James River Coal Company Reports First Quarter 2013 Operating Results

RICHMOND, Va., May 1, 2013 /PRNewswire/ --

• Substantially Completed a Major Restructuring of All Mine Operations and Support Services
• Cash Mining Costs Per Ton Fall in CAPP and Midwest Operations
• Capital Expenditures of $7.7 Million
• Domestic Thermal Market Improves With Higher Natural Gas Prices; Met Coal Market Impacted by Global Economic Concerns
• Continuing to Evaluate Options to Strengthen the Balance Sheet and Improve Liquidity
• Conference Call Slides Posted to Company Website

James River Coal Company (NASDAQ: JRCC), today announced that it had net loss of $42.1 million or $1.21 per diluted share for the first quarter of 2013.  The 2013 results are compared to net loss of $15.7 million or $.45 per diluted share for the first quarter of 2012.

Peter T. Socha, Chairman and Chief Executive Officer commented: "Our mining operations had an excellent quarter.  As previously discussed, they have substantially completed a major restructuring of all mines and support services.  We are now beginning to see the results of this process in both coal production and costs.  We are continuing to adjust our operations to changes in the markets for both thermal and met coal.  The domestic thermal coal market appears to be benefitting from higher prices in the natural gas market.  We are a little more cautious on the met coal market today due to the influence of global economic factors.  Lastly, we are continuing to evaluate a wide variety of options to improve our liquidity and strengthen our balance sheet.  We are very grateful for the large number of holders of our debt and equity securities that have contacted us to discuss their thoughts and suggestions."

FINANCIAL RESULTS

The following tables show selected operating results for the quarter ended March 31, 2013 compared to the quarter ended March 31, 2012 (in 000's except per ton amounts). 

LIQUIDITY AND CASH FLOW

As of March 31, 2013, the Company had available liquidity of $107.2 million calculated as follows (in millions):

Other significant items impacting liquidity in the quarter:

SALES POSITION

As of April 30, 2013, we had the following agreements to ship coal at a fixed and known price (in 000's except per ton amounts):

CONFERENCE CALL, WEBCAST AND REPLAY:  The Company will hold a conference call with management to discuss the quarterly earnings May 1, 2013 at 10:00 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.

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; 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, including competition from alternative sources such as natural gas; 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. 

JAMES RIVER COAL COMPANY
AND SUBSIDIARIES
Consolidated Balance Sheets
(in thousands, except share data)

JAMES RIVER COAL COMPANY
AND SUBSIDIARIES
Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)

JAMES RIVER COAL COMPANY AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)

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.  We believe that Adjusted EBITDA presents a useful measure of our ability to service and incur debt on an ongoing basis. 

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 and 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. 

SOURCE James River Coal Company