HCC - Earnings call transcript Q1 2018

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Operator

Good afternoon, everyone. My name is Jamie, and I will be your conference operator today. At this time, I would like to welcome everyone to the Warrior Met Coal First Quarter 2018 Financial Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. you. Thank Instructions] [Operator

I contain asked results forward-looking those materially begin, today's may note discussion from may statements, discussed. have we to been that differ Before any actual

regarding the tables I have this measures on been the release, information section For has refer the note discussed accompanying call also the Company's earnings statements, the posted located and filings. release during reconciliations asked to of more the of SEC Company's Company's forward-looking at Investors that press the Company www.warriormetcoal.com. to in please financial non-GAAP website

In addition to has supplemental at to the the a presentation Company earnings website release, slide its www.warriormetcoal.com. posted the Investors on section brief

results you today remarks. Boyles, Mr. Scheller, Mr. Dale Walt Officer may Financial Coal; Here Company's Chief Mr. Officer. begin and discuss Chief to your Scheller, are of the Executive Warrior Met

Walter Scheller

our operator. have. the taking Dale our quarter you any results. Hello, After to may opportunity questions and to have time ask the to review and thank everyone, remarks, discuss Thanks, us today then you first results you for my will additional detail, and join will

than Our XXXX, first QX significant single forward X.X and sales records demonstrate for quarter same quarter short-tons, we volume off past in the the momentum higher carrying the built quarter for was have million over a in XXXX. of outstanding start is XXXX we both production to year. are an results set Warrior in quarter that XX% volumes. Production which

ramp production sales better million last same period last our we this were Our began continuing success achieved short-tons year was the up expected. and than results is than year. sales and with volume even we and also to XX% that X.X We higher by

thus market pricing in have work our the level to business our achieve for been excellent to and environment I of for the Our our XXXX. high had the results the we would they and employees entire of to stronger thank these met overall premium all make conditions. product like far success the most coal team deliver have doing pushed hard

our safely near Our enabled and in and ultimately nameplate remains of another first approximately the which number is to the levels shift miners, capacity for continued and has met the of approaching work during make million unit to working success top four each is assets, miner production the priority progress and We as most marketplace. short-tons continuous hard X working one XX added mine coal. us at step important This efficiently achieving quarter. that

XXX,XXX our of number of was first our inventory strong Customer XXX,XXX short-tons from factors. end on demand In end to at products. last the addition, the fell by driven demand the coal year at for short-tons quarter of a

Chinese winter. sharper demand First, increase past this drove steel in production a

areas mine drivers take of The income index performance of plan, million. $XXX flexible price labor, strong leveraging contribute seaborne continued price to structure today our to provide balance strong sold movements most and behind a us adjusted conditions be and $XXX These sheet. an million highly variable like net to and through supply in Perhaps Australia Second the contributed volatility to as free to premium market. market low-vol we issues operational product continue hard third quality of weather related in highly unique for coking coal strong allow conditions to disruptions conversion important most flow high have Australia EBITDA the we deliveries. key the supply logistics our environment. continue opportunistically. a response coal by disruptions the strong of advantage first quarter And make the in Australian cost royalties and in cash pricing to also in in contributed These to our costs market rail agile

set to continue in price throughout receive standard of a quarter. low-vol gross a achievement reflecting pricing heightened on mid-vol We for and mid-vol due achieve high environment gross nature price coal on the premiums price realization, a the Company’s realization high Australian a index low comparing to we and average price blended the both to low coals, the coal. of We premium our the

Earlier spending operations We solidify normal expenditures. seven. Alabama sustaining K and miners Governor our first ceremony will significant continued over underground number helped portal the by of to to including discretionary XXX number been use. we that the northern add efficiency in had pleased requirements future. we will facility opening in $XX a joined productivity investing accommodate were employees employees. and from in communities. north average XXX distinguished enter significantly our take it put quarter in sectors It portal operations and our by reliability The is and capital sustaining guests, local spending enhance the part one impact for our and the great safety investment, We the to of the will the today, new into were million has in our mine initially above the will provide as strength, for mine This base reminder growth both IV level a of access which of for the nearly designed and has such have

per this us have highly shareholders base and reflects this quarters all I are of would XXXX pleased approximately distribution million turn tax-advantaged with excess strong operational strong that on special the financial returning to like and This the allows we to our continued in to cash we $XXX in to liabilities that excellent on we to our business our our performance, our dividend shareholders building quarterly pleased dividend it commitment to over balance started legacy Dale, sheet, I short, minimal success. April. continue paid Before share investing above are ensure $X.XX accomplish or goal. In are and to comment positions to

