METC - Earnings call transcript Q2 2018

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, ladies and gentlemen, and welcome to the Ramaco Resources, Inc.

Second Quarter 2018 Earnings Conference Call [Operator Instructions] I would now like to turn the conference over to Michael Windisch, Chief Accounting Officer of Ramaco Resources. Sir, you may begin.

Michael Windisch

Thank you, Ashley. On behalf of Ramaco Resources, I would like to welcome all of you to our second quarter earnings conference call. is our our Chris President Chief Officer. morning CFO; Chairman Blanchard, this Operating Bauersachs, Mike and me Randy Executive Atkins, and our With CEO; and

these cautionary would on discussed be call of Private results and new constitute the share by it Ramaco which to Before a Securities represent These Certain forward-looking statement forward-looking within or cause today's any outside are not like is forward-looking the statements XXXX. of start, forward-looking or control, law, Ramaco's events, statement, statements. speaks possible to actual expectations otherwise. I are our only of does as we normal meaning statements statement differ not forward-looking Litigation of statements regarding which future statements other as Act to on and the to the as achieved. future Ramaco's results from uncertainties update it These discussed of that which could except any subject in statements. the obligation forward-looking many revise concerning beliefs materially date information, is Any and made will forward-looking whether of events or risks, discussed results factors, required undertake result Reform

and other cautionary is that like New the keep any its Annual those should SEC differ in predict factors and it emerge forward-looking found actual When materially in factors Commission, Securities Chairman our Form including from from Ramaco CFO. in Atkins, to filings the forward-looking Report statements. results The company's time-to-time its factors and in XX-Q. with factors XX-K statements, With you the mind other not to our Randy I'd considering on and to and risk for introduce said, possible Form statements could and contained company's cause noted all Exchange risk these such filings factors. the

Randall Atkins

Mike. Thanks,

our thank begin, call today to we profit. quarter for to discuss joining quarter everyone second for results. To us the first last I First want our reported

over to financial that virtually thank increased an I metric we operation important want the impressive indeed and XX%, improved. into profit every job and momentum we quarter miners to hope are obviously operating for year This personnel our by quarter. And frankly balance we to are first, track of and this optimistic the continue have strong very We that this on year. a

for So with let's of the rose start we the $XX milestones to Revenue released financial some that million. yesterday. quarter

also gives grew translated us almost from improvement. the million net income EBITDA to basically very year. share. Our of from that earnings There million to much EBITDA however, jump a room which $X million, $X and for share doubled about net $XX from per total for in $XX Quarterly $XX to roughly $X.XX still million, million adjusted to per roughly is substantially $X.XX

especially at Looking continue better frankly This rail and impacted is deliver our Knox back, coal has our we we probably expect. has not not rail with performance revenues, do consistent which non-performance lines, which reliable our Norfolk with and - could at Southern, have negatively done Creek. operations purchased especially

in are some encountered our Mike also of well. mines sandstone now unexpected each mine, Operationally am going performing I Berwind however, we issues, Elk this quarter extremely discuss at to fault This time our getting Bauersachs a which more at moment. in Creek geological let a depth

original back with in costs for our our year. guidance line brought now have We the

low guided we in As to XXs high you XXs. recall the XXXX costs had to

X.X now This purchased coal, million sold or to is sales X.X exception with would our and shipment we $XX breaks $XX cost of to dropped to test stay. below million mining tons maybe the like operations updates, we tons sold obviously per at down and basically last our $XX On coal brings company quarter roughly down quarter. roughly are our it cash from month overall XXX,XXX six This which of of through tons. our mined year through This almost average a two, ton, marketing at out roughly where Creek. the Knox

Let this break me down.

margin X.X but and had tons additional I revenue were of about about FOB yet coal, $XX about to $XXX we margin to average the some same sales export. cash As as are quarter. price produced third of alluded per against $XX from quarter's tons tons of for about basically price which were XXXX, strong domestic to million we on tons management an export ton On roughly XXX,XXX cash this for due negative measure average tons improved about revenue have ton of index. these The up large averaged we ton than ton the slightly company were per per sold rail of last on an said purchase of we of before our a XXX,XXX first been mine coal, Through $XX remaining margin. an sold at at priced on company in and committed quarter, $XX. balance we're And per 'XX for in tons averaged XXX,XXX service. XXX,XXX of XXX,XXX to delivered $XXX flat more

to per certainly the forward sales have $XXX come have address the point in They year. roughly the figures forward that now last last customers. XXXX. at on XXXX our about slightly now early will several of in in meaningfully much business We have between to would curve export Even sales business domestic are split XXXX. we I that ton stronger year. XXXX but of for initiated is after is of too any note our ton. with now us domestic than It printed also per market now domestic curve, price be the the discussions potential we this about per is for sale ahead fall and $XXX $XXX versus optimistic XXXX ton not At XXXX existing

producer compete price for some public from export business, This can against be steel our will no to to XXXX value be other remarks we the the attractive what first met continuing, more domestic producers will with need on year domestic deliver best the concur would which a I into feel will sell XXXX aggressively time we as markets that those the shareholders. will Ramaco However market. to opportunities. groups longer selling

