Warrior Met Coal - Earnings Call - Q2 2020

Transcript

Operator (participant)

Good afternoon. My name is Andrew, and I will be your conference operator today. At this time, I would like to welcome everyone to the Warrior Met Coal second quarter 2020 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. If you would like to ask a question during this time, simply press star then the number one on your telephone keypad. If you would like to withdraw your question, please press star then two. If you require operator assistance, please press star then zero. This call is being recorded and will be available for replay on the company's website. 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.

Walt Scheller (CEO)

Thanks, Operator. Hello everyone, and thank you for taking the time to join us today to discuss our second quarter 2020 results. After my remarks, Dale will review our results in additional detail, then you will have the opportunity to ask questions. The second quarter was a very challenging environment as the COVID-19 pandemic continued its spread and disruptive impact on the U.S. and global economies. We saw material cuts in steel production across our key geographies that led to lower demand for Met Coal. In addition, Met Coal pricing hit a four-year low point in early June. These key factors had a significant impact on our financial results for the second quarter, as we will explain in further detail. The widespread outbreak of COVID-19 has affected us all in new and unprecedented ways.

While we continue to operate our mines as a critical infrastructure business in the state of Alabama, these are challenging times, and I would like to thank all of our employees for their hard work and resilience. We've taken the necessary measures to adjust our workplace environment to comply with social distancing and personal hygiene guidelines set forth by various health organizations while maintaining our operations. I would also like to thank our supply chain partners who have adapted their operations during this pandemic to ensure that all of Warrior's customers receive their orders on time. As the quarter progressed, the full impact of COVID-19 on the global steel markets became apparent, with customers taking decisive actions to align their production levels with reduced demand.

These actions have varied from simple operating rate adjustments to the idling of blast furnaces, and in some cases, the intent to permanently close down older and less efficient production lines. The results of these actions can now be measured through the global pig iron production data from the World Steel Association, where most of the steel-producing regions, excluding China, were down significantly, an average of 20%-35% for the second quarter. For the first six months of the year, global pig iron production was down 3.6%, while China continued to surprise to the upside, growing its production by 2.2% for the same period. It's worthwhile pointing out that India's pig iron production, which is of growing importance to the global Met Coal seaborne trade, was down over 32% for the second quarter compared to last year.

The rapid onset of production cuts across most of the world quickly translated into a softening Met Coal market, resulting in a price correction for Met Coal. Despite several announced production cuts from Met Coal suppliers, the rate of decline in demand was simply too steep, far outpacing the supply response. On April 1, the Australian PLV was valued at $145 per metric ton before being impacted by a major correction, losing almost 27% of its value prior to reaching its low point for the quarter of $106 per metric ton on June 2, a valuation not seen since 2016. By the end of the quarter, the index regained a small portion of its losses, closing at $116 per metric ton.

In addition to being challenged with lower index prices, Met Coal producers were also impacted by lower relativities due to increased competition on fewer spot opportunities, and in some cases, coal blend adjustments made by customers as a result of increased coking times and other cost-cutting measures. There's little doubt that these pricing levels have cut deep into the global cost curve, with several Met Coal producing regions trading at or below their cash costs. While I know many people are thinking about what this means for future quarters, let's take a minute to look at the second quarter results in more detail since they do provide an important data point. Sales volumes in the second quarter were 1.5 million short tons compared to 2.2 million short tons in last year's second quarter, which was a record quarter for Warrior.

Our sales by geography in the second quarter were 75% in Europe and 25% in South America. There were no sales into Asia in the second quarter this year compared to 18% in the same period last year as a result of customers significantly cutting back on steel production in countries such as Japan and South Korea. Production volume in the second quarter of 2020 was 2.1 million short tons compared to 2.2 million short tons produced in the same quarter last year. As expected and previously communicated, inventories were higher at the end of the second quarter than the first quarter of 2020. Inventories increased 593,000 short tons to 1.6 million short tons during the second quarter, primarily due to lower sales volumes.

