Good afternoon. 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 Second Quarter 2019 Financial Results Conference Call. [Operator instructions] Thank you. Before we begin, I have been asked to note that today's discussion may contain forward-looking statements and 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 press 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 of its website at www.warriormetcoal.com. Here today to discuss the company's results are Mr. Walt Scheller, Chief Executive Officer; 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 second quarter 2019 results. After my remarks, Dale will review our results in additional detail, and then you'll have the opportunity to ask questions. Warrior performed exceptionally well and exceeded our expectations in the second quarter, which led to record quarterly high sales volumes. The mines continued the strong performance achieving high levels of production that drove the record high sales volumes and we achieved $398 million in revenue, $176 million of adjusted EBITDA and a Warrior record quarterly high free cash flow of $197 million. In addition, we continued our commitment of returning capital to stockholders with a payment of a $230 million special cash dividend. As the result of the company’s performance in the first half of the year and expected market conditions for the remainder of 2019, we’re raising our full year guidance for sales and production volumes which we will discuss later. Production volume in the second quarter was 2.2 million short tons compared to 1.9 million produced in the same quarter of 2018, an increase of 14%. We successfully completed one longwall move in the second quarter this year compared to no longwall moves in the second quarter of 2018 and achieved production levels that were better than expected. These results demonstrate the significant efforts made by our employees in anticipating and planning our longwall move, proactively driving the production efficiencies and managing our equipment downtime. The capital investments that we've made in our mines over the last three years continue to pay off, as we strive to reach full capacity to improve production efficiencies and better equipment utilization with less downtime and a safe environment. A good example from the recently completed quarter is the extra…

Thanks Walt. For the second quarter of 2019, net income on a GAAP basis was $125 million or $2.43 per diluted share compared to net income of $91 million or $1.72 per diluted share in the second quarter of 2018. Excluding the non-recurring other income, non-GAAP adjusted net income for the second quarter of 2019 was $112 million or $2.16 per diluted share compared to $1.81 per diluted share in the second quarter of 2018. Adjusted EBITDA was $176 million in the second quarter that's compared to adjusted EBITDA of $129 million in the same period of 2018, an increase of 37%. The quarterly increase was primarily driven by a 19% increase in sales volume which set a new quarterly record high and a 4% increase in average net selling prices over the same period last year. The company's adjusted EBITDA margin was 44% in the second quarter compared to 40% in the second quarter of 2018. Total revenues were $398 million in the second quarter of 2019 compared to $323 million in the same period last year. This increase was primarily due to the 19% increase in sales volumes. The average net selling price for short ton increased approximately 4% in the second quarter compared to the same period in 2018. The price environment continued to be strong with index prices falling slightly in the second quarter from $205 per metric ton at the end of March to $194 per metric at the end of June. Our gross price realization was 97% in the second quarter of this year. Demurrage and other charges reduced our gross price realization to an average net selling price of $173 per short ton in the second quarter of 2019 compared to $167 in the same period last year. Mining cash cost of sales,…

Thanks Dale. Before we move onto Q&A, I'd like to make a few more comments about the company and its prospects. We're very pleased with the company’s strong operational and financial performance in the second quarter of 2019 and we appreciate the support and engagement we received from our stockholders and of course our employees. As our sales and production volumes have increased, we've benefited from the increased operating leverage and have invested in long term projects that will benefit our operations in the future. We expect our contracted sales volume to remain consistent for the year and expect that a higher portion of our spot sales will be directed toward Asia. As Europeans spot demand remains tempered and several large South American steel producers undergo routine maintenance programs in the third quarter. Although some early indicators point to a reversal of steel pricing, we remain cautious and expect the next quarter to bring continued pressure on index pricing and demand due the reasons previously discussed. In addition, we expect the typical seasonality factors in the anticipation of a reliable seaboard supply chain to have some bearing on the index pricing. As Dale noted, after considering the strong performance of our operations in the first half of 2019 and the expected market conditions for the remainder of the year, we're updating our 2019 sales and production guidance targets. As I've said on previous calls, we run the business as if the next pricing downturn and geological issue are just around the corner with conservative targets and flexible operations that allow us to adjust to the market environment as it changes throughout the year. We expect to update our 2019 guidance during the year as necessary to adapt the changing market conditions and changes in the business. With that we'd like to open the call for questions. Operator?

[Operator Instructions] Our first today comes from David Gagliano from BMO. Please go ahead with your question.

Thank you for taking my questions. The question really is similar to the ones that you've been asked basically after almost every call. You obviously raised the guidance for the year on the sales volumes and while you just address this I think a bit in your prepared remarks. My question is, it still looks pretty conservative even after one factors in the impact of an additional longwall move it's about a million ton roughly, a million ton decline second half versus first half. Is that more likely chalked up to conservativism or is it based on market conditions or something going on at the mine?

No. We're just tracking and doing things the way we normally do, as I said we're just being conservative with the way we approach our expectations and we do have three longwall moves. We can always have anything happen at operations or weather in the Gulf. So we're just taking a cautious approach.

Just wanted to check the box on that one, thanks very much.

Thank you, David.

Our next question comes from Daniel Scott from Clarkson, please go ahead with your question.

Thanks great quarter guys, really well done. My question is about inventories. If I check my notes from the first quarter call, I think you had a substantial builds in the first quarter. I think it was 400,000 tons and just kind of based on sales minus production for this quarter is a slight draw. Am I thinking about that the right way, is there still a pretty good pile of coal and is that maybe around timing of shipments?

Yes. There is still a decent sized amount of coal and we'll work that down through the rest of the year.

