James River Coal — Q2 2013 Earnings Presentation
20 slides from James River Coal's earnings presentation, Aug 9, 2013
Slide 1: Shareholder Update August 2013
Shareholder Update August 2013
Slide 2: Forward Looking Statements
Forward Looking Statements Certain statements in this investor presentation 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 an d our future perfor
Slide 3: Agenda
3 Agenda ● Opening Comments ● Operations Review ● Market Review ● Miscellaneous 3
Slide 4: Opening Comments Summary
Opening Comments Summary ● Mine Operations Continue to Adjust to Soft Coal Market Conditions ● Available Liquidity at June 30, 2013 of $108.8 Million Compared to $107.2 Million at March 31, 2013 ● Capital Expenditures of $11.9 Million in Q - 2, 2013 ● Completed Private Exchange Transactions, Which R
Slide 5: Agenda
5 Agenda ● Opening Comments ● Operations Review ● Market Review ● Miscellaneous 5
Slide 6: Operations Review: Safety
Operations Review Safety 8.40 1.51 5.00 2.06 - 1.00 2.00 3.00 4.00 5.00 6.00 7.00 8.00 9.00 2004 2005 2006 2007 2008 2009 2010 2011 2012 Q1 2013 Q2 2013 JRCC National Average Non - Fatal Days Lost 6
Slide 7: Operations Review: Central Appalachia
Operations Review Central Appalachia ● Idled All Operations for One Week to Manage Inventories – Majority of Kentucky Operations on Four Day Work Week ● Started Production at Mine 3B at Hampden – Replacement Metallurgical (Met) Mine ● Added 1.1 Million Tons of Surface Base Reserves 7
Slide 8: Operations Review: Midwest
Operations Review Midwest ● Continued to Match Production to Market ● All Surface Mines Impacted by Heavy Rainfall During Q - 2 8
Slide 9: Agenda
9 Agenda ● Opening Comments ● Operations Review ● Market Review ● Miscellaneous 9
Slide 10: Market Summary and Sentiment
Market Review Summary 10 Market Change in JRCC Sentiment Comments Domestic CAPP Thermal • Marginal Improvements in Inventories • No Change in Long - Term Market Dynamics Domestic Midwest Thermal • Improved Burns • New Supply Pressures are Continuing Seaborne Thermal • Europe - Overall Coal Burn is F
Slide 11: Metallurgical Coal
Market Review Metallurgical Coal 11 • Supply • Demand • Absence of Supply Shocks • Currency Exchange Rates The Met Market Is Getting Hit From Multiple Fronts:
Slide 12: Metallurgical Coal: Supply
Market Review Metallurgical Coal ● Some Projects Are Still Coming On Line That Were Planned in $300/MT Market ● Costs of Shutting Production are High: – Take/Pay Commitments in Australia – Regulatory Costs in U.S ● U.S. Has Largely Held Market Share Gains Made Over Last Several Years Supply 12
Slide 13: Metallurgical Coal: Demand
Market Review Metallurgical Coal Demand 13 ● The U.S. is One of the Bright Spots for Steel Production ● Europe is Stalled ● China and India are Not Performing Up to Expectations ● Japan is Showing Early Signs of Growth
Slide 14: Metallurgical Coal: Absence of Supply Shocks
Market Review Metallurgical Coal ● Production Elasticity is Limited – Lots of Room for Violent Price Swings, Especially Upward ● Demand Will Come Back – China, India, and Europe Could All Return Simultaneously ● Supply Shocks Could Occur: – Financial Issues of Many Worldwide Coal Companies Could Res
Slide 15: Metallurgical Coal: Currency Exchange Rates
Market Review Metallurgical Coal Currency Exchange Rates 15 Change Vs. U.S. Dollar Since March 31, 2013 Australian Dollar 15% Indian Rupee 12% Australian Producers Have Not Felt The Full Negative Impact of Falling Market Prices Indian Buyers Have Not Seen the Full Positive Impact of Falling Market P
Slide 16: Thermal Coal
Market Review Thermal Coal ● Domestic Thermal Market Remains Sluggish – Continued Pressure From Weather and Natural Gas – Short - Term Pressures on European Prices ● Utilities Continue to Look at New Basin Options ● Recent RFP’s Offer Selective Forward Opportunities ● Inventories at Utilities Remain
Slide 17: Agenda
17 Agenda ● Opening Comments ● Operations Review ● Market Review ● Miscellaneous 17
Slide 18: Miscellaneous: Balance Sheet and Liquidity
Miscellaneous Balance Sheet and Liquidity 18 ● We Need to Deleverage the Balance Sheet Wherever Possible ● Just Adding New Debt is Not a Sound Strategy ● Completed Private Exchange of $243.4 Million of Convertible Debt for $123.3 Million of New Convertible Debt We Are Very Focused On This Process Li
Slide 19: Upcoming Investor Conferences and Meetings
Miscellaneous Upcoming Investor Conferences and Meetings November, 2013 Cowen Securities 4 th Annual Global Metals, Mining & Materials Conference New York 3rd Quarter Report – Early November 19
Slide 20: James River Coal Company and Subsidiaries
Ax JamesRiver COAL COMPANY And Subsidiaries