We expect our inventory levels to temporarily remain elevated as a precautionary measure to reduce the risk should the mines be disrupted or shut down by a COVID-19 outbreak among our workforce. Also, the higher than normal inventory levels will allow us to capitalize on market opportunities that may become available as a result of our competitors being idled or shut down for lengthy periods of time. Our gross price realization for the second quarter of 2020 was 100% of the Platts Premium Low Vol FOB Australian index price and was higher than the 97% achieved in the prior year period. Our higher gross price realization was primarily due to the falling price environment during the month of June. The company spent $31 million on capital expenditures and mine development costs during the second quarter of this year compared to $34 million in the same period last year.

This amount includes the longwall panel development costs for the 4 North Portal. We will continue to balance our free cash flow and liquidity preservation against maintenance and discretionary capital spending and the long-term value of capital projects for the remainder of this year. I'll now ask Dale to address our second quarter results in greater detail.

Dale Boyle (CFO)

Thanks, Walt. As Walt discussed, the overall financial results for the second quarter were primarily driven by a significant reduction in U.S. and global economic activity as a result of the spread of COVID-19 this year compared to a fairly robust market environment in the second quarter last year. In addition, last year's second quarter was a record quarter for Warrior in terms of both sales and production volumes.

These combined factors led to 34% lower sales volumes and 38% lower average net selling prices, slightly offset by lower costs on tighter spending compared to last year's second quarter. As a result of the company's highly variable cost structure, these factors explain the majority of the financial variances in the second quarter compared to the same period last year. For the second quarter of 2020, the company recorded a net loss on a GAAP basis of approximately $9 million, or a loss of $0.18 per diluted share, compared to net income of $125 million, or $2.43 per diluted share in the second quarter of 2019. Non-GAAP adjusted net loss for the second quarter was $9 million, or a loss of $0.18 per diluted share, compared to $2.16 of income per diluted share in the second quarter of 2019.

Adjusted EBITDA was $20 million in the second quarter of 2020 as compared to $176 million in the same period of 2019. The quarterly decrease was primarily driven by a 34% decrease in sales volume and a 38% decrease in average net selling prices. Our adjusted EBITDA margin was 12% in the second quarter of 2020 compared to 44% in the second quarter of 2019. Total revenues were approximately $164 million in the second quarter of 2020 compared to $398 million in the same period last year. This decrease was primarily due to the decrease in sales volumes and average net selling prices in a weaker market environment due to the impact of COVID-19. The average net selling price per short ton decreased approximately 38% in the second quarter of 2020 compared to the same period in 2019.

As you may recall, last year's second quarter saw stronger met coal demand and higher pricing. The Platts Premium Low Vol FOB Australian index price averaged $85 per metric ton, lower in the second quarter of 2020 compared to the same quarter last year. The index price hit a four-year low of $106 per metric ton, or $96 per short ton, in early June. The mortgage and other charges reduced our gross price realization to an average net selling price of $108 per short ton in the second quarter of 2020 compared to $173 per short ton in the same period last year. Mining cash cost of sales was $130 million, or 82% of mining revenues in the second quarter, compared to $205 million, or 53% of mining revenues in the second quarter of 2019.

The decrease of $75 million, or 37%, in cash cost of sales was primarily attributable to three factors: one, a 34% decrease in sales volume; two, a 38% decrease in average net selling prices; and three, tighter cost management in 2020. It is noteworthy to highlight the company's variable cost structure in the second quarter, where cash cost of sales decreased $21 million, or 14%, from the first quarter of 2020 as sales volumes were lower by 19% and average net selling prices were 11% lower. Cash cost of sales per short ton FOB port was $88 in the second quarter compared to $91 in the same period of 2019. The decrease is primarily due to lower price-sensitive costs such as wages, transportation, and royalties that vary with Met Coal pricing.

While our cost per ton FOB port was higher in the second quarter compared to the first quarter of 2020, the change in volumes somewhat distorts the picture of total spending. As I pointed out earlier, our total spending on cash cost of sales declined 14% from the first quarter, and volumes were 19% lower. SG&A expenses were about $8 million, or 5% of total revenues in the second quarter of 2020, and were 22% lower than the prior year period, primarily due to lower professional fees and employee-related expenses. Depreciation and depletion expenses for the second quarter of 2020 were $22 million and were 14% lower than the same period last year. The decrease quarter-over- quarter was primarily due to lower sales volumes.

