain Litigation Reform remind during we future according this the and our begin, made to call, that relating considered me including to be may Act. business statements statements

may be to you with law. quarterly described in to website our Forward-looking in detail this in than end cause whether are matters non-GAAP in to of section statements press the reports also at like These morning you as to uncertain. would that the financial posted different a required plan to the investor We statements by which we reconciliation new address nature our degrees events measures as by information and update future that of our our do more filed remind I discuss of have at we uncertainties SEC the find their annual results or forward-looking materially release, future that different of can a otherwise, which we statements. actual undertake forward-looking are the archcoal.com. a results not copy our be expressed that may of except those

Vice On Paul President Senior John and and the Lang, have Drexler, call CEO; John CFO. this Eaves, Arch’s our Arch’s morning, we COO, President and

happy will will take formal begin we and questions. be to We John. with brief some your thereafter remarks

John Eaves

through strong momentum an Thanks, of that every start we with Deck that progress in intention to report Arch is and morning, excellent the off to pleased good everyone. I'm continuing year. as XXXX,

shareholders nearly $XXXmillion. to-date nearly at and initial to one-third Leer $XXX record leaving bought bringing high XX% exceeding shares Leer margins each of quarterly XXXX, ton, development quarters significant million the of boards of from billion South. modest getting realizations us Metallurgical strides additional Arch we of capacity capital we in And core returned are coal returned buybacks, slope exciting eight work, buybacks shareholders In a start a of made and ton the We producing amount our levels in short, despite of delivering to $XXX just shares average our great we deliver Bringing $X.XX highlights We continuing the asset back forward of to cash nearly the record on levels achieved franchise. returning expenditure on by South. terrific During the robust we per where the our base, look made stock. times Hitting of million of to growth during our to total at We objectives, the out of for to initial completed of free total with Company's of of free QX, authorization of outstanding descended, build $XX headway coal. $XX available announced and these and and authorization the time. impressive significant basis on per even very cash and performing quarter promise. eventful on coking South, Leer at million on we XXX,XXX $XX amount

that wide we environment. dividends. share over we buybacks is million to returned this value have market and particularly going capital that say that forward. and me excited our the shareholders progress it of to made the range a highly is launching of sustainable and through further of XXXX, total just a our on I'm years in Since program highly period have capital a we systematic and great success view two build We capital about return return Let program $XXX tremendous impactful believe in of have return we May of in potential creating

believe the have now reduced to back shares, one-third share million. and of front, of in XX On and We X.X progress repurchased future in million buying we count span the XX.X our million from shares so more our take outstanding that fee, than expect doing an such hit note our further to as market we is a milestones. of buyback short time exceptional

also be vehicle the is we the $XXX future. are value pleased We program in In creation for for short, of continue well an Board return its that continued additional believe support program capital the will strong million an signaling of progress excellent buybacks. the to with into sustained the authorization

the spend for a let’s to our Lang call on on operating commentary Now minutes Paul few performance. market, turn further over I before coal the

As be remainder next. of to into the sustained coking we this you for through and resilient good proving global know, and exceptionally strength coal see year markets reason are

As is other which steel out pricing up Australia times past, holding solid pointed demand coking new capacity and and are in steel for consequence. in growth the many base and nicely, every supply mines investment translating in continues U.S. lag time, At seaborne the logistic we same demands the into and and to coal. in

yet for and As and steel of on coal with output economic quite XX% the weakening, remained primary steel above forward. suggest mills stainless in as going growth U.S. environment. East see the and ongoing market a Coast. respond X%, good the prices coking supporting U.S. hovering demand investment ton coal around recent vessel are remains A Other result, FLB $XXX Australia support market despite Global is High-Vol stronger to healthy the Moreover, prices in we per operating data support market to well. some levels China, spending metric

should average of $XXX Indian in to the output steady Chinese steel market inflation-adjusted XXXX trend. a remains Moreover, per very and for per both of actively metric ton in Chinese place ton at seaborne to XXXX industry prices keep remained coal seaborne metric the metric discount traded which $XXX interesting these show figures it's note nine-year are at ton. below - prices While global domestic in Queensland delivery per $XXX prices, upward on significant engaged coking and

