Exhibit 99.1
FOR IMMEDIATE RELEASE
INTERNATIONAL COAL GROUP REPORTS
SECOND QUARTER 2010 RESULTS
Second Quarter Highlights:
| Ø | Net income increases by 142% over second quarter 2009, excluding non-routine transactions |
| Ø | Operating margins increase by 26% compared to the same period last year |
| Ø | Metallurgical shipments triple versus second quarter 2009 |
Ø | ICG ADDCAR delivers its first overseas highwall mining system to India |
Scott Depot, West Virginia, July 28, 2010 – International Coal Group, Inc. (NYSE:ICO) today reported its results for the second quarter of 2010.
| · | Adjusted EBITDA was $44.8 million for the second quarter of 2010 compared to $52.2 million for the second quarter of 2009. Second quarter 2010 Adjusted EBITDA was reduced by a $10.0 million charge due to a negotiated early termination of a thermal coal sales agreement. This termination enables ICG to sell approximately 400,000 additional tons as premium high-volatile metallurgical coal at significantly higher prices during 2010 and 2011. Second quarter 2009 results included a $7.7 million gain related to the termination of a below-market coal supply agreement. Exclusive of these items, Adjusted EBITDA would have been $54.8 million in the second quarter of 2010 and $44.5 million for the same period in 2009, a 23% increase. |
| · | Net income was $4.5 million, or $0.02 per share on a diluted basis, for the second quarter of 2010 compared to net income of $10.4 million, or $0.07 per share on a diluted basis, for the second quarter of 2009. Net income for the second quarter of 2010 also included a $6.1 million pre-tax loss on extinguishment of debt related to the Company’s capital restructuring. Excluding the $10.0 million contract buyout and the $6.1 million loss on extinguishment of debt, pro forma net income in the second quarter of 2010 would have been $13.5 million, or $0.07 per share on a diluted basis. Excluding the $7.7 million gain related to the 2009 contract termination, pro forma net income in the second quarter of 2009 would have been $5.6 million, or $0.04 per share on a diluted basis. |
| · | Margin per ton sold increased 26% to $14.28 in the second quarter of 2010 compared to $11.32 for the same period last year, primarily due to higher price realization. |
| · | Revenues increased to $300.4 million for the second quarter of 2010 compared to $277.8 million for the second quarter of 2009, primarily due to increased coal sales revenues. |
“Our operating performance was solid throughout the second quarter,” said Ben Hatfield, President and CEO of ICG. “The improved margins, compared to the second quarter of 2009, were driven primarily by our moves to sell more metallurgical tons with higher pricing and our continued focus on effective cost control.”
Hatfield continued, “We’re seeing a steady improvement in thermal coal pricing, as utility coal inventories have fallen from record highs in November 2009 and are slowly approaching normalized levels. Above-normal summer temperatures are expected to further reduce coal stockpiles and provide more support for thermal prices. Although demand for metallurgical coal slowed in the second half of the quarter, we believe this plateau is temporary and not an indication of an extended change in the market outlook.”
Six-Month Results
Revenues for the first six months of 2010 totaled $589.0 million compared to $582.8 million for the same period in 2009. The Company reported Adjusted EBITDA of $91.7 million in the first six months of 2010 compared to $96.7 million in the first six months of 2009. First-half Adjusted EBITDA was reduced in 2010 by a $10.0 million contract buyout and increased in 2009 by a $7.7 million contract termination gain. Excluding these transactions, first-half Adjusted EBITDA would have been $101.7 million in 2010 and $89.0 million in 2009.
Net loss for the first half of 2010 was $4.4 million, or $0.02 per share on a diluted basis, versus net income of $14.1 million, or $0.09 per share on a diluted basis, for the same period a year ago. Excluding the $10.0 million contract buyout and the $28.1 million loss on the extinguishment of debt, pro forma net income in the first six months of 2010 would have been $19.7 million, or $0.10 per share on a diluted basis. Excluding the $7.7 million gain related to the contract termination, pro forma net income in the first six months of 2009 would have been $9.3 million, or $0.06 per share on a diluted basis.
