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ASHLAND COAL REPORTS EARNINGS FOR THIRD QUARTER

 HUNTINGTON, W.Va., Oct. 21 /PRNewswire/ -- Ashland Coal, Inc. (NYSE: ACI) reported today that it earned $43.7 million, or $2.31 a share on a fully diluted basis, for the third quarter ended Sept. 30, 1993.
 For the same quarter of 1992, net income was $8.0 million, or $.41 a share. Revenues for the third quarter were $113.8 million, as compared to $160.7 million in the third quarter of last year.
 For the nine months ended Sept. 30, 1993, Ashland Coal earned $47.0 million, or $2.46 a share before the cumulative effects of required changes in accounting. During the first nine months of 1992, the company earned $23.3 million, or $1.23 a share. After the cumulative effects of the accounting changes, Ashland Coal earned $28.1 million, or $1.45 per share, for the first nine months of 1993. Revenues were $386.9 million in the first three quarters of 1993 compared to $416.1 million for the same period in 1992.
 "Our earnings in the third quarter were significantly affected by three factors," commented William C. Payne, chairman of the board, president and chief executive officer. "First, we recorded a reduction in income tax expense of approximately $50 million which arose principally because of our election to deduct for federal income tax purposes the amortization of goodwill associated with the April 1992 acquisition of Dal-Tex Coal Corporation. Such amortization has just recently become deductible due to a change in the tax law."
 "The second factor," Payne continued, "was a charge against income of about $6 million after tax for certain prepaid royalties on properties which we acquired in the 1970s and which we now believe are of doubtful recoverability.
 "Third," Payne added, "the strike by the United Mine Workers of America continued through the quarter. This strike, which is now in its sixth month, has had a significant adverse effect on the operations of Hobet Mining, Inc. and the subsidiaries of Dal-Tex, and has materially reduced the earnings of Ashland Coal.
 "In view of the UMWA strike, it is impossible to predict when normal operations will resume and when our prospects for greater profitability will be restored. Without the strike, we believe the outlook for Ashland Coal is good. However, so long as the strike continues, the financial performance of our company will be impaired."
 Ashland Coal, Inc. is engaged in the mining, processing and sale of low-sulfur coal, and markets its coal principally to electric utilities in the eastern United States and into the export markets.
 Hobet Mining, Inc. and Dal-Tex Coal Corporation are independent operating subsidiaries of Ashland Coal, Inc.
 ASHLAND COAL, INC. AND SUBSIDIARIES
 Condensed Consolidated Statements of Income
 (In thousands, except per share data)
 Three Months Ended Nine Months Ended
 Sept. 30 Sept. 30
 1993 1992 1993 1992
 (Unaudited)
 Revenues
 Coal sales $111,389 $155,877 $375,015 $404,477
 Operating
 revenues 2,362 4,824 11,893 11,662
 113,751 160,701 386,908 416,139
 Costs and Expenses
 Cost of coal
 sold 109,884 134,311 347,336 344,656
 Operating
 expenses 2,566 3,142 7,912 7,756
 Selling, general, and
 administrative
 expenses 8,342 8,419 26,124 22,917
 120,792 145,872 381,372 375,329
 Operating
 Income
 (Loss) (7,041) 14,829 5,536 40,810
 Other Income (Expense)
 Interest income 307 338 780 719
 Interest
 expense(A) (6,691) (5,942) (19,061) (15,078)
 Income (Loss) Before Income Taxes
 and the Cumulative Effect of
 Changes in
 Accounting (13,425) 9,225 (12,745) 26,451
 Income tax expense
 (benefit)(B) (57,124) 1,261 (59,702) 3,121
