Warrior Met Coal (HCC) 8 May 222022 Q1 Earnings call transcript

Good afternoon. My name is Rocco, and I will be your conference operator today. At this time, I would like to welcome everyone to the Warrior Met Coal First Quarter 2022 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. is the and company's call for be This on replay website. Instructions] being will recorded available [Operator

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

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

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

Scheller, Financial and Dale sir. Here today to Mr. discuss Officer. the begin Walt Executive Boyles, Mr. Chief company's your Chief you Mr. results may Scheller, remarks, Officer; are

due was due sustained volatility and met We're economic throughout steel the global potential positioned future. customers. customer in well and have operator. review second join the to discuss our The today the to first to quarter our We pleased for restocking the met questions. tight were of opportunity the Hello, to steel by for to production. my strong years earnings Thanks, Dale time commitments to of of quarter remained After even global quarter, ask everyone, taking additional over face Demand supply to continuing deliver on the back detail, during continue premium coal us results the results. in strong you'll its record remarks, first first X quarter in coals production thank even our you XXXX our with to reduce in of consecutive then China quarterly customer meeting demand. and will

prices market Russian in of past pricing experienced searching already quarter was the recent a responsible that in this tight alternative volatile in associated [Technical The The coals for surge uncharted buying an invasion territory. most Russian in Ukraine. also Difficulty] history. with panic pushed due largely short-term demand making to the buyers period for We

we brought the pricing back gains the However, in all war. on the a short-lived major give by portion substantial saw of was indices spike as

PLB, metric metric started to the quarter XX, by ton Our over March the ton, the per per peak ton primary ton. then FOB on metric index, of quarter $XXX Australia $XXX per $XXX at while $XXX metric its per at closing climbed

constraints In to Australia continue supply in problem strong addition weather-related America. a be issues and shortages in to logistical demand, to mix North of due a

Ukraine previously imported the buyers already of initiate were Russian As following U.S. purchases coals the Olympic Games. Chinese We the of mentioned, invasion tight market from to only exacerbated expecting the conditions.

largely decreased while China as X.X%. the in to recent measures by as production period, X.X% the production bonded by lower to the X Olympics in decreased the for historical world's production the put albeit to residual restrictions. well Association The Australian steel in However, most transactions iron levels and rest mills imported North pig With production lower in coal Mongolia, the mostly strong recently of production production months as customers shutdowns XX% the for completed they suppliers as and the due reported for of that World early coals in with very were on landborne global warehouses. lower from COVID of the were XXXX. few first quarter, American manage Chinese calls than domestic place a is China's a Steel the steel remain of between Only entire the the able of quarter. sidelines recorded steel well related for pig days Chinese the iron quarter. decrease

supply ongoing rest of the to previous despite the While steel remains the in lower demand steel production the compared overall lower year. volumes world due to chain volumes issues, the solid were

year quarter short quarter our in first the year. X.X was in volume million same last the for tons sales million compared As Warrior, this short to tons X

This primarily the tons strike the ongoing than second last year, to shipping total approximately delays plus due March. some into production the due slipped volume, labor delayed shipments half in first lower that the and maintenance quarter to quarter was XXX,XXX Shredging port. into the at lowering of congestion quarter

our failure higher final the While our sales slippage million. loading second demurrage March, in the These sales in of the costs quarter. which weeks caused volume quarter the last ship the loader the volume volume vessel into resulted XX% of shipping mechanical the few of backend quarter nearly of loadings, issues incurring in related and $X

EPS poor although EBITDA not reduced by our the timely in was income million net performance adjusted as getting addition, We a and our by approximately million, provider transportation believe port by significant product in delays of our quarter $XX $X.XX. to rail manner. the first $XX these In

