Xinergy Ltd. Announces Third Quarter 2011 Operating Results
Toronto Stock Exchange: XRG
(All Amounts in $US unless otherwise stated)
KNOXVILLE, TN, Oct. 19, 2011 /PRNewswire/ - Xinergy Ltd. (TSX: XRG) and (TSX: XRG.WT) ("Xinergy" or the "Company"), a US Central Appalachian producer of high quality coal, today announced operating results for the three months ended September 30, 2011, together with its Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") for the corresponding period, which has been posted on SEDAR at www.sedar.com and on the Company's website at www.xinergycorp.com.
Highlights for the Quarter Ended September 30, 2011
- Coal sales increased 29% to $48.7 million on 532,000 tons sold during the 2011 third quarter compared to $37.7 million on 434,000 tons sold during the 2010 third quarter.
- Adjusted EBITDA increased 9.3% to $12.2 million in the 2011 third quarter as compared to $11.1 million in the same quarter of 2010.
- In July 2011, the Company acquired True Energy, LLC, an active high-volatility metallurgical surface mining operation in southwestern Virginia, for an aggregate purchase price of $20.1 million.
- In July 2011, the Company entered into a long term coal supply agreement with J.P. Morgan Ventures Energy Corporation for the delivery period beginning January 1, 2012 through December 31, 2014, providing for the delivery of an aggregate 2.16 million tons of thermal coal (720,000 tons per year) from the Company's Raven Crest / Brier Creek mines in West Virginia, representing a minimum aggregate value of approximately $170 million ($78.70 per ton) in revenue over the three year term with significant potential upside from index-based escalators and fuel cost adjustments.
"We are pleased to report continued operating momentum in our third quarter 2011 results, during which we generated Adjusted EBITDA of $12.2 million, equating to a 25% Adjusted EBITDA margin on coal sales of $48.7 million," stated Jon E. Nix, Xinergy's Chairman and CEO. Our third quarter 2011 Adjusted EBITDA performance represents a 71% sequential increase over second quarter 2011, and a 9.3% increase over the comparable 2010 period. While mindful of the challenging macroeconomic and CAPP operating environment, we remain optimistic about commencing operations at our Greenbrier mid-vol mining complex before year end, as well as continuing to leverage our strong balance sheet and free cash flow profile towards opportunistic acquisitions."
Third Quarter 2011 Operating Results
The following table highlights operating results for the quarter ended September 30, 2011 and 2010 (in 000's except per ton amounts).
| Three Months Ended September 30, | ||||||
| 2011 | 2010 | |||||
| Total | Per Ton Sold |
Total | Per Ton Sold |
|||
| Tons Produced.................................................... | 525 | 423 | ||||
| Tons Sold........................................................... | 532 | 434 | ||||
| Coal Revenue...................................................... | $ 48,652 | $ 91.50 | $ 37,724 | $ 86.86 | ||
| Cost of Coal Sales............................................... | $ 32,527 | $ 61.17 | $ 23,479 | $ 54.06 | ||
| Gross Margin....................................................... | $ 16,125 | $ 30.33 | $ 14,245 | $ 32.80 | ||
| Depreciation, Depletion & Amortization.................. | $ 7,440 | $ 13.99 | $ 4,769 | $ 10.98 | ||
| General & Administrative...................................... | $ 4,467 | $ 8.40 | $ 3,433 | $ 7.97 | ||
| Amort. of above market coal supply agreement....... | $ 2,398 | $ 4.51 | $ 3,353 | $ 7.72 | ||
| Operating Loss.................................................... | $ 1,820 | $ 3.42 | $ 2,660 | $ 6.12 | ||
| EBITDA............................................................... | $ 13,121 | $ 24.68 | $ 13,362 | $ 30.76 | ||
| Adjusted EBITDA................................................. | $ 12,157 | $ 22.86 | $ 11,121 | $ 25.84 | ||
Committed Sales Position
The following tables show as of September 30, 2011 our contracted sales position for the fourth quarter of 2011 and for calendar years 2012 and 2013.
| 2011 Committed Sales | Total Tons (000's) |
Average Price |
||
| Thermal........................ | 649 | $ 94.58 | ||
| Met.............................. | 31 | $ 118.50 | ||
| 2012 Committed Sales | Total Tons (000's) |
% of Production |
Average Price |
|
| Thermal......................... | 1,736 | 58-69% | $ 82.09 | |
| Met............................... | 30 | 3-6% | $ 118.50 | |
| 2013 Committed Sales | Total Tons (000's) |
% of Production |
Average Price |
|
| Thermal......................... | 1,560 | 52-62% | $ 80.50 | |
| Met............................... | -- | -- | -- | |
Updated Production Guidance for Calendar Years 2012 and 2013
During each of 2012 and 2013, the Company anticipates producing between 3.0 million and 4.0 million tons from existing thermal and metallurgical operations, which is below previous guidance of producing between 4.2 million and 5.0 million tons from existing properties, detailed as follows:
| Thermal Operations | Revised Guidance | Previous Guidance | |
| Kentucky............................ | 1.5--1.8 million tons | 1.8--2.1 million tons | |
| WV--Raven Crest................. | 0.6--0.7 million tons | 0.8--0.9 million tons | |
| WV--Brier Creek.................. | 0.4--0.5 million tons | 0.4--0.5 million tons | |
| Total Thermal Operations..... | 2.5--3.0 million tons | 3.0--3.5 million tons |
| Metallurgical Operations | Revised Guidance | Previous Guidance | |
| WV--South Fork......................... | 0.3--0.75 million tons | 1.0--1.2 million tons | |
| VA--True Energy......................... | 0.2--0.25 million tons | 0.2---0.3 million tons | |
| Total Metallurgical Operations..... | 0.5--1.0 million tons | 1.2--1.5 million tons |
Financial Overview
The following tables present selected balance sheet, statement of operations and sales and operating statistics for Xinergy.
