-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, BL87qghq575Mn3cp9t0fCkpazAc3zD4lUCjylHoroS7FkIBh1F7l1ftWxeGXfsvW ffAcI3YF7P9JVl/e6Koqew== 0000106455-00-000003.txt : 20000320 0000106455-00-000003.hdr.sgml : 20000320 ACCESSION NUMBER: 0000106455-00-000003 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20000317 ITEM INFORMATION: FILED AS OF DATE: 20000317 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WESTMORELAND COAL CO CENTRAL INDEX KEY: 0000106455 STANDARD INDUSTRIAL CLASSIFICATION: BITUMINOUS COAL & LIGNITE MINING [1220] IRS NUMBER: 231128670 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-11155 FILM NUMBER: 572648 BUSINESS ADDRESS: STREET 1: 2 NORTH CASCADE AVENUE 14TH FLOOR STREET 2: 200 S BROAD ST CITY: COLORADO SPRINGE STATE: CO ZIP: 80903 BUSINESS PHONE: 7194422600 MAIL ADDRESS: STREET 1: 2 N CASCADE AVE STREET 2: # 14THFL CITY: COLORADO SPRINGS STATE: CO ZIP: 80903-1614 8-K 1 Form 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report(Date of earliest event reported): March 17, 2000 WESTMORELAND COAL COMPANY ------------------------- (Exact name of registrant as specified in its charter) DELAWARE 0-752 23-1128670 -------- ----- ---------- (State or other jurisdiction (Commission File (I.R.S. Employer of incorporation or Number Identification No.) organization) 2 North Cascade Avenue, 14th Floor, Colorado Springs, Colorado 80903 - -------------------------------------------------------------- ----- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: 719-442-2600 ------------ Item 5. Other Events The Company reported net income from continuing operations of $8.6 million for the full year ended December 31, 1999 compared with net income from continuing operations of $3.3 million for 1998. Item 7. Financial Statements and Exhibits (c) Exhibits Exhibit 99.2 -- Press release dated March 17, 2000. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. WESTMORELAND COAL COMPANY Date: March 17, 2000 /s/ Robert J. Jaeger -------------------------- By: Robert J. Jaeger Senior Vice President-Finance and Treasurer Exhibit 99.2 ---------------------------------- Westmoreland Reports 1999 Year End Net Income from Continuing Operations of $8.6 Million ---------------------------------- Colorado Springs, CO - March 17, 2000 -- Westmoreland Coal Company (AMEX: WLB) today reported net income from continuing operations of $8.6 million for the full year ended December 31, 1999 compared with net income from continuing operations of $3.3 million for 1998. Impacting 1999 results were an expected decrease in revenues that resulted from reduced sales at Westmoreland Resources, Inc. ("WRI") because of an eight week scheduled maintenance outage at a major customer's facility, anticipated losses at Dominion Terminal Associates ("DTA") due to a full year of continued decline in the export coal market, an expected reduction in equity in earnings from Westmoreland Energy compared to 1998 due to the sale of the Rensselaer Project, and expenses of almost $22 million connected with retiree medical obligations, or "heritage costs." Results for 1998 were negatively impacted by approximately $10.0 million in reorganization fees, and a $12.2 million charge related to the company's investment in DTA. Positively affecting net income from continuing operations was the strong performance of the Company's remaining independent power operations and significant interest income. Equity in earnings of independent power projects totaled over $34.0 million and included a gain of approximately $17.0 million from the sale of the Rensselaer project during the first quarter. WRI produced approximately 5.5 million tons of coal. After recognition (for financial statement presentation purposes) of $1.8 million for undeclared, unpaid preferred dividends, net income applicable to common shareholders in 1999 was $6.9 million or $0.97 per share compared to a net loss applicable to common shareholders of $11.4 million, or $1.64 per share in 1998. Positively affecting the calculation of net income applicable to common shareholders were the two tender offers for preferred (depositary) shares conducted in 1999. The tender offers resulted in the retirement of 366,292 shares of preferred stock (1,465,167 depositary shares), and a reduction of accumulated but undeclared, unpaid preferred dividends from $20.8 million immediately prior to the first offering to $8.9 million immediately following the second offering, and a reduction of the ongoing quarterly preferred dividends from $1.2 million to $444,000. Shareholders' equity was also reduced by $27.8 million as a result of the two offerings. As of December 31, 1999, the Company had shareholders' equity of $3.1 million compared to shareholders' equity of $21.8 million as of December 31, 1998. Cash used in operating activities was $23.5 million in 1999 compared to cash provided of $55.9 million in 1998. 