Attached files
| file | filename |
|---|---|
| 8-K - CURRENT REPORT ON FORM 8-K - James River Coal CO | jrcc_8k-043010.htm |
| EX-99.2 - James River Coal CO | jrcc_8k-ex9902.htm |
Exhibit
99.1
FOR IMMEDIATE
RELEASE
|
CONTACT:
|
James
River Coal Company
Elizabeth
M. Cook
Director
of Investor Relations
(804)
780-3000
|
JAMES
RIVER COAL COMPANY REPORTS
FIRST
QUARTER 2010 OPERATING RESULTS
|
§
|
Earnings
per Share of $0.84
|
|
§
|
Adjusted
EBITDA of $48.1 Million
|
|
§
|
Cash
Margin in Central Appalachia (CAPP) of $29.38 Per
Ton
|
|
§
|
Development
of New Met Mines Continue to Be on Schedule; All Expected Shipments are
Currently Unpriced
|
|
§
|
Named
to Forbes 2010 List of “The 100 Most Trustworthy
Companies.”
|
|
§
|
Conference
Call Slides Posted to Company
Website
|
RICHMOND, VA, April 30, 2010 -
James River Coal Company (NASDAQ: JRCC), a producer of steam and
industrial-grade coal, today announced that it had net income of $23.2 million
or $.84 per fully diluted share for the first quarter of 2010. This
is compared to net income of $28.2 million or $1.03 per fully diluted share for
the first quarter of 2009.
Peter T.
Socha, Chairman and Chief Executive Officer commented: “We had another strong
quarter. Our mine operations had a good quarter with production and
cost metrics. We were particularly pleased with our shipping during
the quarter. We believe that this reflects our close working
relationship with the railroad and our domestic utility
customers. With regard to the coal markets, we are beginning to see
clear signs of a recovery from recession levels. We will continue to
be patient with our contracting strategy. We believe that James River
Coal Company is well positioned for a sustained period of
profitability.”
QUARTERLY
RESULTS
The
following tables show selected operating results for the quarter ended March 31,
2010 compared to the quarter ended March 31, 2009 (in 000’s except per ton
amounts).
|
Total
Results
|
Three Months Ended March 31, | |||||||||||||||
| 2010 |
2009
|
|||||||||||||||
|
Total
|
Per
Ton
|
Total
|
Per
Ton
|
|||||||||||||
|
Company
and contractor production (tons)
|
2,305 | 2,866 | ||||||||||||||
|
Coal
purchased from other sources (tons)
|
19 | 37 | ||||||||||||||
|
Total
coal available to ship (tons)
|
2,324 | 2,903 | ||||||||||||||
|
Coal
shipments (tons)
|
2,400 | 2,631 | ||||||||||||||
|
Coal
sales revenue
|
$ | 184,601 | 76.92 | $ | 192,121 | 73.02 | ||||||||||
|
Cost
of coal sold
|
129,317 | 53.88 | 132,707 | 50.44 | ||||||||||||
|
Depreciation,
depletion, & amortization
|
16,358 | 6.82 | 14,473 | 5.50 | ||||||||||||
|
Gross
profit
|
38,926 | 16.22 | 44,941 | 17.08 | ||||||||||||
|
Selling,
general & administrative
|
9,319 | 3.88 | 9,287 | 3.53 | ||||||||||||
|
Operating
Income
|
29,607 | 12.34 | 35,654 | 13.55 | ||||||||||||
|
Adjusted
EBITDA (1)
|
$ | 48,124 | 20.05 | $ | 53,194 | 20.22 | ||||||||||
|
(1)
|
Adjusted EBITDA is defined under
"Reconciliation of Non-GAAP Measures" in this release. Adjusted
EBITDA is used to determine compliance
with financial covenants in our revolving credit
facility
|
|
Segment
Results
|
Three
Months Ended March 31,
|
