Attached files
| file | filename |
|---|---|
| 8-K - CURRENT REPORT ON FORM 8-K - James River Coal CO | jrcc_8k-022610.htm |
| EX-99.2 - James River Coal CO | jrcc_8k-ex9902.htm |
| EX-99.1 - James River Coal CO | jrcc_8k-ex9901.htm |
Exhibit 99.3
Shareholder
Update
February
2010
2
Forward-Looking
Statements
Certain statements
in this Shareholder Update, and other written or oral statements made
by or on behalf of us are "forward-looking statements" within the meaning of the federal
securities laws. Statements regarding future events and developments and our future
performance, as well as management's expectations, beliefs, plans, estimates, guidance
or projections relating to the future, are forward-looking statements within the meaning of
these laws. These forward-looking statements are subject to a number of risks and
uncertainties. These risks and uncertainties include, but are not limited to, the following:
changes in the demand for coal by electric utility customers; the loss of one or more of
our largest customers; inability to secure new coal supply agreements or to extend
existing coal supply agreements at market prices; failure to diversify our operations;
failure to exploit additional coal reserves; the risk that reserve estimates are inaccurate;
increased capital expenditures; encountering difficult mining conditions; increased costs
of complying with mine health and safety regulations; our dependency on one railroad for
transportation of a large percentage of our products; bottlenecks or other difficulties in
transporting coal to our customers; delays in the development of new mining projects;
increased costs of raw materials; lack of availability of financing sources; our compliance
with debt covenants; the effects of litigation, regulation and competition; and the other
risks detailed in our reports filed with the Securities and Exchange Commission (SEC).
by or on behalf of us are "forward-looking statements" within the meaning of the federal
securities laws. Statements regarding future events and developments and our future
performance, as well as management's expectations, beliefs, plans, estimates, guidance
or projections relating to the future, are forward-looking statements within the meaning of
these laws. These forward-looking statements are subject to a number of risks and
uncertainties. These risks and uncertainties include, but are not limited to, the following:
changes in the demand for coal by electric utility customers; the loss of one or more of
our largest customers; inability to secure new coal supply agreements or to extend
existing coal supply agreements at market prices; failure to diversify our operations;
failure to exploit additional coal reserves; the risk that reserve estimates are inaccurate;
increased capital expenditures; encountering difficult mining conditions; increased costs
of complying with mine health and safety regulations; our dependency on one railroad for
transportation of a large percentage of our products; bottlenecks or other difficulties in
transporting coal to our customers; delays in the development of new mining projects;
increased costs of raw materials; lack of availability of financing sources; our compliance
with debt covenants; the effects of litigation, regulation and competition; and the other
risks detailed in our reports filed with the Securities and Exchange Commission (SEC).
Agenda
● Opening
Comments
● Market
Review
● 2010
Guidance
● Miscellaneous
4
Opening
Comments
Summary
● 2009 was a Very
Successful Year for James River Coal Company
● 2009 was a Very
Successful Year for James River Coal Company
● 4th Quarter Results Were a
Result of a Combination of:
● 4th Quarter Results Were a
Result of a Combination of:
● Our Strategic
Decision to Curtail Production
● Our Strategic
Decision to Curtail Production
● Severe Winter
Weather in December
● Severe Winter
Weather in December
● Bad Geology at a
Couple of Mines
● Bad Geology at a
Couple of Mines
● $2.5 Million of
