Westmoreland Coal Company (NasdaqGM:WLB) today reported its second quarter results for 2011.
- Q2 2011 coal tons sold decreased 1.7 million tons from Q2 2010 due to the effects of a prolonged hydroelectric season, flooding in Montana and North Dakota, and the expiration of an unprofitable coal contract in December 2010.
- Operating income decreased $2.3 million from $1.3 million in Q2 2010 to an operating loss of $1.0 million in Q2 2011. Year to date 2011 operating income was $6.4 million compared to 2010 year to date operating income of $6.6 million.
- Adjusted EBITDA decreased $2.2 million during Q2 2011 to $14.2 million as compared to $16.4 million in Q2 2010. Year to date 2011 Adjusted EBITDA was $37.5 million compared to year to date 2010 Adjusted EBITDA of $37.6 million.
- Net loss applicable to common shareholders of $7.7 million ($0.59 per basic and diluted share) for Q2 2011 compared to Q2 2010 net income of $0.9 million ($0.09 per basic and diluted share). Second quarter 2010 net income included $4.3 million of income on a fair value adjustment for the conversion feature in the Company’s convertible debt. Year to date net loss for 2011 was $25.7 million compared to a year to date 2010 net loss of $2.3 million. The 2011 net loss includes $17.0 million in charges related to the refinancing of debt in February 2011 and $3.2 million of expense on the conversion feature’s fair value adjustment.
- Westmoreland again continued its strong safety performance achieving reportable and lost time incident rates approximately 38.5% and 45.2%, respectively, of the national averages for surface operations for the second quarter of 2011.
- During the second quarter of 2011, Westmoreland’s Beulah Mine received the Rocky Mountain Coal Mining Institute Surface Mine Safety Award, small mine category, for the surface mine with the lowest reportable rate of incidents in the eight-member state region.
“The story of the quarter was water; unprecedented amounts of it,” said Keith E. Alessi, Westmoreland’s President and CEO. “Record snow pack in the Cascade Mountains led to one of the longest hydroelectric seasons in history and negatively impacted sales at three of our mines. Year to date we estimate that we experienced a volume reduction of 1.5 million tons as a result of these conditions. In addition, late in the quarter, historic flood levels were experienced in North Dakota which disrupted rail service out of our WRI mine. These conditions have now abated and we expect our tonnage sales to return to normal during the third quarter. During the quarter our power operation performed extremely well and we did an excellent job of managing controllable costs.”
“We are very pleased with the continuation of our strong safety performance during the second quarter of 2011. We again beat the national surface mine averages and take great pride in the Beulah Mine receiving the Rocky Mountain Coal Mining Institute Surface Mine Safety Award.”
Westmoreland News Release Page 2 of 8 August 4, 2011 Westmoreland’s second quarter 2010 income included $4.3 million of income from the fair value adjustment on the conversion feature in the Company’s convertible debt. Excluding the fair value adjustment,
second quarter 2011 net loss increased by $4.4 million. 2011 year to date net income includes $17.0 million of charges related to the refinancing of debt in February 2011 and $3.2 million of expense on the conversion feature’s fair value adjustment. 2010 year to date net income includes $0.5 million of expense on the fair value adjustment of the conversion feature. Excluding those items, net loss increased by $3.7 million.
The Company’s revenues in Q2 2011 decreased to $112.1 million compared with $127.6 million in Q2 2010. This revenue decrease was driven by lower tonnage sales due to the unusually long hydroelectric season, the flooding conditions, and the December 2010 expiration of an unprofitable coal contract.
Westmoreland’s Adjusted EBITDA decreased to $14.2 million in Q2 2011 from $16.4 million in Q2 2010.