Net interest expense was about $8 million in the second quarter and included interest on our outstanding debt, plus amortization of our debt issuance cost associated with our credit facilities, partially offset by interest income. This amount was $1 million higher compared to the same period last year, primarily due to incremental borrowings on our ABL facility and lower returns on cash balances. We recorded a non-cash income tax benefit of $4 million during the second quarter of 2020 compared to income tax expense of $33 million in the same period last year. Turning to cash flow, during the second quarter of 2020, free cash flow was positive, which was the result of cash flows provided by operating activities of $32 million, plus cash used for capital expenditures and mine development costs of $31 million.

Free cash flow in the second quarter of 2020 was positively impacted by a decrease in net working capital. The decrease in net working capital was primarily due to lower accounts receivable, offset partially by higher inventory. Operating cash flows were significantly lower in the second quarter of 2020 compared to 2019, primarily due to lower sales volumes and lower average net selling prices. Cash used in investing activities for capital expenditures and mine development costs was $31 million during the second quarter of 2020 compared to $34 million for the same period last year. While spending was lower by 9% this year, we continue to rationalize spending in this challenging market environment.

Cash flows used by financing activities were $37 million in the second quarter of 2020 and consisted primarily of the repayment on our ABL facility of $30 million, payments for capital leases of $4 million, and the payment of the quarterly dividend of $3 million. Of note, our balance sheet remained strong with a leverage ratio of 0.9 times adjusted EBITDA. In addition, we have adequate liquidity in light of the fact we have shed our fixed cost legacy liabilities and today have a low and variable cost structure and no near-term debt maturities. Our total available liquidity at the end of the second quarter of 2020 was $268 million, consisting of cash and cash equivalents of $221 million and $47 million available under our ABL facility, net of borrowings of $40 million and outstanding letters of credit of approximately $9 million.

Our strong balance sheet and total liquidity position allowed us to pay back $30 million on the ABL facility to keep our interest costs low. Now, turning to our outlook for the remainder of the year. On April 29, in light of the uncertainties regarding the duration of the COVID-19 pandemic and its overall impact on the global economy and the company's operations, we withdrew our full year 2020 guidance. We initially delayed the development of the Blue Creek project until at least July 1 and have now further delayed that project until at least the early part of 2021. This decision is not based on changes in the perceived value of the project, but rather on our short-term focus of preserving cash and liquidity. We also temporarily suspended our stock repurchase program.

We will continue to evaluate the impact of the COVID-19 pandemic on our business for the remainder of the fiscal year and expect to provide further updates to our financial outlook and the development of the Blue Creek project during our next quarterly earnings call. We also are continuing to appropriately adjust our operational needs, including management expenses, capital expenditures, working capital, cash flows, and liquidity. I'll now turn it back to Walt for his final comments.

Walt Scheller (CEO)

Thanks, Dale. Before we move on to Q&A, I'd like to make a few more comments. While we ended the second quarter with limited visibility and high uncertainty about customer demand, we now enter the third quarter with different expectations. We have reasons to believe that the worst in terms of reduced steel production is most likely behind us. At the same time, we remain concerned with pricing levels.

Most of the major steel demand sectors, such as automobile production and construction, to name a few, have started to show positive improvements from their recent lows. As a result, several producers have made plans to increase operating rates, albeit slowly and with measured adjustments. However, it is also clear to us that our customers still cannot predict when the demand for their products will return to pre-COVID-19 levels. In addition, most of our customers remain challenged by thin margins due to lower demand for their products, multi-year low steel prices, and sustained high iron ore costs. Hence, we are cautiously optimistic for third quarter volumes and will continue to keep close contact with our customers during this period in order to optimize our sales orders and capitalize on opportunities that meet our profitability threshold.

As previously mentioned, we expect that our current inventory levels will remain elevated through year-end, as we intend to adjust production rates in accordance with demand and as we manage for potential disruption risks due to COVID-19. Obviously, if we have the opportunity to sell additional volume materializes, we would expect to see a more rapid decrease in our inventory levels. As for the outlook on Met Coal pricing, we believe current market forces will continue to limit the upside potential of all major indices. In order to change our short-term view, we need to see a combination of factors such as material improvements in the imports of seaborne coals into major markets like India, additional supply cuts from high-cost producers, as well as some level of clarity around the import restrictions in the Chinese ports.