Interest and Expenses from New Financing
● $2.5 Million of
Interest and Expenses from New Financing
● Operations Have
Returned to Normal
● Operations Have
Returned to Normal
● Our Marketing
Efforts are Currently Focused on High Vol and PCI
● Our Marketing
Efforts are Currently Focused on High Vol and PCI
● 2010 Should be
Another Very Successful Year
● 2010 Should be
Another Very Successful Year
Agenda
● Operations
Review
● Opening
Comments
● Market
Review
● 2010
Guidance
● Miscellaneous
6
Operations
Review
Safety
● NFDL (Non-Fatal
Days Lost) Rate in Q-4 of 1.16
● NFDL (Non-Fatal
Days Lost) Rate in Q-4 of 1.16
● NFDL Rate in 2009
was 30% Lower than in 2008
● NFDL Rate in 2009
was 30% Lower than in 2008
● Accidents in 2009
were 38% Lower than in 2008
● Accidents in 2009
were 38% Lower than in 2008
● Violations in 2009
were 20% Lower than in 2008
● Violations in 2009
were 20% Lower than in 2008
7
Operations
Review
Central
Appalachia
● Completed New
Portal Reducing Travel Time by 45 Minutes
● Completed New
Portal Reducing Travel Time by 45 Minutes
● Completed Major
Grouting Project to Develop the Substantial
Red Oak Reserves
Red Oak Reserves
● Completed Major
Grouting Project to Develop the Substantial
Red Oak Reserves
Red Oak Reserves
● Acquired Surface
Reserves at Montgomery Creek
● Acquired Surface
Reserves at Montgomery Creek
● Continued to Limit
Production by Idling Mines (128 Production
Shifts) and Limiting Overtime and Saturday Production
Shifts) and Limiting Overtime and Saturday Production
● Continued to Limit
Production by Idling Mines (128 Production
Shifts) and Limiting Overtime and Saturday Production
Shifts) and Limiting Overtime and Saturday Production
8
Operations
Review
Central
Appalachia
● Major Winter Storm
Resulted in Loss of 31 Production Shifts
● Major Winter Storm
Resulted in Loss of 31 Production Shifts
● Encountered
Difficult Geologic Conditions at 3 Mines
● Encountered
Difficult Geologic Conditions at 3 Mines
● 2 Mines Have
Resolved Their Issues
● 2 Mines Have
Resolved Their Issues
● Due to Weather,
Geology, and Reduced Customer Demand,
We Carried Over Approximately 300,000 Tons into 2010 at an
Average Sales Price of $84.88
We Carried Over Approximately 300,000 Tons into 2010 at an
Average Sales Price of $84.88
● Due to Weather,
Geology, and Reduced Customer Demand,
We Carried Over Approximately 300,000 Tons into 2010 at an
Average Sales Price of $84.88
We Carried Over Approximately 300,000 Tons into 2010 at an
Average Sales Price of $84.88
● With the Exception
of Rail Delays Due to Weather, Customer
Shipments and Demand Have Returned to Normal Levels
Shipments and Demand Have Returned to Normal Levels
● With the Exception
of Rail Delays Due to Weather, Customer
Shipments and Demand Have Returned to Normal Levels
Shipments and Demand Have Returned to Normal Levels
9
Operations
Review
Illinois
Basin
● Production Reduced
by 266,000 Tons
● Production Reduced
by 266,000 Tons
● Weather Impact on
Trucking Services to Customers
● Weather Impact on
Trucking Services to Customers
● Weather Impact on
Surface Mine Production
● Weather Impact on
Surface Mine Production
● Customer Deferrals
Due to High Stockpiles
● Customer Deferrals
Due to High Stockpiles
● Carried Over
Approximately 360,000 Tons at an Average Sales
Price of $38.65
Price of $38.65
● Carried Over
Approximately 360,000 Tons at an Average Sales
Price of $38.65
Price of $38.65
Agenda
● Operations
Review
● Opening
Comments
● Market
Review
● 2010
Guidance
● Miscellaneous
11
Market
Review
11
400
Year-Old Map Shows China
as
the Center of the World
Arctic
Summer Sea Ice
Has
Increased by 26 Percent Since
2007
2007
News
and Notes
China
Electric Generation up 40% in
January Compared with January
2009
January Compared with January
2009
Democrats
Seek to Block New
Greenhouse Gas Regulations From
EPA
Greenhouse Gas Regulations From
EPA
Coal
India Ltd. (CIL) Hires KPMG
to
Improve Mine Production
“The
Global Warming Movement as
We Have Known it is Dead.”
We Have Known it is Dead.”