|||||||||||||||
|
2010
|
2009
|
|||||||||||||||
|
CAPP
|
Midwest
|
CAPP
|
Midwest
|
|||||||||||||
|
Company
and contractor production (tons)
|
1,550 | 755 | 2,041 | 825 | ||||||||||||
|
Coal
purchased from other sources (tons)
|
19 | - | 37 | - | ||||||||||||
|
Total
coal available to ship (tons)
|
1,569 | 755 | 2,078 | 825 | ||||||||||||
|
Coal
shipments (tons)
|
1,662 | 738 | 1,844 | 787 | ||||||||||||
|
Coal
sales revenue
|
$ | 155,564 | 29,037 | $ | 167,635 | 24,486 | ||||||||||
|
Average
sales price per ton
|
93.60 | 39.35 | 90.91 | 31.11 | ||||||||||||
|
Cost
of coal sold
|
$ | 106,740 | 22,577 | $ | 111,484 | 21,223 | ||||||||||
|
Cost
of coal sold per ton
|
64.22 | 30.59 | 60.46 | 26.97 | ||||||||||||
| Cost Bridge |
Q-4
2009 vs. Q-1 2010
|
|||||||
|
CAPP
|
Midwest
|
|||||||
|
Beginning
cash costs (Q-4 2009)
|
$ | 67.93 | 31.92 | |||||
|
Fixed
Cost Absorption
|
(4.01 | ) | - | |||||
|
Variable
costs (diesel, explosives, etc.)
|
(2.20 | ) | (0.46 | ) | ||||
|
Other
|
2.50 | (0.87 | ) | |||||
|
Ending
cash costs (Q-1 2010)
|
$ | 64.22 | 30.59 | |||||
LIQUIDITY
AND FREE CASH FLOW
As of
March 31, 2010, the Company had available liquidity of $189.3 million calculated
as follows (in millions):
|
Unrestricted
Cash
|
$ | 153.1 | ||
|
Availability
under the Revolver
|
63.5 | |||
|
Letters
of Credit issued under the Revolver
|
(27.3 | ) | ||
|
Available
Liquidity
|
$ | 189.3 | ||
|
Restricted
Cash
|
$ | 32.1 |
For the
three months ended March 31, 2010, the Company had free cash flow of $34.1
million calculated as follows (in millions):
|
Adjusted
EBITDA
|
$ | 48.1 | ||
|
Capital
Expenditures
|
(14.0 | ) | ||
|
Free
Cash Flow
|
$ | 34.1 |
SALES
POSITION AND MARKET COMMENTS
As of
April 29, 2010, we had the following agreements to ship coal at a fixed and
known price (in 000’s except per ton amounts):
|
2010
Priced (1)
|
||||||||||||||||||||||||
|
As
of February 25, 2010
|
As
of April 29, 2010
|
Change
|
||||||||||||||||||||||
|
Tons
|
Avg
Price Per Ton
|
Tons
|
Avg
Price Per Ton
|
Tons
|
Avg
Price Per Ton
|
|||||||||||||||||||
|
CAPP
|
5,892 | $ | 95.10 | 5,994 | $ | 94.80 | 102 | $ | 77.47 | |||||||||||||||
|
Midwest
(2)
|
3,004 | $ | 41.13 | 3,004 | $ | 41.13 | - | $ | - | |||||||||||||||
|
2011
Priced
|
||||||||||||||||||||||||
|
As
of February 25, 2010
|
As
of April 29, 2010
|
Change
|
||||||||||||||||||||||
|
Tons
|
Avg
Price Per Ton
|
Tons
|
Avg
Price Per Ton
|
Tons
|
Avg
Price Per Ton
|
|||||||||||||||||||
|
CAPP
|
2,389 | $ | 121.80 | 2,424 | $ | 121.21 | 35 | $ | 80.94 | |||||||||||||||
|
Midwest
(2)
|
1,422 | $ | 44.64 | 1,422 | $ | 44.64 | - | $ | - | |||||||||||||||
|
2012
Priced
|
||||||||||||||||||||||||
|
As
of February 25, 2010
|
As
of April 29, 2010
|
Change
|
||||||||||||||||||||||
|
Tons
|
Avg
Price Per Ton
|
Tons
|
Avg
Price Per Ton
|
Tons
|
Avg
Price Per Ton
|
|||||||||||||||||||
|
CAPP
|
350 | $ | 108.31 | 350 | $ | 108.31 | - | $ | - | |||||||||||||||
|
Midwest
(2)
|
500 | $ | 45.00 | 500 | $ | 45.00 | - | $ | - | |||||||||||||||
|
(1)
|
2010
includes all tons that have been shipped and tons with agreements for
fixed prices for the remainder of the
year, including carryover
tons.
