(Source: PRNewswire-FirstCall)
RICHMOND, Va., Aug. 3 /PRNewswire-FirstCall/ -- James River Coal Company , a producer of steam and industrial-grade coal, today announced that it had net income of $16.2 million or $.59 per fully diluted share for the second quarter of 2009 and net income of $44.3 million or $1.61 per fully diluted share for the six months ended June 30, 2009. This is compared to a net loss of $24.0 million or $.97 per fully diluted share for the second quarter of 2008 and a net loss of $40.7 million or $1.76 per fully diluted share for the six months ended June 30, 2008.
Peter T. Socha, Chairman and Chief Executive Office commented: "This was another solid quarter. We are continuing to generate both net income and free cash flow during a weak period in the economy and the coal markets. We will use this period to strengthen our financial position and to make prudent investments in all aspects of our company. We believe that our shareholders will see significant benefits from these decisions as we move from today's weak coal markets to tomorrow's stronger coal markets."
FINANCIAL RESULTS
The following tables show selected operating results for the quarter ended June 30, 2009 compared to the quarter ended June 30, 2008 (in 000's except per ton amounts).
Total Results Three Months Ended Six Months Ended June 30, June 30, 2009 2008 2009 2008 Total Total Total Total Company and contractor production (tons) 2,486 2,845 5,353 5,647 Coal purchased from other sources (tons) 26 65 62 198 -- -- -- --- Total coal available to ship (tons) 2,512 2,910 5,415 5,845 Coal shipments (tons) 2,407 2,892 5,038 5,814 Coal sales revenue $171,649 $137,703 $363,770 $275,891 Cost of coal sold 127,721 128,867 260,428 254,597 Depreciation, depletion, & amortization 15,922 17,552 30,395 34,842 Gross profit (loss) 28,006 (8,716) 72,947 (13,548) Selling, general & administrative 10,559 8,732 19,846 16,066 Adjusted EBITDA (1) $37,036 $3,020 $90,230 $10,675 (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 senior secured credit facilities. Segment Results Three Months Ended June 30, ------------- ------------- 2009 2008 ---- ---- CAPP Midwest CAPP Midwest ---- ------- ---- ------- Company and contractor production (tons) 1,677 809 2,083 762 Coal purchased from other sources (tons) 26 - 65 - -- -- -- -- Total coal available to ship (tons) 1,703 809 2,148 762 Coal shipments (tons) 1,601 806 2,161 731 Coal sales revenue $144,853 26,796 $114,218 23,485 Average sales price per ton 90.48 33.25 52.85 32.13 Cost of coal sold $103,952 23,769 $105,252 23,615 Cost of coal sold per ton 64.93 29.49 48.71 32.31 Segment Results Six Months Ended June 30, ------------- -------------- 2009 2008 ---- ---- CAPP Midwest CAPP Midwest ---- ------- ---- ------- Company and contractor production (tons) 3,718 1,635 4,170 1,477 Coal purchased from other sources (tons) 62 - 198 - -- - --- - Total coal available to ship (tons) 3,780 1,635 4,368 1,477 Coal shipments (tons) 3,445 1,593 4,358 1,456 Coal sales revenue $312,488 51,282 $229,697 46,194 Average sales price per ton 90.71 32.19 52.71 31.73 Cost of coal sold $215,436 44,992 $209,362 45,235 Cost of coal sold per ton 62.54 28.24 48.04 31.07 Cost Bridge Q-1 2009 vs. Q-2 2009 CAPP Midwest ---- ------- Beginning cash costs (Q-1 2009) $60.46 26.97 Labor 2.37 0.31 Fixed costs (absorption) 2.44 0.55 Variable costs - 1.40 Other (0.34) 0.26 ----- ---- Ending cash costs (Q-2 2009) $64.93 29.49 ====== =====
C.K. Lane, Senior Vice President and Chief Operating Officer commented: "Our operations had another excellent quarter in respect to both safety and production. In just the last six quarters, we have cut our NFDL rate (non-fatal days lost) in half. We are also pleased that one of our two mine rescue teams won 1st place in the Kentucky Mining Institute State Mine Rescue Competition held July 30-31 in Lexington, Kentucky. We are very proud of our employees for making James River one of the safest places to work in the coal industry. Our mines continued to perform well even while we reduced our quarterly production by approximately 300,000 tons. This reduction was implemented in order to better manage our inventories and match our contract sales. We were able to make this reduction by eliminating Saturday and third shift production and idling our operations for two additional days during the second quarter."
