Walter Scheller - Chief Executive Officer Dale Boyles - Chief Financial Officer

Curt Woodworth - Credit Suisse David Gagliano - BMO Capital Markets Lucas Pipes - B. Riley FBR Daniel Scott - MKM Partners

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 of last year to 316,000 short-tons at the end of the first quarter on strong demand for our products.

Customer demand was driven by a number of factors. First, Chinese steel production drove a sharper increase in demand this past winter.

Second supply disruptions in Australia have continued to contribute to pricing volatility in the seaborne coal market. And third weather related issues also contributed to supply disruptions through Australia rail deliveries.

Perhaps most important we continue to make the most of today strong market conditions in the first quarter by leveraging our unique cost structure as we sold a high quality product in the strong price environment. These contributed to strong free cash flow conversion net income of $179 million and adjusted EBITDA of $216 million.

The key drivers behind our performance continue to be our highly flexible mine plan, highly variable costs in areas like labor, royalties and logistics and a strong balance sheet. These allow us to provide for an agile operational response to movements in the Australian premium low-vol hard coking coal index price and take advantage of market conditions opportunistically.

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

We continued investing in our operations in the first quarter by spending $23 million in sustaining and discretionary capital expenditures. This spending level above our average normal sustaining requirements has helped to solidify our base operations and will significantly enhance our strength, efficiency and reliability in the future.

Earlier today, we were pleased to take part in the opening ceremony for one such investment, the north portal facility from mine number seven. We were joined by a number of distinguished guests, including Alabama Governor K IV a great reminder of the significant impact that we have had over the local communities.

The new portal which initially will provide access for 200 miners and enter the northern sectors of the mine has been designed for growth and will accommodate nearly 500 underground employees. It will add to both the safety and productivity of our employees as it is put into use.

Before I turn it over to Dale, I would like to comment on the special dividend of $350 million or approximately $6.53 per share that we paid to all shareholders in April. This distribution reflects our commitment to continue returning excess cash to shareholders above our quarterly dividend are we are pleased that our strong balance sheet, minimal legacy liabilities and highly tax-advantaged positions allows us to accomplish this goal.

In short, we are pleased to have started 2018 with this quarters excellent performance, building on our strong operational and financial base and investing in the business to ensure our continued success. We expect to continue generating strong cash flows through the end of the year and to continue creating significant value for shareholders.

I will now ask Dale to address our first quarter results in greater detail.

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 a percentage of the Platts Australian premium low-vol hard coking coal index price. We believe that this new metrics better reflects the changes in customer pricing formulas since the elimination of the quarterly benchmark price in the second quarter of 2017 and better reflect the current market price on shipments during the calendar quarter versus a one-month lag in the quarterly industry index price that we used previously.

There were inherent limitations in the quarterly index, which replaced the benchmark method in Q2 of 2017. First, the average price was on a one-month lag and did not closely correlate with the timing of our shipment.

Also our new metric is based on the daily quoted price of one index Platts and not the average of three in different industries. Emerged and other charges reduced our growth price realization to a net average selling price of 195 per short-term in the first quarter.

This compares to a net average selling price of $214 for short-ton in the same period last year. Mining cash cost of sales was $190 million or 46% of mining revenues in the first quarter compared to $106 million in the first quarter of 2017 driven primarily by the 88% increase in sales volume from the ramp-up of operations.

Cash cost of sales per short-ton, FOB port, was $90 in the first quarter compared to $94 in the same period of 2017 with the decreases in the per ton values being primarily attributed to the leverage of the higher sales volume. SG&A expenses were about $8 million or 2% of total revenues in the first quarter, which was $3 million higher than the same period of 2017, primarily reflecting the Company's growth and incremental expenses associated with being a public company.

Depreciation and depletion expenses for the first quarter 2018 were $25 million or 6% of total revenue compared to $15 million in 2017. The increase in the first quarter expenses was primarily attributable to the ramp-up of sales and production at the mine.

Transaction and other expenses totaled $3 million for the quarter and consisted of fees and expenses associated with a tack on $125 million notes offering. Portion of the fees and expenses associated with the tack on notes offering was expensed and another portion is presented net of the notes on the balance sheet and will be amortized to the P&L over the next seven years.

Interest expenses were almost $9 million in the first quarter and included interest on our equipment promissory note and senior secured notes plus amortization of our debt issuance costs associated with those notes and our ABL. As anticipated, Warrior did not incur any income taxes due to the utilization of its net operating loss carry forwards or NOLs.

One of our key long-term assets and strengths is our NOLs, which we expect will reduce our Federal and State Income Tax liability to zero until the NOLs are fully utilized or expired. We expect this will continue to drive significant free cash flow conversion over the next several years.

Turning to cash flows. During the first quarter, we generated $171 million of free cash flow, which was a result of cash flows provided by operating activities of $194 million plus cash used for capital expenditures of $23 million.

This compares to only $54 million of free cash flow in the first quarter of 2017. Our spending on sustaining and discretionary capital expenditures during the first quarter included a down payment on new set of shields, which are expected to be delivered by the end of the year and further construction on the new portal at mine number seven.

As Walt noted earlier, the new portal was completed in April and is now being used by the miners. Cash flows provided by financing activities were $115 million in the first quarter of 2018 as compared to $191 million used in financing activities in the first quarter of 2017.