XX% during index January. in were the the quarter FOB Australian price the X as Our We South entire below quarter price in first and any sell was the CFR in except in into for in geography by volume XX% the first China sales not America days the in Asia. early XX% the quarter, Europe, did China

first the to sales the units XX%. tons was X.X in in first and continuous quarter longwalls of compared in approximately short quarter Production million Mine year X year. last X volume short X.X tons first spot the X. units the The same in Mine million both the longwall miner and quarter continuous of Our miner this tons were quarter from of X in resulted running produced

volume. Our in quarter in nameplate at quarter the including hourly and of year full represents work invest early flow change quarter spending the X business, tons. and most expect the our ramped year. recently of approximately light representing on year, and first $XXX keep XX% we generation purchase to our running in for Board well was well in of cash production efficiently portal, Capital for the our to company's as $XX next sets XX% and finished and completed the did mine philosophy million the the very note, while efficiently. we salaried the lead normal Mine combination the during development of mines and significant core workforce up million new million materially of existing be approximately the free [Indiscernible] shields current capitalized We the solid. this about On normal to approved quarter producing performing our X This of production which first capacity the and not XX% days approximately investment to that longwall remains the of of minds remained X mines. X longwalls on of employees, on the its of another target North the

We down is be XXXX. quarter in the which payments to make third our this expect in annual guidance reflected expected to is and of delivery year, final

to we on Dale to week. results the Before in important earlier made first exciting I detail, and I ask our wanted moment to announcements greater address quarter this comment take a

decided capital $X.XX an value regular the since value Creek capital long-term why stockholder discussing addition we understanding also about our our cash creation the dividend. Blue with special Board unlock update of Creek Specifically, cash on approach special development accelerate to share reserves, and returns framework approach returns umbrella by and allocation of dividend explains relaunch first to to announced to the dividends allocation. our for it of how per stockholder of think the Blue decision and we of dividends our provides our the our stockholder with in start I'll enhance short- and our quarterly

and cash us look from perspective. let First, at we a operating are where

We cash the for are stronger cash in met to current position over industry outlook years. a flow higher near we ago, in flow coal X cash future. significant pricing of upon today than years generated we the generate free X significant the term, Based having amounts will last the continue free much were

Second, to successfully years low strong as approach coal This to cash and regardless market in operate the of operating or maintain has liquidity leverage to enabled significant we've despite met continue position. will demonstrated volatility market. our over That through ability change the few company past cycles with a headwinds. pricing us flexibility macro not our low-cost,

put moment. cash to extremely to allocation to excited the additional have of balance the capital our allocation to and work, stockholders. have, the prudent in business In and us Third, flexibility let same liquidity we within company. making in built our now, to generation investments me at is both summary, long-standing us capital principles, give necessary But and free to Warrior flow through cash up this always the point, returning transform that we've Blue Creek tell everyone capital our will following cash while allow as are a we say our Dale potential scale. about you about more

of are stockholders We to track build this with about creating a for the enthusiastic strong value on project. opportunity record

demand that vol this timing for blending the Importantly, the to continue will for believe project premium ideal. relaunching high unique A increase is their due to attributes. coals We

premium the Blue strong the vol future. projects, States projects a high new our in Creek's and which considerable of overall support fundamentals lack will suggest X of constrained product. in the X lack Tier remain of and to supply United While due production declining A for the coals pricing demand Tier quality

highest our second growth and short of in tons. XX scheduled its development schedule, million short our resources annual rate IR detail tons quarter on All factors a We the met the of from the XXX to XX expect the we premium part reserves of cost increase the million of to which miner Creek, seaborne mine of believe will our mine markets. achieve our is expected Creek global Creek Once are portfolio X.X vol Another expand customers we've curve. in an offering developed Once of prices to product in at an resulting in XXXX, premium quartile million approximately slide global production XX%. short and fully start production year, quarter premium is in highest X attractive occur costs feature Creek, up this of margins met annual of of of this per expect we we A coal some to totals nearly can combination the found in third first per to first much single of expected coal. longwall U.S. coking coal developed, XXXX. tons to The tons production Based generate XX met expected be average section tons We year presentation units could of be website. million of continuous nameplate that is mine the the these of by Blue in with short the the to Blue Blue new new expect on short coals seaborne new capacity million produce the tons more to high the Blue control longwall the current