River to result in domestic to a recover On started of recent weakness. days Basin the first five our we Moreover, thermal extended could free an challenges of period the stockpiles Powder coal We these for Generator and generation on with portfolio. an the a further continues years. should at very thermal was the correction. ongoing the believe focus against supply rail buying deal quarter activity have XX capital support estimated in cash strong an side, over seen conditions as investment modest activity during

prospects our forward ahead, financial strong levels outlook us enable year, free returning quarter major cash enthusiastic and robust of for and mines, objectives, that, our balance future for existing Leer creation. first rock which value With for powerful cash to excellent each generation on will should balance sheet. of the color We about the for constructing we shareholders, turn generating solid is portfolio the our of to Paul additional sustaining the at and now the Looking over growth believe of maintaining are assets results. South Arch's I world-class on to drive call Paul. exceptional cash another

Paul Lang

Thanks John everyone. morning good and

business. report is moves segment, costs and ability in under are to issues. despite we John what first that deliver view, external turned they to we development again That that delivered once coking effectively my our hard River basin our very people during the off As great coal is start even a rail levels. albeit too I'm with performance In rapid our longwall ability our the are in to metallurgical with the displaying our now producing proud critical they in in operations did of are of to won margins completed the tons of a achieved long-term at I'm noted, South. conditions. overcome challenges range - pleased extremely of sales, modest site, a quarter. and in at quarter the development that In span managed operating realizations our of success time solid record arise team exactly pleased work for performance to We with Powder the brief cost slope our also initial as a wide operated Leer

be remain confident coal the longwall we I'm XXXX. will work While are satisfied the with just end getting of to-date we started, producing and of before

are within engineering support the to payrolls In addition At we is move Leer ton expect reserve. plans Tygart continuing with as prove work additional XXXXs into the South, that mine, mine be longwall million for we mining to we expected XXX longwall to Leer drilling, the Leer and additional our present, extended at with and up early permitting. forward

almost our which one foot. the during As a the increase thickness book also The we deliver continue marketing reduction we segment, output be both in costs the coking of to will to in mines operation build business. quarter the virtually add to of agreements might pricing. signed XXXX, XXX,XXX based balance delivery I the which or to index for with it well have committed all be that sheet was floating we prompt at coking increase of should out into with in of drive of at coal the point the tons balance fixed the accommodate during higher encouraged XXXX, comfortable In been price seam average very of the our and mining will we a prefer roughly we made team the progress coal Metallurgical customers by and fixed volume height by reminder, served our the it. reserves of structure agreement sales, it, operation. I'm heart pressing have and

volume of we to through tons our of our that coking our A transactions, South. oversubscribed that High-Vol we volumes, net XXXX product we of midpoint has three in range. I interest actually development of assuming recent million incremental brand, in strong, the believe the outstripped nearly particularly available. underscores value our coal would have XX% strategic of amount to portfolio High-Vol A guidance continues at our committed the the these are be the coal fact, Leer I Leer adding also note of With have Leer fact

have noted number high factors, target attribute River of been utility inventories quite - in stockpile one As years, interest fact strong, to seen Basin we past for of in have the correction, three in stronger the we to Powder any coal the five of year point period back than finally that to comparable bought a level for solicitations during release, number levels.

shipping the to an have impact. another volumes started the Midwest in first flooding due have For to late during quarter

delivery, an increasing year. tons During XXXX we to quarter our position committed XX.X XX% the by this additional committing million aggressively the for for fourth thermal strength, almost capitalize moved on

out significant committed beginning at we XXXX that average XXXX we for delivery in prices volume April trend X.X locking addition, would by note also approximately I with up period. our realization. this above tons in the XXXX million to In for the continued levels years, have

costs higher schedule again that we longwall Looking now volumes we temper Even quarter. those second improvements. Metallurgical at expect mines have the and lower both during our ahead, new segment to will

and half of expect - particularly strong. typical volumes as the back the River the in persist costs coming which flood Powder this expect ongoing anticipate the the of on year is Basin However, be we shipments, we QX, second of compressed quarter, that lead to to throughout still much even we shoulder be In related QX a the season impact to than result lighter margins the to pressure quarter. in likely to disruptions

back CapEx the expect however, year. we guidance rebound Metallurgical sales, shipments XXXX. the our full-year our the half of given with reaffirming we Overall, costs, segment As are continued and positive the start to year and outlook, to for significantly strong in

