James River Coal Company Reports Fourth Quarter and Full Year 2011 Operating Results
- Annual Coal Sales Revenue Reach a Record of $1.1 billion
- Q-4 Adjusted EBITDA of $44.2 Million
- Q-4 Cash Margin of $20.79 Per Ton in Central Appalachia (CAPP)
- Maintaining a Strong Balance Sheet with Available Liquidity of $236.9 Million
- Reached Agreements to Sell 2.8 Million Tons of CAPP Coal at $115.82 a Ton in 2012
- Substantially Sold Out of Thermal Coal for 2012
- Conference Call Slides Posted to the Company Website
RICHMOND, Va., March 1, 2012 /PRNewswire/ -- James River Coal Company (NASDAQ: JRCC), today announced that it had a net loss of $39.1 million or $1.19 per fully diluted share for the year ended December 31, 2011 and a net loss of $28.5 million or $0.82 per fully diluted share for the fourth quarter of 2011. Included in the year ended December 31, 2011 is an income tax expense adjustment related to a valuation allowance placed on the Company's deferred tax assets of $26.8 million or $0.82 per fully diluted share and $0.77 per fully diluted share for the fourth quarter. This is compared to net income of $78.2 million or $2.82 per fully diluted share for the year ended December 31, 2010 and net income of $25.9 million or $0.93 per fully diluted share for the fourth quarter of 2010. Included in the year ended December 31, 2010 is an income tax benefit related to the reversal of the deferred income tax valuation allowance of $22.1 million, or $0.80 per fully diluted share and $0.79 per fully diluted share for the fourth quarter.
Peter T. Socha, Chairman and Chief Executive Officer, commented: "2011 was a year of transformation for James River Coal Company. We continued the process to grow and diversify our company. We expanded our presence in both the metallurgical coal segment and the international coal markets. In the operations area, we achieved industry-leading performance in both safety and regulatory compliance. In the financial area, we strengthened our balance sheet by refinancing all of our funded debt and substantially improving our liquidity position. While we are cautious and realistic about the current soft market conditions, we are also optimistic that James River will be well positioned for improving markets in the future."
ANNUAL RESULTS
The following tables show selected operating results for the year ended December 31, 2011 compared to the year ended December 31, 2010 (in 000's except per ton amounts).
Total Results | Year Ended December 31, | ||||||||
2011 | 2010 | ||||||||
Total | Per Ton | Total | Per Ton | ||||||
Company and contractor production (tons) | 10,254 | 8,782 | |||||||
Coal purchased from other sources (tons) | 1,605 | 128 | |||||||
Total coal available to ship (tons) | 11,859 | 8,910 | |||||||
Coal shipments (tons) | 11,801 | 8,919 | |||||||
Coal sales revenue | $ 1,105,370 | $ 93.67 | $ 698,949 | $ 78.45 | |||||
Freight and handling revenue | 72,285 | 6.13 | 2,167 | 0.24 | |||||
Cost of coal sold | 905,482 | 76.73 | 512,348 | 57.44 | |||||
Freight and handling costs | 72,285 | 6.13 | 2,167 | 0.24 | |||||
Depreciation, depletion, & amortization | 108,914 | 9.23 | 64,368 | 7.22 | |||||
Gross profit | 90,974 | 7.71 | 122,233 | 13.70 | |||||
