01.04.2017 00:12:00

Contura Announces Fourth Quarter and Formation to Year End(1) Results

BRISTOL, Tenn., March 31, 2017 /PRNewswire/ -- Contura Energy, Inc., a leading U.S. coal supplier, today reported results for the fourth quarter and the period from July 26, 2016 to December 31, 2016 ("formation to year end").  These figures update the preliminary results announced on February 21, 2017 for the same reporting periods. 

Highlights include:

  • Net Income of $35 million for the fourth quarter and Net Loss of $11 million formation to year end
  • Adjusted EBITDA of $104 million for the fourth quarter and $129 million formation to year end
  • The company successfully refinanced its debt after quarter end
  • Announced on March 7 a successful bid to increase its ownership stake in DTA terminal

            

 (millions, except per share)   









Fourth Quarter
2016

Formation to

Year End1

Coal revenues







$399.3

$612.2

Net Income (Loss)







$34.9

($10.9)

Net Income (Loss) per diluted share







$3.24

($1.06)

Adjusted EBITDA2







$103.7

$129.4

Operating cash flow







$34.5

$68.2

Capital expenditures







$21.7

$34.5

Tons of coal sold







12.7

22.5




















1 The "formation to year end" reporting period referred to in this document includes results from July 26, 2016 through December 31, 2016.

2 These are non-GAAP financial measures.  A reconciliation of net loss to adjusted EBITDA is included in tables accompanying the financial schedules.

 

Financial Performance

  • Coal revenues in the fourth quarter were $399.3 million, with Central Appalachia (CAPP) accounting for $100.7 million and Trading and Logistics accounting for $110.3 million. On the thermal side, Northern Appalachia (NAPP) revenue totaled $87.7 million and the Powder River Basin (PRB) generated $100.6 million in coal sales. Freight and handling revenues and other revenues were $40.6 million and $4.0 million, respectively, in the fourth quarter.

    For the fourth quarter, CAPP metallurgical coal shipments were 0.8 million tons at an average per-ton realization of $120.08.  Contura shipped 9.2 million tons of PRB coal during the quarter at an average per-ton realization of $10.88, while NAPP shipments totaled 1.9 million tons at an average per-ton realization of $45.70.  NAPP volumes were slightly affected by a longwall move in October.  Within the Trading and Logistics segment, 0.7 million tons of coal were shipped at an average price of $153.68 per ton. 

    Formation to year end, CAPP metallurgical coal shipments were 1.4 million tons at an average per-ton realization of $99.41.  Contura shipped 16.7 million tons of PRB coal at an average per-ton realization of $10.83 from formation to year end, while NAPP shipments totaled 2.9 million tons at an average per-ton realization of $45.00.  Within the Trading and Logistics segment, 1.5 million tons of coal were shipped at an average price of $106.96 per ton.

  • Total costs and expenses during the fourth quarter were $389.2 million and cost of coal sales was $288.6 million. The cost of coal sales in CAPP during for the quarter averaged $74.28 per ton. NAPP cost averaged $34.70 per ton primarily due to a longwall move in October. The estimated cost impact from the longwall move was approximately $4.00 per ton compared to expected fourth quarter production costs. The cost of coal sales per ton for the PRB mines was $8.89 during the fourth quarter, benefiting from lower than normal overburden removal.

    Total costs and expenses formation to year end were $654.9 million and cost of coal sales was $468.1 million.  The cost of coal sales in CAPP from formation to year end averaged $68.68 per ton.  NAPP costs averaged $36.97 per ton due to a rock intrusion in September and a longwall move in October.  The cost of coal sales per ton for the PRB mines formation to year end was $8.44, benefiting from a lower than normal overburden removal.

  • Selling, general and administrative (SG&A) expenses in the fourth quarter were $9.6 million, which includes approximately $0.5 million of non-recurring expenses associated with the formation of the company. Depreciation, depletion and amortization was $21.7 million during the fourth quarter and amortization of acquired intangibles was $37.7 million. Other expenses include a mark-to-market change in value of warrants totaling $17.4 million, a non-cash charge to earnings.