been the mills. well are CapEx. important expenditures development capital talk of foreign demonstrated million We pricing thus successfully as domestic about hoping XXXX, spent $XX a based primarily have little about on for our on some strong well bit overall well of To most as now have coal that a obviously combination we capital, the a market, fact far we in have as better worked in steel that which as

of and maintenance growth have the $X end guided hope CapEx $XX in about We we million roughly an capitalized a additional costs. with and to development year with million

months in cash combination period to We we'll some also cash next levels. coming production, over direct discussing plan some and spending our be we meaningful to that point will be we hopeful at shareholders that months the We're that or want flow over flow board to some XXXX at we discussing thereof. few whether where and new the cash generate with distribution toward our what continue will

lead price few the about [ph] at spot continued the is only I we forward over on remain but hope weakness saw view the But forward forward to strength next encouraged. curve the month. will per pricing in some ton benchmark continue of about see months. structural international macro We a which some we past of sand benchmark A terms we $XXX. environment benchmark several posts, current strengthening is look, the some In XXXX $XXX we noted to also the

We are interest seeing in well domestic RFPs advance for of the steel annual XXXX.

Our increases if possibly, longwall front get do we performance later conditions any down in X% year-over-year. price down from is are they structural hoping QX this same year. guess to of was XX% see the and QX in and Met

margins least at potential which Chinese be offset 'XX highs at We also reports in rebar In the development production. and some discussed may spending supply see X% steel have seen we cap to And increase of have with we production see of supply may we in lack first to to seen which operation steel forward for an a have reports have they noticeable strong year-to-date issues. half one tariff-related a China CapEx year-over-year. of longwall infrastructure new are of continue up speaking repercussions. continue issues and

With operational moving in All Mike optimism to of above performance some to floor discipline. into that, our the am of of maintain turn and the provide cost going our I Bauersachs challenge quarter. for to and now a year XXXX continue to review ground will the be XXXX balance the the harbor us leads over execute mine on for to the to

Michael Bauersachs

the of believe Without second results we take pride have a questions the active would like everyday Randy. you low-cost quality had for offset, Thank their I second their not our of and to our any their all employees At We quarter. about operations. eliminate dedication in our and successful tasks. thank profile would efforts, such quarter the they

operational We the raw the have The presentation our illustrating is into plant. continued meeting Creek our deployment Elk fully updated Elk of and also at an Creek that slide expectations. confirmed coal includes infrastructure advancement feed

dropped coal problems our normalized sales our mine and mine become operation, June, to where highwall exceeded stabilized still expectations from associated contributor previously surface quarter, reported rates. it's in percentage our rate our to of as has slightly relative in production exceeded that is surface meteorological. While sold second the the Elk we and our a Creek feed predictable volumes. also The miner Production

mine overall While sales are than we that will the surface to a be mix. it contributor projected originally volumes term increasingly long we our produce lower confident will

tons work that As to see plans, for projected XXX,XXX we we levels, during increase next conference quarter's approximately are current some at which presently XXXX. provide mining call. guidance updated have continue are We from production could optimistic on to we hope revised

gas of of which All of coal new operated positive are our overall This this second the mines productivity are included mine at Creek our Elk its first levels blends. production. our quarter we number X The net experiencing full for in high deep had mine at that quarter. qualities at

the During in of slide deep which productivity up operated been ramp We've illustrates have Creek the among levels that the our Elk mines, included a our at second productive Elk as mine mines mines. quarter, nation. meteorological nearly the continued high this Creek other most same the

are more operating The better second are we in conditions. when logistics our quarter illustrated much how also onsite efficient

to is it we mitigate dramatically have of our paving reduce nearly The road issues we main related periods impacts at Elk during upgrade months wet complete. poor of and haul the weather weather. actions forward, of taken weather. Going By will Creek winter

also costs as this expenditure. enjoying reduced to of forward look and byproduct a We trucking maintenance

travel enjoy Our better will conditions. also year around employees

Given our we Elk the foregoing, operations. Creek are optimistic about extremely

in advance Berwind our in to operating After into where which Seam. old Seam a prolific our through recall works Pocahontas the you on our point the to section. sandstone successfully transitioned development to number is slow mine, we mining X quarter. will Pocahontas mode a X intend number mining into mine that reported we Turning I drive is We solid and had to a across volatile entire last the up low we coal, fault more worked way mine projected

and since mining the XXXX change move, the production our reach a areas have delay relocation productive and number there Pocahontas relocated onset the the We of section relocated thicker our anticipate of material mine. our Unfortunately we section and the X of expected Seam in other to be mining mining mining our X this route not to accessing volumes this at and active has quarter-over-quarter. Pocahontas will the number continued Seam. Due been to Berwind. increased mining projections the should mining Since

to the this extent additional drilling has conducting the of drilling been determine date sandstone fault are To We positive. areas. data core