Selling, general & administrative | 57,078 | 4.84 | 38,347 | 4.30 | |||||
Acquisition costs | 8,504 | 0.72 | - | - | |||||
Adjusted EBITDA plus acquisition costs (1) | $ 154,571 | 13.10 | $ 156,628 | 17.56 | |||||
(1) | Adjusted EBITDA plus acquisition costs 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 | Year Ended December 31, | |||||||||||
2011 | 2010 | |||||||||||
CAPP | Midwest | CAPP | Midwest | |||||||||
Total | Per Ton | Total | Per Ton | Total | Per Ton | Total | Per Ton | |||||
Company and contractor production (tons) | 7,823 | 2,431 | 5,962 | 2,820 | ||||||||
Coal purchased from other sources (tons) | 1,605 | - | 128 | - | ||||||||
Total coal available to ship (tons) | 9,428 | 2,431 | 6,090 | 2,820 | ||||||||
Coal shipments (tons) | ||||||||||||
Steam (tons) | 7,166 | 2,480 | 6,109 | 2,810 | ||||||||
Metallurgical (tons) | 2,155 | - | - | - | ||||||||
Total Shipments (tons) | 9,321 | 2,480 | 6,109 | 2,810 | ||||||||
Coal sales revenue | ||||||||||||
Steam | 651,016 | 90.85 | 105,382 | 42.49 | $ 585,064 | 95.77 | 113,885 | 40.53 | ||||
Metallurgical | 348,972 | 161.94 | - | - | - | - | - | - | ||||
Total coal sales revenue | 999,988 | 107.28 | 105,382 | 42.49 | 585,064 | 95.77 | 113,885 | 40.53 | ||||
Freight and handling revenue | 69,778 | 7.49 | 2,507 | 1.01 | - | - | 2,167 | 0.77 | ||||
Cost of coal sold | 811,573 | 87.07 | 93,909 | 37.87 | 419,564 | 68.68 | 92,784 | 33.02 | ||||
Freight and handling costs | 69,778 | 7.49 | 2,507 | 1.01 | - | - | 2,167 | 0.77 | ||||
QUARTERLY RESULTS
The following tables show selected operating results for the quarter ended December 31, 2011 compared to the quarter ended December 31, 2010 (in 000's except per ton amounts).
Total Results | Three Months Ended December 31, | |||||||
2011 | 2010 | |||||||
Total | Per Ton | Total | Per Ton | |||||
Company and contractor production (tons) | 2,675 | 2,085 | ||||||
Coal purchased from other sources (tons) | 709 | 74 | ||||||
Total coal available to ship (tons) | 3,384 | 2,159 | ||||||
Coal shipments (tons) | 3,304 | 2,069 | ||||||
Coal sales revenue | $ 321,758 | 97.38 | $ 161,473 | 78.04 | ||||
Freight and handling revenue | 35,420 | 10.72 | 577 | 0.28 | ||||
Cost of coal sold | 263,315 | 79.70 | 125,677 | 60.74 | ||||
Freight and handling costs | 35,420 | 10.72 | 577 | 0.28 | ||||
Depreciation, depletion, & amortization | 33,435 | 10.12 | 16,087 | 7.78 | ||||
Gross profit | 25,008 | 7.57 | 19,709 | 9.53 | ||||
Selling, general & administrative | 16,553 | 5.01 | 9,400 | 4.54 | ||||
Adjusted EBITDA plus acquisition costs (1) | $ 44,155 | 13.36 | $ 28,479 | 13.76 | ||||
(1) | Adjusted EBITDA plus acquisition costs 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, | |||||||||||
2011 | 2010 | |||||||||||
CAPP | Midwest | CAPP | Midwest | |||||||||
Total | Per Ton | Total | Per Ton | Total | Per Ton | Total | Per Ton | |||||
Company and contractor production (tons) | 2,120 | 555 | 1,372 | 713 | ||||||||
Coal purchased from other sources (tons) | 709 | - | 74 | - | ||||||||
Total coal available to ship (tons) | 2,829 | 555 | 1,446 | 713 | ||||||||
Coal shipments (tons) | ||||||||||||
Steam (tons) | 1,909 | 583 | 1,362 | 707 | ||||||||
Metallurgical (tons) | 812 | - | - | - | ||||||||
