Westmoreland Coal Company (NYSE AMEX: WLB) today reported its results for 2010.
- Operating income increased $52.3 million (164.6%) during 2010 from a loss of $31.8 million to a profit of $20.5 million.
- Adjusted EBITDA increased $51.3 million (169.4%) during 2010 to $81.6 million as compared to $30.3 million in 2009.
- Net loss applicable to common shareholders of $1.9 million ($0.17 per diluted share) for 2010 compared to a net loss of $28.7 million ($2.88 per diluted share) for 2009. The 2010 $1.9 million net loss includes $3.4 million of non-cash, mark-to-market expense relating to the conversion feature in the Company’s convertible notes.
- Total revenues were $506.1 million for 2010, 14.1% higher than revenues for 2009.
- Westmoreland continued its strong safety performance again achieving reportable and lost time incident rates approximately 72% of the national averages for surface operations for both the fourth quarter and all of 2010.
“During 2010, we increased our operating profit by over $52 million by improving both our coal and power operating results while significantly driving down our heritage costs” said Keith E. Alessi, Westmoreland’s President and CEO. “Absent the mark-to-market expense on our convertible debt feature, we would have posted a net income for 2010. Our coal operations achieved strong cost performance during the year, while again demonstrating our commitment to safety by significantly beating the national surface mine averages.”
“With the closing of our $150 million senior secured notes issued on February 4th, we have significantly enhanced our liquidity position, strengthened our balance sheet, and positioned the company for the future. The refinancing expenses and the conversion premium on our convertible debt will result in a first quarter charge of approximately $20 million. Absent those charges, we expect our results to continue to improve in 2011.”
Westmoreland’s 2010 net loss includes $3.4 million of mark-to-market expense from the conversion feature on the Company’s convertible notes and $1.4 million of debt discount amortization expense also associated with the accounting requirements for the convertible notes.
Westmoreland’s 2009 net loss includes a $17.1 million non-cash income tax benefit resulting from other comprehensive income gains, $5.1 million of income from the favorable valuation of the conversion feature in the Company’s convertible notes, a $0.8 million gain related to the settlement of a heritage benefit claim, and $4.8 million of expense related to the settlement of a customer dispute.
Excluding the $4.8 million of expense related to the convertible notes in 2010 and the $18.1 million of income in 2009 discussed above, our 2010 net loss decreased by $49.7 million.
The Company’s revenues in 2010 increased to $506.1 million compared with $443.4 million in 2009. This increase was primarily driven by a $56.9 million increase in coal segment revenue due to price increases under existing coal supply agreements, the start of new agreements, and the significant customer shutdowns we experienced during 2009.
Westmoreland’s Adjusted EBITDA increased from $30.3 million in 2009 to $81.6 million in 2010.