As the fruits to not I our transformational Creek for to Blue a We opportunity seeing start this Warrior. project development of look investment represents once the will mentioned, could on provide excited additional more be additional and now completed. our is approaching in address Dale forward results greater financing be to first our quarter we Blue capital metrics Creek. detail, around for provide strategy some allocation the able information how and are

Walt. Thanks,

I Before into how we Creek about address capital ahead Blue to detail project. go we're want move about allocation while I with the the thinking quarter,

opportunities to the stock focuses through to liquidity as release now special are cash Creek current cash laid on position, regard in there coal we issued policy volatility free our we and specifically, cash time strongly which those the are in to medium returns balancing of our that including and ability appropriate to amount achieving the make context accretive Blue capital minimum our dividends repurchases, certain X, right through of with allocation More of X.Xx to focusing growth additional decisions, those balance investments which return the second, capital metric our key development minimum growth our the They key strong investing $XXX for such as NOLs press our could May first, thinking. market, our or long-term including the of in approach. our provide Creek. to maintaining to highly to million; metrics value we is $XXX In stockholders. near-term believe Xx cash third, allocation a a balance our And to They million, operations on out regardless leveraging that Blue capital met include: of repurchases. guidelines stockholders levered. NOLs. policy We staying stock flow provide of on we higher with Given fund liquidity allocation, capital total the jeopardize

Blue the in an to the of move Creek. now project of expect investment we potential criteria. Creek The one project, Turning rate assets of the rare to Creek In Tier approximately forward the X deterring our the return country, Blue with large-scale Blue to to compared attractive internal we investment on our as deliver XX%.

think about will we account there alternatives $XXX $XXX our beyond look will are how that for opportunistic cash enabled in As million we prudent flexible be financial operations has the to our of to free tap We're approach. financially to pleased take million we opportunities best to strong If so. resources, to flow. funding evaluating us base do external investment, this

the per development internal the or much considering project tons be However, and special enough there entirely required repurchase are we currently that and factors stock would point, as Creek X the for X-year generate external we during in now, to construction pay period free and experiencing. In dividends short cash Blue the early despite to the expect the million At years. move decision forward we year. debt of retire to XX expect approximately as of timing by project producing that pay company inflation influence free our several flow the cash, with the debt investment, while are

XXXX, fourth we the last maturity of Creek the debt and XXXX. late year out in start longwall pushed quarter in refinanced beyond First, the Blue the until our well

increased liquidity sheet. and $XXX an of cash XXXX, Blue has liquidity and of balance since significantly $XXX intention million cash including an originally announced our additional our our Creek Second, early total in million on we with additional

And maintain further conditions of project. financing online the increasing should the prices accelerating in allow years market and if year, the production the time the cash strong line generate X of capital returns high stockholders, to the that, Blue construction free Fifth, of sooner, remain X-year Third, available make we stockholders. cash bring first free quarter the of in These to needed of options to development senior cash before our the this and Creek results. structure. low-cost over period will Creek deliver factors, the that value and confidence the with company both notes. project. these that liquidity reducing current our factors, balance the to generate free us maturity cash still I With efficient success the flows thereby combined can funding turn give additional flow in by to strong project addition strength XX to risk an next to years, Blue also further will profitability to finally, expect provide months both the to X flows Fourth,

the quarter as For a idle of excluding Non-GAAP offset the $XX XX% million quarter same The diluted expenses, per expenses was mine another high $X.XX for $XXX per in last was quarter of share selling sales $X.XX interruption $X.XX other primarily compared income average million income net the increase in the same per year. or decrease a quarter income prices, the by diluted diluted its $XXX compared recorded net the a net quarterly an or last first and to for of on first quarter quarterly a partially volume. XXX% last adjusted in the compared results quarter, record $XX net to in share was diluted record all-time non-recurring EBITDA net basis income per year. to adjusted same in Adjusted business a second year. the driven quarter this of of $X.XX of million of million year, first share by in increase XXXX, company consecutive GAAP loss quarter share,