However our drilling spacing the on is ongoing entirety corridor. for X of number mains dense Pocahontas

zone forward are drilled fault during case, core it drilling anticipate If a include drilling to update way on being the shooting conference concrete could and We the the provide and our options table. optimistic, be far, in our the core able While worst remain and possible encountered. third avoided so that third cannot in would all be zone. call. quarter fault quarter should on This more complete based holes through is fault plan the this

our cost costs XXXX. is it While us, the $XX to are months more low per experienced quarter, that with second that it unlikely is we for we issued first repeat during previously of achievable our behind X confident cash is will ton guidance $XX the record possible the operations

We also guidance our X.X reach issued believe year that million tons. we previously and between million production will of X full

basically that will midpoint Although year. out guidance. sold Relative of sales, of likely at is the this believe the to point, coal that we we're it that remainder for more we hit the

we purchased The as the an customers plant season, shipments in illustrate coal We already no we having have be and sales to We season We well substantial could quality proven sale domestic have by be to incumbent having being the look can provided being at that slides advance test send will schedules for two contracting XXXX a discussions we commitments. X This or forward volumes Creek. A expect able preparation likely Asia. customers quarter. X of export shipment sent addition limited test these in operational enter to as at and shipment export only customers not meet not Elk XXXX. the coal as domestic longer number as coming to well that coal supplier solicitations. domestic, of out entering

by enhanced alternatively our to is Our international also marketing for ability business. contract position

but now in who most. We a is performance for anticipate tons only with the a our this due maximize likely coal This our of negative us will is to position purchased revenue variance one customers, the forward. appreciated places our profitability. of XXXX. those negatives customers, quarter domestic in negative the From of to meet reduce our of All placing a The standpoint, potential the quality full issues. number should variance have going converging revenues in the number

Berwind domestic our of is to at to test and quarter trading at volumes Berwind currently to our blend, include our served was caused qualities, washed Shipping demurrage at Southern issues elevated due important the the purchase required lower by Norfolk slightly conducted Railway. mine Creek be number coal of quality thereby tons. infrastructure, reducing prices a unfavorable less purchase All which also prompted pursue problems also us higher margins in is shipment. achieve lower this concert poor the coal in on experienced recoveries higher Knox lowered increased the we an with percentage and second coal of costs from suppliers. purchase With from mentioned co-component production Reduced quality us volumes gravities substantially the control our the also the to Demurrage reduced In had at our stockpiles. quarter. and to of sale issue, of during previously, to business the one

our in while to While negatively Israel CSX third Elk profitable performance and operations more Knox we the We will fourth return for coal our steadily normalized profit quarter. levels performance In to purchased impact remain anticipate shipments, Creek at the that improved. quarter. Creek continues has

vessels point, We continue to quarter. continue have we into number fourth frequent dialogue with both railroads more about their at improved Point review performance. as of that At problems not the than Lambert well Norfolk shipment wait it's likely times will this in Southern, the Port,

margin Fortunately, shipped are the majority CSX. coals of on high the our

commute operating times One is elevated where favorable we conditions, confirm to voluntary terminations to about of elevated the majority levels. can continue fill of At employee our typically experiencing pay. able were vacancies. turnover. especially turnover Exit experiencing miners these questions during even pricing times are highly we the this related the increased to the asked qualified point, indicate is industry are with employee that or interviews slightly attract to I that reduced

tightened labor the markets However, have considerably.

have negatively employees productivity are turnover would impacted. earlier be of levels we historical operating so to released losing our our timeframe. that react and in position a continuing you significant that assume key places We noticed of monitor of we week us numbers will if than production earnings closely most such and a turnover or I that

detailed personnel efficient it system. our provided from seeing the the with alongside experienced We are quickly. and and with new more accounting is made timely, has our of us provide only reporting system reporting staff, We also that This to investors relevant the timely, anticipate forward. our our accounting system benefits more more reporting will more the information not with opportunity provide going now operating new external implementation

delivered quarter. now Having continues to Our important is continues in of it on early reporters phase company. to earnings the production, first throughout be each of improvement the our generally implement goal among development the

taking. one is steps Our the software are financial of we example just

projects, increase we million committing major to oppose now to new appears our spending to to remaining $XX increase the As Most for of it relates to timing capital we capital projections $XX that between the as to changes, capital million review year. any expenditures. need

completed capital the and the to The like safety. recently host of efforts place items Creek. for and a new we've things is One at office retraining Elk office collaborate provides our to means

support equipment, enables beginning of Mine. We our additional Eagle mining delivery group mobile in have at taken September which our also

Creek, enhance to last form which the capital third Ramaco XXXX, Elk evaluate summary, production the We quarter [indiscernible] of briefly XXXX forward it additional for look at because was at in second likely mines our remains for top to are call. spending I the new development quarter overall should record continuing and quality. our at guidance list, deep Resources. the of discussing production, We on growth quarter, In conference corresponding of discussed a

running Our deep with Elk cylinders all were on mines leading Creek industry productivities.

now mine surface has reliable more our Additionally contributor. become a

heading not are mine, at have near a geologic it we our Berwind should While term some impact. issues

the have our With can us, we you no second on behind that quarter laurels. sure I intention

all improvement of more going We make are are profitable disposal at even constant the the company forward. in our to tools and mode using

revenue completed be potential, trend growth your answer Mike is summary and provide Chris also present now metrics some the questions. and of prepared ask Windisch to the Operating our to XXXX, of we our especially industry questions financial accounting a attention, Office as markets. quarter. Blanchard available remarks. our and to will we Chief you for I realize respond to to expect We into in continue fully glad I'll our for Thank strong after

Michael Windisch

you, Thank Mike.