Sales, Production and Reserves
ICG sold 4.1 million tons of coal during the second quarter of 2010 compared to 4.2 million tons during the second quarter of 2009. Production totaled 4.0 million tons in the second quarter of 2010 versus 4.2 million tons in the same period of 2009. Metallurgical shipments of 622,000 tons represented a 421,000-ton increase over the second quarter of the prior year.
As of June 30, 2010, ICG controlled approximately 1.1 billion tons of coal reserves, located primarily in Illinois, Kentucky, West Virginia, Maryland and Virginia. Additionally, the Company controlled approximately 431 million tons of non-reserve coal deposits, which may be classified as reserves in the future as additional drilling and geotechnical work is completed.
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Operational and Other Updates
| · | Construction resumed in June at the Tygart No. 1 deep mine complex in Taylor County, West Virginia. Initial production of high-volatile metallurgical and high-quality thermal coal is expected in late 2011 with longwall production scheduled to begin in early 2014. At full output, the Tygart No. 1 mine is expected to produce 3.5 million tons per year. |
| · | As previously discussed, during the second quarter of 2010, ICG reached a $10.0 million contract termination settlement with a utility customer. This transaction allows the Company to market approximately 400,000 tons of coal as premium high-volatile metallurgical coal at significantly higher margins. Approximately 80% of these tons have already been committed for sale at more favorable prices. |
· | ICG ADDCAR Systems completed the sale of a new highwall mining system to a customer in India. This sale marks the first delivery of ADDCAR’s unique highwall mining system outside of North America. The system includes ADDCAR’s latest steep-dip mining technologies. |
| · | In March and April 2010, in connection with tender offers and consent solicitations, the Company repurchased approximately $169.1 million aggregate principal amount of its 10.25% Senior Notes due 2014 and $114.5 million aggregate principal amount of its 9.0% Convertible Senior Notes due 2012 as part of a capital restructuring. The Company incurred a $6.1 million loss related to these transactions in the second quarter of 2010. In July 2010, the Company redeemed the remaining $5.9 million of the 10.25% Senior Notes at a redemption price of 105.125% of the principal amount, plus accrued and unpaid interest. The Company used cash on hand to fund the redemption. |
| · | Various ICG mining operations received prestigious awards in May for outstanding safety performance during 2009 from the West Virginia State Council of the Joseph A. Holmes Association and District 3 of the Mine Safety and Health Administration (MSHA). ICG’s Wolf Run Mining operations received two Holmes and two MSHA awards; ICG Eastern operations received two Holmes awards; and Vindex Energy operations received one Holmes and one MSHA award. Additionally, ICG ADDCAR’s Bridger HWM operation was recognized by the State of Wyoming for working all of 2009 without a lost-time accident. |
Market Outlook and Committed Sales
Despite the uncertain near-term global economic outlook, thermal coal fundamentals appear to be improving due to declining utility inventories and increasing electricity consumption. The Company expects metallurgical coal pricing to strengthen going forward as the outlook for world steel demand continues to improve.
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For 2010, committed and priced sales are approximately 16.2 million tons, or 97% of planned shipments, at an average price of $65.25 per ton, excluding freight and handling expenses. The uncommitted tonnage for 2010 includes approximately 0.4 million tons that are expected to be marketed as metallurgical coal.
For 2011, committed and priced sales are approximately 8.8 million tons, or 52.3% of planned shipments, at an average price of $61.37 per ton, excluding freight and handling expenses. The uncommitted tonnage for 2011 includes approximately 2.3 million tons of metallurgical coal.
Liquidity and Debt
As of June 30, 2010, the Company had $205.3 million in cash and has $33.3 million in borrowing capacity available under its new credit agreement.