    SG&A expenses formation to year end were $19.1 million, including approximately $4.0 million of non-recurring expenses associated with the formation of the company.  Depreciation, depletion and amortization formation to year end was $44.0 million and amortization of acquired intangibles was $61.3 million.  Other expenses include a mark-to-market change in value of warrants totaling $34.0 million, which is a non-cash charge to earnings.

  • Contura recorded a net income of $34.9 million, or $3.24 per diluted share for the fourth quarter and a loss of $10.9 million, or $1.06 per basic share from formation to year end.

  • Adjusted EBITDA was $103.7 million for the quarter, excluding $17.4 million derivative charge related to warrants issued on July 26, 2016. Formation to year end, Adjusted EBITDA was $129.4 million, excluding a $34 million derivative charge related to the previously mentioned warrants and $10.6 million for mark-to-market adjustment for acquisition related obligations.

Liquidity and Capital Resources

Cash provided by operating activities for the fourth quarter and formation to year end were $34.5 million and $68.2 million respectively.  Capital expenditures for the fourth quarter were $21.7 million and $34.5 million from formation to year end.

At year-end, Contura had $127.9 million in unrestricted cash.  Total long-term debt, including the current portion of long-term debt as of December 31, 2016, was approximately $349.2 million.

As announced on March 17, 2017, Contura successfully refinanced its debt through a $400 million term loan credit facility and will redeem all outstanding 10% senior secured First Lien Notes and discharge certain other long-term liabilities.  The new term loan matures in March 2024 and has an interest rate of LIBOR plus 5.0% with a LIBOR floor of 1.0%.

Strategic DTA Ownership Transaction

On March 7, 2017 Contura announced a successful joint bid with Arch Coal to significantly increase its ownership in the world-class Dominion Terminal Associates (DTA) coal export terminal in Newport News, Virginia.  As a result of the transaction, Contura holds a 65% majority stake in the facility.  DTA provides coal blending capabilities and transportation flexibility, serving as a strategic cornerstone of Contura's Trading and Logistics business, as well the company's coal export activities.

 

2017 Committed and Priced3 Status (as of March 7, 2017)


(tons in millions)

 Committed tons

 

 Average price
(FOB Mine)

CAPP

2.4

$124.98

NAPP

7.9

$42.80

PRB

29.3

$11.35









3 Based upon contract terms, anticipated delivery schedules, and assumed freight expenses.

 

Additional Information
For additional financial information about Contura, including its audited condensed consolidated financial statements for formation to year end period, please visit www.conturaenergy.com/financials.

ABOUT CONTURA ENERGY
Contura Energy is a private, Tennessee-based company with affiliate mining operations across multiple major coal basins in Pennsylvania, Virginia, West Virginia and Wyoming.  With customers across the globe, high-quality reserves and significant port capacity, Contura Energy reliably supplies both metallurgical coal to produce steel and thermal coal to generate power.  For more information, visit www.conturaenergy.com.

FORWARD-LOOKING STATEMENTS
This news release includes forward-looking statements.  These forward-looking statements are based on Contura's expectations and beliefs concerning future events and involve risks and uncertainties that may cause actual results to differ materially from current expectations.  These factors are difficult to predict accurately and may be beyond Contura's control.  You should also review the uncertainties discussed in the Company's condensed consolidated financial statements for the period ended December 31, 2016.  Forward-looking statements in this news release or elsewhere speak only as of the date made.  New uncertainties and risks arise from time to time, and it is impossible for Contura to predict these events or how they may affect the Company.  Contura has no duty to, and does not intend to, update or revise the forward-looking statements in this news release or elsewhere after the date this release is issued.  In light of these risks and uncertainties, investors should keep in mind that results, events or developments discussed in any forward-looking statement made in this news release may not occur. 

FINANCIAL TABLES FOLLOW

Use of Non-GAAP Measures

In addition to the results prepared in accordance with generally accepted accounting principles in the United States (GAAP) provided throughout this press release, Contura has presented the following non-GAAP financial measures, which management uses to gauge operating performance: Adjusted EBITDA and cost of coal sales per ton.  These non-GAAP financial measures exclude various items detailed in the attached reconciliation tables.