|
|
(2)
|
The
prices for the Midwest are minimum base price amounts adjusted for
projected fuel escalators.
|
GUIDANCE
In
accordance with our past practice, James River Coal Company will update guidance
in the second quarter earnings release.
FORBES
100 MOST TRUSTWORTHY COMPANIES
James
River Coal Company has been named to the Forbes 2010 list of “The 100 Most
Trustworthy Companies.”
Forbes
used Audit Integrity, an independent financial analytics company in Los Angeles
to identify the most transparent and trustworthy businesses that trade on
American stock exchanges. These companies have consistently
demonstrated transparent and conservative accounting practices and solid
corporate governance and management.
CONFERENCE CALL, WEBCAST AND
REPLAY: The Company will hold a conference call with
management to discuss the first quarter earnings on April 30, 2010 at 11:00 a.m.
Eastern Time. The conference call can be accessed by dialing
877-340-2553, or through the James River Coal Company website at http://www.jamesrivercoal.com. International
callers, please dial 678-224-7860. A replay of the conference call
will be available on the Company’s website and also by telephone, at
800-642-1687 for domestic callers. International callers, please dial
706-645-9291: pass code 66107301.
James
River Coal Company mines, processes and sells bituminous steam and
industrial-grade coal primarily to electric utility companies and industrial
customers. The Company’s mining operations are managed through six
operating subsidiaries located throughout eastern Kentucky and in southern
Indiana.
FORWARD-LOOKING STATEMENTS:
Certain statements in this press release, and other written or oral statements
made by or on behalf of us are "forward-looking statements" within the meaning
of the federal securities laws. Statements regarding future events and
developments and our future performance, as well as management's expectations,
beliefs, plans, estimates or projections relating to the future, are
forward-looking statements within the meaning of these laws. These
forward-looking statements are subject to a number of risks and uncertainties.
These risks and uncertainties include, but are not limited to, the following:
changes in the demand for coal by electric utility customers; the loss of one or
more of our largest customers; inability to secure new coal supply agreements or
to extend existing coal supply agreements at market prices; our dependency on
one railroad for transportation of a large percentage of our productions;
failure to exploit additional coal reserves; the risk that reserve estimates are
inaccurate; failure to diversify our operations; increased capital expenditures;
encountering difficult mining conditions; increased costs of complying with mine
health and safety regulations; bottlenecks or other difficulties in transporting
coal to our customers; delays in the development of new mining projects;
increased costs of raw materials; the effects of litigation, regulation and
competition; lack of availability of financing sources; our compliance with debt
covenants; the risk that we are unable to successfully integrate acquired asset
into our business; and the other risks detailed in our reports filed with the
Securities and Exchange Commission (SEC). Management believes that these
forward-looking statements are reasonable; however, you should not place undue
reliance on such statements. These statements are based on current expectations
and speak only as of the date of such statements. We undertake no obligation to
publicly update or revise any forward-looking statement, whether as a result of
future events, new information or otherwise.