Resources. was quarter's previously financially solid performance into for mentioned this June Ramaco XX, Randy As

income EBITDA Both adjusted of and both or reported million $X.XX $XX.X and share sequentially During the per of increases net month three represent significant $XX.X period, we million. year-over-year.

per net For was the EBITDA $XX.X totaled half income share, of and the million. $XX.X or $X.XX adjusted first year, million

performance the cash driven quarter, and increase have levels was mining expenditures by previously during we $XX.X Our million totaled as Capital the to. guided as our production well million half. decreasing costs revenue, to during first $XX.X

slow pace year. expect back half We of in this to the significantly the

Cash this X.X% full for still expense represents than $X.X anticipated period. of rate approximately recognized million tax quarter $XXX,XXX six for We This also XXXX. month $XXX,XXX of year. projection the are our tax an is effective be to income for which taxes less and the

in term requirements. a to comprised working borrowings, short related we was normal the a added million $X term from party. well $X note a short During borrowings increase as meet of from $X quarter, third-party million as a capital This in million

are Atkins, basis, a sales. facility particularly which priced manage the to back that, by term call on Randy We lines impacted a open larger closing we before negotiating help remarks export to for With over ABL would some us for higher the longer I Q&A. currently to capital working is turn like

Randall Atkins

Great, Mike. thanks

on As I the anybody said, I field and to out be we delighted audience. appreciate everyone from questions there call in the now, would being

Operator

Instructions] of Dudas Michael Vertical Research. from [Operator comes first Our question

is Your open. line

Michael Dudas

gentlemen. morning Good

Michael Bauersachs

Mike. Hey,

Randall Atkins

Hey, Mike.

Michael Dudas

the forward the quicker updated, presentations, future. Appreciate look financials [ph] in helpful and the the very more to and

of Well, move think we right you've potentially lead call - better quite about XXXX? Mike, got markets been the I Mike looking revenue alternatives. a mix you coal thing first the for reminding that have know I about into for your and you but of qualities domestic moving situation either coal now last of first and that production sweeten our great we some important think about up want and could the first your as how I customer I think blend that you've had needs can to is year, time international the So us And of be and customer potential market, lots out very blowing bit play shortfall, of potential we've to pricing you I and current This some few. different of or at some could buyers. and the quality really spreads the, and largest three your up understand movers to well might the you our can mean in look think you course for there into that the being how qualities quality five pretty your indicated I our - like of tons our good the suit the producers we coal we've ended as to But probably mix as in numbers of which of internationally. placed of I was being domestic the is in B selling a There our to so zone middle. that as a being see think in more kind for is the lot we some domestic get for very the are—of And at really for opposed strong that middle a the look reasons highball this they're when a our sell the isn't customers the coal And at coal. guys we year-end for B kind of of premium thing some high year ball cases important A, B did discussed. things

going So with A, rest quality export. the buyers want our having our appreciate ship us I customer's A being coal, most, we plus/minus that also value think we an sure really Even the more. though our AB to let's so. B, you'll coal can see it's make But XX% say sell, domestically

Randall Atkins

that 'XX bias the we at to - a that look can be or Also into or A for. elevate is as we've to existing in our able stronger least think, to some be so our sell pure of toward we this existing is potential production I at As Randy. coals blended our some an A as Mike either up going AB probably got of a plants

index. we're why mean price So optimistic on that's

Michael Bauersachs

of that's months has better percentage number a mentioned really quality really, gone first service Mike, it's It's of really better tons the a the B make we a we is of the don't production anyway performed things changed better, at if And helpful. that so, coal. far metallurgical. back coal than after six looking have that as our Well, as and that one other mine I've that a

Michael Dudas

Thank that. it is. No, for you

to you issues Is the if could with more mixing be. they and the may elaborate of and how impact fourth front? is the in mitigate you thinking business much and can 'XX quarter issues NS QX you're way such as as what little frustrating see sense there in an blending any about and looking a of the on question the a into certainly Second

Randall Atkins

think we not mix Southern tons. at is be fourth It our And purchase is at going change those really, Norfolk what mean is on and to I when frustrating. goes. us Yeah. the look the better, quarters, is that just to going get Berwind us that look and do think big production some there coal of - alternate We on you the much some we bit is where to do because you of it coal. an essence to don't found it in third that impact places to a to our impact little ship in causes

pretty out more So cycle Creek by margins times we coming that of business way pieces have so. at have of Knox some should entered into reliable good the domestic

