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RICHMOND, Va., Feb 27, 2009 /PRNewswire-FirstCall via COMTEX News Network/ -- James River Coal Company (Nasdaq: JRCC), a producer of steam and industrial-grade coal, today announced that it had a net loss of $33.6 million or $1.26 per fully diluted share for the fourth quarter of 2008 and a net loss of $96.0 million or $3.91 per fully diluted share for the year ended December 31, 2008. This is compared to a net loss of $18.5 million or $1.04 per fully diluted share for the fourth quarter of 2007 and a net loss of $54.0 million or $3.29 per fully diluted share for the year ended December 31, 2007.
Peter T. Socha, Chairman and Chief Executive Officer commented, "We are very pleased with our progress this quarter. We have finally finished a multi-year period of low contract sales prices and rising costs due, in large part, to a new regulatory environment. Our mines have now made many of the adjustments required by federal and state authorities. We have also started shipping under our new domestic utility contracts that were signed last summer. While we expect both the economy and the coal markets to be unsettled for the next several quarters, we believe that James River Coal Company is well positioned for the next economic cycle."
QUARTERLY RESULTS
The following tables show selected operating results for the quarter ended December 31, 2008 compared to the quarter ended December 31, 2007 (in 000's except per ton amounts).
Total Results Three Months Ended December 31,
2008 2007
Total Per Ton Total Per Ton
Company and contractor production
(tons) 2,734 2,647
Coal purchased from other sources
(tons) 15 157
Total coal available to ship
(tons) 2,749 2,804
Coal shipments (tons) 2,792 2,914
Revenues
Coal sales $140,774 50.42 $124,747 42.81
Synfuel handling - - 1,390 -
Cost of coal sold 134,418 48.14 118,052 40.51
Depreciation, depletion, &
amortization 18,277 6.55 17,235 5.91
Gross loss (11,921) (4.27) (9,150) (3.14)
Selling, general &
administrative 9,869 3.53 8,966 3.08
Adjusted EBITDA (1) $(203) (0.07) $1,791 0.61
(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
December 31,
2008 2007
CAPP Midwest CAPP Midwest
Company and Contractor
production (tons) 1,944 790 1,885 763
Coal purchased from other
sources (tons) 15 - 155 1
Total coal available to ship
(tons) 1,959 790 2,040 764
Coal Shipments (tons) 1,981 811 2,118 796
Coal sales revenue $114,221 26,553 $101,469 23,278
Average sales price per ton 57.66 32.74 47.91 29.24
Cost of coal sold $111,232 23,186 $96,838 21,214
Cost of coal sold per ton 56.15 28.59 45.72 26.65
Cost Bridge Q-3 2008 vs. Q-4 2008
CAPP Midwest
Beginning cash costs $58.59 30.40
Variable costs (steel, diesel, etc) (1.50) (1.47)
Sales Related (1.05) 0.34
Other 0.11 (0.68)
Ending cash costs 56.15 28.59
ANNUAL RESULTS
The following tables show selected operating results for the year ended December 31, 2008 compared to the year ended December 31, 2007 (in 000's except per ton amounts).
Total Results Year Ended December 31,
2008 2007
Total Per Ton Total Per Ton
Company and contractor
production (tons) 11,112 11,171
Coal purchased from other
sources (tons) 243 880
Total coal available to
ship (tons) 11,355 12,051
Coal shipments (tons) 11,383 12,049
Revenues
Coal sales $568,507 49.94 $513,706 42.63
Synfuel handling - - 6,854 -
Cost of coal sold 527,888 46.38 473,347 39.29
Gain on curtailment of
pension plan - - (6,091) (0.51)
Depreciation, depletion, &
amortization 70,277 6.17 71,856 5.96
Gross loss (29,658) (2.61) (18,552) (1.54)
Selling, general &
administrative 34,992 3.07 32,191 2.67
Adjusted EBITDA (1) $17,571 1.54 $24,760 2.05
(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 Year Ended December 31,
2008 2007
CAPP Midwest CAPP Midwest
Company and Contractor
Production (tons) 8,006 3,106 8,040 3,131
Coal purchased from other
sources (tons) 243 - 867 13
Total coal available to
ship (tons) 8,249 3,106 8,907 3,144
Coal Shipments (tons) 8,271 3,112 8,893 3,156
Coal sales revenue $467,609 100,898 $422,429 91,277
Average sales price per ton 56.54 32.42 47.50 28.92
Cost of coal sold $433,781 94,107 $396,639 76,708
Cost of coal sold per ton 52.45 30.24 44.60 24.31
LIQUIDITY
As of December 31, 2008, the Company had available liquidity of $ 3.4 million. This amount included $3.3 million of cash on hand and $0.1 million of net availability under the Revolver.
Due to a normal seasonable low level of accounts receivable and inventory, the gross availability under the Revolver was approximately $10.1 million. The Company is required to maintain minimum liquidity as defined under our credit agreements of $10 million. As of February 26, 2009 and based on unaudited results, the Company believes that the gross availability under the Revolver is the maximum of $35 million.
The Company was in compliance with all covenants in its senior debt facilities as of December 31, 2008.
SALES POSITION
This information is being provided in a separate release detailing financial guidance for 2009.
CONFERENCE CALL, WEBCAST AND REPLAY: The Company will hold a conference call with management to discuss the fourth quarter earnings on February 27, 2009 at 11:00 a.m. Eastern Time. The conference call can be accessed by dialing 877-795-3613, or through the James River Coal Company website at http://www.jamesrivercoal.com. International callers, please dial 719-325-4812. A replay of the conference call will be available on the Company's website and also by telephone, at 888-203-1112 for domestic callers. International callers, please dial 719-457-0820: pass code 5314969.