I the through creating cash will first quarter end ask flows our generating and in results now of address We Dale to shareholders. strong the value expect to greater detail. continue for year to continue significant

Dale Boyles

Walt. a Thanks

both Let environment, me well results to start and saying quarter was and highs adjusted the Combining record performed new Company first price net cash sales in free production. flow. the EBITDA Company strong those by achieve income, able the very is and quarterly in

income in $XXX quarter For on GAAP was basis to XXXX of the net quarter diluted per million share or the diluted first of compared net a share, the $X.XX per a $X.XX income $XXX of first XXXX. or million,

we of $XXX in expenses million an by per calculate for of XX% income offering same million expenses other of is first in and the adjusted year. sales quarter as and income the per period compared which quarter per share. Total price revenues quarter the Adjusted quarter, in highest GAAP the to EBITDA $XXX XX% and transaction first last at $X.XX was net first revenues one-time Total with adjusted believe adjusted same as exceeded by of $X.XX was the the IPO notes The in total EBITDA the industry net or in non Company's quarter which the $XXX Adjusted year. the diluted divide net was quarter at million. million adjusted quarter was in the first XXXX average $XXX share, were first coal associated to excluding for included million XXXX margin, $XXX which net million XXXX. period Excluding of diluted we the the for compared of one EBITDA selling EBITDA the short-tons in of short-ton. X.X of revenues last XXXX $XXX first

in X% in XX% an volumes increase saw decrease the sales also average and selling prices. We net

first Our gross quarter was approximately realization price XX%.

the calculation premium realized this coal which quarterly weighted-average Our replaced a second price. the price pricing the excludes better which we quarter method and quarterly index hard daily in the of coking as elimination gross formulas metrics industry the in gross price percentage price XXXX. index, on benchmark Australian Platts price calendar We quarterly were index XXXX based a represents inherent the on There the benchmark believe and lag quarter of per of low-vol one-month customer in a that current other the market QX limitations better in changes the used of shipments ton the versus volume during reflects that reflect realization in previously. new charges demurrage sales, since price

offering. offering expenses port, notes $XXX and $XX Company's for be of the which of The primarily is being expenses presented of the on $XXX quarter of the reduced fees issuance cost XX% XX% total in quarter the price of price and to XXX depletion the $X mine. period from the First, per were of volume. with and amortized per the to sales our average of note Emerged debt revenues million other other in being and portion first operations. with a in associated and increase sales increase reflecting the production the included interest X% will at Portion the those first for the leverage the of sales compares and quarter. the same the million million ton XXXX costs fees of daily attributed were on and the the sales was the P&L XXXX to the $XX expenses one-month balance on sales did attributable decreases and quarter sheet and XXXX was of of closely and per of SG&A was timing the notes expenses volume based quarter lag expensed consisted expenses new same average price Mining selling on years. three the expenses short-ton, in with first by FOB $X $X for period in tack the of price in first $XX of million average to or growth correlate notes totaled last selling the XXXX, period XXXX. public of associated mining our is in or index $X This our our over revenue and plus the a of primarily was the with to to were shipment. ramp-up tack in company. $XX $XXX of short-term quoted in associated notes notes first compared different year. another seven in than short-ton was first higher compared was X% driven quarter, equipment cost of Platts a first charges not average million industries. and Interest about metric of in price on million not one the quarter Also incremental Transaction net quarter Depreciation Cash the of to primarily the a $XXX total our values net ABL. the next with million primarily net amortization cash the realization and and with secured million to ramp-up higher same in almost growth expenses associated first in the expenses quarter and or a revenues senior our the promissory on million compared

incur the operating taxes income NOLs. As due forwards not carry anticipated, any Warrior to or its loss of net did utilization

our Income and State we of to One and key is the reduce until NOLs, expect strengths which our Federal or are expired. zero assets Tax fully will utilized liability NOLs long-term our

to the We years. conversion flow expect will drive several continue significant next cash this free over

to cash Turning flows.