The definition of these non-GAAP measures may be changed periodically by management to adjust for significant items important to an understanding of operating trends.  These measures are not intended to replace financial performance measures determined in accordance with GAAP.  Rather, they are presented as supplemental measures of the Company's performance that management finds useful in assessing the company's financial performance and believes are useful to securities analysts, investors and others in assessing the Company's performance over time.  Moreover, these measures are not calculated identically by all companies and therefore may not be comparable to similarly titled measures used by other companies.

 

CONTURA ENERGY, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF OPERATIONS

(Amounts in thousands, except share and per share data)



Fourth Quarter


Period from           

July 26, 2016 (inception) to December 31, 2016

Revenues:




Coal revenues

$

399,336



$

612,247


Freight and handling revenues

40,641



70,544


Other revenues

4,029



6,628


Total revenues

444,006



689,419


Costs and expenses:




Cost of coal sales (exclusive of items shown separately below)

288,610



468,051


Freight and handling costs

40,641



70,544


Other expenses

1,467



2,559


Depreciation, depletion and amortization

21,748



43,978


Amortization of acquired intangibles, net

37,719



61,281


Selling, general and administrative expenses (exclusive of depreciation, depletion and amortization shown separately above)

9,588



19,135


Mark-to-market adjustment - acquisition-related obligations

(10,616)



(10,616)


Total costs and expenses

389,157



654,932


Income from operations

54,849



34,487


Other income (expense):




Interest expense

(11,702)



(20,792)


Interest income

21



23


Mark-to-market adjustment for warrant derivative liability

(17,423)



(33,975)


Bargain purchase gain

7,719



7,719


Miscellaneous income, net

32



239


Total other expense, net

(21,353)



(46,786)


Loss before income taxes

33,496



(12,299)


Income tax benefit

1,370



1,369


Net income (loss)

$

34,866



$

(10,930)


Basic income (loss) per common share

$

3.38



$

(1.06)


Diluted income (loss) per common share

$

3.24



$

(1.06)


Weighted average shares - basic

10,309,310



10,309,310


Weighted average shares - diluted

10,747,134



10,309,310


 

 

CONTURA ENERGY, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

(Amounts in thousands, except share and per share data)



December 31,
 2016

Assets


Current assets:


Cash and cash equivalents

$

127,948


Trade accounts receivable, net

182,600


Inventories, net

75,399


Assets held for sale

1,714


Prepaid expenses and other current assets

37,555


Total current assets

425,216


Property, plant, and equipment, net

317,013


Other acquired intangibles (net of accumulated amortization of $61,851)

87,149


Long-term restricted cash

43,341


Long-term deposits

55,501


Other non-current assets

18,532


Total assets

$

946,752


Liabilities and Stockholders' Equity


Current liabilities:


Current portion of long-term debt

$

2,324


Trade accounts payable

98,166


Acquisition-related obligations - current

27,258


Accrued expenses and other current liabilities

90,864


Total current liabilities

218,612


Long-term debt

346,837


Acquisition-related obligations - long-term

59,088


Asset retirement obligations

187,097


Other non-current liabilities

97,894


Total liabilities

909,528




Stockholders' Equity


Preferred stock - par value $0.01, 2.0 million shares authorized, none issued


Common stock - par value $0.01, 20.0 million shares authorized, 10.3 million issued and outstanding at December 31, 2016

103


Additional paid-in capital

45,964


Accumulated other comprehensive income

2,087


Accumulated deficit

(10,930)


Total stockholders' equity

37,224


Total liabilities and stockholders' equity

$

946,752


 

 

CONTURA ENERGY, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS

(Amounts in thousands) 



Period from July 26, 2016
(inception) to       

December 31, 2016

Operating activities:


Net loss

$

(10,930)


Adjustments to reconcile net loss to net cash provided by operating activities:


Depreciation, depletion and amortization

43,978


Amortization of acquired intangibles, net

61,281


Accretion of acquisition-related obligations discount

4,936


Mark-to-market adjustment for warrants derivative liability

33,975


Mark-to-market adjustment for acquisition-related obligations

(10,616)


Bargain purchase gain

(7,719)


Accretion of asset retirement obligations

10,819


Employee benefit plans, net

3,154


Other, net

1,637


Changes in operating assets and liabilities:


Trade accounts receivable, net

(114,244)


Inventories, net

(32,046)


Prepaid expenses and other current assets

(1,096)


