Westmoreland Issues Open Letter to Shareholders
Englewood, CO – November 6, 2015 – Westmoreland Coal Company (NasdaqGM:WLB) today released an open letter to its shareholders in response to a letter from Venor Capital Management LP dated October 30, 2015.
The Independent Directors, together with the executive management team, met to consider the letter of October 30 by Venor Capital Management LP (“Venor”) on November 4th. We carefully reviewed the thoughts and suggestions presented in its public letter.
First, we appreciate your support and acknowledgement of the efficacy of our business model. Your assessment cuts through the “fog” of the many issues surrounding and affecting coal company valuations including socially-inspired disinvestment, a herd trading mentality, and the so-called “war on coal.”
While we are concerned with our stock price, we do not agree with the implication that our current share price is mainly attributable to a lack of effective communication with our shareholders. We feel there is always room for improvement and are firmly committed to effective shareholder communication and creation of shareholder value.
To this end, prior to receipt of the Venor letter, we had already instituted a national search for an Investor Relations executive. We are well down the path on this process and are being deliberate in our hiring as the successful candidate must be experienced and fit the Westmoreland culture and team. In addition, Westmoreland’s management looks forward to conducting an analyst day in New York, similar to the analyst day we held this summer. However, the timing of such an event must reflect the realities of closing the San Juan acquisition as well as our disclosure limitations pending the release of annual results. We commit to such an annual event at which time management will cover the several analyses and topics Venor and other investors request. Management also presents at many industry conferences and actively interacts with investors during quarterly earnings calls. Finally, as you will see in the 10-Q filed today, we added additional disclosure intended to highlight one-time cash flow events.
While the board is open to the idea of a stock/debt repurchase program, we continue to remain cautious at this time. We are presently involved in financing the San Juan acquisition, contingent upon regulatory approval. Given today’s market environment, we consider it prudent to reduce debt while preserving adequate liquidity. We believe a conservative approach is both wise and understandable at this time.
Over the past several years, we have aggressively acted upon the acquisition opportunities that were compatible with our business model. We see fewer of these opportunities in the near term. Thus, we enter a period of “harvesting,” a period where we will increase standardization, deleverage the business, allocate capital back to both debt and equity holders and pursue greater operating efficiency to drive down mining costs to maintain our customers’ competitiveness.
Finally, we are always willing to consider candidates for the board. The board, as a part of its ongoing governance process, consistently looks at its composition and the required skills that should be reflected in our board members. Any shareholder may put forward a candidate for the board for consideration as part of our ongoing governance process, and such candidates will be considered against our existing requirements for board membership. We act deliberately in both increasing the size of the board and in inviting specific candidates to join the board, in line with our proper governance process that is already established.
We are privileged to have many shareholders, like Venor, who share our passion for our business. We are committed to open dialogue and strategies aimed at the creation of shareholder value.
Chairman of the Board of Directors
Westmoreland Coal Company
About Westmoreland Coal Company
Westmoreland Coal Company is the oldest independent coal company in the United States. Westmoreland’s coal operations include sub-bituminous and lignite surface coal mining in the Western United States and Canada, an underground bituminous coal mine in Ohio, a char production facility, and a 50% interest in an activated carbon plant. Westmoreland also owns the general partner of and a majority interest in Westmoreland Resource Partners, LP, formerly Oxford Resource Partners, LP, a publicly-traded coal master limited partnership. Its power operations include ownership of the two-unit ROVA coal-fired power plant in North Carolina. For more information, visit www.westmoreland.com; provided that no information contained at such website is incorporated by reference here.
Cautionary Note Regarding Forward-Looking Statements
Forward-looking statements are based on Westmoreland’s current expectations and assumptions regarding its business, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Our actual results may differ materially from those contemplated by the forward-looking statements. Westmoreland cautions you against relying on any of these forward-looking statements. They are statements neither of historical fact nor guarantees or assurances of future performance. Important factors that could cause actual results to differ materially from those in the forward-looking statements include political, economic, business, competitive, market, weather and regulatory conditions.
Any forward-looking statements made by Westmoreland in this news release speak only as of the date on which it was made. Westmoreland undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future developments or otherwise, except as may be required by law.
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Investor Contact: Kevin Paprzycki (855) 922-6463