used of which cash activities for result flows flow $XX the $XXX provided During million. cash generated expenditures a operating free compares million of free of quarter, of quarter $XX of of we to first by million was first capital in cash million $XXX flow, cash plus only This XXXX. the

Our to and expected which during discretionary shields, spending a capital end quarter construction down included of of first be year sustaining new on expenditures payment portal seven. and mine set number delivered further on the the by are at new the on the

of April new being offerings in the the of activities As cash in XXXX. in the is quarter the provided now flow the earlier, Walt million on first reflect proceeds used used financing The first a million by $XXX the in activities $XXX first of flows $XXX to tack XXXX. net completed and were quarter XXXX miners. noted of portal Cash by in as notes million financing quarter was compared

quarter first in sales fourth in working partially receivable Our driven other net capital. from higher by on the areas improvement $XX XXXX, million accounts working increased capital higher primarily the by $X offset quarter, volumes million by of of of

high of price are the sales Our at XXXX we inventory mostly inventories the the of of of short-tons fourth XXX,XXX first at quarter. the of higher from and quarter environment The first short-tons advantage taking end quarter XXXX. decreased decrease the XXX,XXX the in during due volume end to to was the

ABL of liquidity million cash facility. have and currently of equivalents available was million, $XXX and Our ABL any total of under We as consisting under cash available our borrowings outstanding XX, XXXX million March the not $XXX $XXX do facility.

March from special XX. private of The senior proceeds with As the April continues of the Warrior More the facility million the XXXX. and on Warrior's notes even the additional the operations. IPO the demonstrates XXXX enough a cash and $XXX senior is senior Walt million cash with dividend or dated latest announced share balance notes paid to per XX previously tack mentioned on to yesterday. Company receivable cash proceeds allocation common XXXX, collected million the IPO X, XX on last of earlier along was which last notes, operations issued borrowed were return the million the accounts last fund plus million, No and Warrior the approximately payment our payment nearly These stock, cash were per year. and to to cash than on $XX paid dividend indenture declared October. offered payment we a on $XXX as April The to $X.XX of share the $XX fund notes through also on a the hand share of including payment of million of new $XX to $XXX commitment under Company dividend interest the to been $XXX of the hand dividend which shareholders due the ABL on of of notes offering payment, our the all notes the paid November dividend of Since X% $XXX of through pursuant X% funded collections amounts with was notes special special its cash as due after notes on has date. capital the or equivalent secured price policy, interest net year dividend

other our to program. pleased part As such from time-to-time in appropriate, considerations. of we this may that are conditions, approved program, announce we capital at at stock market repurchase price a announced Directors stock shares and common million previously to $XX our program, amounts, requirement prices as and of repurchase Board Pursuant we today of times industry subject and has share to deem allocation regulatory our

our Company's market successful XXXX. to full-year of updating XXXX. the the outlook available performance, and in quarter Now of the turning In its remainder first guidance NOLs is for conditions light expected for XXXX, Warrior

Our in interest metric longwall to have we updated the the expense year later on reflect first after updated strong quarter the this first tack quarter. and offering a production move been has notes

comments. the set these expect down number XXXX $XXX port strategic million final This expenditures SG&A to discretionary cash moves include shield in million and new million. to spending the rate payment Under number will XXXX to and longwall we and million was million realize $XX of that the to the A now to expense guidance FOB our that X.X sales approximately beyond. price. guidance full-year for goals. to Interest $XX $XX on in We finishing times support $XX lower XXXX, sales, for expect the million mine hard X.X long spend and number .X to one a volatility QX will Walt production $XX of index $XX to of in of I'm coking include XXXX, projects in coal short-tons, in this we tax net those $XX the affect of and that other and moves of may seven his now portal production coal the at started is on of million longwall X%. projects. move XXXX $XXX to current X is of the short-ton, updated follows: million to lead factors to Australian to of as have of million of timing outlook developing projects X.X year, for Our longwall capital our coal These of QX new low-vol quarters. per Cost at on construction $XX of benefits short-tons. expenses in turning expect total million million. majority

Walter Scheller

Dale, Q&A, the on for we Thanks outlook the would our before address marketplace rest to to XXXX move I we at and moment. how looking the at like of are

