May 12--Knoxville-based National Coal Corp. Monday reported a net loss of $7.9 million, or 23 cents per share, for first-quarter 2009 compared to a net loss of $10.1 million, or 36 cents per share, a year ago as the company shifted to new mining operations and faced decreased demand because of a weakened economy.

National Coal Corp. released its first-quarter financial report, with total revenues essentially flat at $35.1 million compared to $35.7 million in the same period last year.

"Our first quarter was somewhat difficult," President and CEO Dan A. Roling said during a conference call with investment analysts Monday. "The first quarter was impacted by the closure of two mines, and we finished removing assets from those mines, moving into new mines."

The company failed to achieve its anticipated production levels, but production is back on track since March and National Coal should be able to meet its goals and see decreasing costs going forward, Roling said. For the three months ended March 31, National Coal produced 380 thousand tons of coal, or about 21.4 percent less than first quarter 2008. Roling said production should still be sufficient to meet contractual obligations.

As the economy shrank and demand for coal decreased, National Coal sold 469,012 tons of coal in the quarter compared to 612,159 tons the first quarter of 2008 -- a 23.4 percent decrease.

"The coal market has pulled back from 2008, when prices set record highs," Roling said.

Despite those record prices, the coal industry was only able to increase production to 1.17 billion tons -- just 0.6 percent more than a record set in 2006, Roling said. This is an indication of difficulties the industry will likely have meeting demand as the economy recovers, Roling said.

Roling said the company should be in a good position to take part in a stronger market when demand for coal returns.

Business writer Ed Marcum may be reached at 865-342-6267.

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