Total Shipments (tons) | 2,721 | 583 | 1,362 | 707 | ||||||||
Coal sales revenue | ||||||||||||
Steam | $173,274 | 90.77 | 24,590 | 42.18 | $ 133,465 | 97.99 | 28,008 | 39.61 | ||||
Metallurgical | 123,894 | 152.58 | - | - | - | - | - | - | ||||
Total coal sales revenue | 297,168 | 109.21 | 24,590 | 42.18 | 133,465 | 97.99 | 28,008 | 39.61 | ||||
Freight and handling revenue | 34,705 | 12.75 | 715 | 1.23 | - | - | 577 | 0.82 | ||||
Cost of coal sold | 240,598 | 88.42 | 22,717 | 38.97 | 102,345 | 75.14 | 23,332 | 33.00 | ||||
Freight and handling costs | 34,705 | 12.75 | 715 | 1.23 | - | - | 577 | 0.82 | ||||
SAFETY
During the fourth quarter our Rockhouse Creek No. 8 and No. 2 Mines won the Mountaineer Guardian Award, presented by the West Virginia Coal Association in recognition of the outstanding safety record. "We are very proud of our employees who work very hard to make James River a safe place to work," commented C.K. Lane, Chief Operating Officer. "James River Coal Company's 2011 Non Fatal Days Lost (NFDL) rate was 17% lower than our 2010 rate and 39% below the national average. In addition, we had 14 operations receive Sentinel of Safety Awards for not having a lost time accident in a year."
LIQUIDITY AND CASH FLOW
As of December 31, 2011, the Company had available liquidity of $236.9 million calculated as follows (in millions):
Unrestricted Cash | $ 199.7 | |
Availability under the revolver | 100.0 | |
Letters of Credit Issued under the Revolver | (62.8) | |
Available Liquidity | $ 236.9 | |
Restricted Cash | $ 29.5 | |
Capital Expenditures for the fourth quarter were $43.3 million and were $138.5 million for twelve months ended December 31, 2011.
SALES POSITION
As of February 29, 2012, we had the following priced sales position:
2012 Priced | ||||||||
As of November 7, 2011 | As of February 29, 2012 | Change | ||||||
Tons | Avg Price Per Ton | Tons | Avg Price Per Ton | Tons | Avg Price Per Ton | |||
CAPP (1) | 5,104 | $ 82.55 | 7,917 | $ 94.37 | 2,813 | $ 115.82 | ||
Midwest (2) | 2,776 | $ 44.16 | 2,776 | $ 44.16 | - | $ - | ||
2013 Priced | ||||||||
As of November 7, 2011 | As of February 29, 2012 | Change | ||||||
Tons | Avg Price Per Ton | Tons | Avg Price Per Ton | Tons | Avg Price Per Ton | |||
CAPP (1) | 1,337 | $ 80.45 | 1,337 | $ 80.45 | - | $ - | ||
Midwest (2) | 2,140 | $ 45.35 | 2,140 | $ 45.35 | - | $ - | ||
2014 Priced | ||||||||
As of November 7, 2011 | As of February 29, 2012 | Change | ||||||
Tons | Avg Price Per Ton | Tons | Avg Price Per Ton | Tons | Avg Price Per Ton | |||
CAPP (1) | 300 | $ 75.75 | 300 | $ 75.75 | - | $ - | ||
Midwest (2) | 700 | $ 49.00 | 700 | $ 49.00 | - | $ - | ||
(1) Priced Tons in CAPP do not include approximately 700,000 tons of met coal that has been sold but not yet priced | ||||||||
(2) The prices for the Midwest are minimum base price amounts adjusted for projected fuel escalators. | ||||||||
2012 GUIDANCE
The guidance contained below represents forecasts, which indicate a range of possible outcomes and are provided to assist investors with the development of earnings estimates. While James River 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 risks identified under "forward-looking statements" below.