Great. And when you think about, obviously you paid a special, you're generating tremendous amount of cash these days. Where's this thinking, kind of now going forward especially with Apollo out about special dividends versus maybe another incremental share repurchase or we're going to start maybe hoarding money a little more in anticipation of Blue Creek?

Dan, its Dale. Well, nothing has changed with Apollo’s exit; we really haven't changed our capital allocation policy. We are going to continue. We have a new $70 million repurchase plan that we’ll be executing that will also consider special dividends. As we get later into the year and get our Blue Creek analysis finished, we may have some time out after that but once we know definitively what we're going to do with Blue Creek that points in the right direction for any changes in our capital allocation policy.

That makes sense. And then finally for me, when you look at your sales mix by geography, you talked about spot tons of most likely be to Asian clients. Do you see a material shift, kind of based on what pricing is doing and seeing little slowness in Europe about how your production or your sales mix might change in the back half of the year and into next year?

I don't think the sales mix will change much. I think short term with things softening a bit in Europe, we're going to see the spot opportunities moving into Asia. But, as we build our book for next year, I would expect it will be balanced about the same way it has been.

I guess just to attack on to that shipping rates are higher than they've been. Is that going to effect to some extent, the region of course, the quality offset that?

I think the quality offsets that.

Alright, great, congratulations on the quarter.

Thank you.

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

Good afternoon, everyone and I would like to second the congratulations on another fantastic quarter, so really well done.

Thank you.

I wanted to follow up on Blue Creek. It sounds like you're pretty excited about the opportunity there, but you're still evaluating the projects. Could you remind us kind of what are the key things you're evaluating at this time and not to get carried away or anything, but should we kind of be thinking about this project as a go ahead at this point or are they still kind of major issues that you're trying to sort out first. Obviously you would make that kind of still had this issue. Thank you very much for your perspective.

Thank you. Well, our goal is to be able to put this in front of the board a little later in the year for discussion. As we've said, we're drilling some additional holes to determine quality to confirm quality I shouldn’t say determine, to confirm quality for the first 5 to 10 years of mining at that site. We're doing some sanity checks in engineering around the overall cost of the project. We are evaluating the market for the call. Just trying to get some additional permitting done. So, I think we're tying up what [new sense] we think we have before we could make a strong recommendation to the board later this year.

Got it, that's very helpful. So, but you wouldn't expect any inadvertent changes from kind of your basic assumptions that you disclosed at the market today said here.

That's fair. We don’t anticipate anything different but we'll see.

Got it. Okay well, really appreciate it and keep up the great work. Thank you.

Thank you.

Our next question comes from Alex Hacking from Citi. Please go ahead with your question.

Yes, thanks for the call. Just following-up on Blue Creek. You mentioned interest from steel mills in participating. I guess, what kind of structures would you be thinking about there just kind of a typical take or pay agreement?

No, we wouldn’t be in take or pays. We may do something with, we're just looking at all opportunities, we're not saying that’s a strong direction that we're going in. we're just going to look at all our options available to us and as we work through those with the pros and cons but would be some kind of if we went that route to be some kind of all take agreement maybe with some amount of capital to offset the total cost, something in that general nature.

Okay, makes sense. And then in terms of the CapEx, obviously it's spread out over several years, five years I think. How what's the cadence of that, is it roughly equal per year or is the CapEx kind of heavily weighted up front? Thanks.

I would say it's more heavily loaded towards the back end. The first half is slope development and putting in a couple of shafts at the first 18 months or so but then after that you start continuous miner development equipment purchases building out of prep plan. So, I would expect really the back half of the project is a little more capital intensive.

Okay, thanks. And then, when you talk about putting it in front of the board later this year, does that mean that assuming everything looks good and the board approves that that you would sort of announce a go-ahead decision before the end of this year? Thanks.

I don’t know that will have before the end of this year but I would look at something probably possibly late this year or late next year.

Okay, that's great. Thank you, so much.

Thank you.

[Operator Instructions] Our next question comes from Chris Terry from Deutsche Bank.

Hi, Walt and Dale. A couple from me. Just in terms of the realization the 97% to 98% that you've achieved for the first half. Sorry, I apologize if you've already spoken about this but just sort of second half would you expect similar levels to that or slightly higher? Thanks.

Well, I think you could expect something similar to that, I mean it could be a little higher because we have been in a following market, so the way that works you know it's usually on a trailing basis because a lot of our shipments are the average of the index price 30 days prior to the loading of the vessel. So, but to go remember that's also a blended mix percentage that includes our mid vol sales sort of mid vol sales are a little bit higher than the low vol sales on a particular quarter, that can have some impact on to. So, but in generally I would expect very similar results.

Okay, thank you. And then, just in terms of Blue Creek and thinking about it against potential M&A, do you continue to asses that and how do you see the differences between organic versus inorganic growth? Thanks.

We do continue to look at opportunities they present themselves, we just think this is an outstanding project and we're going to measure everything against it and determine what we think is in the best sense of our shareholders.

Okay. And the final one from me, just there was a question earlier on the inventory levels but what do you like to keep sort of through the cycle that 0.5 million tons you have now presumably you run that down a little bit at some point but what's your sort of base load level that you like to maintain?

I think, anything less than 300 or so, just pretty lean. So, in that 300 to 400 range.

Okay, that's it from me. Thank you.

Thank you.

And ladies and gentlemen, we reached the end of the question and answer session. At this time I'd like to turn the conference go back over to Mr. Scheller for any closing remarks.

Well, that concludes our call for this afternoon. Thank you again for joining us today and we appreciate your interest in Warrior Met Coal.

Ladies and gentlemen, that does conclude today's conference call. We do thank you for joining today's presentation. You may now disconnect your lines.