Long-term restricted cash

49,459


Long-term deposits

(55,407)


Other non-current assets

(14,681)


Trade accounts payable

59,242


Accrued expenses and other current liabilities

51,053


Asset retirement obligations

(514)


Acquisition-related obligations

(9,300)


Other non-current liabilities

5,199


Net cash provided by operating activities

68,180


Investing activities:


Capital expenditures

(34,497)


Proceeds from sale of property, plant and equipment

1,787


Cash acquired in acquisition

51,000


Net cash provided by investing activities

18,290


Financing activities:


Proceeds from borrowings on long-term debt

42,500


Principal repayments of capital lease and capital financing obligations

(243)


Debt issuance costs

(243)


Principal repayments of notes payable

(536)


Net cash provided by financing activities

41,478


Net increase in cash and cash equivalents

127,948


Cash and cash equivalents at beginning of period


Cash and cash equivalents at end of period

$

127,948




Supplemental cash flow information:


Cash paid for interest

$

356


Supplemental disclosure of non-cash investing and financing activities:


Capital leases and capital financing - equipment

$

3,473


Accrued capital expenditures

$

4,778


Issuance of equity in connection with acquisition

$

44,644


Issuance of 10% Senior Secured First Lien Notes in connection with acquisition

$

285,936


Issuance of GUC Distribution Note in connection with acquisition

$

4,208


Issuance of warrants in connection with acquisition

$

1,167


 

 

CONTURA ENERGY, INC. AND SUBSIDIARIES

ADJUSTED EBITDA RECONCILIATION

(Amounts in thousands)


Reconciliation of Non-GAAP measures


Fourth Quarter


CAPP


NAPP


PRB


Trading and
Logistics


All
Other


Consolidated

Net income (loss)

$

35,857



$

26,376



$

(3,607)



$

(4,291)



$

(19,469)



$

34,866


Interest expense

62



103



184





11,353



11,702


Interest income

(6)









(15)



(21)


Income tax benefit









(1,370)



(1,370)


Depreciation, depletion and amortization

2,902



(3,309)



21,990





165



21,748


Mark-to-market adjustment for warrant derivative liability









17,423



17,423


Bargain purchase gain









(7,719)



(7,719)


Mark-to-market adjustment - acquisition-related obligations









(10,616)



(10,616)


Amortization of acquired intangibles, net







37,719





37,719


Adjusted EBITDA

$

38,815



$

23,170



$

18,567



$

33,428



$

(10,248)



$

103,732


 

Segment Information


Fourth Quarter


CAPP


NAPP


PRB


Trading and
Logistics


All
Other


Consolidated

Total revenues

$

100,904



$

89,555



$

102,181



$

151,214



$

152



$

444,006


Depreciation, depletion, and amortization

$

2,902



$

(3,309)



$

21,990



$



$

165



$

21,748


Amortization of acquired intangibles, net

$



$



$



$

37,719



$



$

37,719


Adjusted EBITDA

$

38,815



$

23,170



$

18,567



$

33,428



$

(10,248)



$

103,732


Capital expenditures

$

3,625



$

10,651



$

7,330



$



$

65



$

21,671


 

 

CONTURA ENERGY, INC. AND SUBSIDIARIES

ADJUSTED EBITDA RECONCILIATION

(Amounts in thousands)


Reconciliation of Non-GAAP measures


Period from July 26, 2016 (inception) to December 31, 2016


CAPP


NAPP


PRB


Trading and
Logistics


All
Other


Consolidated

Net income (loss)

$

37,436



$

26,434



$

1,467



$

(22,053)



$

(54,214)



$

(10,930)


Interest expense

97



171



296





20,228



20,792


Interest income

(6)









(17)



(23)


Income tax benefit









(1,369)



(1,369)


Depreciation, depletion and amortization

6,442



(772)



38,005





303



43,978


Mark-to-market adjustment for warrant derivative liability









33,975



33,975


Bargain purchase gain









(7,719)



(7,719)


Mark-to-market adjustment - acquisition-related obligations









(10,616)



(10,616)


Amortization of acquired intangibles, net







61,281





61,281


Adjusted EBITDA

$

43,969



$

25,833



$

39,768



$

39,228



$

(19,429)



$

129,369


 