Guidance By Segment (In 000's except per ton amount) | |||||||||
Tons Shipped (1) | Cash Cost (2) | ||||||||
Central Appalachia | |||||||||
Thermal, Stoker and PCI | 6,700 | $ 74.00 | - | 76.00 | |||||
Metallurgical | 2,800 | $ 108.00 | - | 112.00 | |||||
Midwest | 2,700 | - | 2,800 | $ 34.00 | - | 38.00 | |||
(1) Substantially all the CAPP tons that are currently unsold or unpriced consist of met, PCI, and industrial stoker. | |||||||||
(2) Cash costs per produced ton excludes purchase coal. | |||||||||
Total JRCC Operations (In 000's except tax rate) | ||||
Depreciation, Depletion and Amortization | $ 132,000 | |||
Tax Rate | 0% | |||
Capital Expenditures | ||||
Maintenance and Safety Capital | $ | 110,000 | ||
Completion of Ongoing Projects | 15,000 | |||
$ | 125,000 | |||
MISCELLANEOUS
The following additional items had an impact on our results of operations and balance sheet during the fourth quarter of 2011:
- Due to changes in the current coal markets, we reduced the book value of our deferred tax asset. This resulted in a $26.8 million adjustment to income tax expense in the fourth quarter.
- We recorded additional expense of a net of $1.3 million during the quarter related to workers' compensation. This amount included $3.5 million of increased expense due to a reduction in the discount rate, due to lower market interest rates. This was partially offset by a $2.2 million positive impact due to improved safety performance at the mines and the management of the workers' compensation claim process.
- We recorded an increase in our pension obligation and black lung benefits obligation of $19.6 million and $10.2 million, respectively, in the fourth quarter. These increases are primarily attributed to a decrease in discount rates, due to lower market interest rates. These adjustments had no income statement impact.
CONFERENCE CALL, WEBCAST AND REPLAY: The Company will hold a conference call with management to discuss the fourth quarter earnings on March 1, 2012 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 855-859-2056 for domestic callers. International callers, please dial 404-537-3406: pass code 41616568.
James River Coal Company is one of the leading coal producers in Central Appalachia and the Illinois Basin. The company sells metallurgical, bituminous steam and industrial-grade coal to electric utility companies and industrial customers both domestically and internationally. The Company's operations are managed through eight operating subsidiaries located throughout eastern Kentucky, southern West Virginia and southern Indiana. Additional information about James River Coal can be found at its web site www.jamesrivercoal.com.
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. Forward looking statements include, without limitation, statements regarding future sales and contracting activity, projected fuel escalators and all guidance figures. 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: our cash flows, results of operation or financial condition; the consummation of acquisition, disposition or financing transactions and the effect thereof on our business; our ability to successfully integrate International Resource Partners LP and its related entities (IRP); governmental policies, regulatory actions and court decisions affecting the coal industry or our customers' coal usage; legal and administrative proceedings, settlements, investigations and claims; our ability to obtain and renew permits necessary for our existing and planned operation in a timely manner; environmental concerns related to coal mining and combustion and the cost and perceived benefits of alternative sources of energy; inherent risks of coal mining beyond our control, including weather and geologic conditions or catastrophic weather-related damage; our production capabilities; availability of transportation; our ability to timely obtain necessary supplies and equipment; market demand for coal, electricity and steel; competition; our relationships with, and other conditions affecting, our customers; employee workforce factors; our assumptions concerning economically recoverable coal reserve estimates; future economic or capital market conditions; our plans and objectives for future operations and expansion or consolidation; 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, 2011 | December 31, 2010 | ||||||||||