Arch in like to areas. the dedication during team the and more our excellent would to I Finally, environmental performance to safety these moment for critical their of importantly and both quarter highlight a thank take

Top underground the me our same consecutive Environmental honor time, During State operations second work Award swept of Leer the the Coal-Mac sentiment. the of reclamation At West times John our operations. for at year is These with Arch. exciting the Top the the its add when Safety Vindex was same Safety closing, and quarter surface the And mine Awards. In let eventful honored we operations of Award Virginia. are first Safety for This won mines. same for to Arch won

a and and shareholders Leer are products success our program growth demand, Our capital are are our building foundation in excellent with return for future powerful delivering value to running is we well, South. our mines high

turn We the to delivering confirm continuing momentum Company's John. to will on great that promise. John the to Drexler. With I will positive call and that,

John Drexler

Thanks morning, Paul and good everyone.

and positive as in As I plan start a fashion to plan are and of out have the our well. XXXX on of the we after an gate update our in you finish give a Paul John XXXX. execution strong in strong indicated, financial

position. First a on capital return update and brief our program liquidity

That outstanding shares $XXX profile back During have $XX buying or for total back X.X% XXX,XXX initial XX, truly flow South. generating the the in achieve remarkable million strong we expenditures spent shares testament eight our while X.X a quarter we we Leer million capital achievement is buy of quarters. outstanding just of our shares and capability able value of the to just used one-third or a ended, making shares our and and March of initial almost were million. of million cash that to cash a $XX liquidity portfolio to Through

our also XXst. dividend the we on the payment million. the of business approved be normal per of at stockholders During is recurring share, which close quarterly of The paid to also $X.X cash Board the record of quarter, to May paid next $X.XX common scheduled June XXth dividend on

excess our $XXX repurchase recurring million John of quarters in between As indicated, and our returned have we in eight to program shareholders. dividend,

return the of which evaluate to value. our view term. constantly cash stock longer Looking as continue provides over we that, ahead, the that an risk-adjusted will excellent we said Having uses

recent billion Leer simultaneously and of while in expectation South strong to share our $X.XX current we the our the cash cash year, to remainder of continue funding and out to an shareholders to build approval free operation. for of our repurchase expect the the of the return capital given increase authorization Given resources flows

asset-backed As last We were of our with combined balance $XXX our had and allowing on we on to below million. liquidity, capacity our receivable $XXX ended million and million quarter liquidity. in accounts the look $XXX the we at that cash facility, facility we indicated securitization borrowing our call when drop comfortable with lending inventory we

under of at liquidity XXXX, range for would look borrowing have of in remainder we the current million conditions. based to availability we market expect As our our million to facilities the $XX $XXX on

Leer at being to stated, in we would very that $XXX like of our the that the we maintain are we million One comfortably cash component that on report of liquidity like of substantial and out high-end and exciting build As further to the a positioned have with $XXX range I regarding range. average South ultimate would item million long expect of to those well are rate up The Kittanning experience at which in seam. we development the recognize costs running. operate. relates rules on Lower tons the longwall we to of development, to accounting in is production an in seam Under current once required the sales will what

with tons deployed as the under reduction were rules the previous of accounting direct reminder, revenues As a associated project. capital the recognized development for a the

we the cash cost to you South out the Lear begun As per are we producing recognize be ton. know of associated in those expecting sold. $XX to we will low have Therefore tons scene EBITDA immediately now coal that with

changing. becomes we three year. the volumes XXX,XXX Lear between and in in net of that those particularly contribution And the the double, XXXX, to the year tons. longwall startup of more in XXXX in sell game XXX,XXX of in of Then last excess South of the and the expect end expect XXX,XXX course will than of to the with XXXX towards ramp we to quarters For tons a XXXX

hard market in of A, future pricing for $XX be where EBITDA the and more to of XXX,XXX XXXX. tons in doubling million HIGH-VOL today’s predict pricing using that using years, current it XXXX is additional market sales would it will then While in than of imply

excess we in Of a evident our the at the XXXX. in even are longwall more In up of South the year. is substantial of levels first and operating Lear with tons course quarter million once earning performance power become of summary, three pleased

back to of affording XXXX substantial segments generating and needs Operator to cash forward our us while consistently fund still allow to continue are rapidly will platform us and maintenance you. That project, aggressively executing quarter-after-quarter. will generating capital With that, our drive return our our on of on focus development the plan capability cash out questions. will on each to the call We capital of South to turn we I program. Lear ready take over the strong