current approximately We XX% quarter this believe adjusted that net of delays volume year, XXX% and to to same million quarter the average volumes shipping high the primarily was lower versus first increase compared XXX,XXX XX% last quarter the in financial delays partially were the adjusted due same environment. magnified by in first the million revenues million, share. first last quarter noted, the the XX% the impact increase tons, compared The in the the impact the $X.XX last to sales Total year. $XXX quarter $XX selling XX% offset EPS by million by was prices, Walt short income quarter period year. the net margin in reduced of was This by Our EBITDA previously in year. in pricing $XXX by sales per first by $XX same EBITDA

mark-to-market addition, to is our gas natural mark-to-market in a triggered on natural this $XX In million. put in prices, were prior This prices run-up other XX% non-cash has which increase in an offset Ukraine, by into loss revenues gas by impacted positively of the attributed hedge place quarter hedges in the first our to year loss hedges gas recently. war approximately

quarter results, price Demurrage index $XXX realization year operations quarter higher due first the our hedges. last average to not metric Premium quarter. price in The $X was selling and The his that per decrease Index other last gas ton lower delay ton ton cost in a an to up compared sales gross per year. higher ton of as as the year. Demurrage short discussed offset quarter to was of to $XXX in be XX% first year, $XXX $XXX due the this million versus with million variable compared impact year. revenues of low was vol charges per compared mining Platts generating are quarter year earlier same in net costs the associated quarter partially port million to price in the of same or reduced Our price-sensitive averaged due FOB first this million the just the The and or the could in much $XX in Australian primarily sales year this first issues volume, same $XX wages, to per the Cash higher $XXX XX% they million the last strong transportation XX% revenues for by quarter costs. XXX% averaged in comments. short were royalty metric $XXX total charges first of primarily and last approximately of quarter to Walt dollars price mining of

in on to dust roof ton the only were compared magnetite, same per cost materials transportation per bolts, met royalties on inflation, due the were other and and equipment. year to $XX Despite and for approximately in items compared short the prices, our belt increases variable in $X costs margins Cash coal of short higher ton. production of met costs year. $XX last both costs in the and addition, increase year. quarter cash plus cable, accounted first the rock inflation In such rising $XXX to and vary the increase, Cash higher cash $XXX ton, quarter demonstrating short flow. to significantly and cost $XX higher quarter pricing coal leverage driving wages, first last higher due FOB to royalty in the in year, ton compared was period port, the to same short an per costs that as were sales price-sensitive quarter first last this with quarter same Transportation the profitability approximately per of structure, inflation free of

on quarter transportation last As same first index the a X-quarter and basis, versus prices averaged year. $XXX costs quarter higher lag in may you the remember,

cost only higher prices pricing. than primarily XX% are transportation in of period-over-period, compared XX% royalty and components the higher royalty cost year, quarter $XXX last quarter normal costs of X/X driven the per costs per coal of As in larger first this same year, transportation approximately met percentage. a the the the to Variable by were of ton the ton significantly and variable result significantly

year, than retirement eligible higher royalty stay to first expect near and the price. in percentage due were X.X% to grants highs, year be revenues and total As total quarters. at SG&A costs coal expenses in same this expense, to million due quarter stock of $XX a all-time these employee our primarily last prices the we and a higher compensation the higher cost higher stock coming about or our were of or transportation equity quarter cash XX%

expenses. During $X legal expenses primarily expenses non-recurring were strike. capacities, ongoing expenses directly were at the first These operations for expenses and labor labor, as Idle we other safety first taxes at incremental and quarter, both fixed the are and that and the interruption mine business electricity, and reduced security, with mines, in primarily incurred in to non-recurring labor incremental of million negotiations insurance, $X related million quarter were running such nature. represent maintenance, the incurred

cash Turning to flow.

