SYS-CON MEDIA Authors: Xenia von Wedel, Peter Silva, Glenn Rossman, Ava Smith, Elizabeth White

News Feed Item

Xinergy Announces Results for Second Quarter Ended June 30, 2014

KNOXVILLE, TENNESSEE -- (Marketwired) -- 08/14/14 --


--  The Company amended its metallurgical coal supply agreement with Globe
    Metallurgical to reflect increases in price and tonnage while extending
    the term through June 2017. 
    
--  In July 2014, we partnered with Mercuria Energy Trading ("Mercuria"),
    one of the largest and most experienced commodity trading companies in
    the world, to market our thermal and metallurgical coal. 
    
--  Increased metallurgical coal production at South Fork to 96,200 tons in
    the quarter ended June 30, 2014 while reducing cash cost per ton to
    $93.94. 
    
--  Increased thermal coal production at Raven Crest to 156,096 tons in the
    quarter ended June 30, 2014 while reducing cash cost per ton to $57.04. 
    
--  At June 30, 2014, the Company has reduced its inventory levels from the
    previous quarter by about 24% to approximately 123,000 tons which has a
    market value of about $8.0 million. 
    
--  The Company continues to evaluate possible sales of non-strategic,
    surplus and non-core assets in addition to other transactions in efforts
    to strengthen our balance sheet and improve liquidity in the near term. 
    

Xinergy Ltd. (the "Company") (TSX:XRG), a Central Appalachian coal producer, today announced that the Company had a net loss of $(9.1) million, or $(0.14) per diluted share for the second quarter ended June 30, 2014. This is compared with a net loss of $(9.4) million, or $(0.17) per diluted share for the second quarter of 2013. The Company had a net loss of $(20.9) million, or $(0.35) per diluted share for the six months ended June 30, 2014. This is compared with a net loss of $(11.3) million, or $(0.21) per diluted share for the six months ended June 30, 2013. Second quarter 2014 adjusted EBITDA was $(0.4) million compared with $(2.1) million for the second quarter 2013. For the six months ended June 30, 2014 adjusted EBITDA was $(3.9) million compared with $(5.7) million for the six months ended June 30, 2013. The Company's Condensed Consolidated Interim Financial Statements for the three and six months ended June 30, 2014, together with its Management's Discussion and Analysis ("MD&A") for the corresponding period, have been posted on SEDAR at www.sedar.com and on the Company's website at www.xinergycorp.com.

"We have now positioned Xinergy as a producer of premium mid-vol metallurgical coal and high quality thermal coal, while we continue to focus daily to be one of the lowest cost operators in Central Appalachia," said Bernie Mason, Xinergy's President and CEO.

"We are also very excited about our recent announcement that Mercuria will serve as our exclusive coal sales agent. Mercuria is a global leader in energy and commodity trading and we expect them to assist us through this stagnant market and also help us to the next level," continued Mason.

Financial Overview

The following tables present selected balance sheet, statement of operations and sales and operating statistics as of June 30, 2014 and December 31, 2013, for the three and six months ended June 30, 2014 and the three months ended March 31, 2013.


                                  As of       As of       As of       As of 
                                June 30    March 31 December 31     June 30 
($'000)                            2014        2014        2013        2013 
----------------------------------------------------------------------------
Balance Sheet                                                               
Cash and cash equivalents    $    2,060  $   10,436  $   10,485  $   17,058 
Total current assets         $   16,414  $   23,972  $   20,941  $   42,296 
Total assets                 $  130,525  $  140,362  $  139,372  $  160,271 
Total current liabilities    $   16,173  $   16,714  $    9,966  $   12,752 
Total long-term liabilities  $  229,434  $  229,682  $  228,737  $  220,093 
Shareholders' equity         $ (115,082) $ (106,034) $  (99,331) $  (72,574)
                                                                            
                                  Three       Three                   Three 
                                 months      months  Six months      months 
                                  ended       ended       ended       ended 
($'000, except per share)      June 30,   March 31,    June 30,    June 30, 
                                   2014        2014        2014        2013 
----------------------------------------------------------------------------
Statement of Operations                                                     
Coal revenues                $   20,117  $   11,710  $   31,827  $    4,739 
Cost of coal sales           $   18,939  $   14,063  $   33,002  $    5,014 
Gross margin                 $    1,178  $   (2,353) $   (1,175) $     (275)
(Loss) income before taxes   $   (9,106) $  (11,820) $  (20,926) $   (9,379)
Net (loss) income            $   (9,106) $  (11,820) $  (20,926) $   (9,379)
Basic and diluted net                                                       
 income(loss) per share      $    (0.14) $    (0.22) $    (0.35) $    (0.17)
                                                                            
