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. [Operator Instructions] Thank you. Before we begin, I have been asked to note that today's discussion may contain forward-looking statements, any actual results may differ materially from those discussed. For more information regarding forward-looking statements, please refer to the Company's press release and SEC filings. I have also been asked to note that the Company has posted reconciliations of the non-GAAP financial measures discussed during this call in the tables accompanying the Company's earnings release, located on the Investors section of the Company's website at www.warriormetcoal.com. In addition to the earnings release, the Company has posted a brief supplemental slide presentation to the Investors section on its website at www.warriormetcoal.com. Here today to discuss the Company's results are Mr. Walt Scheller, Chief Executive Officer of Warrior Met Coal; and Mr. Dale Boyles, Chief Financial Officer. Mr. Scheller, you may begin your remarks.

Thanks, operator. Hello, everyone, and thank you for taking the time to join us today to discuss our first quarter results. After my remarks, Dale will review our results and additional detail, and then you will have the opportunity to ask any questions you may have. Our first quarter results demonstrate that we are off to an outstanding start in 2018, carrying forward a significant momentum we have built over the past year. Q1 of 2018 set single quarter records for Warrior in both production and sales volumes. Production volume for the quarter was 2.1 million short-tons, which is 30% higher than the same quarter in 2017. Our sales volume is also 2.1 million short-tons and was 88% higher than the same period last year. We achieved this success by continuing to ramp up with production and sales that we began last year and our results were even better than we expected. Our entire team pushed the business hard to deliver these excellent results and make the most of the high pricing environment for our premium met coal product and stronger overall our market conditions. I would like to thank all our employees for the work they have been doing to achieve the level of success we have had thus far in 2018. Our top priority remains working safely as that is the first and most important step to working efficiently and ultimately achieving success in the marketplace. This continued hard work has enabled us to make progress and approaching production levels near the nameplate capacity of our assets, which is approximately 8 million short-tons of met coal. We added another 32 miners, and one shift for each continuous miner unit at number four mine during the quarter. In addition, our coal inventory fell from 341,000 short-tons at the end…

Thanks a Walt. Let me start by saying the Company performed very well in the first quarter in both sales and production. Combining those results is strong price environment, the Company was able to achieve new quarterly record highs and net income, adjusted EBITDA and free cash flow. For the first quarter of 2018 net income on a GAAP basis was a $179 million or $3.36 per diluted share, compared to net income of the $108 million, or $2.06 per diluted share in the first quarter of 2017. Excluding one-time transaction and other expenses for the notes offering in the first quarter, non GAAP adjusted net income was at $182 million or $3.42 per diluted share. Adjusted net income in the first quarter of 2017 was $2.22 per diluted share, and excluding expenses associated with the IPO last year. Adjusted EBITDA was $216 million in the first quarter as compared to adjusted EBITDA of $135 million in the same period of 2017. The Company's adjusted EBITDA margin, which we calculate as adjusted EBITDA divide by total revenues and which we believe is one of the highest in the industry was 51% for the first quarter compared to 53% in the same period last year. Total revenues for the first quarter of 2018 were $422 million which included net coal sales of 2.1 million short-tons at an average net selling price of $195 per short-ton. Total revenues in the quarter exceeded the first quarter of 2017 by $168 million. We also saw an 88% increase in sales volumes and the 9% decrease in average net selling prices. Our first quarter gross price realization was approximately 99%. Our gross price realization represents a volume weighted-average calculation daily realized price per ton based on gross sales, which excludes demurrage and other charges as…

Thanks Dale, before we move on to Q&A, I would like to address our outlook for the rest of 2018 and how we are looking at the marketplace at the moment. We are continuing to see robust customer demand within our core markets for our premium met coal products. As a result, we have strong order book for the second quarter that will benefit from the current high met coal price environments. However, we expect sales and production volumes for the second quarter will not be as high as our first quarter based on a few factors. First, coming off all three longwall moves in the fourth quarter 2017, we ran the operations harder than we originally planned, in order to take advantage of the high price environment during the first quarter. As a result, our operational results were better than we expected, we ran the mines an extra six days during the first quarter, which will result in bringing forward an extra longwall moves into 2018 and a shift of approximately 200,000 tons from Q2 to Q1. Second, we plan on a six-day outage during the second quarter to complete several expected maintenance projects that will lower production of both mines by approximately 200,000 tons. This outage had already been reflected in our previously issued guidance for 2018. Third as a result of record first quarter production, we now expect to have two back-to-back longwall moves in the third quarter, which means slightly less production in the second quarter. As we near the end of the panels, the core - become thinner and mining equipment near it's required rebuilding. With all that said about expected volumes in the second quarter, we have tighten the guidance ranges on our key metrics for 2018, we remain cautious conservative in our approach…

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

Yes good morning guys or good afternoon. So I just wanted to drill down into the guidance, so if you look at your run rate this quarter, Walt at 8.4. I think if I'm understanding it correctly you are saying that take 200,000 tons out of 2Q for the outage and then you got three additional longwall moves, which would be about 400,000 to 500,000 tons. So that would put you theoretically at a run rate of production closer to 7.8, and then within that you still have sort of efficiency gains you are going to get throughout the year, labor productivity, I think you are adding more CM units and then you would also have optioinality if you wanted to add more days I guess, like you did this quarter. So it seems like A, is that math roughly correct and then is there any other outstanding issue to that we would need to think about certainly as a it would pertain to where you are at low end of the guidance seems I think very low?