Assets | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | 199,711 | 180,376 | ||||||||
Trade receivables | 107,557 | 59,970 | |||||||||
Inventories: | |||||||||||
Coal | 52,717 | 23,305 | |||||||||
Materials and supplies | 17,800 | 13,690 | |||||||||
Total inventories | 70,517 | 36,995 | |||||||||
Prepaid royalties | 8,465 | 6,039 | |||||||||
Other current assets | 11,461 | 5,991 | |||||||||
Total current assets | 397,711 | 289,371 | |||||||||
Property, plant, and equipment, net | 909,294 | 385,652 | |||||||||
Goodwill | 26,492 | 26,492 | |||||||||
Restricted cash and short term investments | 29,510 | 23,500 | |||||||||
Other assets | 41,575 | 59,554 | |||||||||
Total assets | $ | 1,404,582 | 784,569 | ||||||||
Liabilities and Shareholders' Equity | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | 110,557 | 57,300 | ||||||||
Accrued salaries, wages, and employee benefits | 12,996 | 7,744 | |||||||||
Workers' compensation benefits | 9,200 | 9,000 | |||||||||
Black lung benefits | 2,512 | 2,282 | |||||||||
Accrued taxes | 7,563 | 4,924 | |||||||||
Other current liabilities | 27,861 | 16,496 | |||||||||
Total current liabilities | 170,689 | 97,746 | |||||||||
Long-term debt, less current maturities | 582,193 | 284,022 | |||||||||
Other liabilities: | |||||||||||
Noncurrent portion of workers' compensation benefits | 60,721 | 55,944 | |||||||||
Noncurrent portion of black lung benefits | 56,152 | 43,443 | |||||||||
Pension obligations | 29,121 | 11,968 | |||||||||
Asset retirement obligations | 94,654 | 43,398 | |||||||||
Other | 14,390 | 665 | |||||||||
Total other liabilities | 255,038 | 155,418 | |||||||||
Total liabilities | 1,007,920 | 537,186 | |||||||||
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 | |||||||||||
35,671,953 and 27,779,351 shares as of December 31, 2011 and December 31, 2010 | 357 | 278 | |||||||||
Paid-in-capital | 541,362 | 324,705 | |||||||||
Accumulated deficit | (97,682) | (58,593) | |||||||||
Accumulated other comprehensive loss | (47,375) | (19,007) | |||||||||
Total shareholders' equity | 396,662 | 247,383 | |||||||||
Total liabilities and shareholders' equity | $ | 1,404,582 | 784,569 | ||||||||
JAMES RIVER COAL COMPANY AND SUBSIDIARIES Consolidated Statements of Operations (in thousands, except share data) | |||||||||||||
Year Ended December 31, | |||||||||||||
2011 | 2010 | 2009 | |||||||||||
Revenues | |||||||||||||
Coal sales revenue | $ | 1,105,370 | 698,949 | 678,562 | |||||||||
Freight and handling revenue | 72,285 | 2,167 | 2,996 | ||||||||||
Total revenue | 1,177,655 | 701,116 | 681,558 | ||||||||||
Cost of sales: | |||||||||||||
Cost of coal sold | 905,482 | 512,348 | 505,892 | ||||||||||
Freight and handling costs | 72,285 | 2,167 | 2,996 | ||||||||||
Depreciation, depletion and amortization | 108,914 | 64,368 | 62,078 | ||||||||||
Total cost of sales | 1,086,681 | 578,883 | 570,966 | ||||||||||
Gross profit | 90,974 | 122,233 | 110,592 | ||||||||||
Selling, general and administrative expenses | 57,078 | 38,347 | 39,720 | ||||||||||
Acquisition costs | 8,504 | - | - | ||||||||||
Total operating income | 25,392 | 83,886 | 70,872 | ||||||||||
Interest expense | 50,096 | 29,943 | 17,057 | ||||||||||
Interest income | (494) | (683) | (60) | ||||||||||
Charges associated with repayment of debt | 740 | - | 1,643 | ||||||||||
Miscellaneous (income) expense, net | (812) | 27 | (281) | ||||||||||
Total other expense, net | 49,530 | 29,287 | 18,359 | ||||||||||
Income (loss) before income taxes | (24,138) | 54,599 | 52,513 | ||||||||||
Income tax expense (benefit) | 14,951 | (23,566) | 1,559 | ||||||||||
Net income (loss) | $ | (39,089) | 78,165 | 50,954 | |||||||||
Earnings (loss) per common share | |||||||||||||
Basic earnings (loss) per common share | $ | (1.19) | 2.82 | 1.85 | |||||||||