                                  Three       Three                   Three 
                                 months      months  Six months      months 
                                 ended       ended       ended       ended  
                               June 30,   March 31,    June 30,    June 30, 
                                   2014        2014        2014        2013 
                                                                            
Sales & Operating Statistics                                                
----------------------------------------------------------------------------
Tons sold                       290,318     165,074     455,392      49,270 
                                                                            
Tons produced                   252,296     177,377     429,673      53,867 
                                                                            
  Sales price/ton            $    69.29  $    70.94  $    69.89  $    96.19 
  COGS/ton sold              $    65.23  $    85.19  $    72.47  $   101.77 
  Gross margin/ton sold      $     4.06  $   (14.25) $    (2.58) $    (5.58)
  Cash costs/ton produced    $    71.85  $    81.48  $    75.83  $   112.03 

Capital Expenditures

We spent approximately $1.2 million on capital expenditures for the three months ended June 30, 2014. The Company estimates an additional $0.7 million to $2.7 million in capital expenditures will be incurred during the remainder of 2014, for an estimate of $4.0 to $6.0 million for the full year 2014.

Liquidity and Capital Resources

At June 30, 2014, as outlined in the following table, we had total cash and cash equivalents of $2.1 million and $8.8 million of restricted cash, compared with $10.5 million and $10.0 million at December 31, 2013, respectively.


                                                                December 31,
                                               June 30, 2014            2013
------------------------------------------------------------ ---------------
                                                                            
Cash, operating                               $        2,060  $       10,485
  Cash, restricted:                                                         
    Kentucky sale proceeds                    $        2,308  $          518
    Kentucky sale proceeds held in escrow     $            -  $        3,001
    Deposits                                  $        1,440  $        1,440
    Reclamation bond collateral               $        5,009  $        5,009
                                             --------------- ---------------
Total Cash, Restricted                        $        8,757  $        9,968
                                             --------------- ---------------

In accordance with the Notes, the restricted cash received from the Kentucky sales proceeds was used to make capital expenditures. At June 30, 2014 we have $2.3 million compared to $0.5 million on December 31, 2013. In June 2014, the Company received $2.5 million of the Kentucky sale collateral proceeds that were held in escrow.

The Company remains highly leveraged. Our Notes have an outstanding balance of $195.0 million and provide for semi-annual interest payments of $9.0 million in mid-November and mid-May. Our senior notes have an outstanding balance of $20.0 million and provide for quarterly interest payments of $0.5 million.

In the second quarter of 2014, the Company experienced positive gross margins from both active mining operations by achieving lower cash costs and higher revenues. We continued to reduce inventories but the shipping delays and rail service disruptions experienced in the first quarter of 2014 continued into the early second quarter of 2014. This continued impact of delays resulted in reduced revenues of approximately $3.8 million and deferred the sale and shipment of approximately 38,000 tons. At June 30, 2014, we have approximately 123,000 tons of inventory on hand with a current market value of about $8.0 million.

On March 31, 2014, we received $4.95 million from the sale of common shares pursuant to a private placement. We continue to negotiate with financial institutions and advisors in efforts to arrange financing to provide adequate liquidity that when combined with existing cash balances, will be sufficient to make the $9.0 million interest payment on our Notes in November 2014. We also continue to explore strategic alternatives that may include an additional sale of equity securities, the sale of debt securities, the sale of surplus or obsolete mining equipment, owned reserves and other assets and/or the restructuring of our debt.

Conference Call, Webcast and Replay

The Company will hold its quarterly conference call to discuss second quarter 2014 operating results on Friday August 15, 2014 at 10:00 a.m. EDT. The conference call will be open to the public toll free at (877) 317-6789. International callers should use (412) 317-6789, and Canadian callers should use (866) 605-3852. The conference call can also be accessed via webcast on the Company's website with a replay available shortly after the event.

About Xinergy Ltd.

Headquartered in Knoxville, Tennessee, Xinergy Ltd., through its wholly owned subsidiary Xinergy Corp. and its subsidiaries, is engaged in coal mining in West Virginia and Virginia. Xinergy sells high quality metallurgical and thermal coal to electric utilities, steelmakers, energy trading firms and industrial companies. For more information, please visit www.xinergycorp.com.