Debt outstanding as of June 30, 2010 totaled $365.3 million, net of a $36.3 million discount, consisting primarily of $115.0 million aggregate principal amount of newly issued 4.0% Convertible Senior Notes and $200.0 million aggregate principal amount of newly issued 9.125% Senior Secured Second-Priority Notes.
Outlook
The Company has updated its guidance to reflect modifications to its production mix and the global economic conditions affecting the coal market:
| · | For 2010, the Company expects to sell between 16.6 million and 16.8 million tons of coal, including 2.7 million to 2.8 million tons of metallurgical coal. The average selling price is projected to be $66.25 to $67.25 per ton, with an average cost of $51.75 to $52.75 per ton, excluding selling, general and administrative expenses. The Company expects coal production to be between 15.8 million and 16.0 million tons. |
| · | Adjusted EBITDA, or earnings before deducting interest, income taxes, depreciation, depletion, amortization, loss on extinguishment of debt and noncontrolling interest, is expected to be in the range of $200 million to $220 million in 2010. |
| · | The Company’s expectation for average coal pricing by region for 2010 is as follows: |
| Region | 2010 Forecast | |
| Central Appalachia | $72.75 - $73.75 | |
| Northern Appalachia | $69.25 - $70.25 | |
| Illinois Basin | $36.75 - $37.00 | |
| Average | $66.25 - $67.25 |
| · | The Company anticipates 2010 capital expenditures of between $105.0 million and $115.0 million. |
For 2011, the Company expects to produce and sell between 16.5 million and 17.5 million tons of coal, including 3.1 million to 3.2 million tons of metallurgical coal. The average selling price is projected to be $72.00 to $77.00 per ton.
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General Information
ICG is a leading producer of coal in Northern and Central Appalachia and the Illinois Basin. The Company has 13 active mining complexes, of which 12 are located in Northern and Central Appalachia and one in Central Illinois. ICG’s mining operations and reserves are strategically located to serve utility, metallurgical and industrial customers domestically and internationally.
# # #
Forward-Looking Statements
| n | Statements in this press release that are not historical facts are forward-looking statements within the “safe harbor” provision of the Private Securities Litigation Reform Act of 1995 and may involve a number of risks and uncertainties. We have used the words “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project” and similar terms and phrases, including references to assumptions, to identify forward-looking statements. These forward-looking statements are made based on expectations and beliefs concerning future events affecting us and are subject to various risks, uncertainties and factors relating to our operations and business environment, all of which are difficult to p redict and many of which are beyond our control, that could cause our actual results to differ materially from those matters expressed in or implied by these forward-looking statements. The following factors are among those that may cause actual results to differ materially from our forward-looking statements: market demand for coal, electricity and steel; availability of qualified workers; future economic or capital market conditions; weather conditions or catastrophic weather-related damage; our production capabilities; consummation of financing, acquisition or disposition transactions and the effect thereof on our business; a significant number of conversions of our convertible senior notes prior to maturity; our plans and objectives for future operations and expansion or consolidation; our relationships with, and other conditions