Westmoreland Coal Company (NASDAQ:WLB) today reported its first quarter results for 2011.
- Operating income increased $2.1 million (40.0%) from $5.3 million in Q1 2010 to $7.4 million in Q1 2011.
- Adjusted EBITDA increased $2.1 million (9.7%) during Q1 2011 to $23.3 million as compared to $21.2 million in Q1 2010.
- Net loss applicable to common shareholders of $18.0 million ($1.45 per basic and diluted share) for Q1 2011 which included $17.0 million of losses on the extinguishment of debt and a $3.2 million conversion premium on the Company’s convertible notes pursuant to the first quarter bond issuance and refinancing. The Q1 2010 net loss was $3.2 million ($0.30 per basic and diluted share).
- Total revenues were $127.8 million for Q1 2011, 1.0% higher than revenues for Q1 2010. This was accomplished on lower volume due to the expiration of an unprofitable coal contract.
- Westmoreland again continued its strong safety performance achieving reportable and lost time incident rates approximately 20.0% and 29.8%, respectively, of the national averages for surface operations for the first quarter of 2011.
- During the first quarter of 2011, Westmoreland’s Beulah Mine received the Lignite Energy Council’s Safety Excellence Award for the mine or plant with the lowest accident incident rate in the lignite industry and Westmoreland’s Jewett Mine received the 2011 Railroad Commission of Texas Coal Mining Reclamation Award for its “Wilkerson Springs Creek Relocation.”
“The first quarter of 2011 was the sixth straight quarter in which we increased our operating profit and adjusted EBITDA over the prior year quarter” said Keith E. Alessi, Westmoreland’s President and CEO. “As previously announced, we incurred substantial charges during the quarter related to the refinancing of debt and placement of our senior subordinated debt issuance in February 2011. The expiration of an unfavorable coal contract led to improved results in our coal operation despite lower sales. Strong hydro-power conditions combined with scheduled maintenance shutdowns by our coal customers and our ROVA plant will negatively impact our Q2 2011 versus the Q2 2010 results. However, this is in line with our expectations.”
“We are very pleased with our safety performance during the first quarter of 2011. We once again beat the national surface mine averages by a significantly large margin due to the continuation of our Beulah Mine’s award winning safety performance. We are also extraordinarily proud of the reclamation award that our Jewett Mine recently received from the Railroad Commission in Texas. These achievements underscore our commitment to safe and responsible mining practices.”
Westmoreland’s Q1 2011 net loss includes $17.0 million of losses on the extinguishment of debt and $3.2 million of mark-to-market expense from the conversion of the Company’s previously outstanding convertible notes. Westmoreland’s Q1 2010 net loss included $4.8 million of expense related to the valuation of the conversion feature in the Company’s convertible notes. Excluding the $20.2 million of refinancing and debt conversion expense in Q1 2011 and the $4.8 million of mark-to-market expense on the convertible debt in Q1 2010, the Company’s net loss decreased by $0.6 million.
The Company’s revenues in Q1 2011 increased to $127.8 million compared with $126.4 million in Q1 2010. This revenue increase was driven by stronger tonnage sales and favorable pricing at the Company’s Absaloka Mine which offset the expiration of an unprofitable coal contract at its Rosebud Mine.
Westmoreland’s Adjusted EBITDA increased to $23.3 million in Q1 2011 from $21.2 million in Q1 2010.