Walter
Russell Mead
Drax
(UK) Scuppers
Green
Fuel Targets
Chemicals
Shipments on CSX Up
13% YTD
13% YTD
12
CAPP
and The Illinois Basin
South
Atlantic Utilities, Railroads, and Ports
12
Market
Review
Travel
Notes
● Production Response
in CAPP Will be Muted by Regulatory Issues
● Production Response
in CAPP Will be Muted by Regulatory Issues
● High Inventories in
the River Market Reflect the Contango Trade
from the Second Half of 2009
from the Second Half of 2009
● High Inventories in
the River Market Reflect the Contango Trade
from the Second Half of 2009
from the Second Half of 2009
● Customer Demand Has
Materially Improved Since February 1st
● Customer Demand Has
Materially Improved Since February 1st
● The US Will Set a
New Monthly Record for Met and PCI Exports Soon
● The US Will Set a
New Monthly Record for Met and PCI Exports Soon
● Utility Inventory
Levels are All Over the Map
● Utility Inventory
Levels are All Over the Map
● Transportation
Issues May Take Several Months to Clear Up
● Transportation
Issues May Take Several Months to Clear Up
13
South
Africa
Europe
13
Market
Review
Travel
Notes
● More Than 75% of
South Africa Coal Exports Will Go East in 2010
● More Than 75% of
South Africa Coal Exports Will Go East in 2010
● Inquiries From China
Increased Significantly in December
● Inquiries From China
Increased Significantly in December
● India Will be
Limited by the Lack of Cape Size Coal Import
Facilities Until 2011 or 2012; Watch Colombia After That
Facilities Until 2011 or 2012; Watch Colombia After That
● India Will be
Limited by the Lack of Cape Size Coal Import
Facilities Until 2011 or 2012; Watch Colombia After That
Facilities Until 2011 or 2012; Watch Colombia After That
● There is a New
Higher “Normal” for Stockpiles at ARA
● There is a New
Higher “Normal” for Stockpiles at ARA
● Very Strong Interest
for US Thermal Coal in 2011 and Beyond
● Very Strong Interest
for US Thermal Coal in 2011 and Beyond
● The Fiscal Situation
of Greece, et al May Lead to Accelerated Coal
Production Cuts in Other Countries Due to High Subsidies
Production Cuts in Other Countries Due to High Subsidies
● The Fiscal Situation
of Greece, et al May Lead to Accelerated Coal
Production Cuts in Other Countries Due to High Subsidies
Production Cuts in Other Countries Due to High Subsidies
14
CAPP
Midwest
14
Market
Review
Sales
Commitments
● Carried Over
Approximately 300,000 Tons at $84.88
● Carried Over
Approximately 300,000 Tons at $84.88
● Sold Approximately
420,000 Tons for 2010 at $60.89
● Sold Approximately
420,000 Tons for 2010 at $60.89
● Approximately 90%
Contracted for 2010 (Midpoint
Guidance)
● Approximately 90%
Contracted for 2010 (Midpoint
Guidance)
● Carried Over
Approximately 360,000 Tons at $38.65
● Carried Over
Approximately 360,000 Tons at $38.65
● Approximately 95%
Contracted for 2010 (Midpoint
Guidance)
● Approximately 95%
Contracted for 2010 (Midpoint
Guidance)
Market
Review
15
High
Vol and PCI
● Two High Vol Mines
Expected to Re-Open in Q-3
● Two High Vol Mines
Expected to Re-Open in Q-3
● Increased Inquiry
Activity for PCI Coal
● Increased Inquiry
Activity for PCI Coal
● Sales Focus Will
be on Both Domestic and International Markets
● Sales Focus Will
be on Both Domestic and International Markets
● Summary
Table
● Summary
Table
|
|
|
Under
Contract
|
|
Annual
Capacity
|
|
Industrial
Stoker (1)
|
|
480,000
|
|
500,000
|
|
PCI
(1)
|
|
220,000
|
|
750,000
|
|
High Vol
Met
|
|
-
|
|
300,000
|
(1) The
Company may adjust annual capacity between the stoker and PCI markets depending
on market demand
(1) The
Company may adjust annual capacity between the stoker and PCI markets depending
on market demand
Agenda
● Operations
Review
● Opening
Comments
● Market
Review
● 2010
Guidance
● Miscellaneous
17
2010
Guidance
The
guidance contained herein represents forecasts, which
indicate a range of possible outcomes and are provided to assist
investors with the development of annual earnings estimates.
While James River believes that these forecasts represent the
best estimate of management as to future events, actual events
will differ from these forecasts, and such differences could be
material. These forecasts are subject to risks identified under
“forward-looking statements” above.
indicate a range of possible outcomes and are provided to assist
investors with the development of annual earnings estimates.
While James River believes that these forecasts represent the
best estimate of management as to future events, actual events
will differ from these forecasts, and such differences could be
material. These forecasts are subject to risks identified under
“forward-looking statements” above.
The
guidance contained herein represents forecasts, which
indicate a range of possible outcomes and are provided to assist
investors with the development of annual earnings estimates.
While James River believes that these forecasts represent the
best estimate of management as to future events, actual events
will differ from these forecasts, and such differences could be
material. These forecasts are subject to risks identified under
“forward-looking statements” above.
indicate a range of possible outcomes and are provided to assist
investors with the development of annual earnings estimates.
While James River believes that these forecasts represent the
best estimate of management as to future events, actual events
will differ from these forecasts, and such differences could be
material. These forecasts are subject to risks identified under
“forward-looking statements” above.