Segment Information


Period from July 26, 2016 (inception) to December 31, 2016


CAPP


NAPP


PRB


Trading and
Logistics


All
Other


Consolidated

Total revenues

$

138,973



$

132,363



$

183,123



$

234,704



$

256



$

689,419


Depreciation, depletion, and amortization

$

6,442



$

(772)



$

38,005



$



$

303



$

43,978


Amortization of acquired intangibles, net

$



$



$



$

61,281



$



$

61,281


Adjusted EBITDA

$

43,969



$

25,833



$

39,768



$

39,228



$

(19,429)



$

129,369


Capital expenditures

$

4,626



$

18,136



$

11,123



$



$

612



$

34,497


 

 

CONTURA ENERGY, INC. AND SUBSIDIARIES

RESULTS OF OPERATIONS

(Amounts in thousands, except for per ton data)



Fourth Quarter


Period from July 26, 2016 (inception)

to December 31, 2016


Total

% of Total


Total

% of Total

Revenues:






Coal revenues:






Steam

$

180,571


41%


$

299,744


44%

Metallurgical

218,765


49%


312,503


45%

Freight and handling revenues

40,641


9%


70,544


10%

Other revenues

4,029


1%


6,628


1%

Total revenues

$

444,006




$

689,419









Tons sold:






Steam

11,081


87%


19,413


86%

Metallurgical

1,637


13%


3,068


14%

Total

12,718




22,481









Coal sales realization per ton:






Steam

$

16.30




$

15.44



Metallurgical

$

133.64




$

101.86



Average

$

31.40




$

27.23



 

 

CONTURA ENERGY, INC. AND SUBSIDIARIES

RESULTS OF OPERATIONS

(Amounts in thousands, except for per ton data)



Fourth Quarter


Period from July 26, 2016 (inception) to       

December 31, 2016

Coal Revenues (1):




CAPP Operations

$

100,746



$

137,981


NAPP Operations

$

87,653



$

129,961


PRB Operations

$

100,595



$

180,555


Trading and Logistics Operations

$

110,342



$

163,750






Tons Sold (1):




CAPP Operations

839



1,388


NAPP Operations

1,918



2,888


PRB Operations

9,243



16,674


Trading and Logistics Operations

718



1,531






Coal sales realization per ton (1):




CAPP Operations

$

120.08



$

99.41


NAPP Operations

$

45.70



$

45.00


PRB Operations

$

10.88



$

10.83


Trading and Logistics Operations

$

153.68



$

106.96


Average

$

31.40



$

27.23










(1) Our All Other Category, which has no coal sales or coal production, is not presented.

 

 

CONTURA ENERGY, INC. AND SUBSIDIARIES

RESULTS OF OPERATIONS

(Amounts in thousands, except for per ton data)



Fourth Quarter


Period from July 26, 2016
(inception) to         

December 31, 2016

Cost of coal sales (exclusive of items shown separately below)

$

288,610



$

468,051


Freight and handling costs

40,641



70,544


Other expenses

1,467



2,559


Depreciation, depletion and amortization

21,748



43,978


Amortization of acquired intangibles, net

37,719



61,281


Selling, general and administrative expenses (exclusive of depreciation, depletion and amortization shown separately above)

9,588



19,135


Mark-to-market adjustment - acquisition-related obligations

(10,616)



(10,616)


Total costs and expenses

$

389,157



$

654,932






Cost of coal sales (1):




CAPP Operations

$

62,322



$

95,328


NAPP Operations

$

66,558



$

106,781


PRB Operations

$

82,131



$

140,803


Trading and Logistics Operations

$

77,167



$

124,954






Tons Sold (1):




CAPP Operations

839



1,388


NAPP Operations

1,918



2,888


PRB Operations

9,243



16,674


Trading and Logistics Operations

718



1,531






Cost of coal sales per ton (1):




CAPP Operations

$

74.28



$

68.68


NAPP Operations

$

34.70



$

36.97


PRB Operations

$

8.89



$

8.44


Trading and Logistics Operations

$

107.47



$

81.62










(1) Our All Other Category, which has no coal sales or coal production, is not presented.

 

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/contura-announces-fourth-quarter-and-formation-to-year-end1-results-300432927.html

SOURCE Contura Energy, Inc.

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