| ($'000) | As of September 30, 2011 |
As of June 30, 2011 |
As of March 31, 2011 |
As of December 31, 2010 |
|||
| Balance Sheet | |||||||
| Cash and cash equivalents | $ 94,441 | $ 145,592 | $ 17,192 | $ 17,029 | |||
| Total current assets | 123,953 | 171,196 | 41,334 | 47,442 | |||
| Total assets | 285,523 | 295,525 | 162,156 | 153,234 | |||
| Total current liabilities | 36,614 | 36,751 | 38,446 | 28,659 | |||
| Total long-term liabilities | 220,145 | 218,611 | 81,084 | 75,449 | |||
| Shareholders' equity | 28,763 | 40,163 | 42,626 | 49,126 |
| 2011 | 2010 | ||||||
| ($'000, except per share) | Three months ended September 30 |
Three months ended June 30 |
Nine months ended September 30 |
Three months ended September 30 |
|||
| Statement of Operations | |||||||
| Coal revenues | $ 48,652 | $ 40,637 | $ 132,340 | $ 37,724 | |||
| Cost of coal sales | 32,527 | 29,954 | 97,548 | 23,479 | |||
| Gross margin | 16,125 | 10,683 | 34,792 | 14,245 | |||
| Income (loss) before taxes | 4,618 | (5,289) | (13,516) | 4,786 | |||
| Net income (loss) | 5,409 | (2,817) | (7,660) | 1,667 | |||
| Basic net income (loss) per share | 0.10 | (0.05) | (0.14) | 0.03 | |||
| Diluted net income (loss) per share | 0.09 | (0.05) | (0.14) | 0.03 | |||
| 2011 | 2011 | |||||||
| Three months ended September 30 |
Three months ended June 30 |
Three months ended March 31 |
Nine months ended September 30 |
|||||
| Sales & Operating Statistics | ||||||||
| Tons sold | 531,724 | 510,381 | 553,485 | 1,595,590 | ||||
| Tons produced | 525,129 | 513,866 | 465,620 | 1,504,615 | ||||
| Sales price/ton | $91.50 | $79.62 | $77.78 | $82.94 | ||||
| COGS/ton sold | $61.17 | $58.69 | $63.36 | $61.14 | ||||
| Gross margin/ton sold | $30.33 | $20.93 | $14.42 | $21.80 | ||||
| Cash costs/ton produced | $59.64 | $58.39 | $61.18 | $59.69 | ||||
About Xinergy Ltd.
Headquartered in Knoxville, Tennessee, Xinergy Ltd., through its wholly owned subsidiary Xinergy Corp. and its subsidiaries, is engaged in coal mining in eastern Kentucky, West Virginia and Virginia. Currently, Xinergy sells high quality coal to electric utilities and industrial companies throughout the south-eastern United States. For more information, please visit www.xinergycorp.com.
Forward-Looking Information
This release contains "forward-looking information" that includes information relating to future events and future financial and operating performance, including management's assessment of Xinergy's future outlook. Forward-looking information should not be read as a guarantee of future performance or results and will not necessarily be accurate indications of the times at, or by which, that performance or those results will be achieved. Forward-looking information is based on information available at the time it is made and/or management's good faith belief as of that time with respect to future events, and such information is subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking information. Important factors that could cause these differences include but are not limited to: changes in contracted sales, the business of the Company may suffer as a result of uncertainty surrounding the coal market; the Company may be adversely affected by other economic, business, and/or competitive factors; the worldwide demand for coal; the price of coal; the price of alternative fuel sources; the supply of coal and other competitive factors; the costs to mine and transport coal; the ability to obtain new mining permits; the costs of reclamation of previously mined properties; the risks of expanding coal production; the ability to bring new mines on line on schedule; industry competition; the Company's ability to continue to execute its growth strategies; and general economic conditions. These and other risks are more fully described in the Company's filings with the Canadian Securities Administrators, including its Annual Information Form for the year ended December 31, 2010, available on SEDAR at www.sedar.com. You should not put undue reliance on any forward-looking information. We assume no obligation to update forward-looking information to reflect actual results, changes in assumptions or changes in other factors affecting forward looking information, except to the extent required by applicable securities laws. If we do update one or more forward-looking information, no inference should be drawn that we will make additional updates with respect to those or other forward-looking information.
SOURCE Xinergy Ltd.
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