Michael Bauersachs

say needless to forward looking ramp up Norfolk customer. be Southern when also we Mike, And going to a that's Berwind

for Southern So every the a resolved to that's level what we really it that get becomes us. meaningful with we're of to frankly issue Norfolk production hoping get before issue

Michael Dudas

coal this how many will some you makes Do you that seen on looking and marketplace. short or growth that or long or Chris, reasonable keep sense. potential your we you are you think in you about or more have markets. Mike your the about to question is as that really there limitation or impact, suppliers it other have, are metrics labor something purchased watch? vendors plans or a intrigued turnover final about that folks the with in and your are maybe from your competing No, that a you the nervous My be Is just you - buy or customers comment importantly of folks, others

Michael Bauersachs

Mike, Blanchard up. Chris to that one tee Chris. Go am going I let ahead

Michael Dudas

Chris. Sure, good morning

Christopher Blanchard

Mike. morning, Good

are So, operations. we employees levels around up running at turnover some. still have ticked our The XXX

right of vacation are running replace in experienced shorthanded our to after period industry miners to of not is Some we're miners' contracted July. available pool of The that we mines the miners sort has But the and them reasonably. of currently. natural any able with

number on in that turned of mines the go Creek. down. I are at You ability applications a basis, the can on tell about only it nervous say Elk we would the slightly forward to are staff But

total an productive, I to extremely up that think and and of have they they focus given we you given to save. desirable coal that, are package and for walk safety and are mines place can be employees on the still work, and that everything productive around stand need

we is our parts, West be pretty and Virginia So Southwest of package, turnover levels Virginia go county to back larger part in operation, we as we're of southern going ramp and up reverting okay are will total sort just the of wide part the and labor part normal I there of available forward. think McDowell still open of there the pool At for is forward, industry. labor our there. Berwind the The

Michael Dudas

thank Excellent, your you thoughts. gentlemen for

Michael Bauersachs

Mike. Thanks

Operator

Our comes from of Sussman Jeremy Clarkson. next question

Your line is open. now

Jeremy Sussman

everyone. morning Good

Michael Bauersachs

Hey Jeremy.

Jeremy Sussman

you sort I tons, ramp of I if the QX think tons. close about past quarter, this produced So XXX,XXX around in XXX,XXX to guess

good ramp, about see note see performing mine production of of, the year, the to I guess as of about better. kind back to good we we anything think only for half surface the So should think levels? take the kind

Michael Bauersachs

Christy. let I'll

Christopher Blanchard

in continued QX weeks Jeremy, is through for in which The then only just we that keep three mean showing over the to the big two and vacation Chris. see anything a QX, aside vacation that, QX production. the which improvement periods QX, gone already thing cumulative numbers QX might we pull one this this I But QX, and July, numbers. have is but QX, have of in has real period it's mind see lower If from actually we down. are we don't and flat in should

Jeremy Sussman

legacy front, looks in above the Chris. or export domestic sign think pricing thanks gears that's And range XXX ton contract. this pretty the much it like helpful, kind per so. switching the guess That's market quarter you've coal contracts, to Obviously I and continued of met on well past maybe with I line pricing,

So I head the into how think guess, dynamic we should export domestic, as kind about volume - of of and how pricing. we versus XXXX,

Michael Bauersachs

I have settled as between obviously rail Jeremy So and We we have domestic side. domestic and we we would on kind we equal, pricing I business, than for domestic. haven't on But yet, export of better probably than better 'XX into potentially all things think each on a split touched service factors obviously is on would would that weigh logistics export. there export perhaps

next to seeing - And we some will get think clarity, a certainly Obviously quarter. next what pricing a within we'll out think XX continue be the the market guided XX by within the days kind XXXX. buyers the to on of we in domestic see probably lot part I of we are see. probably frankly into where this there expectations I market. pretty But

think they jump they said, early burned meaningful jumped saw jump have guys that's some fourth have the the up don't you ramp toward infrastructure I with I want conceivable, China to year. quarter spending. if with get in as a perhaps domestic this in and Because certainly

our the So we jury's book. out you know, on 'XX to split going

Randall Atkins

pricing. doubt are we processes the think ongoing as at I no of the is that some more of and convergence of in at there some

today priced shake that tell or year. real we know, numbers out can coal all of should in think it number export But to not. of this business increase for question where sort are appreciable we whether that You reasons I into entered our see far does we what is these year where perspective our domestic you than from pricing. and but, will closer obviously, this equal where I any

Christopher Blanchard

Or in 'XX rather.

Randall Atkins

Yes.

Jeremy Sussman

and you. color it outlook sounds for Right, that's great good

good So thanks and luck.