The cash flow reflect a net proceeds the tack on notes offerings of $125 million in the first quarter of 2018. Our net working capital increased by $9 million from the fourth quarter of 2017, primarily driven by higher accounts receivable of $35 million on higher sales volumes in the first quarter, partially offset by improvement in other areas of working capital.

Our inventory decreased from 341,000 short-tons at the end of the fourth quarter of 2017 to 316,000 short-tons at the end of the first quarter of 2018. The decrease in inventories was mostly due to the higher sales volume and we are taking advantage of the high price environment during the first quarter.

Our total available liquidity as of March 31, 2018 was $422 million, consisting of cash and cash equivalents of $322 million and $100 million available under our ABL facility. We currently do not have any outstanding borrowings under the ABL facility.

As Walt mentioned earlier Warrior declared a special cash dividend of $350 million or approximately $6.53 per share on Warrior's common stock, which was paid on April 20. The dividend was funded with cash on hand along with the net proceeds of the private tack on notes offering of $125 million and of 8% senior secured notes due 2024.

These new notes were offered as additional notes under the indenture dated November 2, 2017, pursuant to which Warrior also previously issued $350 million of 8% senior notes due 2024 last October. The Company paid a special dividend on April 20 with the cash on hand as of March 31 of $322 million, including the proceeds of the notes, plus the cash collections from its accounts receivable balance of $152 million through the payment date.

More than enough cash has been collected to fund the operations even after payment of the dividend and the $19 million interest payment on the senior notes paid yesterday. No amounts were borrowed on the ABL facility to fund the dividend payment, interest payment or the operations.

Since the IPO last year and through the latest special dividend the Company is return cash to shareholders of nearly $18 per share all notes equivalent to the IPO price of $19 a share and continues to demonstrates our commitment to our capital allocation policy, we announced last year. As part of our previously announced capital allocation program, we are pleased to announce today that our Board of Directors has approved a $40 million stock repurchase program.

Pursuant to this program, we may repurchase shares of our common stock from time-to-time in amounts, at prices and at such times as we deem appropriate, subject to market and industry conditions, share price regulatory requirement and other considerations. Now turning to our outlook for the remainder of 2018.

In light of the Company's successful first quarter performance, available NOLs and expected market conditions in 2018, Warrior is updating its guidance for the full-year 2018. Our interest expense metric has been updated to reflect the first quarter tack on notes offering and we have updated the longwall move later this year after a strong production in the first quarter.

Our updated guidance for the full-year 2018 is as follows: coal sales at 6.8 million to 7 .3 million short-tons, coal production of 6.8 million to 7.3 million short-tons. Cost of sales, FOB port of $89 to $95 per short-ton, capital expenditures of $100 to $120 million.

SG&A expenses $30 million to $33 million. Interest expense of $40 million to $42 million and the cash tax rate of 0%.

A number of factors may affect our outlook include the number and timing of longwall moves and volatility in the Australian low-vol hard coking coal index price. We now expect to have to longwall moves in Q3 and one move in Q4 of 2018 that will lower total production in those quarters.

Under our current guidance for 2018, we expect to spend approximately $30 million to $37 million on discretionary projects. These include finishing the construction of new portal at mine number seven that was started in 2017, a down payment on net new set of longwall shield and other projects that will support strategic goals.

This is long lead times on developing these projects this year, we expect to realize the majority of the benefits of the spending in 2019 and beyond. I'm now turning to Walt for his final comments.

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 for the full-year until we get another quarter behind us. We believe customers demand will continue to be strong over the course of 2018, and anticipate near-term met coal prices will be largely dependent upon a few key factors.

These factors include higher global steel production underpinned by strong economic growth, continued supply disruptions in Australia and Chinese environmental policies. While most of the Australian weather related disruptions and port and rail constraints have recently been resolved, there are number of infrastructures issues that are expected to continue the impact the Australian production and keep global supply type.

These include a potential 20 million ton reduction in coal rail volumes, as a result of changes to maintenance scheduled by key Queensland rail operator. In regard to Chinese environmental policy, we are continuing to see the replacement of smaller steels mills in China with larger blast furnaces that are located closer to the coast in an effort to curb pollution in cities, which has benefitted seaborne producers by making their coal more attractive to Chinese steel producers.

Additionally, China's winter restrictions on blast furnace operations had a lower-than-expected impact on met coal demand. With soft enforcement on steel and coke production limits, keeping demand relatively high.

It remains to be seen that China will change its enforcement approach to be established limits and what impact this will have on global met coal pricing. The actual impact of each of these factors on met coal pricing in the short-term is difficult to predict.

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

We expect Warrior's premium, high CSR coal coupled with our highly flexible cost structure will enable us to continue to generate industry-leading margins and strong cash flows through this cycle. As I have said on previous calls, we run the business as if the next pricing downturn is just around the corner, with conservative target and flexible operations to adjust to the market environment as it changes throughout the year.

Having said that, we are pleased with our results for the first quarter of 2018 and believe the Company is on track to meet or exceed our goals for the remainder of the year. With that, we would like to open the call for questions.

Operator?

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.

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.

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.

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.

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.

That concludes our call this afternoon. Thank you again for joining us today.

We appreciate your interest in Warrior Met Coal.