Diluted earnings (loss) per common share | $ | (1.19) | 2.82 | 1.85 | |||||||||
JAMES RIVER COAL COMPANY AND SUBSIDIARIES Consolidated Statements of Cash Flows (in thousands) | |||||||||||||||
Year | Year | Year | |||||||||||||
Ended | Ended | Ended | |||||||||||||
December 31, | December 31, | December 31, | |||||||||||||
2011 | 2010 | 2009 | |||||||||||||
Cash flows from operating activities: | |||||||||||||||
Net income (loss) | $ | (39,089) | 78,165 | 50,954 | |||||||||||
Adjustments to reconcile net income (loss) to net cash provided by | |||||||||||||||
operating activities | |||||||||||||||
Depreciation, depletion, and amortization | 108,914 | 64,368 | 62,078 | ||||||||||||
Accretion of asset retirement obligations | 4,477 | 3,334 | 3,212 | ||||||||||||
Amortization of debt discount and issue costs | 14,684 | 8,066 | 1,813 | ||||||||||||
Stock-based compensation | 5,283 | 5,400 | 5,967 | ||||||||||||
Deferred income tax expense (benefit) | 14,139 | (22,236) | 180 | ||||||||||||
Loss (gain) on sale or disposal of property, plant, and equipment | (59) | 307 | (61) | ||||||||||||
Write-off of deferred financing costs | 740 | - | - | ||||||||||||
Changes in operating assets and liabilities: | |||||||||||||||
Receivables | 69,043 | (16,681) | (9,988) | ||||||||||||
Inventories | (13,967) | (3,680) | (15,025) | ||||||||||||
Prepaid royalties and other current assets | (104) | (2,433) | (1,440) | ||||||||||||
Restricted cash and short term investments | (6,010) | 38,542 | (56,820) | ||||||||||||
Other assets | 566 | (2,060) | (4,233) | ||||||||||||
Accounts payable | (3,145) | 10,828 | (10,596) | ||||||||||||
Accrued salaries, wages, and employee benefits | 892 | 762 | 340 | ||||||||||||
Accrued taxes | (889) | (303) | (1,787) | ||||||||||||
Other current liabilities | 7,497 | 1,066 | (3,626) | ||||||||||||
Workers' compensation benefits | 4,977 | 5,609 | 3,558 | ||||||||||||
Black lung benefits | 3,420 | 3,018 | 1,657 | ||||||||||||
Pension obligations | (1,696) | (2,244) | 2,144 | ||||||||||||
Asset retirement obligations | (5,204) | (809) | (861) | ||||||||||||
Other liabilities | (697) | 43 | 93 | ||||||||||||
Net cash provided by operating activities | 163,772 | 169,062 | 27,559 | ||||||||||||
Cash flows from investing activities: | |||||||||||||||
Additions to property, plant, and equipment | (138,455) | (95,426) | (72,159) | ||||||||||||
Payment for acquisition, net of cash acquired | (515,962) | - | - | ||||||||||||
Proceeds from sale of property, plant and equipment | 103 | 82 | 149 | ||||||||||||
Net cash used in investing activities | (654,314) | (95,344) | (72,010) | ||||||||||||
Cash flows from financing activities: | |||||||||||||||
Proceeds from issuance of long-term debt | 505,000 | - | 172,500 | ||||||||||||
Repayment of long-term debt | (150,000) | - | - | ||||||||||||
Proceeds from Revolver | - | - | 12,500 | ||||||||||||
Repayments of Revolver | - | - | (30,500) | ||||||||||||
Net proceeds from issuance of common stock | 170,545 | - | - | ||||||||||||
Debt issuance costs | (15,668) | (1,346) | (5,517) | ||||||||||||
Proceeds from exercise of stock options | - | 73 | 75 | ||||||||||||
Net cash provided by (used in) financing activities | 509,877 | (1,273) | 149,058 | ||||||||||||
Increase in cash and cash equivalents | 19,335 | 72,445 | 104,607 | ||||||||||||
Cash and cash equivalents at beginning of period | 180,376 | 107,931 | 3,324 | ||||||||||||
Cash and cash equivalents at end of period | $ | 199,711 | 180,376 | 107,931 | |||||||||||
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 defined as EBITDA as further adjusted for certain cash and non-cash charges as specified in our revolving credit facility and is used in several of the covenants in that facility. Adjusted EBITDA plus acquisition costs further adjusts Adjusted EBITDA to add back certain non-recurring costs incurred in connection with the IRP acquisition that may not reflect the trend of future results. We believe that Adjusted EBITDA plus acquisition costs presents a useful measure of our ability to service and incur debt on an ongoing basis.
