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National Coal Corp. Reports Third Quarter 2010 Results

Tuesday, November 16th, 2010

Highlights
– Third quarter 2010 revenues totaled approximately $9.7 million
– During the three months ended September 30, 2010, National Coal reported a net loss from continuing operations of $3.7 million, compared to a net loss from continuing operations of $4.5 million for the third quarter 2009
– During the three months ended September 30, 2010, National Coal reported an Adjusted EBITDA of ($0.9) million, compared to $0.1 million for the third quarter of 2009
– The Company has agreed, subject to shareholder approval, to be acquired by Ranger Energy for $1.00 per share
National Coal Corp. (Nasdaq: NCOC), a Central and Southern Appalachian coal producer, reports that for the three months ended September 30, 2010, it achieved total revenues from continuing operations of $9.7 million based primarily on the sale of 102,175 tons of coal. In the same prior-year period, National Coal generated revenues from continuing operations of $22.1 million based primarily on the sale of 286,447 tons of coal. The decrease in revenue from coal sales for the three months ended September 30, 2010, as compared to the same period in 2009, was primarily due to the assignment of a coal supply agreement to Ranger Energy Investments, LLC on April 20, 2010, as part of the Company’s sale of certain assets and real property.
For the three months ended September 30, 2010, National Coal reported a net loss from continuing operations of $3.7 milllion or $0.43 per diluted share compared to a net loss of $4.5 million or $0.53 per diluted share for the three months ended September 30, 2009. For the three month period ended September 30, 2010, National Coal had an Adjusted Earnings Before Interest, Taxes, and Depreciation and Amortization (“Adjusted EBITDA”) of ($0.9) million, compared to an Adjusted EBITDA of $0.1 million for the third quarter of 2009.
In 2009, the Company concluded that cash generated from operations would not be sufficient to pay interest or principal on its 10.5% Notes due December 2010, and began exploring strategic alternatives to improve liquidity and reduce its debt obligations. On September 27, 2010, National Coal entered into a merger agreement with Ranger Energy Investments, LLC, pursuant to which the Company will merge with a subsidiary of Ranger Energy and each outstanding share of the Company’s common stock will be converted into the right to receive $1.00 in cash. A special meeting of shareholders will be held on December 2, 2010, at which time shareholders will vote on whether to approve the merger. If approved, National Coal Corp. will become a privately-held company and its shares will no longer be publicly traded.
The merger is expected to close prior to December 15, 2010, the maturity date of the Company’s 10.5% Notes due 2010. If the merger does not close prior to such date, the Company will default on its 10.5% Notes due 2010 and most likely need to seek protection from creditors under federal bankruptcy laws.
(Ref 2094)

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