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; failure to diversify our operations; failure to exploit additional coal reserves; the risk that reserve estimates are inaccurate; increased capital expenditures; encountering difficult mining conditions; increased costs of complying with mine health and safety regulations; our dependency on one railroad for transportation of a large percentage of our products; bottlenecks or other difficulties in transporting coal to our customers; delays in the development of new mining projects; increased costs of raw materials; lack of availability of financing sources; our compliance with debt covenants; the effects of litigation, regulation and competition; 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.
CONTACT: James River Coal Company
Elizabeth M. Cook
Director of Investor Relations
(804) 780-3000
JAMES RIVER COAL COMPANY
AND SUBSIDIARIES
Consolidated Balance Sheets
(in thousands, except share data)
December 31, December 31,
2008 2007
Assets
Current assets:
Cash and cash equivalents $3,324 5,413
Receivables:
Trade 33,086 40,544
Other 475 762
Total receivables 33,561 41,306
Inventories:
Coal 6,847 5,915
Materials and supplies 9,581 8,277
Total inventories 16,428 14,192
Prepaid royalties 2,803 3,817
Other current assets 5,094 4,180
Total current assets 61,210 68,908
Property, plant, and equipment, at cost:
Land 6,693 6,220
Mineral rights 229,841 191,586
Buildings, machinery and equipment 320,982 285,009
Mine development costs 39,596 31,923
Total property, plant, and equipment 597,112 514,738
Less accumulated depreciation,
depletion, and amortization 252,264 195,534
Property, plant and equipment, net 344,848 319,204
Goodwill 26,492 26,492
Other assets 30,996 24,683
Total assets $463,546 439,287
JAMES RIVER COAL COMPANY
AND SUBSIDIARIES
Consolidated Balance Sheets
(in thousands, except share data)
December 31, December 31,
2008 2007
Liabilities and Shareholders' Equity
Current liabilities:
Current maturities of long-term debt $18,000 1,600
Accounts payable 57,068 46,641
Accrued salaries, wages, and employee
benefits 6,642 6,010
Workers' compensation benefits 9,300 9,450
Black lung benefits 1,539 2,050
Accrued taxes 4,457 4,234
Other current liabilities 19,165 7,394
Total current liabilities 116,171 77,379
Long-term debt, less current maturities 150,000 187,200
Other liabilities:
Noncurrent portion of workers' compensation
benefits 46,477 44,142
Noncurrent portion of black lung benefits 29,029 22,084
Pension obligations 19,693 5,423
Asset retirement obligations 36,409 32,288
Other 529 997
Total other liabilities 132,137 104,934
Total liabilities 398,308 369,513
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
27,393,493 and 21,906,265 shares as of
December 31, 2008 and 2007, respectively 274 219
Paid-in-capital 272,366 159,403
Accumulated deficit (187,712) (91,719)
Accumulated other comprehensive income (loss) (19,690) 1,871
Total shareholders' equity 65,238 69,774
Total liabilities and shareholders' equity $463,546 439,287
JAMES RIVER COAL COMPANY
AND SUBSIDIARIES
Consolidated Statements of Operations
(in thousands, except per share data)
Year Year Year
Ended Ended Ended
December 31, December 31, December 31,
2008 2007 2006
Revenues $568,507 520,560 564,791
Cost of sales:
Cost of coal sold 527,888 473,347 496,799
Gain on curtailment of pension
plan - (6,091) -
Depreciation, depletion, and
amortization 70,277 71,856 74,562
Total cost of sales 598,165 539,112 571,361
Gross profit (loss) (29,658) (18,552) (6,570)
Selling, general, and
administrative expenses 34,992 32,191 30,867
Total operating loss (64,650) (50,743) (37,437)
Interest expense 17,746 19,764 16,782
Interest income (469) (471) (366)
Charges associated with repayment
and amendment of debt 15,618 2,421 -
Miscellaneous income, net (1,279) (598) (533)
Total other expenses, net 31,616 21,116 15,883
Loss before income taxes (96,266) (71,859) (53,320)
Income tax benefit (273) (17,844) (27,151)
Net loss $(95,993) (54,015) (26,169)
Loss per common share
Basic loss per common share $(3.91) (3.29) (1.65)
Shares used to calculate basic
loss per share 24,520 16,412 15,849
Diluted loss per common share $(3.91) (3.29) (1.65)
Shares used to calculate dilutive
loss per share 24,520 16,412 15,849
JAMES RIVER COAL COMPANY
AND SUBSIDIARIES
Reconciliation of Non-GAAP Measures
(in thousands)
(unaudited)
EBITDA is a measure 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 our current debt covenants.
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.
EBITDA and Adjusted EBITDA 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 and Adjusted EBITDA may not be comparable to other
similarly titled measures of other companies. Additionally, EBITDA or
Adjusted EBITDA 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 Year Ended
December 31 December 31 December 31 December 31
2008 2007 2008 2007
Net loss $(33,587) (18,451) (95,993) (54,015)
Income tax benefit (273) (4,224) (273) (17,844)
Interest expense 4,046 4,854 17,746 19,764
Interest income (152) (68) (469) (471)
Depreciation, depletion,
and amortization 18,277 17,235 70,277 71,856
EBITDA $(11,689) (654) (8,712) 19,290
Other adjustments
specified in our current
debt agreement:
Gain on curtailment of
pension plan - - - (6,091)
Charges associated with
repayment of debt and
amendment of debt 8,382 - 15,618 2,421
Other adjustments 3,104 2,445 10,665 9,140
Adjusted EBITDA $(203) 1,791 17,571 24,760
SOURCE James River Coal Company
http://www.jamesrivercoal.com
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