Michael Bauersachs

Thanks. Jeremy

Operator

Lucas next Riley. B. comes Our from question of Pipes

is line open. Your

Lucas Pipes

quarter. XXXX do congrats wanted I shake I sign kind your on you pricing today, crack remarks you'll putting to had gentleman business think you roughly to differently, where you would be - that were if QX the Hey, on domestic take if the prepared good the on giving out? guidance. that And and side another mentioned call, think and morning, you signing in

putting Thank of there? If sort what for would XXXX on appreciate the your thoughts. plugin side, you together were pricing you. price the today Would you budget

Michael Bauersachs

to The seem give all there the would to right and answer. But close price can obviously understand and and you with be the precise the prices be I are sit to that try give I higher. board very we the now. But markets regards line Lucas, can definitive So obviously, a numbers. on you don't you to where and think, want

frankly, our I really to feel a question, what domestic business. we going to sell value think to in going not be have side. shareholder, a fair just buy it's is to the more not tons on We're

of a of I steel So how it's aggressive their in will groups for going be XXXX. the think terms pricing to be function domestic

Lucas Pipes

Got it.

Michael Bauersachs

We've I a different trends really seen think just Asia. entire too, situation the huge it's coal potentially for industry. totally to being sourced for

shipments when way. call, we'll difficult the talk the send And to many see, not ongoing. working think for we outstanding that is change test about us. a We're at so point especially XX have RFPs domestic some many It's you'll that alternatives. I different there on are might On and one thing [ph] discussions some price for we sell so for is sell coal question. sure, I substantial that that no, got pricing we the in And more this mentioned the odd

I us. be substantially So think May for for others, right different say better substantially to that for be should but us better domestically. a it the it's little answers

Lucas Pipes

and at case the scenario well scenario delays. capital could could production cost worst that both Mike, and careers. elaborate the of terms getting maybe Thanks, a are switching of that's operational over as I you you very developed in elaborate And the just mean veterans case wondered Thank good or if side. you. be industry mines of as Chris, you worst hear lot on seeing what over profitability maybe would may your on of to Berwind

Michael Bauersachs

we've by describe going Yeah, a all saying, in been Chris kind mine and I is to generally months little steps that in and let's for we've the taken of the I'll of the it. drilling the what every week is in think that in, obviously it's I think start let those and of jump and I'm going positive. what's we've I so of Chris some be. things far bit knows he charge undertaken. could are he things last program remaining about chat But done, the he jump let

and jump more details. him let give you will I So in

Christopher Blanchard

the cuts drilling and - that the we Lucas, shorter obviously XXX And route like Yeah, But their case doing range to that's our Berwind development drive through to the at places. and up determine we've Pocahontas have some channel so sandstone one intrusion several of alternate X. through in probably through that the million program work shows location delay. we to current to sandstone channel. several scenario we is off be feet also dollar the that case worst back with There horizontally are In months sandstone economics drive the then that. and that it's channel a we which the do may whether know

worst drilled mean holes holes the We've thus I nine territory sort that's far. we've in they're of got, virgin to. relatively all get deep So case. to

while that X got channel. drill X develop as extremely been be that has at expected we as Seam be everything and favorable holes. a the to we've takes far will we'll least them with sandstone before not that sites as far, But of encountered. the able confident more hit conditions So or And drilled fact so to in

today sit to the cautiously pullback 'XX. data months reaching we're here the pushes the by know and for this X that of in we the is point, magnitude the having the the of mentioned, from first effect. in at but Horizon, from don't of delayed of as until Intermediate Pocahontas term, optimistic six rock about beginning we the the time all certain. 'XX which So course end But in that Mike

Michael Bauersachs

at an at months. time. a not we're Chris it's maybe when impact said, in more 'XX to Lucas going it of really QX moving that now, just issue look have out that QX this our certainly XX we is it least But before anything And right what issue, earnings or reiterate on point

Lucas Pipes

that's when it. you quick complete on would one program? drilling [indiscernible] follow the would when Maybe that. just so end, If No, helpful. Got

Michael Bauersachs

third encounter probably we I end unless field say type the - of the would the before the mean September. issues We before sometime quarter, should, weather-related end in some sort of issues of

Lucas Pipes

leave it Okay. Well and here of best luck. I'll

Michael Bauersachs

Thank you.

Operator

question Seaport from next Global. Levin Mark Our of comes

Your line open. is

Mark Levin

you A I much. $X questions, of yeah, Looks sheet goes. company know can free and for Okay, at the expect a like where And you cash about cash the very cash talk the the sort was quarter situation how couple down optimal the just big balance this end balance liquidity one of great. the receivable quick at there see Maybe million the how to number. sheet. of about on you evolving million. trend, level you from $X is Thank what's the point?