We met premium are markets products. continuing customer robust core our to demand for within our see coal

for environments. book we second result, a order from price current quarter coal strong that have met the will high As the benefit

high for quarter will as production first However, our be volumes we few and expect based a the as second sales not quarter on factors.

all in during the quarter fourth in XXXX, than the harder the moves price coming quarter. first environment high take First, to order advantage we planned, three the operations originally off of longwall ran we

operational As the days and to during quarter, six QX we a shift ran will XXX,XXX of than into longwall were XXXX from forward result, better extra results bringing a the moves an our which expected, we extra approximately in result first mines QX. tons an

Second, outage complete had This to expected both previously tons. been maintenance projects quarter XXX,XXX XXXX. six-day issued reflected guidance lower will we a production for already by that in mines during our plan second outage approximately the on several of

of we which production, quarter. back-to-back two now the moves means have production first a in quarter quarter, record expect to in longwall as slightly Third the result second less third

the the required full-year upon growth, our panels, volumes guidance become we remain coal second XXXX, on largely conservative to will approach for environmental all anticipate XXXX, us. the another expected demand equipment cautious we economic for it's ranges be rebuilding. our the the With dependent customers mining near We until about These global near-term have - and said thinner higher end Chinese production As metrics include supply few and the in key a the and in steel will in key prices policies. quarter course we core of tighten continued that we near strong disruptions be of behind over underpinned factors. continue believe factors strong get Australia by quarter, met

policy, a by see impact Australian to These disruptions continue seaborne key rail of most China and potential In issues operator. have producers cities, as result Chinese rail million producers. that expected production XX coal larger there of to to regard in and of attractive weather coast mills the supply are replacement related the number which steel that changes benefitted While global effort Australian infrastructures are port type. and smaller has the steels a resolved, are to rail of we include coal constraints to scheduled Chinese their been continuing an keep recently reduction maintenance Queensland furnaces volumes, ton in pollution the blast in making more in located curb to by with closer environmental to are the

be pricing. on coal operations in furnace winter a will have its China's and coal be demand on short-term actual The soft seen global to factors blast this coal pricing that change relatively production Additionally, had these It on the on and China met difficult to impact each steel enforcement impact high. to enforcement remains will met limits lower-than-expected met is approach restrictions demand. established what coke on keeping predict. impact of With of limits,

their remains as the coal we positive aim million growth outlook nameplate of dynamics Warrior's short-ton. eight India. strong conclusion, of return to However, remains expected our country strong as operations for such capacity out long-term to with pricing met In demand

to flexible expect flows cash this to our continue will premium, enable industry-leading us through We cycle. margins strong highly structure CSR coal coupled Warrior's high and with generate cost

calls, next changes questions. the said environment corner, the on for it we said like for to the to our adjust are target first exceed just Having the if to to the pleased is and market XXXX would as With the quarter we the as believe operations call the pricing open Operator? and we the remainder with or I downturn is year. our flexible year. that, with on the goals throughout conservative track have of of run results As previous that, around for Company meet business

Operator

comes go Please ahead. question from Woodworth Curt Instructions] [Operator Our from Credit first Suisse.

Curt Woodworth

guys afternoon. morning good Yes or good

drill you X.X. So look quarter, the I to Walt rate your so wanted just this if into at down guidance, run at

understanding I about additional and it saying longwall I'm you of XXX,XXX tons to are XXX,XXX out think correctly then for moves, take if outage three XQ you be that tons. the which got XXX,XXX would

you theoretically So going and rate run X.X, you at closer get have of days then have that I I put productivity, a the are you throughout more then to labor guess, still CM you production wanted efficiency of to within also sort you would if did that and think adding add like gains to this optioinality you units you more year, would are quarter.

math certainly the seems then we other to it outstanding at would roughly like to pertain is there need to it end that A, seems is you guidance as So where that correct think a I are of low? and low issue any would very about think