LIQUIDITY AND CASH FLOW
As of June 30, 2009, the Company had available liquidity of $36.9 million calculated as follows (in millions):
Cash and Cash Equivalents $1.9 Availability under the Revolver 35.0 Drawn under the Revolver - ----- Available Liquidity $36.9 =====
Effective July 1, 2009, the Company is no longer required to maintain the $10.0 million minimum liquidity as defined under its senior secured credit facilities. The Company was in compliance with all of the covenants in its senior secured credit facilities as of June 30, 2009.
Major cash flow items during the quarter include $17.9 million for capital expenditures, $9.0 million to pay down our revolving credit facility and $7.0 million for a semi-annual interest payment on our bonds.
Financial Leverage, calculated as Total Liabilities divided by Shareholders Equity, has been reduced from 6.1x at December 31, 2008 to 3.4x at June 30, 2009. This calculation is not used in any of our existing credit facilities and is provided for informational purposes only.
SALES POSITION AND MARKET COMMENTS
As of July 31, 2009, we had the following agreements to ship coal at a fixed and known price (in 000's except per ton amounts):
2009 Priced (1) --------------- As of April 30, 2009 As of July 31, 2009 Change Tons Avg Price Tons Avg Price Tons Avg Price Per Ton Per Ton Per Ton ---- -------- ---- --------- ---- --------- CAPP 6,655 $ 89.34 6,946 $ 88.63 291 $ 72.47 -------- ----- ------- ----- ------- --- ------- Midwest(2) 3,561 $ 34.27 3,537 $ 34.11 - $- --------- ----- ------- ----- ------- --- ------- 2010 Priced ----------- As of April 30, 2009 As of July 31, 2009 Change Tons Avg Price Tons Avg Price Tons Avg Price Per Ton Per Ton Per Ton ---- --------- ---- --------- ---- --------- CAPP 4,600 $101.74 4,782 $100.60 182 $ 71.65 -------- ----- ------- ----- ------- --- ------- Midwest(2) 813 $ 43.61 2,642 $ 41.47 1,829 $ 40.52 -------- ----- ------- ----- ------- --- ------- 2011 Priced ----------- As of April 30, 2009 As of July 31, 2009 Change Tons Avg Price Tons Avg Price Tons Avg Price Per Ton Per Ton Per Ton ---- ---------- ---- ---------- ---- --------- CAPP 2,350 $122.51 2,350 $122.51 - $- -------- ----- ------- ----- ------- --- ------ Midwest(2) - $- 375 $45.47 375 $45.47 --------- ----- ------- ----- ------- --- ------ 2012 Priced ----------- As of April 30, 2009 As of July 31, 2009 Change Tons Avg Price Tons Avg Price Tons Avg Price Per Ton Per Ton Per Ton ---- --------- ---- --------- ---- --------- CAPP 350 $108.31 350 $108.31 - $- ------- ---- ------- ---- ------- ---- ----- (1) 2009 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 in years 2009 and 2010 are minimum base price amounts adjusted for projected fuel escalators. UPDATED GUIDANCE
The Company has previously issued forecasts of certain operating measures for 2009. These forecasts are revised as indicated below. In many cases they represent a range of possible outcomes and are provided to assist investors with the development of annual earnings estimates. While the Company believes that these forecasts represent the best current estimate of management as to future events, actual events will differ from these forecasts and such differences could be material. These forecasts are subject to the risks identified under Forward-Looking Statements below.