Curt, in my opinion the math you are doing requires us to run almost flawlessly. What we said is we ran these mines very hard, we were in the best part of the longwall panels, because we were still early in longwall panels where the coal - equipments the most recently rebuilt, so it gave us the best opportunity and we pushed these mines really hard the first quarter. I would rather wait another quarter to see how our performance is there to do a further update. Right now we have brought the bottom up a couple hundred thousand, brought the top up a 100,000. We do have this outage where we are going to be out for about a week in the second quarter, we have baked that into the original plan, but you will definitely see that in the second quarter and that will drop out some tons. And as I said, everything were nearing the end of these panels, we are pushing them harder so we are going to get to the end of these panels a little more quickly than we had anticipated. The additional longwall move, the way you have to think about that that was going to be right at the beginning of January next year. When you draw that back into this year what happens is you don’t have the opportunity to make a those tons backup. So while it's a good thing to bring another longwall move back into 2018 because that means we are running really well if the upside is a little bit limited by the fact that you do have that longwall move and it’s just not going to be additional free running. So I would rather wait another quarter for us to be any more bullish than we are today.

Okay. I think you are all seeing that the productivity benefit of the new portal and I think you have stated that you would add more CM units maybe that’s not going to happen, but that’s fine I understand. And then just second question on the buyback, the 40 million, should we think about that as something you would like to build upon in the future depending on met prices as it shift away from the recent history of things special dividends or how should we think about sort of the addition of that in terms of capital allocation? Thanks a lot.

Hey Curt, this is Dale. To answer that question, really this give us more optionality, when we first announced our capital allocation policy, we said that we have returned cash to shareholders through special as well as the implementation of repurchase plan and we are just now getting to that point. And so I think this just adds another tool the tool belt that we can further expand as we grow and as we continue this ramp up in our business. So it’s a modest size here to start with and we certainly can upsize that as we move forward.

Alright, thanks and congrats on a good quarter.

Thank you.

Thanks.

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

Thanks for taking my question. Actually I didn’t quite understand the commentary around the pricing convention. Are you changing in any way the pricing convention that you talked through previously? Or is it just a change to the reference in the discount that you have this quarter at 99% number because its Platts index?

Yes, we are just changing the reference. This whole quarterly index that kind replaced the benchmark, the benchmark method. With that being on a one-month lag basis, it really did not match up with how our customers price as we have said before, we have different categories of pricing and a large portion of those price for example, 10 days prior to loading the vessel. Well if you are using a quarterly lag - with a quarterly index with a one-month lag you are not pricing in the same ballpark. I mean you could with a rising or falling price environment. So what we did is we change and said to better reflect how we perform against current pricing in the market. We really look at the Platts index right the low-vol index that’s quoted by Platts. So what we did is we are just taking the daily actual price there and comparing to what our realization is on a volume weighted basis, so that then you can say okay, that's more current because otherwise you are trying to explain anomalies to this one-month lag quarterly that has no bearing or relationship to our current customers price. We only have a couple of customers that price from that old index average and so otherwise move to more using these averages around the shipment date. So the focus is a better reflection of actually our realizations of the current pricing environment rather than something is kind of outdated. So that's why we changed, it’s just more closely correlate to how our pricing with our customers.

But I do think you will still see as we have said in the past, if you look at the trailing 12 months you are going to see that our realizations if you want to compare that to that new index price or benchmark price, you will see they are going to be very close. We have always said we would be 98%, 99% of that number and I think I will remain to be true, but we are just trying to give you more of a real-time feel for how we are doing.

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

Yes. That’s correct.

Alright and then just maybe a follow-up to the previous question. I mean I guess, I’m just going to ask you directly, should we expect additional special dividend along with this buyback program given the even on lower met prices we are coming up with over 200 million free cash over the next three quarter on sort of 180 met that might change a little but we are in that zip code. So should we continue to expect some more of these special dividends over the next few quarters?

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

Okay, that’s helpful. Thanks very much.

Thank you.

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

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

Sure. If you look at the trailing 12 month, I think this puts us on about 0.68 so well below one time leverage ratio. And as we said before, our target range is really that one and a half to two times. And that's where we feel comfortable and you know as far as additional to that I think you would just kind of have look at the market condition, commodity prices, where the opportunities and evaluate all of that with our capital allocation policy in the future. So never say never right, but we are always going to evaluate that to make sure that we have the optimal capital structure here, but we are still sticking with that one and a half to two times leverage range for our balance sheet.