JAMES
RIVER COAL COMPANY
AND
SUBSIDIARIES
Consolidated
Balance Sheets
(in
thousands, except share data)
|
March
31, 2010
|
December
31, 2009
|
|||||||
|
Assets
|
||||||||
|
Current
assets:
|
||||||||
|
Cash
and cash equivalents
|
$ | 153,129 | 107,931 | |||||
|
Receivables:
|
||||||||
|
Trade
|
67,295 | 43,289 | ||||||
|
Other
|
111 | 260 | ||||||
|
Total
receivables
|
67,406 | 43,549 | ||||||
|
Inventories:
|
||||||||
|
Coal
|
16,172 | 22,727 | ||||||
|
Materials
and supplies
|
11,103 | 10,462 | ||||||
|
Total
inventories
|
27,275 | 33,189 | ||||||
|
Prepaid
royalties
|
5,671 | 6,045 | ||||||
|
Other
current assets
|
3,119 | 3,292 | ||||||
|
Total
current assets
|
256,600 | 194,006 | ||||||
|
Property,
plant, and equipment, at cost:
|
||||||||
|
Land
|
7,444 | 7,194 | ||||||
|
Mineral
rights
|
231,919 | 231,919 | ||||||
|
Buildings,
machinery and equipment
|
374,847 | 362,654 | ||||||
|
Mine
development costs
|
42,580 | 41,069 | ||||||
|
Total
property, plant, and equipment
|
656,790 | 642,836 | ||||||
|
Less
accumulated depreciation, depletion, and amortization
|
304,580 | 288,748 | ||||||
|
Property,
plant and equipment, net
|
352,210 | 354,088 | ||||||
|
Goodwill
|
26,492 | 26,492 | ||||||
|
Restricted
cash
|
32,135 | 62,042 | ||||||
|
Other
assets
|
32,800 | 32,684 | ||||||
|
Total
assets
|
$ | 700,237 | 669,312 | |||||
JAMES
RIVER COAL COMPANY
AND
SUBSIDIARIES
Consolidated
Balance Sheets
(in
thousands, except share data)
|
March
31, 2010
|
December
31, 2009
|
|||||||
|
Liabilities and Shareholders'
Equity
|
||||||||
| Current liabilities: | ||||||||
|
Accounts
payable
|
$ | 38,395 | 46,472 | |||||
|
Accrued
salaries, wages, and employee benefits
|
10,657 | 6,982 | ||||||
|
Workers'
compensation benefits
|
8,950 | 8,950 | ||||||
|
Black
lung benefits
|
1,782 | 1,782 | ||||||
|
Accrued
taxes
|
7,321 | 4,383 | ||||||
|
Other
current liabilities
|
20,217 | 15,439 | ||||||
|
Total
current liabilities
|
87,322 | 84,008 | ||||||
|
Long-term
debt
|
279,650 | 278,268 | ||||||
|
Other
liabilities:
|
||||||||
|
Noncurrent
portion of workers' compensation benefits
|
51,053 | 50,385 | ||||||
|
Noncurrent
portion of black lung benefits
|
41,124 | 31,017 | ||||||
|
Pension
obligations
|
14,123 | 14,827 | ||||||
|
Asset
retirement obligations
|
40,540 | 39,843 | ||||||
|
Other
|
622 | 622 | ||||||
|
Total
other liabilities
|
147,462 | 136,694 | ||||||
|
Total
liabilities
|
514,434 | 498,970 | ||||||
|
Commitments
and contingencies
|
||||||||
|
Shareholders'
equity:
|
||||||||
|
Preferred
stock, $1.00 par value. Authorized 10,000,000 shares
|
- | - | ||||||
|
Common
stock, $.01 par value. Authorized 100,000,000 shares; issued
and outstanding 27,543,278 and 27,544,878 shares as
of March 31, 2010 and December 31, 2009, respectively
|
275 | 275 | ||||||
|
Paid-in-capital
|
321,499 | 320,079 | ||||||
|
Accumulated
deficit
|
(113,513 | ) | (136,758 | ) | ||||
|
Accumulated
other comprehensive loss
|
(22,458 | ) | (13,254 | ) | ||||
|
Total
shareholders' equity
|
185,803 | 170,342 | ||||||
|
Total
liabilities and shareholders' equity
|
$ | 700,237 | 669,312 | |||||
JAMES
RIVER COAL COMPANY
AND
SUBSIDIARIES
Consolidated