18
Total
JRCC Operations
(In
$’s in 000’s except EPS)
(1)
Adjusted EBITDA is used to determine compliance with financial covenants in
our senior
secured credit facilities
2010
Guidance
2010
Guidance Does Not Include High Vol
|
Earnings Per
Share
|
|
$1.70
|
to
|
$2.25
|
|
Adjusted
EBITDA (1)
|
|
$140,000
|
to
|
$165,000
|
|
Selling,
General and Administrative
|
|
$38,000
|
|
|
|
Capital
Expenditures
|
|
$85,000
|
|
|
|
Depreciation,
Depletion and Amortization
|
|
$63,000
|
|
|
|
Tax
Rate
|
|
5%
|
|
|
2010
Guidance
19
Guidance by
Segment
(in
000’s except per ton amounts)
|
|
|
Under
Contract
|
|
Guidance
|
||
|
|
Tons
|
Price
|
|
Tons
|
Cash
Cost
|
|
|
Central
Appalachia |
|
5,892
|
$95.10
|
|
6,300
- 6,600
|
$64.00-
66.00
|
|
Midwest
|
|
3,004
|
$41.13
|
|
3,100
- 3,300
|
$30.00-32.00
|
2010
Guidance Does Not Include High Vol
20
2010
Guidance
● Ongoing Capital
Expenditures $70
Million
● Ongoing Capital
Expenditures $70
Million
● Federal &
State Safety Mandates $10
Million
● Federal &
State Safety Mandates $10
Million
● Other $ 5
Million
● Other $ 5
Million
Total $85
Million
Total $85
Million
Capital
Expenditures
Cash
Cost in CAPP
● Guidance CAPP Cash
Cost of $64 to $66
● Guidance CAPP Cash
Cost of $64 to $66
● Fixed Cost
Absorption Impact of $5 to $7 Per Ton
● Fixed Cost
Absorption Impact of $5 to $7 Per Ton
● Guidance Assumes
That Production is Curtailed For All of 2010.
However, We Currently Expect that Production May Ramp Up
During the Second Half of 2010
However, We Currently Expect that Production May Ramp Up
During the Second Half of 2010
● Guidance Assumes
That Production is Curtailed For All of 2010.
However, We Currently Expect that Production May Ramp Up
During the Second Half of 2010
However, We Currently Expect that Production May Ramp Up
During the Second Half of 2010
Agenda
● Operations
Review
● Opening
Comments
● Market
Review
● 2010
Guidance
● Miscellaneous
Miscellaneous
|
|
December
31,
2008 |
December
31,
2009 |
Proforma
December, 31, 2009 |
|
Unrestricted
Cash
|
$3.3
|
$107.9
|
$107.9
|
|
Availability
Under
Revolver |
-
|
35.0
|
65.0
|
|
Total
Liquidity
|
$3.3
|
$142.9
|
$172.9
|
|
|
|
|
|
|
Restricted
Cash
|
$5.2
|
$62.0
|
$62.0
|
|
Working
Capital
|
($55.0)
|
$110.0
|
$110.0
|
22
Liquidity
(in
millions)
In
January, 2010 we amended our Revolver which resulted in an increase in
availability to $65 million. Our
intention is to use the revolver to support new letters of credit which
will replace our existing letters of credit. As we secure the letters of credit with our Revolver, our cash that is currently being held as security for the letters of credit will become
unrestricted and available for use.
will replace our existing letters of credit. As we secure the letters of credit with our Revolver, our cash that is currently being held as security for the letters of credit will become
unrestricted and available for use.
In
January, 2010 we amended our Revolver which resulted in an increase in
availability to $65 million. Our
intention is to use the revolver to support new letters of credit which
will replace our existing letters of credit. As we secure the letters of credit with our Revolver, our cash that is currently being held as security for the letters of credit will become
unrestricted and available for use.
will replace our existing letters of credit. As we secure the letters of credit with our Revolver, our cash that is currently being held as security for the letters of credit will become
unrestricted and available for use.
Miscellaneous
|
Upcoming
Investor Conferences and Meetings
(Webcast
May be Accessed at www.jamesrivercoal.com)
|
||
|
March
2, 2010
|
Simmons
& Company International
10th Annual Energy
Conference
|
Las
Vegas
|
|
March
3-4, 2010
|
UBS
Texas
Energy/Coal/Utility 1x1 Conference
|
Dallas
|
|
March
5, 2010
|
Brean,
Murray, Carret & Co.
Global
Resources and Infrastructure
Conference |
New
York
|
|
March
8-12, 2010
|
CERA
Week 2010
|
Houston
|
|
March
31, 2010
|
Davenport
Coal Conference
|
Richmond
|
|
Early
May
|
1st
Quarter Earnings Release
|
24
Question and
Answer
Session
Session
