ST. LOUIS, May 15, 2014 /PRNewswire/ -- Armstrong Energy, Inc. ("Armstrong") today reported coal sales revenue of $110.9 million for the three months ended March 31, 2014, an increase of 9.5% compared to $101.2 million for the three months ended March 31, 2013. Coal sales increased 0.1 million tons to 2.4 million tons in the first quarter of 2014, as compared to the first quarter of 2013. Average sales price per ton for the three months ended March 31, 2014 was $47.04 per ton, as compared to $45.73 for the same period of the prior year. Operating income and Adjusted EBITDA, as defined below for the three months ended March 31, 2014 was $2.8 million and $15.7 million, respectively, as compared to an operating income and Adjusted EBITDA in 2013 of $1.9 million and $13.6 million, respectively.

Our coal sales revenue for the three months ended March 31, 2014 increased by $9.6 million, or 9.5%, to $110.9 million, as compared to the three months ended March 31, 2013. This increase is attributable to a favorable volume variance of approximately $6.6 million due to the increase of 0.1 million tons sold in the current year and a favorable price variance of $3.0 million year-over-year due to favorable customer mix and higher year-over-year contract prices. The completion of the Lewis Creek underground mine in July 2013 led to additional capacity experienced in the current year.

Cost of coal sales increased 9.9% to $90.1 million in the three months ended March 31, 2014, from $82.0 million in the same period of 2013. On a per ton basis, our cost of coal sales increased during the three months ended March 31, 2014, compared to the same period of 2013, from $37.06 per ton to $38.24 per ton. This increase is due to lower productivity at the Parkway underground mine driven by poor geological conditions as well as production inefficiencies encountered at the Lewis Creek underground mine subsequent to the completion of the development of the mine, partially offset by favorable mining conditions at our Midway and Lewis Creek surface mines in the current year.

Production royalties to a related party decreased $0.1 million to $2.0 million for the three months ended March 31, 2014, as compared to $2.1 million in the same period of 2013. The decrease relates to production royalties earned by our affiliate, Thoroughbred Resources, L.P. ( formerly Armstrong Resource Partners, L.P.) being lower as a result of a slight decrease in production at the Kronos underground mine in the current year, as compared to 2013.

Interest expense, net was $8.2 million for the three months ended March 31, 2014, as compared to $8.6 million for the three months ended March 31, 2013. The decrease is principally attributable to a decrease in the effective interest rate used to calculate interest on the long-term obligation to related party, partially offset by the increase in the principal balance of the long-term obligation to related party from the closing of the reserve transfer to Thoroughbred in April 2013, which increased the principal balance on the obligation by $4.9 million.

Liquidity

The principal indicators of our liquidity are our cash on hand and availability under our revolving credit facility. As of March 31, 2014, our available liquidity was $76.8 million, comprised of cash on hand of $53.1 million and $23.7 million available under our revolving credit facility.

We believe that existing cash balances, cash generated from operations and availability under our revolving credit facility will be sufficient to meet working capital requirements, anticipated capital expenditures and debt service requirements.

Short-term Outlook

Our anticipated coal sales for 2014 are between 9.8 million and 9.9 million tons. As of March 31, 2014, Armstrong has 9.8 million tons priced and committed for 2014 at an average price of $46.81.

Capital expenditures in 2014 for equipment and land acquisitions are currently expected to be in a range of $18-$19 million with an additional $18-$19 million for mine development.

Conference Call

A conference call regarding Armstrong's first quarter 2014 financial results will be held today at 11:00am eastern time. To participate in the conference call, dial (877) 870-4263 and ask for the Armstrong Energy, Inc. conference call. A replay of the call will also be available under the Investors section of Armstrong's website at http://www.armstrongenergyinc.com.

About Armstrong Energy, Inc.

Armstrong is a diversified producer of low chlorine, high sulfur thermal coal from the Illinois Basin, with both surface and underground mines. Armstrong controls approximately 571 million tons of proven and probable coal reserves in Western Kentucky and currently operates seven mines. Armstrong also owns and operates three coal processing plants and river dock coal handling and rail loadout facilities which support its mining operations.

Financial Summary

Adjusted EBITDA

The following table reconciles Adjusted EBITDA to net loss, the most directly comparable GAAP measure:

Adjusted EBITDA is a supplemental measure of our performance that is not required by, or presented in accordance with, accounting principles generally accepted in the United States (GAAP). It is not a measurement of our financial performance under GAAP and should not be considered as an alternative to net income or any other performance measures derived in accordance with GAAP or as an alternative to cash flows from operating activities as a measure of our liquidity.

We define "Adjusted EBITDA" as net income (loss) before deducting net interest expense, income taxes, depreciation, depletion and amortization, non-cash production royalty for related party, loss on settlement of interest rate swap, loss on deferment of equity offering, gain on settlement of asset retirement obligations, non-cash stock compensation expense, non-cash charges related to nonrecourse notes, gain on deconsolidation, and (gain) loss on extinguishment of debt. We caution investors that amounts presented in accordance with our definition of Adjusted EBITDA may not be comparable to similar measures disclosed by other issuers, because not all issuers and analysts calculate Adjusted EBITDA in the same manner. We present Adjusted EBITDA because we consider it an important supplemental measure of our performance and believe it is useful to an investor in evaluating our company.

Various statements contained in this release, including those that express a belief, expectation or intention, as well as those that are not statements of historical fact, are forward-looking statements. These forward-looking statements may include projections and estimates concerning the timing and success of specific projects and our future production, revenues, income and capital spending. Our forward-looking statements are generally accompanied by words such as "estimate," "project," "predict," "believe," "expect," "anticipate," "potential," "plan," "goal" or other words that convey the uncertainty of future events or outcomes. The forward-looking statements in this release speak only as of the date of this release; we disclaim any obligation to update these statements unless required by law, and we caution you not to rely on them unduly. We have based these forward-looking statements on our current expectations and assumptions about future events. While our management considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond our control. These and other important factors may cause our actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by these forward-looking statements. When considering any forward-looking statements, you should keep in mind the cautionary statements in our SEC filings, including the more detailed discussion of these factors and other factors that could affect our results included in "Risk Factors" in our Annual Report on Form 10-k filed with the Securities and Exchange Commission on March 25, 2014.

CONTACT: Richard Gist, 314-721-8202, rgist@armstrongcoal.com