affecting, our customers; availability and costs of key supplies or commodities, such as diesel fuel, steel, explosives and tires; availability and costs of capital equipment; p rices of fuels which compete with or impact coal usage, such as oil and natural gas; timing of reductions or increases in customer coal inventories; long-term coal supply arrangements; reductions and/or deferrals of purchases by major customers; risks in or related to coal mining operations, including risks related to third-party suppliers and carriers operating at our mines or complexes; unexpected maintenance and equipment failure; adoption by Appalachian states of EPA guidance regarding stringent water quality-based limitations in CWA Section 402 wastewater discharge permits and CWA Section 404 dredge and fill permits; environmental, safety and other laws and regulations, including those directly affecting our coal mining and production, and those affecting our customers’ coal usage; ability to obtain and maintain all necessary governmental permits and authorizations; competition among coal and other energy producers in the United States and internationally; railroad, barge, trucking and other trans portation availability, performance and costs; employee benefits costs and labor relations issues; replacement of our reserves; our assumptions concerning economically recoverable coal reserve estimates; availability and costs of credit, surety bonds and letters of credit; title defects or loss of leasehold interests in our properties which could result in unanticipated costs or inability to mine these properties; the impact of the mine explosion at a competitor’s mine on federal and state authorities’ decisions to enact laws and regulations that result in more frequent mine inspections, stricter enforcement practices and enhanced reporting requirements; future legislation and changes in regulations or governmental policies or changes in interpretations or enforcement thereof, including with respect to safety enhancements and environmental initiatives relating to global warming or climate change; impairment of the value of our long-lived and deferred tax assets; our liquidity, including our abili ty to adhere to financial covenants related to our borrowing arrangements; adequacy and sufficiency of our internal controls; and legal and administrative proceedings, settlements, investigations and claims, including those related to citations and orders issued by regulatory authorities, and the availability of related insurance coverage. |
| n | You should keep in mind that any forward-looking statement made by us in this press release or elsewhere speaks only as of the date on which the statements were made. See also the “Risk Factors” in our 2009 Annual Report on Form 10-K and subsequent filings with the Securities and Exchange Commission, all of which are currently available on our website at www.intlcoal.com. New risks and uncertainties arise from time to time, and it is impossible for us to predict these events or how they may affect us or our anticipated results. We have no duty to, and do not intend to, update or revise the forward-looking statements in this press release, except as may be re quired by law. In light of these risks and uncertainties, you should keep in mind that any forward-looking statement made in this press release might not occur. |
# # #
For more information, contact Ira Gamm, Vice President – Investor and Public Relations, at (304) 760-2619
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INTERNATIONAL COAL GROUP, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2010 AND 2009
(in thousands, except share and per share amounts)
Three months ended June 30, | Six months ended June 30, | |||||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||||