accounts negatively net $XXX XXXX. combined in capital lower increased an primarily higher volumes, the quarter $XX for in and resulted operating by increase we pricing, from million which this shipping to During due due which this flow in XX% first free flow, free of of The XX%. met of capital previously mine inventories increase of last the of year's generated was from flow year, conversion used This the fourth quarter cash less our increase million activities costs Free working resulted $XX by sales first the first of quarter with $XX of expenditures coal development delays flows this on million, quarter cash impacted year noted. versus working of cash capital in quarter net receivable cash to provided in cash million. was

$XXX liquidity available available or our $XX of total over XX% increase approximately and representing was outstanding million the quarter credit net quarter at cash cash under the $XXX equivalents the of of of Our of million, an ABL XXX of This end fourth of is $X facility. and consisted of XXXX and million million. first letters

to at environment final about The operating without production of outlook the Mine and now X than guidance include section and lower running believe outlined production. of we We contract, capacity restart it for our we meet well able I'll be new Mine the to comments. Now anticipate Walt and back believe customer for of including turning his that X we'll at to normal labor are our operating In the release. positioned XXXX. for to fulfill volumes commitments earnings XXXX. turn volumes, sales a outlook current XX% and our rates

Thanks, Dale.

like on final some for to the quarter we XXXX. I'd full of to second our year and Before make outlook move Q&A, comments on

As due earlier and of structure, cost quarter to variable remarks, cash ton significantly his Dale the the as our such plus XXXX first was components transportation royalties, the impact short our wages, cost of in noted in per higher of inflation.

this expect historical continue coming higher costs of into We trend the until quarters royalty normalize to transportation and prices back levels. to

Another may hit we our cash supply intended consumer is and with rising impact fastest price as up earlier. the along demand its of noted high. the factor rate, to X.X% stimulus cost inflation, pandemic-related that to negatively pace impact a decades XX-year an up U.S. March index as inflation push in X measures the imbalances, in annual economy, shore

As in to XX% rates, steel year. we quarter, and increases expecting other XX% materials freight from and last we're supplies anywhere this prices, labor stated

noted increases bolts, among per during roof and These year. Dale inflation cost earlier, rock the As we magnetite, the structures, inflation things, quarter of incurred short affect, first dust purchases. equipment approximately cable, other of $X machinery this higher belt and ton

the renewed first The quarter it weeks of energy pressures right risk remains coal Russian buying We rise high due Russian in economic China strength expect certain indices coal continue making downturn But global brought coals the inflationary reversed are how and as India costs. for in as coals and and is Russian customers indices purchasing current bands recent being. time the met of the continue as to some difficult expected to for to additional such from high sanctions few of be the geographies to have do suppliers. the

of from supply be expect beginning to year. Australia we in addition, second In the stronger half the

to supply expect and of result, demand a we purchasing lower As improved provide managers. pricing to relief combination the

above expect remain we'd call still for like as disruptions pricing open of questions. to Operator? result cost the to Ukraine. by trade curve economics in caused that, With we war However, a the

Today's Capital Instructions] comes first with David Markets. [Operator from Gagliano question BMO

unwind, the it million a On the and I'll try the timing reasonable obviously, on year on of few. pretty should a just of in few volumes to think keep guide X.X quarters? few over have it first the on near-term Or assume the tons unchanged them for you think, midpoint, inventory that a sort of about per all, sales, quarter quarters, evenly on that's basis, increase. I how if sales -- piece? tight. take I implies the next spread the next of Is average we significant

the question, expect This David. more to Walt. it half be for back is would I Thanks loaded.

we'll to the some where second on dumps. at quarter, think continue issues I one car of see the they're down the port working

So as and not I expect the be. second will quite quarter third as quarter fourth the be strong to

little So it back a be more I will think half loaded.

just closely in CapEx the more Is plan then of to and returns was And that timing enough. plan makes Creek terms and between fund Creek Fair the schedule that to Okay. near cash with provided in enough cash more gears balancing the deck up switching other to sense. funding the term the to day, you Creek. shareholders? slide return of and Blue of to the this shareholder piece build cash then Blue Or start if returning upfront, do then the and Blue fund upfront essentially that

given that 'XX if Dale. building is over X/X continue would this say you we can spend next No, think prices to of do the than of have anybody David, time project. higher would more heading we shareholder that. into stayed returns longer do But presentation, think we We capital the at Yes. 'XX. the and cash, anticipated. look I I year, Obviously, the we're in

cash. year where we the or and markets cash coming we generating, are a to But X. going we're given special in little we're believe dividends could more that the the or So stockpile do multiple one