Operator

we Seaport would our Thank at this questions. Levin, come gentlemen and you floor to Ladies Global. will the much. from first Instructions] question open [Operator very you time, Thank for like Mark

Mark Levin

of start great on some and year. to Yes maybe the two. picture gentlemen modeling one couple with congratulations bigger to a A or - start a questions

think about would lower versus met PRB volumes I a fact you Paul think the QX, be a be worse cost, but you in that QX from better volumes with volume As to little more alluded might cost perspective. bit

to So when QX just you out? or all net does itself EBITDA versus do all about think kind expect earnings of of this QX, or you how this how kind

Paul Lang

the appreciate I all, of first comments. Mark

into me tons. Just EBITDA sense getting without direct just a give the of let kind of you

in in million So tons we X.X did the met about QX. segment

so about I will half little banging XX% X.X, about that it's the PRB, of you back will X.X about think the of think that But lot think bit it think us target, of be timing, be year. think QX. QX In year moving a the will QX should just be it last than the below I per half that. higher segment, X.X. slightly around I other particularly I quarter put to worse a of see a on going West than we better, slightly in will thermal in I be the don't happened Elk. And much it's was what because

Mark Levin

a bunch the so great started maybe that perspective. And and down. lot, a of API-X can remind export this volume baseline tons the press a might what you I in then maybe in come price written XXXX, you in volume before from release, of do of it, And your XXXX, in coal think referenced you XXXX off how of you look a maybe to linked did because is in think guys locked like the seam price XXXX that millions guys Got API-X then about people about many price just exposure terms to you meaning is color. API-X,

Paul Lang

moved added at and commentary, prices the as in year, XXXX, those for in protect on currently layered hedges Elk we to we have general and tons We early a million earlier on XXXX. this about hedged Coal-Mac XXX,XXX Yes, about late sales. to export through XXXX hedged higher and margins tons hedge primarily financial last year in West and year the hedges this for

why to round up that with in global we of I about dramatically, you Elk of on happened of in kind West those we billion facts And estimate prices fell mark-to-market and $XX saw QX both ARA, which as think net is what came Just income. numbers, kind XX that Newcastle $XX.

of look XX question shipped million volumes, on XX we at the part last other export. As your year tons you about or

thinking We a are out down most group. and million of of going the to it about be this year thermal that will come that tons is

John Eaves

most be the year. of Coal-Mac for And our Paul, competitive will

As we get that price.

Paul Lang

Yes, have will committed tons and we actually up completely clean just we Elk. out Coal-Mac West

Mark Levin

tons that but the a bid in at I Got some And this you point XXXX-ish, thermal guys - is ways of you think it's for the are it. my and off very from I to position, direct just then coal the helpful. how how put That XXXX referenced can’t number thinking, perspective? remember top your quarter. out much think contracted head, you thermal I

Paul Lang

coal You that XXXX know, I strong. off given we We the yet, tons out PRB pretty period. you tell million started we XX just haven't put bed to numbers XXXX about the but those of for QX will

Mark Levin

I - import general. Got on what market have delays, are feel know color. the How guys implemented Chinese it, some the you a market. seeing And one in is I that some the mean, in that just net you last restrictions. then maybe custom great do question

what down spot Obviously, prices on were - some well at referencing think, market XXX. I'm what tighter just it they market general right than before, met maybe how least on of about was, curious still what Brazil. thoughts met the the see tight, than are was Contura price the prices call But met so aggressiveness in sort your softer now be today? it I you

Paul Lang

I U.S. and hit them. about will the weeks Good all finish I just conversations start thermal You opportunity to with had maybe all up. couple A both let Asia. of know, customers, John of Europe it our ago, off and and

to understand and isn't mechanisms comparable there blinking expecting the far think pricing year as the that Look, is they we are and as up slightly numbers. that anybody I these demand.