| REVENUES: | ||||||||||||||||
| Coal sales revenues | $ | 270,714 | $ | 254,677 | $ | 541,204 | $ | 528,493 | ||||||||
| Freight and handling revenues | 9,006 | 6,041 | 18,383 | 14,675 | ||||||||||||
| Other revenues | 20,720 | 17,079 | 29,447 | 39,595 | ||||||||||||
| Total revenues | 300,440 | 277,797 | 589,034 | 582,763 | ||||||||||||
| COSTS AND EXPENSES: | ||||||||||||||||
| Cost of coal sales | 211,927 | 207,324 | 431,992 | 439,289 | ||||||||||||
| Freight and handling costs | 9,006 | 6,041 | 18,383 | 14,675 | ||||||||||||
| Cost of other revenues | 26,400 | 6,630 | 33,581 | 15,966 | ||||||||||||
| Depreciation, depletion and amortization | 26,135 | 26,035 | 52,532 | 52,298 | ||||||||||||
| Selling, general and administrative | 8,335 | 8,670 | 16,920 | 19,281 | ||||||||||||
| Gain on sale of assets, net | (34 | ) | (3,108 | ) | (3,515 | ) | (3,186 | ) | ||||||||
| Total costs and expenses | 281,769 | 251,592 | 549,893 | 538,323 | ||||||||||||
| Income from operations | 18,671 | 26,205 | 39,141 | 44,440 | ||||||||||||
| INTEREST AND OTHER INCOME (EXPENSE) | ||||||||||||||||
| Loss on extinguishment of debt | (6,098 | ) | — | (28,085 | ) | — | ||||||||||
| Interest expense, net | (10,015 | ) | (13,214 | ) | (23,315 | ) | (26,232 | ) | ||||||||
| Total interest and other income (expense) | (16,113 | ) | (13,214 | ) | (51,400 | ) | (26,232 | ) | ||||||||
| Income (loss) before income taxes | 2,558 | 12,991 | (12,259 | ) | 18,208 | |||||||||||
| INCOME TAX (EXPENSE) BENEFIT | 1,924 | (2,613 | ) | 7,889 | (4,108 | ) | ||||||||||
| Net income (loss) | 4,482 | 10,378 | (4,370 | ) | 14,100 | |||||||||||
| Net (income) loss attributable to noncontrolling interest | — | 4 | — | (25 | ) | |||||||||||
| Net income (loss) attributable to International Coal Group, Inc. | $ | 4,482 | $ | 10,382 | $ | (4,370 | ) | $ | 14,075 | |||||||
| Other Data: | ||||||||||||||||
Adjusted EBITDA (a) | $ | 44,806 | $ | 52,240 | $ | 91,673 | $ | 96,738 | ||||||||
| Earnings per share: | ||||||||||||||||
| Basic | $ | 0.02 | $ | 0.07 | $ | (0.02 | ) | $ | 0.09 | |||||||
| Diluted | $ | 0.02 | $ | 0.07 | $ | (0.02 | ) | $ | 0.09 | |||||||
| Weighted-average common shares outstanding: | ||||||||||||||||
| Basic | 202,484,814 | 152,832,797 | 191,992,083 | 152,803,420 | ||||||||||||
| Diluted | 203,932,265 | 154,672,255 | 191,992,083 | 153,983,725 | ||||||||||||
| (a) | This press release includes a non-GAAP financial measure within the meaning of applicable SEC rules and regulations. Adjusted EBITDA is a non-GAAP financial measure used by management to gauge operating performance. We define Adjusted EBITDA as net income or loss attributable to International Coal Group, Inc. before deducting interest, income taxes, depreciation, depletion, amortization, loss on extinguishment of debt and noncontrolling interest. Adjusted EBITDA is not, and should not be used as, a substitute for operating income, net income and cash flow as determined in accordance with GAAP. We present Adjusted EBITDA because we consider it an important supplemental measure of our performance and believe it is frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industry, substantially all of which present EBITDA or Adjusted EBITDA when reporting th eir results. We also use Adjusted EBITDA as our executive compensation plan bases incentive compensation payments on our Adjusted EBITDA performance measured against budgets. Our ABL Loan Facility uses Adjusted EBITDA (with additional adjustments) to measure our compliance with covenants, such as fixed charge ratio. EBITDA or Adjusted EBITDA is also widely used by us and others in our industry to evaluate and price potential acquisition candidates. Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are that Adjusted EBITDA does not reflect our cash expenditures, or future requirements, for capital expenditures or contractual commitments; changes in, or cash requirements for, our working capital needs; or interest expense, or the cash requirements necessary to service interest or principal payments, on our debts. Although depreciation, depletion and amortization are non-cash charges, the assets being depreciated, depleted and amortized will often have to be replaced in the future. Adjusted EBITDA does not reflect any cash requirements for such replacements. Other companies in our industry may calculate EBITDA or Adjusted EBITDA differently than we do, limiting its usefulness as a comparative measure. A reconciliation of Adjusted EBITDA to GAAP net income or loss attributable to International Coal Group, Inc. appears at the end of this press release. |
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INTERNATIONAL COAL GROUP, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF JUNE 30, 2010 AND DECEMBER 31, 2009
(in thousands)
June 30, 2010 | December 31, 2009 | |||||||
| ASSETS | ||||||||
| CURRENT ASSETS: | ||||||||
| Cash and cash equivalents | $ | 205,310 | $ | 92,641 | ||||
| Accounts receivable, net | 92,259 | 80,291 | ||||||
| Inventories, net | 76,132 | 82,037 | ||||||
| Deferred income taxes | 15,548 | 15,906 | ||||||
| Prepaid expenses and other | 18,118 | 17,734 | ||||||
| Total current assets | 407,367 | 288,609 | ||||||
| PROPERTY, PLANT, EQUIPMENT AND MINE DEVELOPMENT, net | 1,022,984 | 1,038,200 | ||||||
| DEBT ISSUANCE COSTS, net | 13,371 | 7,634 | ||||||
| ADVANCE ROYALTIES, net | 17,046 | 18,025 | ||||||
| OTHER NON-CURRENT ASSETS | 6,554 | 15,492 | ||||||
| Total assets | $ | 1,467,322 | $ | 1,367,960 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Accounts payable | $ | 61,324 | $ | 63,582 | ||||
| Short-term debt | 2,334 | 2,166 | ||||||
| Current portion of long-term debt and capital lease | 24,947 | 17,794 | ||||||
| Current portion of reclamation and mine closure costs | 9,376 | 9,390 | ||||||
| Current portion of employee benefits | 4,043 | 3,973 | ||||||
| Accrued expenses and other | 69,455 | 74,803 | ||||||
| Total current liabilities | 171,479 | 171,708 | ||||||
| LONG-TERM DEBT AND CAPITAL LEASE | 337,969 | 366,515 | ||||||
| RECLAMATION AND MINE CLOSURE COSTS | 66,651 | 65,601 | ||||||
| EMPLOYEE BENEFITS | 76,330 | 63,767 | ||||||
| DEFERRED INCOME TAXES | 56,382 | 57,399 | ||||||
| BELOW-MARKET COAL SUPPLY AGREEMENTS | 28,398 | 29,939 | ||||||
| OTHER NON-CURRENT LIABILITIES | 3,158 | 3,797 | ||||||
| Total liabilities | 740,367 | 758,726 | ||||||
| COMMITMENTS AND CONTINGENCIES | ||||||||
| STOCKHOLDERS’ EQUITY: | ||||||||
| Common stock | 2,038 | 1,728 | ||||||
| Treasury stock | (216 | ) | (14 | ) | ||||
| Additional paid-in capital | 857,925 | 732,124 | ||||||
| Accumulated other comprehensive income (loss) | (2,770 | ) | 1,048 | |||||
| Retained deficit | (130,083 | ) | (125,713 | ) | ||||
| Total International Coal Group, Inc. stockholders’ equity | 726,894 | 609,173 | ||||||
| Noncontrolling interest | 61 | 61 | ||||||
| Total stockholders’ equity | 726,955 | 609,234 | ||||||
| Total liabilities and stockholders’ equity | $ | 1,467,322 | $ | 1,367,960 | ||||
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INTERNATIONAL COAL GROUP, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2010 AND 2009
(in thousands)
Six months ended June 30, | ||||||||
| 2010 | 2009 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net income (loss) | $ | (4,370 | ) | $ | 14,100 | |||
| Adjustments to reconcile net income (loss) to net cash from operating activities: | ||||||||
| Depreciation, depletion and amortization | 52,532 | 52,298 | ||||||
| Loss on extinguishment of debt | 28,085 | — | ||||||