Statements of Operations
(in
thousands, except per share data)
(unaudited)
|
Three
Months
Ended
March
31, 2010
|
Three
Months
Ended
March
31, 2009
|
|||||||
|
Revenues
|
$ | 184,601 | 192,121 | |||||
|
Cost
of sales:
|
||||||||
|
Cost
of coal sold
|
129,317 | 132,707 | ||||||
|
Depreciation,
depletion and amortization
|
16,358 | 14,473 | ||||||
|
Total
cost of sales
|
145,675 | 147,180 | ||||||
|
Gross
profit
|
38,926 | 44,941 | ||||||
|
Selling,
general and administrative expenses
|
9,319 | 9,287 | ||||||
|
Total
operating income
|
29,607 | 35,654 | ||||||
|
Interest
expense
|
7,381 | 4,053 | ||||||
|
Interest
income
|
(4 | ) | (25 | ) | ||||
|
Miscellaneous
income, net
|
(42 | ) | (54 | ) | ||||
|
Total
other expense, net
|
7,335 | 3,974 | ||||||
|
Income
before income taxes
|
22,272 | 31,680 | ||||||
|
Income
tax expense (benefit)
|
(973 | ) | 3,509 | |||||
|
Net
income
|
$ | 23,245 | 28,171 | |||||
|
Earnings
per common share
|
||||||||
|
Basic
earnings per common share
|
$ | 0.84 | 1.03 | |||||
|
Diluted
earnings per common share
|
$ | 0.84 | 1.03 | |||||
JAMES
RIVER COAL COMPANY
AND
SUBSIDIARIES
Condensed
Consolidated Statements of Cash Flows
(in
thousands)
(unaudited)
|
Three
Months
Ended
March
31,
2010
|
Three
Months
Ended
March
31,
2009
|
|||||||
|
Cash
flows from operating activities:
|
||||||||
|
Net
income
|
$ | 23,245 | 28,171 | |||||
|
Adjustments
to reconcile net incometo net cash provided by operating
activities
|
||||||||
|
Depreciation,
depletion, and amortization
|
16,358 | 14,473 | ||||||
|
Accretion
of asset retirement obligations
|
821 | 793 | ||||||
|
Amortization
of debt discount and issue costs
|
1,882 | 293 | ||||||
|
Stock-based
compensation
|
1,420 | 1,514 | ||||||
|
Changes
in operating assets and liabilities:
|
||||||||
|
Receivables
|
(23,857 | ) | (18,014 | ) | ||||
|
Inventories
|
5,406 | (14,883 | ) | |||||
|
Prepaid
royalties and other current assets
|
547 | 933 | ||||||
|
Restricted
cash
|
29,907 | - | ||||||
|
Other
assets
|
549 | 2,871 | ||||||
|
Accounts
payable
|
(8,077 | ) | 1,921 | |||||
|
Accrued
salaries, wages, and employee benefits
|
3,675 | 2,490 | ||||||
|
Accrued
taxes
|
2,938 | 5,079 | ||||||
|
Other
current liabilities
|
4,671 | 229 | ||||||
|
Workers'
compensation benefits
|
668 | 1,027 | ||||||
|
Black
lung benefits
|
707 | 592 | ||||||
|
Pension
obligations
|
(508 | ) | 536 | |||||
|
Asset
retirement obligations
|
(17 | ) | (210 | ) | ||||
|
Other
liabilities
|
- | 43 | ||||||
|
Net
cash provided by operating activities
|
60,335 | 27,858 | ||||||
|
Cash
flows from investing activities:
|
||||||||
|
Additions
to property, plant, and equipment
|
(13,972 | ) | (12,413 | ) | ||||
|
Net
cash used in investing activities
|
(13,972 | ) | (12,413 | ) | ||||
|
Cash
flows from financing activities:
|
||||||||
|
Proceeds
from Revolver
|
- | 5,000 | ||||||
|
Repayments
of Revolver
|
- | (14,000 | ) | |||||
|
Debt
issuance costs
|
(1,165 | ) | - | |||||
|
Net
cash used in financing activities
|
(1,165 | ) | (9,000 | ) | ||||
|
Increase
in cash
|
45,198 | 6,445 | ||||||
|
Cash
and cash equivalents at beginning of period
|
107,931 | 3,324 | ||||||
|
Cash