Despite the many unknowns, there are a few important reasons that our business is well-positioned to weather any prolonged economic challenge. One, our highly talented workforce is committed to safely and efficiently driving results. Two, we maintain one of the world's highest quality Met Coal portfolios and have strong long-term customer relationships. Three, we have a strong balance sheet and adequate liquidity. Four, our low and variable cost structure enables us to drive high margins and free cash flow across most business environments. Five, we have made significant investments in our operations over the past three years, allowing us to now reduce capital expenditures as needed without significantly impacting our operations. As a result of these factors, I'm confident we will emerge from this health crisis ready to achieve our long-term growth potential. With that, we'd like to open the call for questions.

Operator.

Operator (participant)

We will now begin the question and answer session. To ask a question, you may press star and one on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star and two. At this time, we will pause momentarily to assemble our roster. The first question comes from David Gagliano of BMO Capital Markets. Please go ahead.

All right. Great. Thanks for taking my questions. I just wanted to drill down a little bit on some of the expectations for the near term given the inventory build here and the weak market.

Can you give us a sense as to what your thoughts are with regards to third quarter operating metrics, ideally production, and—sorry—sales volumes to the extent that you can give us some sense there? Also, production and cash costs, I noticed crept up to the upper 80s. Is that a level that we should be assuming moving forward, or do we expect it to get back down to the low 80s in the second half?

Walt Scheller (CEO)

I think we intend to, as we said, we think we saw the low point in Q2, so we expect to see a little bit of strengthening in Q3 and Q4. I'm not going to say that'll be to a huge degree, but we expect to see a little strengthening in terms of demand. In terms of our cost structure, we intend to match more closely our production to our sales expectations.

To the extent we view that as being a little lower production, production always kind of drives costs, so I would expect that our costs will be not significantly different from where we are today.

Okay. With regards to the capital allocation change, as far as CapEx for full year 2020, what's the latest target there?

Oh, yeah, we haven't released what our target is. We're squeezing our capital as well. I mean, we're looking at everything we're doing. A lot of that capital is going into 4 North, which is the future of Mine 4, and we don't want to stop spending that capital.

Dale Boyle (CFO)

David, this is Dale. I'd just add that, look, we're just going to balance all of our spending with what volumes and pricing look like with a goal of trying to be free cash flow positive the remainder of the year.

We may be a little above or a little below that, but we just continue to rationalize all our spending. There are certain CapEx projects we want to continue, and we think that we can do that by just managing all of our spending altogether.

Okay. I mean, at least for the Blue Creek, it sounds like obviously pushed out to the beginning of 2021. I think there was $25 million or something like that. Maybe I'm wrong, but $25 million-ish that was earmarked for early spending in 2020, second half, perhaps. That's obviously not happening now in 2020. Is that reasonable to assume?

Walt Scheller (CEO)

That's correct. We have minimal spending for Blue Creek for the entire year.

Okay. All right. That's it for me. Thanks.

Thank you.

Operator (participant)

The next question comes from Scott Shear of Clarksons. Please go ahead.

Good afternoon, everyone.

I think I asked this last quarter, but given kind of the inventory build, I wanted to try again. Are you anywhere close to capacity at this stage? At what point, if any, would you consider or kind of be forced to slow production rates to try to manage inventory levels?

Walt Scheller (CEO)

We are not close to capacity at this point, but as I have already said, we intend to more closely match production with our sales volumes. I would not expect an inventory build going forward. Hopefully, we will see a little bit of a reduction.

Okay. That is helpful. Switching gears a little bit, I was hoping you could just give us a little bit more market color on what you are seeing currently in terms of demand.

Could you talk about any kind of bright spots you're seeing, what areas remain weak, and what your sales split was over the quarter?