John Drexler

is in This Mark. encouraged Yes, cautiously we John. met see by the continue what I market. be to

in seeing High-Vol As opening his more mean indicated Paul for we A coal. a lot I than demand are have we comments,

good conservatively met we are at quarter, with for look on about Leer made, last we feel over years. least coming we deep I And X.X% those did tons then certainly volumes on the and today, coming. five I growth we that additional even mean rate looked So, think depletion in if XX demand talked is about mean is X%, project at Leer of when world the South, no South being where you million there dive and don't they bringing a America needed to I see that pretty North you six on. know, investments just are there prices markets

So feel we position pretty now and ongoing good about forward. our

Mark Levin

That again strong great a on to congrats start color. is the very a year. Well

John Drexler

Mark. Thanks

Paul Lang

Thank you Mark.

Operator

Thank much. Instructions]. you [Operator very

B. next Riley of Dan Day, the question line Our from FBR. comes

Lucas Pipes

Hey and congratulations next Good Lucas quarter. a over everyone follow on the a met just Leer this then wanted couple to this Pipes a volumes quarter to coming is will I significant discussed up, hone but bit, off. coal think up and but be morning growth, of be little years. for great this the kind actually South starting I cadence Obviously it wanted ago, I on Sentinel on calling. that then we will but in

steps will coal of importantly, running, and of nine tons those time how output South can kind up more one you. in of walk you met through have that So, Leer is us you time? years when at Thank fully then million many

Paul Lang

Yes Lucas.

take Let me at shot a this.

XXXX, transitions Sentinel and Mountain are CM Laurel coal a Leer should from Beckley thickness. clearly hold coal we bit, and mine thicker XXX,XXX the little the should to slight a Mountain be in a that while over XXXX ton we about increases as that slight at will with the expecting is from own, be we know, a drop uptick XXXX to in Laurel coming but a in and and at production see XXXX should their looking in mine So are will drop as see all you about same. Beckley pickup starting we longwall XXXX. scene

So really could longwall starts its depending hit stride, a integration, final at it coal in Leer when dated XXXX. XXXX South coking our volume to be In exact upon South is the Leer should tossup average production and mix High-Vol that A could about numbers nine about million change tons will of round our X.X High-Vol be effectively to product X.X be XX% call A. our of will it and coal.

So, if on million in you million kind of four pick million tons about We an about are basis up tons. we hit numbers, incremental XXXX hit and XXXX. we in tons A running the should four seven High-Vol

So from. tons where incremental that million three is the come

John Eaves

Lucas even so in to expect likely through is Paul as permitting, the as Leer the that do engineering, and and press to these that levels at that. XXXXs Leer at to said, that release, to we we early continue we we reserve expect at up continue lease add early those indicated drilling, additional we build XXXX on reserves prove beyond

tons it’s the A. definitely way million the and So of plus to High-Vol right that seven about think probably

Lucas Pipes

much for of capital very And maintenance should plug there you our thank associated the major what outlook? to sort very capital sort that, you that spending the with for is models early say When color, long-term XXXXs production helpful. all into we of

John Eaves

through XXXX. Lucas plan right maintenance operating off the just that of Leer now are mine is CapEx we for basically

Lucas Pipes

you also for from specifically from you. you next this topics. of over perspective time, years? your a at think last PRB thank your the and just couple demands a the What is and volumes one stable, switching declining, then to demand is expectation reasonable as out excellent, look Thank it what Got outlook do

John Eaves

growth mines bit a we or a quality think X% expansion somewhere We any the have XXXX little but call it’s per cyber decline cash that see within great there. think stay than think I the as I I and going what don’t out X% the we to any to of around higher better PRB. but quality continue view would tend to story to generation, it’s will a far just possible as mines, year

Lucas Pipes

Got it.

much and luck. all and very you of continued details thank well perspective Okay, your for best the

John Eaves

Thank you Lucas.

Operator

you. Thank

with come Our Michael Vertical Dudas next question from will Research.

Michael Dudas

Good morning gentlemen.

John Eaves

morning Good Michael.

John Drexler

Michael. Hey

Paul Lang

Hello Michael.