and cash equivalents at end of period
|
$ | 153,129 | 9,769 | |||||
JAMES
RIVER COAL COMPANY
AND
SUBSIDIARIES
Reconciliation
of Non GAAP Measures
(in
thousands)
(unaudited)
EBITDA is
used by management to measure operating performance. We define EBITDA
as net income or loss plus interest expense (net), income tax expense (benefit)
and depreciation, depletion and amortization (EBITDA), to better measure our
operating performance. We regularly use EBITDA to evaluate our
performance as compared to other companies in our industry that have different
financing and capital structures and/or tax rates. In addition, we
use EBITDA in evaluating acquisition targets.
Adjusted
EBITDA is the amount used in several of the covenants in our revolving credit
facility. Adjusted EBITDA is defined as EBITDA further adjusted for
certain cash and non-cash charges. Adjusted EBITDA is used to
determine compliance with financial covenants and our ability to engage in
certain activities such as incurring additional debt and making certain
payments.
Cash
margin per ton is calculated as the difference between coal revenue per ton sold
and cost of coal sold per ton. Although cash margin per ton is not a
measure of performance calculated in accordance with GAAP, management believes
that it is useful to an investor because it is widely used in the coal industry
as a measure to evaluate a company’s profitability from tons sold.
Free cash
flow as shown in the press release is calculated as Adjusted EBITDA less capital
expenditures. It is not a measure of cash flow as defined by
GAAP. We use free cash flow as a measure of our ability to make
investments, acquisitions and payments to our stakeholders. Free cash flow
should not be considered in isolation, nor as an alternative to cash flows
generated from operations.
EBITDA,
Adjusted EBITDA, cash margin per ton and free cash flow are not recognized terms
under GAAP and are not an alternative to net income, operating income or any
other performance measures derived in accordance with GAAP or an alternative to
cash flow from operating activities as a measure of operating
liquidity. Because not all companies use identical calculations, this
presentation of EBITDA, Adjusted EBITDA, cash margin per ton and free cash flow
may not be comparable to other similarly titled measures of other
companies. Additionally, EBITDA, Adjusted EBITDA, cash margin per ton
or free cash flow are not intended to be a measure of free cash flow for
management’s discretionary use, as they do not reflect certain cash requirements
such as tax payments, interest payments and other contractual
obligations.
|
Three
Months Ended March 31,
|
||||||||
|
2010
|
2009
|
|||||||
|
Net
income
|
$ | 23,245 | 28,171 | |||||
|
Income
tax expense (benefit)
|
(973 | ) | 3,509 | |||||
|
Interest
expense
|
7,381 | 4,053 | ||||||
|
Interest
income
|
(4 | ) | (25 | ) | ||||
|
Depreciation,
depletion, and amortization
|
16,358 | 14,473 | ||||||
|
EBITDA
(before adjustments)
|
$ | 46,007 | 50,181 | |||||
|
Other
adjustments specified in
our current debt agreement:
|
2,117 | 3,013 | ||||||
|
Adjusted
EBITDA
|
$ | 48,124 | 53,194 | |||||