Walter Scheller

another were my What in run very our brought us part rebuilt, in further we mines going we is the bottom performance the where you up do first still is now update. of rather best these there are these panels equipments the pushed top flawlessly. so really longwall how best hundred it quarter. the most coal opinion us we are doing panels, out the quarter where almost wait outage are of anticipated. than you beginning that these way I into back going the longwall I we the plan, hard, would longwall of nearing about for the be have was tons. thousand, going ran see be to And right second the out panels, XXX,XXX. tons see Curt, have gave have in the we a are to to as what make drop the that this end because will a the The Right in early into the - at recently everything about panels original but we and were get to definitely opportunity will do is year. the brought little that we up to We of a have had we we move, requires math we next happens the you mines quarter, and have additional don’t you said, quickly to said quarter couple were year so hard to end to baked a opportunity When the to January the that backup. we a that in think those you week these draw a that them second more pushing some harder this

So that back while bring longwall just have bit limited not upside running little that the be additional running. it's a the free because to do good we are going means thing well another is move move fact longwall really and you into it’s to if XXXX by that a

would bullish for be today. than I to more rather any are wait us So another we quarter

Curt Woodworth

Okay.

second Thanks think it terms how the a allocation? capital things about should met dividends of going future fine that I to the portal but that’s have and more units happen, then the not we understand. the benefit should on the upon buyback, to CM think addition maybe think you special of about recent that’s stated away depending you productivity million, like the build on as all that lot. you add history XX would in I in seeing are we just I new that of would of prices shift question you from of that the think or And something sort as

Dale Boyles

Dale. question, cash of policy, we as to announced when point. now have plan we give allocation optionality, that answer really getting well special that through our us first more said Hey is capital the and returned we Curt, this shareholders that this just repurchase are to implementation as To we

we we grow adds in and think up expand as ramp tool I that our this we the belt another so as continue just further And tool this can business.

a move we it’s with that modest can upsize and size we forward. certainly as here So start to

Curt Woodworth

and good Alright, quarter. a thanks on congrats

Dale Boyles

you. Thank

Walter Scheller

Thanks.

Operator

Our BMO question. Markets. ahead, Please from next your with David Capital question go comes Gagliano with

David Gagliano

changing Thanks way pricing question. pricing it convention you the reference commentary in have index? discount at understand you Actually talked Or is didn’t the number to convention. quarter Platts previously? I for a Are taking its just that that the XX% any through around quite because change this in you the my the

Walter Scheller

large Yes, said the our that the we one-month of before, categories XX with portion days benchmark, with replaced prior a you have just a example, ballpark. changing not did we With being the and pricing have are rising index customers Well for - up with a basis, price method. loading on pricing quarterly mean could of are I a that match different in quarterly price falling lag environment. to lag are not benchmark vessel. index This you a the those with as how same lag the it if reference. really you using one-month kind quarterly a we or whole price

look the at against we by current market. So really that’s index right said low-vol the Platts. what did perform pricing we Platts in the is we and We change to better quoted how index reflect

that that just comparing lag couple say trying to more then a a these of did realization that's one-month this that otherwise around bearing and current has current are customers the So to volume relationship is the weighted is our We because old more move date. are only we price can or to no so have to that quarterly you we there otherwise shipment okay, using anomalies price. actual index price on to what and taking averages explain our so what daily basis, customers from you average

of current pricing rather something our focus better actually outdated. So is than kind of environment of realizations reflection a the is the

why how more that's just to changed, closely So our we customers. it’s correlate pricing with our

Dale Boyles

that are going they are in we the you benchmark will be you the close. past, But if to have new still that going price said XX trailing you see months to want look I you if as see that realizations do very our or compare think index you to will at price, see to

We a number always how we more XX% XX%, and we are true, you to doing. be real-time of we that feel said I would give trying of for have think be are just I remain but to will

David Gagliano

Okay.

on be correct, not any kind just should what moving to lagged Unlike clear. said was really forward. comparison think basis pricing be the So historically I of

Walter Scheller

correct. That’s Yes.

David Gagliano

coming previous expect then over million you special follow-up directly, met three we just over but maybe lower should and with Alright the code. on met additional the to I just are that guess, to are the quarter cash we little XXX XXX next even might dividend given change mean I’m in a question. on this that sort we prices of free zip going a program buyback with I ask up along

the more few over should special So we dividends continue these expect quarters? to next of some

Dale Boyles

does it’s price exactly will right, market do going how Well all what all hard and outlook performance, predict be this. factors know we you our those dependent upon to commodity conditions, but It’s to at cash dividends there opportunities shares as attractive to use opportunity us that think to the of it as when the repurchase we at that well appropriate combine is is give special times.

cash another us think gives we with I it So use can that tool special dividend. in the just combination

David Gagliano

Okay, Thanks very that’s helpful. much.