Forward-Looking Information

This news release contains forward-looking information is based on the Company's expectations and beliefs concerning future events and involves risks and uncertainties that are outside of our control and may cause actual results to materially differ from current expectations. Some of these key assumptions include, among other things: no material disruption in production, or no material variation in anticipated thermal and metallurgical coal sales volumes; no material decline in markets and pricing of steam or metallurgical coal other than anticipated variations; continued availability of and no material disruption in rail service; no production, construction or shipping disruptions due to adverse weather conditions other than normal, seasonal patterns; no material delays in the current timing for completion of ongoing projects; no material delays in the receipt of anticipated mining permits from governmental agencies; financing will be available on terms favorable and reasonable to the Company; no material variation in historical coal purchasing practices of customers; coal sales contracts will be entered into with new customers; parties execute and deliver contracts currently under negotiation; and no material variations in the current regulatory environment. The reader is cautioned that such assumptions, although considered reasonable by us at the time of preparation, may prove to be incorrect.

Actual results achieved during the forecast period may vary from the information provided herein as a result of numerous known and unknown risks and uncertainties and other factors. Additional factors include, but are not limited to the factors on page 6: changes in general economic, market and business conditions; uncertainties associated with estimating the quantity and quality of coal reserves and resources; commodity prices; currency exchange rates; the availability of credit facilities for capital expenditure requirements; debt service requirements; dependence on a single rail system; changes to federal and state legislation; liabilities inherent in coal mine development and production; competition for, among other things, capital, acquisitions of reserves, undeveloped lands and skilled personnel; geological, mining and processing technical problems; ability to obtain required mine licenses, mine permits and regulatory approvals required to proceed with mining and coal processing operations; ability to comply with current and future environmental and other laws; actions by governmental or regulatory authorities including increasing taxes and changes in other regulations; the occurrence of unexpected events involved in coal mine development and production; and other factors, many of which are beyond our control. Many of these risk factors and uncertainties are discussed in our Annual Information Form ("AIF") in a section entitled "Risk Factors" and other documents filed with the Canadian securities regulatory authorities available on SEDAR at www.sedar.com. Please refer to these documents for further details about the risks faced by the Company.

Non-GAAP Measures

This news release reports certain financial measures that are not recognized by Canadian generally accepted accounting principles "GAAP" to evaluate the performance of the Company. Since certain non-GAAP financial measures may not have a standardized meaning and may not be comparable to similar measures presented by other companies, Canadian securities regulations require that non-GAAP financial measures are clearly defined, quantified and reconciled with their nearest GAAP measure. Investors and other readers of this news release are cautioned that these non-GAAP financial measures should not be construed as alternatives to other measures of financial performance calculated in accordance with GAAP. Please refer to page (2), page (11), and page (24) to page (25) of the Company's MD&A which is available on SEDAR at www.sedar.com for further details with respect to the use of non-GAAP measures and for the applicable reconciliations.

Contacts:
Xinergy Ltd.
G. L. "Bernie" Mason
Chief Executive Officer
865-474-7000

Xinergy Ltd.
Michael R. Castle
Chief Financial Officer
865-474-7000

Xinergy Ltd.
Robert L. Gaylor
Senior Vice President
865-474-7000
www.xinergycorp.com