| Amortization and write-off of deferred finance costs and debt discount | 4,753 | 3,378 | ||||||
| Amortization of accumulated employee benefit obligations | 206 | (52 | ) | |||||
| Compensation expense on share based awards | 1,756 | 2,233 | ||||||
| Gain on sale of assets, net | (3,515 | ) | (3,186 | ) | ||||
| Provision for bad debt | (79 | ) | (110 | ) | ||||
| Deferred income taxes | (11,051 | ) | 3,632 | |||||
| Changes in assets and liabilities: | ||||||||
| Accounts receivable | (11,889 | ) | (9,308 | ) | ||||
| Inventories | 5,885 | (22,812 | ) | |||||
| Prepaid expenses and other | (384 | ) | 16,663 | |||||
| Other non-current assets | 1,053 | (630 | ) | |||||
| Accounts payable | 6,069 | (10,784 | ) | |||||
| Accrued expenses and other | (5,228 | ) | (5,058 | ) | ||||
| Reclamation and mine closure costs | 191 | 176 | ||||||
| Other liabilities | 5,672 | (1,438 | ) | |||||
| Net cash from operating activities | 69,686 | 39,102 | ||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Proceeds from the sale of assets | 3,785 | 3,066 | ||||||
| Additions to property, plant, equipment and mine development | (41,190 | ) | (35,750 | ) | ||||
| Withdrawals (deposits) of restricted cash | 8,792 | (163 | ) | |||||
| Net cash from investing activities | (28,613 | ) | (32,847 | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Borrowings on short-term debt | 2,388 | — | ||||||
| Repayments on short-term debt | (2,220 | ) | (3,578 | ) | ||||
| Borrowings on long-term debt and capital leases | — | 9,086 | ||||||
| Repayments on long-term debt and capital leases | (9,435 | ) | (8,755 | ) | ||||
| Proceeds from convertible notes offering | 115,000 | — | ||||||
| Proceeds from senior notes offering | 198,596 | — | ||||||
| Proceeds from common stock offering | 102,453 | — | ||||||
| Repurchase of senior notes | (182,777 | ) | — | |||||
| Repurchase of convertible notes | (137,342 | ) | — | |||||
| Purchases of treasury stock | (202 | ) | (14 | ) | ||||
| Proceeds from stock options exercised | 10 | — | ||||||
| Debt issuance costs | (14,875 | ) | (609 | ) | ||||
| Net cash from financing activities | 71,596 | (3,870 | ) | |||||
| NET CHANGE IN CASH AND CASH EQUIVALENTS | 112,669 | 2,385 | ||||||
| CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 92,641 | 63,930 | ||||||
| CASH AND CASH EQUIVALENTS, END OF PERIOD | $ | 205,310 | $ | 66,315 | ||||
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INTERNATIONAL COAL GROUP, INC. AND SUBSIDIARIES
RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EBITDA
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2010 AND 2009 (Unaudited)
(in thousands)
Three months ended June 30, | Six months ended June 30, | |||||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||||
| Net income (loss) attributable to International Coal Group, Inc. | $ | 4,482 | $ | 10,382 | $ | (4,370 | ) | $ | 14,075 | |||||||
| Depreciation, depletion and amortization | 26,135 | 26,035 | 52,532 | 52,298 | ||||||||||||
| Interest expense, net | 10,015 | 13,214 | 23,315 | 26,232 | ||||||||||||
| Income tax expense (benefit) | (1,924 | ) | 2,613 | (7,889 | ) | 4,108 | ||||||||||
| Loss on extinguishment of debt | 6,098 | — | 28,085 | — | ||||||||||||
| Noncontrolling interest | — | (4 | ) | — | 25 | |||||||||||
| Adjusted EBITDA | $ | 44,806 | $ | 52,240 | $ | 91,673 | $ | 96,738 | ||||||||
RECONCILIATION OF NET INCOME (LOSS) TO PRO FORMA NET INCOME (LOSS)
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2010 AND 2009 (Unaudited)
(in thousands)
Three months ended June 30, | Six months ended June 30, | |||||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||||
| Net income (loss) attributable to International Coal Group, Inc. | $ | 4,482 | $ | 10,382 | $ | (4,370 | ) | $ | 14,075 | |||||||