Okay.

that to answer. -- very bit so do Creek, on little down that's on And timing try and to the more have CapEx just I you the have -- helpful. and a drill Blue like want Would

balance want that have Or that of the return it? shareholders? think cash you on so reasonable saying Blue I'm you'd sheet not is $XXX would how to the And like the Creek before to is before CapEx, what assume to to to it cash million CapEx tied about

a we the mean, target that from in a where demand comments, because target -- look, start what of the any or said, But other all do and X-year the going you're pricing. said to we'll all drain fund going in cash coal and don't can at we will to want cash is then of higher just have while to markets go that And market don't price into a you the valleys markets the cash not No. so We set things minimum minimum. that year. times. going your the there's be our we look, can returning project. minimum you to whether with have you I can't expect it my fund met We've on, haven't of today. that over and the cash period, destruction construction, returns than peaks the that the predict so cash so in obviously, balance I million of than to all on turns shareholders, the want we if $XXX we are

the stockpile both, little objectives. both here cash So we do given and accomplish a think we'll ability to

to That's helpful. else. it Okay. over somebody I'll turn

Securities. of [Operator question comes next Instructions] B. Today's from Pipes Riley Lucas

are environment balance income. you prices Could generate and us this balances taxable in of this year? course of first this touch a like the you remind NOLs. when so wanted will what an robust I to remaining lot the the on affect How over today

NOLs it's into and of Dale. Yes. million almost in then had we federal Lucas, state $X almost $XXX thanks Coming for NOLs. year, the billion questions, your

how using prices lot given came of year we stay cash going are And NOLs remaining. use with of we're a lot this as those how those where this year. of and on just depending we're into yes, on they lot a depend a profitability, a as generating long high lot be will fast And to of So we them.

as be usage that will of year, we'll this at coming so cash so to no And to But but kind the to for for a matter continues of what. end be the BlueCreek. returns extra here year, as it's provide big shareholders -- well predict funding this hard where

the the second your quarter repurchases volumes capital And exhausted. your is that have Would Very year around of of even in we almost discussion returns, less and historically, first, given repurchases assuming such. than Yes. better And also your then look in the prominently up helpful. in the at list? priority move featured end this change, and discussions. share terms Would

second of do blow expect stay going I'm current here be pretty use going think fact, the seen swings, be expect be, correction and quarter. be them $XX. up or in would even going pretty in would them that repurchases you're not probably at quarter that the the we pretty we depends to early would year. as standpoint, in there's It overnight, year. pace, year. But Yes. obviously, of third probably stock I that from remainder sure this couple how to it the through swings the steep it's in quick. next fast to months, prices this last on We period But $XX, don't for significant we've to big really

So quickly. adjust real it can

and quarter the we'll So maybe or make decision second quarter. don't [indiscernible] as early it's as later think third that I but on,

that puts Warriors historical annualized production, the the million than And ton and at what would then and at are labor? where you say, approach Would you X level, higher X X Is does million takes. it the million kind the in today some that? what or ton to appreciate figure. maybe Is X the so look you when of color million approached could it tons on again? bridge compare X as I million periods key short-term there level an How the tons when plan? tons the are in were we're guidance we If to maybe -- or I past, are that mine level, perspective when how midpoint,

other really X to it XXX% labor. close than X, At capacity. tons Mine capacity, the we Mine X capacity. tons. you at X that million to full bridges up getting gets almost then Right entirely [indiscernible] XX% that or running at once back are now, we're more some entirely running you there's million and It's brings That another get about you just