Our sales split over the quarter was 75% into Europe, 25% into South America, as I said. We didn't move anything into Asia in the second quarter. In the third quarter, we expect to be moving some callback into Asia. I think we'll start to move back toward where we were historically. I don't think we'll get there in one quarter, but over a period of a couple of quarters, I think we'll get back to the same levels where we were historically, which was 50%-55% into Europe, 25% into South America, with the remainder going into Asia.

I think we've seen across all of the areas in which we do business, the demand, everybody kind of hunkered down in Q2, and I think we've seen the demand on all of our customers pick back up, maybe not to normal levels, but to levels that were higher than they were in Q2. That is in South America, Europe, and as I said, we know it is in Asia because we're going to move some coal into Asia this quarter.

Okay. Great. I appreciate all the color. Thanks for taking my questions. Best of luck.

Thank you.

Operator (participant)

The next question comes from Lucas Pipes of B. Riley FBR. Please go ahead.

Lucas Pipes (Managing Director)

Hey, good afternoon, everybody. Look, I wanted to follow up on some of the earlier questions and maybe approach it slightly differently. Can you share your commitments, volume commitments for the second half of the year?

Walt Scheller (CEO)

You know what? We do not normally do that. I can tell you that normally we had normally been in the 70%-80% committed with 20%-30% spot sales. In the second quarter, it was more of a 50/50. Like we expected volumes, I would expect those numbers to move generally back closer to normal. We may not get there by the end of the year, but I would expect the committed volumes would go well north of 50%, and spot volumes would drop naturally below that level that was at in Q2.

Lucas Pipes (Managing Director)

Okay. That is helpful. Kind of a gradual ramp up towards the more typical range of 70%-80% over the back half of the year.

Walt Scheller (CEO)

Yeah, I think so. I think that is reasonable.

Lucas Pipes (Managing Director)

I appreciate that.

I wanted to get a better sense for what to expect on Q3 pricing. Obviously, that's a moving target with where spot prices are. I'm hoping they'll recover like some of the other commodities. What's your read just in terms of mix between number seven, minus four, the inventory that you have on the ground? Is it pretty plain vanilla for Q3, or any kind of special items that we should take into account given this very uncertain environment here?

Walt Scheller (CEO)

I think in terms of pricing, as I said, there's going to have to be some significant changes for us to see significant changes in pricing. I think we'll be kind of range-bound. I don't know. Even though we saw a low of $106, I think that's about where we are today. I think we're going to see that kind of being around the bottom.

I don't see any reason for prices to go significantly up at this point. I think we'll be kind of muddling through this type of pricing for at least a quarter, and then we'll see what happens into the fourth quarter. In terms of inventory mix, that shifts quarter to quarter. I don't think we'll see any dramatic differences in which coals move from where we have been in the past.

Lucas Pipes (Managing Director)

Okay. Really appreciate the color and best of luck, especially during these times.

Walt Scheller (CEO)

Thank you.

Operator (participant)

Again, if you have a question, please press star and then one. The next question comes from Alex Hacking of Citi. Please go ahead.

Alex Hacking (Equity Research Analyst)

Hi. Thanks for the call. Just to follow up on the sales question one more time, if I may.

Is there any way you can quantify the kind of improvements that you've seen in July and maybe June from what you were seeing in April and May? Thanks.

Walt Scheller (CEO)

It is really when we look out, we're looking out a couple of months as we go in terms of what commitments are made and what vessels are nominated and those things. What we've seen is just the difference between the commitments that we had for June versus July. June was significantly lower. As we look at where our commitments were for July and August, we just have reason to believe Q3 will start to move in the right direction in terms of demand.

Alex Hacking (Equity Research Analyst)

Okay. Thanks. I guess just following up on Blue Creek, this is a project that's going to have a long development cycle, and met coal prices are going to be volatile.

You're able to kind of postpone the project now because it's still in the very early stages. If we're two or three years into the development and met coal prices plummet again, would you guys have the flexibility to kind of push back development? Or once you guys are seriously into the weeds on the project, do you kind of need to push ahead? I know this is a very forward-looking question on a project that hasn't even started yet, but I'm just trying to get a sense for how future volatility is going to affect things. Thank you.

Walt Scheller (CEO)

Sure. Thank you for the question. What we've said in the past about the Blue Creek project is it's kind of a, we kind of built it as a staged project where there are some lumpy items.