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
"For the past 4 years we have been working mainly to export. For the last 3 or 4 years the main market was Russia. In the past year we have been working to expand our footprint in Europe and the United States," explained Andris Gailitis, CEO of DEAC, in this SYS-CON.tv interview at Cloud Expo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
The Domain Name Service (DNS) is one of the most important components in networking infrastructure, enabling users and services to access applications by translating URLs (names) into IP addresses (numbers). Because every icon and URL and all embedded content on a website requires a DNS lookup loading complex sites necessitates hundreds of DNS queries. In addition, as more internet-enabled ‘Things' get connected, people will rely on DNS to name and find their fridges, toasters and toilets. Acco...
Scott Jenson leads a project called The Physical Web within the Chrome team at Google. Project members are working to take the scalability and openness of the web and use it to talk to the exponentially exploding range of smart devices. Nearly every company today working on the IoT comes up with the same basic solution: use my server and you'll be fine. But if we really believe there will be trillions of these devices, that just can't scale. We need a system that is open a scalable and by using ...
The Internet of Things is tied together with a thin strand that is known as time. Coincidentally, at the core of nearly all data analytics is a timestamp. When working with time series data there are a few core principles that everyone should consider, especially across datasets where time is the common boundary. In his session at Internet of @ThingsExpo, Jim Scott, Director of Enterprise Strategy & Architecture at MapR Technologies, discussed single-value, geo-spatial, and log time series dat...
The term culture has had a polarizing effect among DevOps supporters. Some propose that culture change is critical for success with DevOps, but are remiss to define culture. Some talk about a DevOps culture but then reference activities that could lead to culture change and there are those that talk about culture change as a set of behaviors that need to be adopted by those in IT. There is no question that businesses successful in adopting a DevOps mindset have seen departmental culture change, ...
High-performing enterprise Software Quality Assurance (SQA) teams validate systems that are ready for use - getting most actively involved as components integrate and form complete systems. These teams catch and report on defects, making sure the customer gets the best software possible. SQA teams have leveraged automation and virtualization to execute more thorough testing in less time - bringing Dev and Ops together, ensuring production readiness. Does the emergence of DevOps mean the end of E...
"Verizon offers public cloud, virtual private cloud as well as private cloud on-premises - many different alternatives. Verizon's deep knowledge in applications and the fact that we are responsible for applications that make call outs to other systems. Those systems and those resources may not be in Verizon Cloud, we understand at the end of the day it's going to be federated," explained Anne Plese, Senior Consultant, Cloud Product Marketing at Verizon Enterprise, in this SYS-CON.tv interview at...
"Cloud consumption is something we envision at Solgenia. That is trying to let the cloud spread to the user as a consumption, as utility computing. We want to allow the people to just pay for what they use, not a subscription model," explained Ermanno Bonifazi, CEO & Founder of Solgenia, in this SYS-CON.tv interview at Cloud Expo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
P2P RTC will impact the landscape of communications, shifting from traditional telephony style communications models to OTT (Over-The-Top) cloud assisted & PaaS (Platform as a Service) communication services. The P2P shift will impact many areas of our lives, from mobile communication, human interactive web services, RTC and telephony infrastructure, user federation, security and privacy implications, business costs, and scalability. In his session at @ThingsExpo, Robin Raymond, Chief Architect...
Enthusiasm for the Internet of Things has reached an all-time high. In 2013 alone, venture capitalists spent more than $1 billion dollars investing in the IoT space. With "smart" appliances and devices, IoT covers wearable smart devices, cloud services to hardware companies. Nest, a Google company, detects temperatures inside homes and automatically adjusts it by tracking its user's habit. These technologies are quickly developing and with it come challenges such as bridging infrastructure gaps,...
SYS-CON Media announced that Centrify, a provider of unified identity management across cloud, mobile and data center environments that delivers single sign-on (SSO) for users and a simplified identity infrastructure for IT, has launched an ad campaign on Cloud Computing Journal. The ads focus on security: how an organization can successfully control privilege for all of the organization’s identities to mitigate identity-related risk without slowing down the business, and how Centrify provides ...
SAP is delivering break-through innovation combined with fantastic user experience powered by the market-leading in-memory technology, SAP HANA. In his General Session at 15th Cloud Expo, Thorsten Leiduck, VP ISVs & Digital Commerce, SAP, discussed how SAP and partners provide cloud and hybrid cloud solutions as well as real-time Big Data offerings that help companies of all sizes and industries run better. SAP launched an application challenge to award the most innovative SAP HANA and SAP HANA...
"SAP had made a big transition into the cloud as we believe it has significant value for our customers, drives innovation and is easy to consume. When you look at the SAP portfolio, SAP HANA is the underlying platform and it powers all of our platforms and all of our analytics," explained Thorsten Leiduck, VP ISVs & Digital Commerce at SAP, in this SYS-CON.tv interview at 15th Cloud Expo, held Nov 4-6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
"We help companies that are using a lot of Software as a Service. We help companies manage and gain visibility into what people are using inside the company and decide to secure them or use standards to lock down or to embrace the adoption of SaaS inside the company," explained Scott Kriz, Co-founder and CEO of Bitium, in this SYS-CON.tv interview at 15th Cloud Expo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
Explosive growth in connected devices. Enormous amounts of data for collection and analysis. Critical use of data for split-second decision making and actionable information. All three are factors in making the Internet of Things a reality. Yet, any one factor would have an IT organization pondering its infrastructure strategy. How should your organization enhance its IT framework to enable an Internet of Things implementation? In his session at Internet of @ThingsExpo, James Kirkland, Chief Ar...