 Income Before the Cumulative
 Effect of Changes
 in
 Accounting 43,699 7,964 46,957 23,330
 Cumulative Effect
 of Changes
 in Accounting -- -- (18,836) --
 Net Income $ 43,699 $ 7,964 $ 28,121 $ 23,330
 Earnings per common share
 Primary:
 Earnings before
 cumulative effect
 adjustments $2.45 $.43 $2.62 $ 1.31
 Cumulative effect
 adjustments -- -- (1.09) --
 Net Income $2.45 $.43 $1.53 $ 1.31
 Fully diluted:
 Earnings before
 cumulative effect
 adjustments $2.31 $.41 $2.46 $1.23
 Cumulative effect
 adjustments -- -- (1.01) --
 Net Income $2.31 $.41 $1.45 $1.23
 Weighted average shares outstanding
 Primary 17,714 17,127 17,321 16,512
 Fully diluted 18,788 18,574 18,637 17,962
 (A) Net of $1,555,000 and $4,391,000 of capitalized interest for the three months and nine months ended Sept. 30, 1992.
 (B) The three months and nine months ended Sept. 30, 1993 include approximately $50 million of deferred tax benefit arising from the amortization for tax purposes of goodwill associated with the 1992 acquisition of Dal-Tex Coal Corporation. Such goodwill became deductible with the enactment of the Omnibus Budget Reconciliation Act of 1993.
 ASHLAND COAL, INC. AND SUBSIDIARIES
 Operating Information
 (In thousands of tons)
 Three Months Ended Nine Months Ended
 Sept. 30 Sept. 30
 1993 1992 1993 1992
 Coal Sales
 Domestic contract 1,766 2,799 6,411 7,333
 Domestic spot 1,504 1,304 4,407 3,199
 Export 314 1,250 1,781 3,183
 3,584 5,353 12,599 13,715
 Coal Sources
 Hobet Mining,
 Inc.(A) 283 1,231 2,019 3,839
 Dal-Tex Coal
 Corp.(A) 281 1,259 2,462 2,778
 Mingo Logan Coal
 Company(A) 1,916 1,259 5,299 3,711
 Coal-Mac, Inc.(A) 591 548 1,491 1,706
 Purchases 508 560 1,437 1,350
 Other, including
 inventory change 5 496 (109) 331
 3,584 5,353 12,599 13,715
 (A) Independent operating subsidiary of Ashland Coal, Inc.
 ASHLAND COAL, INC. AND SUBSIDIARIES
 Condensed Consolidated Balance Sheets
 (In thousands)
 September 30 December 31
 1993 1992
 Asset (Unaudited)
 Current Assets
 Cash and cash equivalents $ 32,022 $ 37,609
 Accounts receivable 53,475 75,249
 Inventories 29,157 24,458
 Prepaid royalties 13,254 8,947
 Deferred income taxes 2,886 -
 Assets to be sold and leased back - 64,182
 Other current assets 2,558 1,001
 133,352 211,446
 Other Assets
 Prepaid royalties 56,286 60,372
 Coal supply agreements 49,958 59,889
 Notes receivable and other assets 22,922 25,108
 129,166 145,369
 Property, Plant, and Equipment
 Cost 826,443 806,596
 Less accumulated depreciation,
 depletion, and amortization 207,334 170,079
 619,109 636,517
 $881,627 $ 993,332
 Liabilities and Stockholders' Equity
 Current Liabilities
 Accounts payable $ 22,420 $ 34,618
 Accrued expenses 24,553 28,408
 Income taxes payable - 395
 Deferred income taxes - 5,434
 Current portion of long-term debt 23,292 105,025
 70,265 173,880
 Long-Term Debt 312,014 317,958
 Accrued Postretirement Benefits 66,022 20,243
 Accrued Black Lung Benefits 14,205 14,014
 Other Long-Term Liabilities 21,234 19,782
 Deferred Income Taxes 48,186 121,677
 Deferred Gains on Sale and Leaseback of
 Assets 3,767 3,482
 Convertible Class C Preferred Stock
 (subject to redemption) - 34,021
 Stockholders' Equity
 Convertible Class B preferred stock 33,050 33,050
 Convertible Class C preferred stock 34,791 -
 Common stock 136 136
 Paid-in capital 106,189 104,398
 Retained earnings 171,768 150,691
 345,934 288,275
 $ 881,627 $ 993,332
 -0- 10/21/93
 /CONTACT: David G. Todd of Ashland Coal, 304-526-3755/
 (ACI)


CO: Ashland Coal, Inc. ST: West Virginia IN: MNG SU: ERN

CD -- PG007 -- 4948 10/21/93 08:05 EDT
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