EBITDA, Adjusted EBITDA, and Adjusted EBITDA plus acquisition costs 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, and Adjusted EBITDA plus acquisition costs may not be comparable to other similarly titled measures of other companies. Additionally, EBITDA, Adjusted EBITDA, and Adjusted EBITDA plus acquisition costs 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 | Twelve Months Ended | ||||||||||||||
December 31 | December 31 | December 31 | December 31 | ||||||||||||
2011 | 2010 | 2011 | 2010 | ||||||||||||
Net income (loss) | $ | (28,542) | 25,870 | (39,089) | 78,165 | ||||||||||
Income tax expense (benefit) | 23,951 | (22,892) | 14,951 | (23,566) | |||||||||||
Interest expense | 13,423 | 7,516 | 50,096 | 29,943 | |||||||||||
Interest income | (138) | (83) | (494) | (683) | |||||||||||
Depreciation, depletion, and amortization | 33,435 | 16,087 | 108,914 | 64,368 | |||||||||||
EBITDA (before adjustments) | $ | 42,129 | 26,498 | 134,378 | 148,227 | ||||||||||
Other adjustments specified | |||||||||||||||
in our current debt agreement: | |||||||||||||||
Direct acquisition costs | - | - | 8,504 | - | |||||||||||
Charges associated with repayment of debt | - | - | 740 | - | |||||||||||
Other | 2,026 | 1,981 | 8,200 | 8,401 | |||||||||||
Adjusted EBITDA | $ | 44,155 | 28,479 | 151,822 | 156,628 | ||||||||||
Write-up of IRP Inventory | - | - | 2,749 | - | |||||||||||
Adjusted EBITDA plus acquisition costs | $ | 44,155 | 28,479 | 154,571 | 156,628 | ||||||||||
In addition, in this press release we are presenting below our earnings per share before acquisition and refinancing expenses for the fourth quarter and year ending December 31, 2011. As we do not routinely engage in transactions of the magnitude of the IRP acquisition or the refinancing of our debt, and consequently do not regularly incur transaction-related expenses of similar size, we believe presenting earnings per share excluding acquisition and refinancing expenses provides investors with an additional measure of our core operating performance. Charges related to the IRP acquisition and refinancing of our debt included in our results of operations are as follows:
Three months | Twelve months | |||||
ended | ended | |||||
December 31, 2011 | December 31, 2011 | |||||
Acquisition costs | - | 8,504 | ||||
Charges associated with repayment of debt | - | 740 | ||||
Amortization of contracts included in depreciation, | ||||||
depletion and amortization | 2,418 | 5,935 | ||||
Write-up to Fair Market Value of IRP's inventory at acquisition | - | 2,749 | ||||
Interest on repaid Senior Notes after new financing completed | - | 2,344 | ||||
Total IRP acquisition and recapitalization expenses | $ | 2,418 | 20,272 | |||
Earnings per share impact | $ | 0.07 | 0.62 | |||
SOURCE James River Coal Company
Share this article