We the see workforce continue to month-to-month. grow

through And labor will the to production we that so go continue our the as current resolve is year and/or grow expectation situation. we our

our continue through those methodologies. that's one of So expectations to grow to X

luck. color Really of best appreciate the and

today David of our follow-up is and Ladies BMO Markets. Gagliano gentlemen a next Capital from question

to thing, away spread. there know last so numbers. that discount, is to tricky, pricing from volatility to the pinpoint you The much of that said, what ago. question trying had move right. speaking relative kind related realized overnight a quarter, was timing like really impact that said We've has a I All a just at moment it's actually about benchmarks right, And always given you the on of deliveries even.

could the for look lagging -- generally a timing, were talk we was a If context. should pricing, speaking, wondering index if we current for on far quarter, to what's maybe if it how a bit lag we we realized about of for example? and average, assumption Warrior's just pricing back I reasonable be different is [May], little here at So

Typically, anywhere. our month. depends It based it's about up contract, but pricing set on on a is to based

to So set previous pricing. in averaging the our be from we'll days XX prices order

the And that's given assumption world everything reasonable still Okay. going a in today? on

variable pricing is only at the pricing that whatever reflective rail going when costs to because to though easily a said, could still reiterate is we in that have are Dale is to the set. be the of considerable pricing our day's and what previous or And is. done what quarter's was. pricing It I is adjustment spot want

adjustment quickly. will adjustment So X had quarter, rail if very you price significant follow necessarily a not in the

adjusted transportation So a you could see or quarter high rail that rates rates for price. high beyond

sale a and customer into everything of sensitivity appetite just I -- saying any base demand Warriors of mills given in about is you the know bit a That's bit sensitivity? And in in taking quite full just directly terms on for commentary in delivery I provides European Okay. what Europe. talk was helpful. if terms of their going regarding and could the price Europe, little wondering volume

we that those Europe we in of everyone Actually, in seen commitments fact, that. And the think out see trying replace of where And out coming to full from to demand going some haven't to customers. taking see very so when folks scramble figure change full deliveries and they're robust was we of Europe. were I and coal out to our Russia, demand increased is on customers in any still planning

got coal. They thermal with about some coal calls using Yes. even our

of a the lot we've in over the Ukraine. inquiries last couple given had situation of So months

Okay. That's helpful.

Nathan And at Martin our Benchmark Company. next question from The today comes

Congrats quarter. on the

have little of up probably most point, I'll been back think maybe mine come asked this a cash here. I cost bit but at to guidance costs. Obviously,

to I I was said cost recall, also elevated the you as Walter and stay first if is an that that elevated, like think related quarter, XX% comments, in mentioned But think variable you that. it's could Dale, commented your I we that of prices -- I versus the probably XX% costs roughly see variable if items. maybe level XX% normal, the in maybe think prepared it

question were is, new think has maybe of what you cost your year. raise you So we cash guess guidance, I off guys I assuming? in this fall you steep previously, my the there? pretty are changed a kind net through with as assuming view said progress How price

in metric and far I got the would did fall pretty far it next much X ton to $XXX. $XXX the average quarters prices the how to try in drop quarter, look to given draw even what how well, we think they and is Well, and say, first average a

that drop. kind to to a as number have before of upper another $XXX drop, developed then So around and our our a quarter quarter metrics transportation said, there's going because be steep around Xs or costs where we're we Walt going it's

why quarter that that's to So in we've lag. X got factor

Dale. Okay,

of XXX that's kind understand if upper year a average, new kind you full and correctly, incorporated guidance? XXX for that I in short-term and So to XXX assuming like XXX you're of

would Yes, like because average something somewhere that. every have quarter after to first quarter the $XXX,

So year. to for have pretty the have rest drop-off some you'd of big the

time. appreciate I really luck. of all That's sense. Makes it. Got Best I had the guys.

back our gentlemen, Scheller turn concludes I'd this to closing for like conference Mr. over the session. and to remarks. Ladies question-and-answer

that you Thank all for participating. you. concludes And Thank today's conference.

now may disconnect. You

you, Thank thank conference and participation. we all you Today's has now sir. your concluded, for

disconnect now your lines. a And may You evening. have wonderful