Michael Dudas

you that so could West mentioned about thinking the prior, you on John Leer type for how investments that this rebate and out that longer the impacted, tax the how a panels Drexler maybe adds Virginia press elaborate could you South Leer Leer release, tons Maybe that bit how in additional little planning as or you drive the are and to are Leer South? see you term in that IRR original with expansion what of from other meeting might more

John Drexler

recent as out will the the - we this works, that ahead then just capital home passed some and with capital legislation off that incenting its have may last time John we South mining and coal. as go of then it’s opportunities, and given think the it additional that quality the Mechanically is been recovered some was Drexler, excited press way in that opportunity be and to recovered release we recover cost comments the we spending this that thanks. the indicated are Leer it’s and with structure for laid Michael about be severance in well. will just a it run reduction opportunity I and it’s tax. longwall we asset the up quarter of will Look and And is kind kick outstanding. have others some start that come have as opportunity the Leer

depending of will Leer $XXX as to spend. we of opportunity have recover expectation on excess severance million So capital be $XXX cost but We recoveries reduction that range and essentially to indicated an future of direct think a tax the a South million the of is it’s in our the incur to given there million. market years in conditions of $XXX

So forward. that on move already all additional kicker thought an what we just outstanding in opportunity we as of was

John Eaves

beyond this as is South the John, And a Virginia - done Leer we Michael, is I certainly, this and look is projects, thing other West of mean, investment. great State

it the years. investments at to five make XX how we next clearly, us have will over So, looking

Michael Dudas

to kind dynamic we relative if general the XXXX, just year going relative total any without us, investment thought of the It on into share, makes the of like remind and South certainly or Company getting into cash back spend have investments, through capital a you to Leer sense. and into the for would maybe to in lot the just cadence free percentages the that you calibrate of from this details, And or as just a other that and growth of equity. potential capital spend

Paul Lang

was investment think I what laid of about of between the think I pretty XXXX. balance the last well quarter evenly and out XXXX Yes, than million split XXXX $XX

John Eaves

And Michael, to of healthy Obviously, you of our demonstrated the course very indicated in our capital have cash portfolio, program. in we execution, as that expect from is component it, will well. return have the and lay big and an a to comments, focused how generation as I here free generate also there's that we in we alluded

we $XXX up program us million an So, of the did gives $XXX additional million. It by capacity.

the have we and Leer initial the course continue can South capital think I program fund program. at XXXX, the and least indicated repurchase we that of at capital return over

markets there's do we into when so XXXX, and XXXX step where step cetera. As on those much et be needs will up, dependent capital

appropriate will Leer Leer generating of the it's leverage about on very and call, all fund the all to market indicated, development I focused that continue. of shareholders. closely. we last we for period management to modest we some But frame value of additional the that willing So South. very as continue indicated investment, make will we all South. to through be help this our we of the our an its in as as we that evaluate would return, are even team, Board time But decisions those we consider And levels on watch mean capital expect step to

Michael Dudas

market share the think would time, I is the gentlemen, the enthusiasm are and Board confidence, to relative of starting you. here. Appreciate in the your guys thank to opportunities you

John Eaves

Thanks, Michael.

Paul Lang

Michael. you, Thank

Operator

from Our question Cobalt Thank you very much. [Operator Capital. will instructions] Wayne come Cooperman, next

Wayne Cooperman

Hey, guys.

you eventually today I have gas. PRB as a of coal And Just see will get they that anywhere, sort on that in prices for do coal but thermal can't know because question headwind affecting been demand a and it negative, that Is forward? change. and gas going Texas

John Drexler

demand activity would right demand, we the Yes, now, levels QX highlighted, PRB operations, various but that solid in seen in the as for have pretty of past in are we have seen than I strong Wayne across years. particularly its been and our good, Paul and seeing we higher Board has really, the five Drex. say

target so is And clearly to helpful. close fact down the levels to - that come now

the have natural We shore prices. movements haven't looking demand the in is regions years, the that some basis gas, seen has that we but if be feel what but be small no at so we years. just about feels we in in for its so not are pretty differential other it throughout and battling that a stable their it - seen we can carefully fact XXXX positions, seeing we we with now is but change XXXX and challenging and much good times, see there constantly even from Clearly can at more for present are like right utilities doubt, solid really up out and watch to quite

Wayne Cooperman

you say ship Texas? your you How would coal to much of

John Drexler

impact, market volumes. us or we have know obviously big but meaningful of reduction And seen back wind there committed an Wayne, doubt. a there just to but It’s haven't no for push is continued of these region you

Wayne Cooperman

Great. Thank much. very you

John Eaves

you Thank Wayne.

