- Maintaining a strong balance sheet with $46.4 million in cash and incremental $20 million in committed senior secured term loan financing
- Received permits and commenced site preparation work in advance of construction of preparation plant and rail loading facility at South Fork
- Consummated previously announced agreement to acquire a mid-vol met project in Fayette, Nicholas and Greenbrier Counties, West Virginia
- Secured a three year thermal coal supply agreement covering 144,000 tons at $67.50/ton in 2013 and 432,000 tons at $71.75/ton in each of 2014 and 2015
Toronto Stock Exchange: XRG
KNOXVILLE, TN, Nov. 14, 2012 /PRNewswire/ - Xinergy Ltd. XRG, a Central Appalachian coal producer, today announced operating results for the three months ended September 30, 2012, together with its Management's Discussion and Analysis ("MD&A") for the corresponding period. These documents are posted on SEDAR at www.sedar.com and on the Company's website at www.xinergycorp.com.
The Company reported a third quarter net loss of $35.6 million or $0.65 per diluted share in the quarter ended September 30, 2012 as compared to net income of $5.4 million or $0.09 per diluted share for the third quarter last year. Earnings before interest, taxes, depreciation and amortization (EBITDA) for the third quarter 2012 was $(7.7) million compared with $13.1 million for the comparable period last year. Excluding non-recurring items, Adjusted EBITDA for the third quarter 2012 was $(6.6) million compared with $12.2 million for the third quarter last year. Third quarter 2012 results were negatively impacted by a $15.0 million asset impairment charge and significantly lower production and sales compared with the third quarter of 2011.
In the third quarter of 2012, the Company reported coal revenues of $16.5 million on 242,390 tons sold compared with $48.7 million on 531,724 tons sold for the comparable period last year. Average realized sales price per ton was $68.16 during the quarter compared with $91.50 in the third quarter last year. Total cash costs were $17.5 million or $95.17 per ton produced compared with $31.3 million or $59.64 per ton a year ago.
"Challenging market conditions for both thermal and metallurgical coal persisted in the third quarter, though we believe we are seeing a bottoming in both markets," said Matt Goldfarb, Xinergy's CEO. "Xinergy has taken decisive steps to rationalize our cost structure by idling certain mines and cutting corporate overhead by roughly half, while at the same time positioning our shareholders to participate in the upside of our premium quality mid-vol met assets and low cost CAPP thermal mines as the market recovers.
Since our third quarter ended, the Company has made significant progress towards unlocking the value of its premium-quality mid vol met footprint in West Virginia. Following receipt of our permits in October, we began site preparation work in advance of commencing construction of our preparation plant and rail siding facility at South Fork. We remain focused on pushing our South Fork project forward on an expedited basis, with construction expected to be completed during the third quarter of 2013. Additionally, we are pleased to have closed on the previously announced agreement to acquire a mid-vol met project in Fayette, Nicholas and Greenbrier Counties, West Virginia that we refer to as Meadow River. Meadow River is an underground, Sewell seam mid-vol project in close proximity to South Fork with an 18-24 month development schedule. The Company views Meadow River as substantially enhancing its mid-vol met reserve profile, with the potential to significantly enhance its production profile as and when market conditions warrant the required capital expenditures to bring the project into development.
Xinergy is also pleased to have entered into a three-year thermal coal supply agreement, which should further "de-risk" our asset portfolio as we await cash flow contribution from South Fork. The Company continues to prioritize balance sheet liquidity, measured capital spending and fixed-cost rationalization as we navigate depressed market conditions and position our Company for long-term growth."