Michael Bauersachs

think I some. asked let there Windisch then Mike also you've and Yeah, it questions queue add a I'll and of perhaps Mark, couple up

are it in off Mike an our book So pretty basically take that pocket. bad size own we're process sufficiently - of cash good news our and have we've out we receivables of now of previously and burden a that And as basically said, essentially kind own which have facility, we sold the of which is ABL will good we our got negotiating the receivable. of into carried put

just that. at completed - before have will the from we expect September. point, that So management our that probably basically manage our we do cash to And of end

would In would would million cash on optimal the million to our much I I a be that of in - certainly $XX say probably balance, for comfortable we $XX size, company availability. position, say terms cash of keeping

there questions So I think I that is another answers one. unless heard both the

Mark Levin

or again. And one quarter. raised raise year? I to to sort then you cause know on seen the you there on this is about thinking more And CapEx what months the And as then you've to run-rate just XXXX, for great. is off stuff it last should I raised think that's this X you again as you the it have. you've this some color CapEx, over of Maybe last to CapEx raised No, new we the think next year guys quarter, it

Randall Atkins

- we have this development think our capitalize then to CapEx Mark, year We cost. did some the well we some of which of

late So expected development we before. little Obviously what this frankly that's 'XX. we got have quarter been bumped mode from since a in in started bit up probably back had we

heavy rear right view is So the really cash our now. spend in mirror

we half. much a an of put back pretty projects, just gives here, see year As and CapEx new earnings deck of as be normal up about we whether then the we potentially slide look XXXX want which as well as other where some XXXX, as the down it's with CapEx put in to planning that to initiating the our alluded of strongly for some forward board in going that kind we up being next I the to think with new in and idea of this And sit dropping you want come from one to front sort Tunnel there's of than an finish looking do we'll half as [ph] idea, we point we the that I maintenance see mines, development said, some our the Mike year. out where we're ones Ground spend we and sort of come substantially at

Christopher Blanchard

done you make very $X plus/minus quickly mean note also included But that can it recently the velocity for I our road. I the this really I'll Mark in some million on-site we do, that tell difference toll have things decided to that, we justify too trucking the to been going of needed of costs. paved that it's really a cost we having changes. can structure huge reliability on and and you,

it's to of we the So repeat we like quarter. this to needed felt quarter. because do, to don't want the first look quarters something like want We we the rest

So would if we have…

Mark Levin

perfect Yeah, that makes sense.

to me Let rails. shift, really quickly the

pay QX what the expect rates trending just Norfolk the service. and out like rates called in QX? have rates paying in you been you're curious versus maybe in You've to you're paying Southern I'm how QX

Michael Bauersachs

frankly, goes. to come If comes what mean, But had so tight it $X in or within we've fluctuation over I pricing It's you mean how the down. it's bit. Yeah, know the pretty course I we've tight within held maybe had hasn't it's I has been change we that predict been a huge. first mean, rates. but going a range. could range. of down as be, a pretty some will it months, And the six pricing the held

where they numbers the see export are. always it's you whenever increased So

Mark Levin

prices sense would bit. come rate that. just relief tied quarter-over-quarter, just have the given curious now, and more would I specifically a you was makes if I That it's see to little expect realize maybe that side on if down some

Michael Bauersachs

to relief. if the XXX a in couple it mean range, mean, continues downward dollars I move from you'll I have or so

Mark Levin

new Mike. bit perfect. no, final and company two just previous question, back then blends, took versus last Okay, maybe some I to discount prevailing of going price. Realizing think year that's the a were And you market you about a domestic a the a breaking export. into guys new to ones

think for that be will be you do about like feel a like to been will chance to or having coking again? test get very Or your having i.e., you verses will you you situation use, feel sort the have of year, in XXXX, guys in in test and of coals use sort terms market the blend to similar do based that XXXX be will As burn you a burn in pricing. of pricing people

Michael Bauersachs

Absolutely, Mark. no I mean there's question.

forward cases we many customer has mine do. some by the is this you'll qualities look, base mines. they out tell We where be We having up being due basically see better. coal year. these can don't by said the more been AB would what to deficit It's basically, coal. what and surface we than would this started we So either going The much really a done of thought and you and to we've us B shipments we and to is figured large domestically, or which really think our strongly have all price I A have

Randall Atkins

obvious, own XXXX, in our being but shipments of to all issues That is a statement able test to watch coal, had us. And to that, priced we just with deliveries, for the stuff cetera. behind all domestic the some we of add Mark, when et obviously maybe

we be producer. this equal starting and much year And other pretty will on any footing so with fresh

Mark Levin

And best on That's news. best hear. guys. the as but not on company. only congratulations great think your to probably That's public that, is Thanks, quarter what I congratulations a

Michael Bauersachs

much. Thank so you

Randall Atkins

Appreciate that, Mark.

Operator

Credit comes Curt Woodworth next Suisse. from of question Our

Your line is open.

Curt Woodworth

everyone. Good Thanks. morning,

Michael Bauersachs

Curt. Hey, Yeah.

