Westmoreland Coal (NasdaqGM: WLB), a major producer of largely minemouth coal for western U.S. power plants, said April 26 that its adjusted EBITDA increased $2.7m (11.6%) during the first quarter to $26m as compared to $23.3m in the year-ago quarter.
Operating income increased $0.3m (4.1%) during the first quarter to $7.7m as compared to $7.4m in the first quarter of 2011. Total revenues were $145.9m for the first quarter compared to $127.8m in the year-ago quarter, an increase of 14.2%. Net loss applicable to common shareholders of $0.8m ($0.06 per basic and diluted share) for the first quarter compared to a first-quarter 2011 net loss of $18m ($1.45 per basic and diluted share). The first-quarter 2011 net loss included $20.2m of charges related to the refinancing of debt.
“We successfully completed the acquisition of the Kemmerer Mine on January 31 and its two month performance is included in our first quarter results,” said Westmoreland CEO Keith Alessi about a strip coal mine in southwest Wyoming that in part serves the adjacent Naughton power plant of PacifiCorp. “The Kemmerer integration has gone very smoothly and the mine’s financial performance during the quarter exceeded our internal projections as a result of stronger than projected sales, productivity gains and cost management. We are still working through the process of valuing the Kemmerer assets and recording the final purchase accounting for the transaction.”
Alessi added: “We were pleased with our overall results, particularly in light of the extremely mild winter conditions experienced throughout the service areas of our customers. I consider this to be continuing validation of our business model, which is largely focused on long term, cost plus contracts. Our model provides for downside protection in quarters, such as this, in which we experience reduced tonnage. We remain focused on managing our balance sheet and finished the quarter in one of the most liquid positions we have experienced in many years as a result of these efforts, and the recent financing associated with the Kemmerer acquisition. During the quarter, we also welcomed Bob King to the company as our President and Chief Operating Officer. Bob’s deep industry experience will be invaluable to us as we explore ways to become more efficient and to grow the business.”
Westmoreland’s mines had 5.5 million tons of coal sales in the first quarter, down slightly from 5.6 million tons in the year-ago quarter. But the operating income from each ton sold climbed to $2.38 in the first quarter, up from $1.57 in the first quarter of 2011.
Westmoreland is the oldest independent coal company in the U.S. Its coal operations include mining at two operations in the Powder River Basin in Montana to in part serve the Colstrip power plant, sub-bituminous mining in Wyoming (Kemmerer), and lignite mining operations in Montana, North Dakota and Texas. Its power operations include ownership of the two-unit ROVA coal-fired power plant in North Carolina, which is a legacy operation from a time when Westmoreland was much more heavily involved in the independent power industry.