Financial Overview
The following tables present selected balance sheet, statement of operations and sales and operating statistics for Xinergy.
| ($'000) |
As of September 30 2012 |
As of June 30 2012 |
As of December 31 2011 |
As of September 30 2011 |
||||||||||||||||
| Balance Sheet | ||||||||||||||||||||
| Cash and cash equivalents | $ | 46,358 | $ | 53,454 | $ | 72,983 | $ | 94,441 | ||||||||||||
| Total current assets | 64,814 | 78,828 | 117,269 | 123,953 | ||||||||||||||||
| Total assets | 223,565 | 257,693 | 289,701 | 285,523 | ||||||||||||||||
| Total current liabilities | 25,136 | 22,368 | 40,309 | 36,614 | ||||||||||||||||
| Total long-term liabilities | 220,311 | 222,106 | 224,803 | 220,145 | ||||||||||||||||
| Shareholders' equity | (21,882) | 13,220 | 24,589 | 28,763 | ||||||||||||||||
| 2012 | 2011 | |||||||||||||||||||
| ($'000, except per share) |
Three months ended Sept 30 |
Three months ended June 30 |
Nine months ended Sept 30 |
Three months ended Sept 30 |
||||||||||||||||
| Statement of Operations | ||||||||||||||||||||
| Coal revenues | $ | 16,522 | $ | 23,143 | $ | 69,612 | $ | 48,652 | ||||||||||||
| Cost of coal sales | 21,051 | 26,372 | 77,930 | 32,527 | ||||||||||||||||
| Gross margin | (4,528) | (3,229) | (8,318) | 16,125 | ||||||||||||||||
| Income (loss) before taxes | (35,613) | (18,070) | (51,312) | 4,618 | ||||||||||||||||
| Net income (loss) | (35,613) | (14,474) | (48,398) | 5,409 | ||||||||||||||||
| Basic and diluted net income(loss) per share | (.65) | (.27) | (.89) | .09 | ||||||||||||||||
| 2012 | 2011 | |||||||||||
|
Three months ended Sept 30 |
Three months ended June 30 |
Nine months ended Sept 30 |
Three months ended Sept 30 |
|||||||||
| Sales & Operating Statistics | ||||||||||||
| Tons sold | 242,390 | 363,495 | 1,031,582 | 531,724 | ||||||||
| Tons produced | 183,909 | 272,999 | 837,081 | 525,129 | ||||||||
| Sales price/ton | $ | 68.16 | $ | 63.67 | $ | 67.48 | $ | 91.50 | ||||
| COGS/ton sold | $ | 86.85 | $ | 72.55 | $ | 75.54 | $ | 61.17 | ||||
| Gross margin/ton sold | $ | (18.68) | $ | (8.88) | $ | (8.06) | $ | 30.33 | ||||
Estimated Capital Expenditures
We have spent approximately $24.5 million on capital expenditures for the nine months ended September 30, 2012. The Company anticipates an incremental $5.0 million to $6.0 million in capital expenditures for the remainder of 2012, or a total of approximately $30.0 million for fiscal 2012.
Capital expenditures for the fourth quarter of 2012 include $4.0 million for the October acquisition of Meadow River, and approximately $1.0 million for site development at South Fork with any residual capital expenditures being attributable to maintenance capital expenditures at our other mining complexes.
Liquidity
As of September 30, 2012, we had total cash and cash equivalents (excluding restricted cash) of $46.4 million. On October 29, the Company secured a $20 million senior secured term loan financing commitment from Bayside Capital, Inc., replacing the commitment previously obtained by the Company in July, in order to achieve greater operating flexibility and reduced carrying costs.
Conference Call, Webcast and Replay
The Company will hold its quarterly conference call to discuss third quarter 2012 operating results on Thursday, November 15, 2012 at 10:00 a.m. EDT. The conference call will be open to the public toll free at (877) 340-2553. International callers should use (412) 317-6789, and Canadian callers should use (866) 605-3852. The conference call can also be accessed via webcast on the Company's website with a replay available shortly after the event.
About Xinergy Ltd.
Headquartered in Knoxville, Tennessee, Xinergy Ltd., through its wholly owned subsidiary Xinergy Corp. and its subsidiaries, is engaged in coal mining in eastern Kentucky, West Virginia and Virginia. Xinergy sells high quality thermal and metallurgical coal to electric utilities, steelmakers, energy trading firms and industrial companies. For more information, please visit www.xinergycorp.com.
SOURCE Xinergy Ltd.
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