For instance, the initial development of the shaft and slope and a few things like that. Once you started, you kind of need to finish it. It is kind of a natural breakpoint where if you wanted to stop the project before you started CM development, it would be a very easy time to do that. Once you have started CM development, it is still relatively easy to stop at any point going forward from there. At that point, the lumpiness becomes around building of a prep plant, which is something that once you started, you kind of want to finish it, a few things like that. We have fashioned the project so that if we did need to stop, if things turn south and we want to stop the project, there are some very clear financial needs that we would have for given periods of time.

Alex Hacking (Equity Research Analyst)

Okay. Thanks. Just one more if I may. You mentioned earlier potential, obviously, that a mine could get closed by COVID. I mean, how concerned are you about that? How is the situation in the areas that you're operating? How much absenteeism are you facing at the moment? Any color there would be helpful. Thank you very much.

Walt Scheller (CEO)

We've had a few positive cases, and we've worked very closely with the hourly workforce to identify how we would address those types of situations. Thankfully, we haven't had any real outbreak at our operations. Here in Alabama, the numbers have been going up, so I can't tell you what will happen tomorrow. We're prepared.

As I said, with the inventory levels, if we do end up in a situation where we need to shut down for a few weeks, we're prepared to be able to do that. We've kind of tried to, when we can run in the second quarter, we ran hard to make sure that if we did have a situation arise, we were prepared for it.

Alex Hacking (Equity Research Analyst)

I appreciate the color. And good luck. Thank you very much.

Walt Scheller (CEO)

Thank you.

Operator (participant)

Thanks. Again, if you have a question, please press star and then one. The next question comes from Chris Terry of Deutsche Bank. Please go ahead.

Chris Terry (Director)

Hi, Walter. A couple of questions from me. Just starting on the second quarter costs a little bit further, is there a dollar per ton number that you'd be willing to talk about that's related to the actual COVID impacts?

What is that going forward? Does it actually impact, or is it so immaterial that you would not quote that number?

Walt Scheller (CEO)

Yeah. Thanks, Chris, for the question. It is not material. We are incurring some cost for temperature checks, things like that. I think probably seeing more on the inefficiency side with staggered shift times, the number of fewer people can go down in a shaft at a time and on main buses. More inefficiencies, I would say, rather than just direct cost.

Chris Terry (Director)

Okay. Okay. Thanks. Blue Creek, I know you have had a lot of questions on that so far, but just one other one. You will basically go through the second half of 2020, and then you will get to the start of 2021. It will depend on if we still had coal prices where we are today, you would probably defer that again?

Or what's the decision process to actually start it?

Walt Scheller (CEO)

You know what? That'll be part of our budgeting process that we will work through with the board, and we'll take into consideration where the market is, where we see the market going, and how do we finance the project. We will look at things carefully toward the end of the year and determine how do we approach it going into early next year.

Chris Terry (Director)

Okay. Thanks. Just one final one from me. I guess with the election not too far away to the end of the year, is there any impact to your minds at all related to the Streams Protection Act? Just wanted to understand that a little bit better under either party, just some of the operating conditions if there's a change in the current government.

Walt Scheller (CEO)

In terms of I think you were asking about the Stream Protection Act, I think that would all depend on we have no idea what that would look like and what challenges there would be to it and just what all would be included. It would be really difficult for me to speculate as to what any impact would be from that.

Chris Terry (Director)

Okay. Thanks. Just circling back to, I guess, the inventory that you've said, trying to match inventory levels over time, once you get through the actual COVID period and there's less risk around any uncertainty on the operation side, what sort of levels of inventory do you like to carry, or what do you think is a good number to use maybe next year, etc.? What would that number be ideally?

Walt Scheller (CEO)

I think long-term, and I'm not going to say that means early next year or anything, but I think long-term, we've always said less than 500,000 makes sense.

Chris Terry (Director)

Okay. That's it from me. Thanks, guys.

Walt Scheller (CEO)

Thank you.

Operator (participant)

Thanks. This concludes our question and answer session. I would like to turn the conference back over to Walt Scheller for any closing remarks.

Walt Scheller (CEO)

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

Operator (participant)

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.