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

I'm not sure I understand your question, but there is a pricing scenario within that one and a half to two times and if you just took last year's volumes, you could see that we could really be in a range of more down in that 130, 135 to 150 to 155 for target a range like that if one and a half to two times.

Got it. So kind of EBITD in a 150, 155 environment and then one and half to two times leverage that's kind of where you would be comfortable?

Yes.

That's very helpful. Thank you. And also a question on the NOLs. If I recall correctly, there were limitations as to changes in ownership, for example, I think shareholders couldn’t accumulate more than 5% without there being risk to the NOL within a one year anniversary of the IPO and then you also have to have very favorable private letter ruling that removes the restriction on the use of the NOLs and I think that had a three-year anniversary from the IPO, if I recall correctly. Could you just remind us kind of what limitations there were and to the extent that also ties in with the share buyback program, and if that could crate complication? Thank you.

Yes. So I'm not sure we have enough time today or next week for an in-depth discussion of all the limitations around Section 382. But think of it this way, we had through April 1, 2018 just recently we passed the two-year anniversary that was the most restricted period. If we had had a more than 50% change of ownership under these calculations, we would have lost all the NOL, okay. So now, we are under a different Section 382 Rules where you basically have a three year look back from each of these change in control calculations or change of ownership or shift in the ownership with the 5% holders. So our last shift calculation was the IPO date. So then you have a three year look back from there so that carries forward every three years to the extent you have any of these. So you do have these restrictions of creating new 5% holders and then charter restriction is still in place three years after the IPO to help protect the NOLs. And in relation to the share repurchase program were still subject to those rules, but we believe we created process and in the controls to ensure that we don't trip any of those rules, so that we would limit the NOLs. So we making sure that we can do this without impairing those assets because those are tremendous assets for this Company. Just looking at Q1, if you think about a all-in tax rate of 25%, 21 Federal and State for Alabama, we have repaid somewhere around $31 million of cash taxes. So that's a huge savings just in Q1. So we want to make sure that we protect these and we feel like we have built in the controls under this ownership change say rules to prevent that.

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

Thanks.

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

Hey thank you very much. Obviously a very, very strong production quarter there running at over eight million tons a year. As we think about how you have been ramping up over the last several quarters from the down cycle to what would be your nameplate capacity. Is this a now typical year for nameplate capacity with three longwall moves and this kind of performance in the first quarter? Or is there more upside next year versus this year and I guess tied to that are how many longwall moves we are looking at in 2019?

Well, think the longwall moves in my opinion you are going to have some years where you only have two, you are going to have, every now and then a year where you have four like we did last year, but the norm is going to be three. In terms of how we will do quarter-by-quarter its really - again its depended on where we are somewhat in the longwall panels, because in a couple of our longwalls the coal is thicker, so we get more tons per foot at the beginning of the panel toward the end of these panels the equipment is always pretty well beat up because of some of the rock we do cut. So we typically have a little more maintenance delays as we get to the end of these panels, coupled with little lower tons per foot. I think what you saw in the first quarter is an indication of just what we can do, and you know, what we can do aside of this is there is always be longwall moves and we are always going to have those periods where the condition, the coal sands conditions get a little tougher. But I think I have said before that if you really want to see first two quarter this year, you are going to see how the Company operates without any longwall moves and compare that to how we did last year in the early part of the year after we completed our longwall move and that will tell you the kind of progress we are making. Now we are adding one more CM unit this year, but the reality is for the guys that we hired we are getting more and more production out of them, productivity out of them which is a good sign. So we are making a lot of headway, but we are not there yet.

Okay that’s helpful. And then as far as on unit costs with such strong performance through the sector seems all the right things happening at the same time. Cost came in at $90 a ton, which is within your very tight guidance and with longwall moves coming up in the balance of the year is it going to be a challenge then to hit that unit cost guidance?

I’m pretty confident we will be able to hit that guidance. We had a few things that we worked pretty hard on in the first quarter as well, things like building fields and sealing some areas that hadn’t previously been sealed and the costs associated with that. So we were pretty aggressive both in our production expectations and in the work we wanted to get done in the coal mines which costs a little more get done.

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

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

Okay well Dale thanks very much.

Thank you.

Thanks Daniel.

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

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

Well you know to this point, we have not seen a great deal of inflationary pressure, we anticipate that could come, but we haven’t experienced that yet. In terms of hiring we are still aggressively hiring month-by-month, so that goes on. And we still have a good number of people to hire yet and we will get there, but we are trying to make sure we get as many experienced miners as we can, that allows us to get productivity more quickly.

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

We want to add an incremental probably 70 or 75 people, but we will more hires than that to cover up any turnover we have as well. So incrementally we want to add about 70 to 80 people.

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

Thank you.

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

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