Englewood, CO – April 25, 2014 – Westmoreland Coal Company (NasdaqGM:WLB) today reported its first quarter results for 2014.
- Q1 2014 revenues grew 11.6% to $180.2 million compared with $161.4 million in Q1 2013.
- Q1 2014 Adjusted EBITDA increased 12.5% to $28.9 million compared with $25.7 million in Q1 2013.
- Q1 2014 operating income increased 42.1% to $8.1 million compared with $5.7 million in Q1 2013.
- Net loss applicable to common shareholders for the three months ended March 31, 2014 increased to $19.3 million compared with a loss of $2.7 million for the three months ended March 31, 2013. The loss for Q1 2014 includes approximately $18.1 million of additional interest, currency losses, and transaction fees related to the Sherritt acquisition.
- Q1 2014 operating cash flows increased to $29.6 million. Westmoreland’s cash position remained flat at $61.9 million, despite $16.9 million being placed into escrow related to the Sherritt acquisition financing.
- The company expects to close on the Sherritt coal assets within a week. Guidance for Adjusted EBITDA and capital expenditures is described below.
“The first quarter’s results were in line with our expectations,” said Keith E. Alessi, Westmoreland’s CEO. “The 2014 first quarter reflects the newly restructured ROVA power agreement and does not include any benefit of the Indian Coal Tax Credit. The tax credit expired on December 31, 2013 and has not yet been renewed, although it has been included in pending legislation.”
“Our quarterly results are often materially impacted by the timing of customer maintenance outages. The first quarter of 2014 benefited in comparison to the prior year from the fact that there were two outages during the 2013 quarter. The second quarter of 2014 is expected to have two scheduled outages versus none in 2013. The 2014 pattern is consistent with our historical experience, with 2014 second quarter results expected to be lower than 2013 and quarters three and four to be higher, leaving us within our previously announced U.S. business guidance range.”
“We expect to close on the Sherritt coal asset acquisition within a week. We have received all required regulatory approvals and received final court approval on April 23rd.”
“Sherritt’s operations are heavily skewed to cold weather months, with as much as 75% of EBITDA historically falling in the first and fourth quarters. We expect these assets to generate between $52 million and $62 million in adjusted EBITDA from close until December 31, 2014. Given historical trends, planned customer outages, and internal projections, it is likely that 29%, 22% and 49% of the projected 2014 adjusted EBITDA will occur in quarters two, three and four, respectively. We further expect capital expenditures from close through December 31, 2014 will be between $25 million and $30 million.”
“We are excited to welcome Sherritt’s employees, customers and joint venture partners into the Westmoreland team and look forward to introducing our business model to the Canadian business,” Alessi concluded.
Robert P. King, Westmoreland’s President of U.S. Operations added, “During the first quarter, favorable weather and low hydro generation continued to generate high demand for power. Our customers ran their plants at high levels and Westmoreland’s mines and power plant operated very well. However, sales and shipments from our Absaloka Mine were negatively impacted throughout the quarter by railroad disruptions. Railroad service has improved in April and shipments from Absaloka have increased to normal levels.”
“Westmoreland’s operations continued to deliver very good safety performance with reportable incident and lost time frequency rates significantly below the national averages for surface mines and power plants. Four of our six mines and the ROVA plant operated with zero reportable incidents in the first quarter.”