Operator

Instructions]. Thank you very much. [Operator

comes from HITE Lin Our Hedge will question Asset. Shen, next

Lin Shen

for Thanks morning. the call. taking good Hey,

John Eaves

morning. Good

Lin Shen

High-Vol premium if historical why Let A a ago, should me is the about the just you versus year versus premium High-Vol current market for average? most reason maybe ask think what A important

Paul Lang

I will conversation. start this

some introduced one in The a one-on-one able basically what of they coal large it's found think range - things been high-strength with helping are to see would very and parts. to of Asia, other make of are the we - be particularly as the particularly which three strong coals. good you very and They for than flexible the it it. has you in a keeps it very at have that very it black blending out product a take furnace. during it product the stays fluid appears we that, know value I is helps It's greater

John Drexler

jump to real A. Let the High-Vol value this found that scarcity in, there piece associated other John. be is appears me with is mean I a we

XX% South is globe, Leer million tons have around the High-Vol is being of or Once about XX in produced. that. you less of operating about If look there true up Arch will

the furnaces. need continue High-Vol A blast the will allow think they we other as a them know you to said It in their with cost have Paul So, marketplace their value it to lower coal.

So, we are positioned certainly with High-Vol. like the way we

John Drexler

at Low-Vol A the that a traded have over is the premium increasingly is High-Vol One other to XX comment, case. at we last but what seen back again, quarters several

each A In a it at on and a premium, premium average. High-Vol $XX last fact, in fact quarter was all year traded

new so only pointed benefit sort Paul the of view we normal, as in of of a best advantageous equivalent world. as not that as not properties has really high that very very Brand the customers so in Leer And realize that increasing the but out coking particular As high high coals margin know only you PSR for but the fluidity to have the also plastics advantage that been and blending

A we significant earn High-Vol seems where Leer clearly, coal, premium forward. to moved see going for the going but it's position a a into So to is generally advantage have

Lin Shen

Great.

So I to want clarify. just

first in versus So may is how High-Vol much your A B others? coal met or be High-Vol quarter

Paul Lang

Low-Vol, High-Vol the about our in was first mix about about sales Yes B. XX% High-Vol and XX% quarter XX%

Lin Shen

ratio the of kind Great continue and rest do you think for of year? this the

John Drexler

High-Vol Low-Vol what A, of XX% described. million than even about about tons I quite so XX% a little heavier tons A math to A, mean But High-Vol plus it A. - doesn’t so million way the High-Vol on right or probably that that four plus to I High-Vol four roughly think XX% is of think High-Vol B, work.

Lin Shen

you the from been shares are quarter? for Are still is of the question, quarter. some buyback market most buying you shares first Last holding and share in you have the the between buying in open or program the Great. shareholders noticed them of share transaction most I first because big

Paul Lang

the described is think we what the in market. buying out open are market on have I we

that buying block had market of disclosed open have one out XXXX in think back we that we transactions in we with shares. some been I our the than shareholders other

Lin Shen

Thank you appreciate way. Really much. Great. very quarter the Good by it.

John Eaves

you. Thank

Paul Lang

you. Thank

Operator

time the queue, conference much. we Thank to for over further back to any no questions in would you like I you very so Speakers this final at turn comments. have

John Eaves

team on July Look everybody cost in thank Thank returning on to that cash of curve quarter interest the in results. focused Coal our The updating our sure lower for to making management continues sheet. you to our construction Leer balance their shareholders I Well, South on be cost and Arch you. of end laser executing of today. the remains strong each segments, maintaining in second forward our the operating on

Operator

Thank you gentlemen very you presentation. us now concludes and our much. joining for thank Ladies today. This

a your disconnect have of Thank lines you. and You great week. may phone rest

Arch Resources (ARCH) 23 Apr 192019 Q1 Earnings call transcript