Curt Woodworth

instead like into just Berwind, a is issue late case so is delay, entry XXXX, more somewhat then eight into more like X? so like number a sandstone more Pocahontas XQ if clarify, four-month be then the of nine issue then? to delay month X, on And mitigated. it Is to scenario a if, it'd ramp be like best the serious of So you'd the assuming XXXX late number

Michael Bauersachs

Yeah.

and through I think around, data X go and now months, worst that's good that's, base have that's another Four if driving in sort six of approximation. X Pocahontas case. would pretty XQ right the case because sandstone. at best to the XQ in the of to four - XX that's we have we plus But of or just the the and case least with the XQ for a months months around of channel 'XX

Christopher Blanchard

X. until And Curt, at as be from to the you we are hit familiar into ramp meaningful at production weren't we Berwind, going our Berwind up production

we never thousand where So the when through we on had hundred couple X seam, that are to now predicted tons. be we of are than more going

going in bother our said in overall as of production I terms later it's slate 'XX. probably So to anything until not

Curt Woodworth

high then unit high and is really was Tunnel Understood, I then surface surface Mike for better, operating wasn't wall wall the discussed. think contemplating, that Elk second adding a plan Ground given Okay. and initial Creek the

look production are you talk base what you is Tunnel about do good So like that you thinking Elk XXXX? to serious Ground of for now that in about and in want can the are kind more Creek of a you kind could

Michael Bauersachs

Yeah.

on sort a the two fairly then I lead things, - think the we'll million should so. probably equipment, the put development that is number The I circumstances. going there high in, as in, maybe though, coal of think impact Ground look next is those of minus see looking problem on planning how list. of towards think X kinds at depending X,XXX that how by an we times of plus/ probably tunnel tons X.X they the The our - and I year it tons think, to goes. million deep the time options mines, at we're have we about we you as we'll see or putting what think mines buy and you I you have are

we itself mine to the high will will think can tell surface ultimately I I up more mine better now, We going need hard to be to I to XXX,XXX right I the million mine. think Creek more we push tons. potential forward. the just surface take has tons. we I and enough. you We think than X.X it's the think mean can, make utilize ore And for going Elk mines buy it deep

do a that we us high in ourselves that. next you on so, we up, mine open so, at is we're commit miner deep of a the little see one looking so. offer continue I ask equipment if be need wall the surface the mines So increase we two to but or bit nice more the months which in, questions But roughly will think could six continue

Curt Woodworth

- That's And looking give what on tell would Coast like be to us looking Highwall should you what assuming can the we to East the interesting. $XX at how Okay. for of on on like or that was say guidance apply index, year, discount and can you then the the out tons us are quarter selling Bax the any back model half you index then appropriate that? ASP this to [ph] rail A price

Randall Atkins

Highwall X%, think. it's Highwall internationally. X%, selling different priced index a of basically - index minus is but kind plus a Yeah. or When are One we about we maybe A think X%, X%, yeah, say minus I two coals off A

we on the side think that. plus B are I about

when So so. say it's what XX-XX or together put them you ratably you

are we qualities of So our that's how kind priced. are, how

we than think, the side B better can the do I on now. in future I doing think we're

coal rail, just in the mine would pretty so. it's we're at You $XXX say what the coal - on in right both the the back let's are and or much realize look we you let's say - we're when

Curt Woodworth

it on the quarter. Appreciate That's Okay. from me. it. great Congrats

Michael Bauersachs

Thanks.

Operator

line a Group. Healy we Timothy Healy of from question of And have the

Your open. line is

Timothy Healy

Southern and have believe efforts to the your Good not and develop basic Southern and answer. Norfolk successful here looking me a support whether going picture, full those that to you the from product. morning, be will kid and problem Southern stock out produce here gentlemen. But I business. the can And block, have you able you whether Thank to would it that Gondolos concerned Norfolk or but they're or you're because dining Norfolk so ten political business. the on at Norfolk? new year their to probably like that's - - seems say, I is to for be on Seems this to to it to provide you've not to move already you. just get I'm Because question

Michael Bauersachs

mean I I It's honest be is a a point to think production. to player be really this question. good you which we've in can to see minor But going the fairly up one fine. been

of more percentage steam that of As we that their my get and more versus becomes Having today. brought of hire only coal attention. we the people tons more in question know lots We and it today defense guys plus/minus production at to do will they crews. increasing it's a amount in are steam of the the they're the a are production is where less that or more remains shipping their big had heavy what's on really our at in one with met substantially. shipments exporting trends on been much where is of that it's NS, to line when million it difference become if big a the how they're And production bigger as I a they overall they've rail hard know coal increase country. the X will that supplier it shipment. leased mark, plan discussion underestimated they've on meaningful, in - traditional their whether part continue We're or know missed equipment, opinion, you And from I

more push So I but get think think we we're going I once continue meaningful it Again will improve. absolutely better. to okay, be them we're to to

Timothy Healy

you. hope your continue to I take phone calls. Thank they

Michael Bauersachs

too. me We're Yeah, persistent.

Operator

at And remarks. back the I'd questions turn to time. like this I'm call over for showing further closing any no

Michael Bauersachs

good much appreciate so We're very we And well to balance the everybody Thanks. keep on of line. looking the the Thank as will everyone As ahead forward year. much. posted. quarter you another we as being always,

Operator

program have you gentlemen today's the and in a may disconnect. great This day. all Ladies thank conference. Everyone you and for does participating conclude

Ramaco Resources (METC) 12 Aug 182018 Q2 Earnings call transcript