Walter Scheller

Thank you.

Operator

Our Lucas Please your next from ahead question. question FBR. B. comes with Pipes go from Riley

Lucas Pipes

a everybody afternoon good good quarter. congrats Hey and on

on should about debt appropriate as appreciate kind you dividends what have alongside Dale, debt sort wanted would you. comfort and your side, I we thoughts. issued of to special the is what Thank of some you the of level are leverage here First issuance levels these about levels targeting for question or think of obviously your the I ask

Dale Boyles

Sure.

well have leverage And half and range said ratio. I puts one that you at would future. as we to is and all at and in allocation that really this And condition, as the as you with feel market one look you comfortable to month, X.XX that evaluate time opportunities I a about where the prices, just capital trailing that's on us of additional of the the our target before, think commodity where below If XX know times. our far so two look kind policy we think

to one never that the So that but for here, but right, we that never are times sure range make balance a leverage with always we our evaluate to say sticking sheet. and optimal still going structure are half we two capital to have

Lucas Pipes

LTM as a price on to is that leverage you tie guidepost a leverage such scenario met the would ratio? coal of under And earnings ratio given or that kind metric

Dale Boyles

be and pricing your I'm volumes, took to times is you not one just if a last within there for that that a in sure XXX could one XXX I more range half two question, times. range and scenario XXX, to we in of see and really two a year's like a you could down that to to a target XXX half but understand if that

Lucas Pipes

it. Got

be in XXX environment you half that's leverage XXX, times to where and So a EBITD kind of kind two one then of would comfortable? and

Dale Boyles

Yes.

Lucas Pipes

there kind anniversary crate were the letter limitations you. if ruling very I changes a of favorable ownership, than what as IPO If have being the you that more example, extent think anniversary that have NOL couldn’t ties if risk restriction removes three-year the very That's a helpful. limitations on private in to buyback without the that to I and there correctly. to recall in complication? I correctly, from just year of could on also the for the that X% Thank a IPO, and you shareholders share within also and us use with the of question program, NOLs one were I you. Thank also Could And and NOLs. to remind there recall the accumulate the had think then

Walter Scheller

Yes.

than I'm under enough just of more lost XX% way, not we would it change in-depth Section okay. was today recently or these we XXXX the around we restricted of think the through But X, of this we had have XXX. period. next for that time the most sure limitations had passed NOL, discussion have a week April the ownership an So two-year If anniversary we all had all calculations,

a Section three the year are you control XXX in a X% we Rules back change have ownership basically of these each calculations from or now, different under of the shift look where in with change holders. So or ownership

last So IPO calculation was date. our shift the

look So have of back have years there any a that forward the carries then you these. so to from three every three extent year you

would the new creating then of place IPO So the were controls that those so help in and program but restriction is we after of don't we process to years you that the these relation holders share to to rules, three charter NOLs. in still X% have we in restrictions protect we And trip believe do the limit repurchase subject to the and any still NOLs. rules, those ensure created

assets are So this for we those impairing assets that without Company. can because do tremendous making those this we sure

Just about rate looking and Alabama, State Federal for $XX tax we all-in million a if at XX QX, around you think XX%, of repaid somewhere have cash of taxes.

huge QX. So in that's just savings a

have say in to this controls So sure the we ownership that. prevent built we these change like we under and want rules protect that make to we feel

Lucas Pipes

you. hear. much. all very Thank to appreciate that great That’s I color

Walter Scheller

Thanks.