| Loss on contract buyout | 10,000 | — | 10,000 | — | ||||||||||||
| Loss on extinguishment of debt | 6,098 | — | 28,085 | — | ||||||||||||
| Gain on contract buyout | — | (7,721 | ) | — | (7,721 | ) | ||||||||||
| Income tax expense (benefit) | (7,047 | ) | 2,926 | (13,973 | ) | 2,926 | ||||||||||
| Pro forma net income (loss) attributable to International Coal Group, Inc. | $ | 13,533 | $ | 5,587 | $ | 19,742 | $ | 9,280 | ||||||||
OPERATING STATISTICS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2010 AND 2009 (Unaudited)
(in thousands, except per ton amounts)
Central Appalachia | Northern Appalachia | Illinois Basin | Purchased Coal and Ancillary | Total | ||||||||||||||||
| For the three months ended June 30, 2010: | ||||||||||||||||||||
| Tons sold | 2,319 | 1,049 | 586 | 161 | 4,115 | |||||||||||||||
| Coal sales revenues | $ | 169,316 | $ | 69,823 | $ | 21,840 | $ | 9,735 | $ | 270,714 | ||||||||||
| Cost of coal sales | $ | 133,274 | $ | 54,199 | $ | 16,993 | $ | 7,461 | $ | 211,927 | ||||||||||
Coal sales revenue per ton (b) | $ | 73.04 | $ | 66.57 | $ | 37.26 | $ | 60.32 | $ | 65.79 | ||||||||||
Cost of coal sales per ton (b) | $ | 57.49 | $ | 51.67 | $ | 28.99 | $ | 46.23 | $ | 51.51 | ||||||||||
| For the three months ended June 30, 2009: | ||||||||||||||||||||
| Tons sold | 2,480 | 947 | 546 | 207 | 4,180 | |||||||||||||||
| Coal sales revenues | $ | 175,571 | $ | 48,685 | $ | 17,701 | $ | 12,720 | $ | 254,677 | ||||||||||
| Cost of coal sales | $ | 140,142 | $ | 44,745 | $ | 14,274 | $ | 8,163 | $ | 207,324 | ||||||||||
Coal sales revenue per ton (b) | $ | 70.81 | $ | 51.36 | $ | 32.41 | $ | 61.55 | $ | 60.92 | ||||||||||
Cost of coal sales per ton (b) | $ | 56.52 | $ | 47.21 | $ | 26.13 | $ | 39.50 | $ | 49.60 | ||||||||||
| For the six months ended June 30, 2010: | ||||||||||||||||||||
| Tons sold | 4,792 | 2,118 | 1,237 | 291 | 8,438 | |||||||||||||||
| Coal sales revenues | $ | 348,280 | $ | 130,188 | $ | 45,376 | $ | 17,360 | $ | 541,204 | ||||||||||
| Cost of coal sales | $ | 273,540 | $ | 107,870 | $ | 36,401 | $ | 14,181 | $ | 431,992 | ||||||||||
Coal sales revenue per ton (b) | $ | 72.69 | $ | 61.46 | $ | 36.67 | $ | 59.73 | $ | 64.14 | ||||||||||
Cost of coal sales per ton (b) | $ | 57.09 | $ | 50.92 | $ | 29.42 | $ | 48.79 | $ | 51.20 | ||||||||||
| For the six months ended June 30, 2009: | ||||||||||||||||||||
| Tons sold | 5,249 | 2,055 | 1,136 | 420 | 8,860 | |||||||||||||||
| Coal sales revenues | $ | 359,693 | $ | 108,936 | $ | 36,424 | $ | 23,440 | $ | 528,493 | ||||||||||
| Cost of coal sales | $ | 295,973 | $ | 97,123 | $ | 30,487 | $ | 15,706 | $ | 439,289 | ||||||||||
Coal sales revenue per ton (b) | $ | 68.53 | $ | 53.01 | $ | 32.06 | $ | 55.81 | $ | 59.65 | ||||||||||
Cost of coal sales per ton (b) | $ | 56.39 | $ | 47.26 | $ | 26.83 | $ | 37.40 | $ | 49.58 | ||||||||||
(b) | “Coal sales revenue per ton” and “Cost of coal sales per ton” are calculated as Coal sales revenues or Cost of coal sales, respectively, divided by Tons sold. Although Coal sales revenue per ton and Cost of coal sales per ton are not measures of performance calculated in accordance with GAAP, management believes that they are useful to an investor in evaluating performance because they are widely used in the coal industry as a measure to evaluate a company’s sales performance or control over its costs. Coal sales revenue per ton and Cost of coal sales per ton should not be considered in isolation or as substitutes for measures of performance in accordance with GAAP. In addition, because Coal sales revenue per ton and Cost of coal sales per ton are not calculated identically by all companies, ICG’s presentation may not be comparable to other similarly titled measures of other com panies. |
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