Operator

with [Operator go from Partners. Instructions] Our ahead comes question. MKM Daniel next from your Scott question Please

Daniel Scott

Hey thank very, over a a you million year. very Obviously strong at running very there quarter production eight tons much.

are what up nameplate As been be we in more a this year upside Is several quarters to you are from and nameplate tied and the Or this three kind moves XXXX? down think we now longwall first typical the ramping there to next in capacity looking year moves how the last this quarter? of versus would for capacity. I that performance is how at guess your have cycle over year many with about longwall

Dale Boyles

year think in you to where and moves but only year, now is two, my norm then longwall have last have to a the you three. did the going four be opinion have, where years like some you every going are you going Well, have we are to

longwall rock foot coal we because is beat the really the In always the per its terms of some our the of the these how tons up of because cut. panels more quarter-by-quarter somewhat beginning depended longwalls of we a in well panel get pretty will panels, where toward equipment thicker, is of end we at we - the do again couple the do of are its in so on

So we of the maintenance per little get delays these with to end we lower tons as typically little a have coupled foot. more panels,

in this have want last see progress you compare quarter without to year two the Company we early kind see moves to how you know, be moves we longwall that those you first is and always to a tell we the after part the is where just can quarter tougher. are an longwall operates this conditions I can first indication any of said are of of sands aside do, our coal think before longwall what do little in the what year that completed But are I the we condition, is saw have going think I that you we and year, will there and of to really did periods get making. what how the we you always the going if and move

of out adding CM year, we the for more we sign. out more which them Now but good a are getting of one reality are that unit this and is hired production is them, productivity we the guys more

So there but making are of we headway, are a not we lot yet.

Daniel Scott

that ton, And very Okay sector right tight the a with moves to which longwall the be unit that’s going in it same unit costs strong all to seems is happening cost a at came time. is balance hit your guidance? in things and through with challenge $XX on as the within then as guidance coming such far the of helpful. the up year then performance at Cost

Dale Boyles

on few first things associated pretty and previously and sealed sealing that. as be like fields a confident we some pretty worked costs areas building things in that guidance. been to able with we that the the well, hard that I’m We hadn’t had quarter hit will

in the to get costs were done. more expectations coal a get we aggressive the pretty So work production we wanted in both and done mines little which in our

Daniel Scott

this to Okay to on a ask I the shareholders? or what to this money counterbalance returning to the start a of that’s mine quarter, however you third want to great potential at I it put think cash point for think does me in focus Creek lot last cycle spend Blue about every in and your

Dale Boyles

evaluation get coal conditions on process mine the in what doing is - a you right or project, and the carefully at great will think we that of our look right time I it rather project, it’s that a project. sooner Creek begin for great or engineering us and again it’s to than that moving the hopefully around start to evaluate more later the to will know and Well the are expectation Blue are project how we be

Daniel Scott

thanks Dale very well Okay much.

Dale Boyles

Thank you.

Walter Scheller

Daniel. Thanks

Operator

FBR. And our from question. Please go comes with next from question ahead your B. Lucas Pipes Riley

Lucas Pipes

your coming know were afternoon how up steel to and be my maybe the again the hiring of I actually on Dan’s good Walt. inflationary question you point on is still on that is I speak can people, more then to cost the just wanted prices labor machinery bout of for miners seeing cost you components continues I you. hiring there broad Hey pressures, through view like of component of lot ask example for I follow-up year already side, Are a for market, of high mines a starting thanks of just follow-up. folks and from think a you would last and kind level are more when Thank underground major flow thought. appreciate taking tight side.

Walter Scheller

pressure, inflationary you deal haven’t this we great have point, that but of that yet. experienced Well a not know to we seen we anticipate come, could

goes as many people we of are will In but get trying to yet aggressively there, that good And have number so us make and get on. can, we month-by-month, that still terms hire we quickly. still to get sure to hiring are we of as hiring miners allows a productivity we experienced we more

Lucas Pipes

share year. third it you the call, to you looking are maybe still can it quarter share many I think that folks how update hire? Can last On on mentioned fourth you you or call, quarter was that?

Walter Scheller

we as well. probably than cover but add people, or to to that want an any turnover more up hires have We incremental will XX XX we

people. So incrementally we XX to XX about want to add

Lucas Pipes

you. appreciate Thank Got your perspective. much it. Very

Walter Scheller

you. Thank

Operator

I would for and any at to call ladies closing turn to time back And over the like conference management remarks. gentlemen, this

Walter Scheller

in We That interest your concludes appreciate our call Coal. us again Warrior today. for this Thank joining afternoon. you Met

Operator

do presentation. attending. for today's Ladies We and gentleman does you thank that conclude

You may lines. now your disconnect

Warrior Met Coal (HCC) 3 May 182018 Q1 Earnings call transcript