1999 was impacted by the payment of pre-petition liabilities, catch-up payments for retiree health benefits and the payment of reorganization and proxy contest expenses. In contrast, 1998 includes cash received from the Rensselaer restructuring at WEI and from the termination of the salaried pension plan, and reflects the deferral of health care benefit payments during bankruptcy. Cash used in financing activities in 1999 was primarily for the purchase of preferred stock. Consolidated cash and cash equivalents as of December 31, 1999 totaled $20.1 million, including $12.1 million at WRI. Cash at WRI, an 80%-owned subsidiary, is available to the Company through dividends. The Company also had restricted cash, which was not classified as cash or cash equivalents, of $14,896,000 at December 31, 1999. Annual Meeting of Shareholders - ------------------------------ The Company will hold its Annual Meeting of Shareholders beginning at 10:00 a.m. on Friday, June 9, 2000 at the Antlers Adam's Mark Hotel in Colorado Springs, Colorado. An Annual Report, proxy materials and voting instructions will be mailed to all common shareholders and holders of depositary shares eligible to vote at the meeting. 1999 Form 10-K - -------------- Westmoreland expects to file its 1999 Form 10-K with the SEC on or about March 23, 2000. Shareholders may request a copy by contacting the Company at the following address: Westmoreland Coal Company, 2 North Cascade Avenue, 14th Floor, Colorado Springs, CO, 80903. The Form 10-K is also available electronically through the SEC EDGAR system. Westmoreland Coal Company is a diversified energy company headquartered in Colorado Springs, Colorado. It is currently engaged in western Powder River Basin coal mining through its 80%-owned subsidiary Westmoreland Resources, Inc. and independent power production through its wholly owned subsidiary Westmoreland Energy, Inc. The Company also holds a 20% interest in Dominion Terminal Associates, a coal shipping and terminal facility in Newport News, Virginia. Certain statements in this report which are not historical facts or information are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including, but not limited to, the information set forth in Management's Discussion and Analysis of Financial Condition and Results of Operations. Any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. For example, words such as "may," "will," "should," "estimates," "predicts," "potential," "continue," "strategy," "believes," "anticipates," "plans," "expects," "intends," and similar expressions are intended to identify forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, levels of activity, performance or achievements of the Company, or industry results, to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the following: general economic and business conditions; the ability of the Company to implement its business strategy; the Company's access to financing; the Company's ability to successfully identify new business opportunities; the Company's ability to achieve anticipated cost savings and profitability targets; changes in the industry; competition; the Company's ability to utilize its tax net operating losses; the ability to reinvest excess cash at an acceptable rate of return; weather conditions; the availability of transportation; price of alternative fuels; costs of coal produced by other countries; demand for electricity; the effect of regulatory and legal proceedings and other factors discussed in Item 1 of the Company's Form 10-K. As a result of the foregoing and other factors, no assurance can be given as to the future results and achievement of the Company. Neither the Company nor any other person assumes responsibility for the accuracy and completeness of these statements. THE ATTACHED FINANCIAL RESULTS should be read in conjunction with the Company's COMPLETE financial statements contained in the 1999 Form 10-K. ### For further information contact Diane Jones (719) 442-2600. Westmoreland Coal Company and Subsidiaries Consolidated Balance Sheets (Unaudited) December 31, 1999 1998 - -------------------------------------------------------------------------- ---------- ---------- (in thousands)
Assets Current assets: Cash and cash equivalents $ 20,122 $ 84,073 Receivables: Trade 2,156 2,566 Excess of trust assets over pneumoconiosis benefit obligation 6,397 - Terminated pension plan, net 500 500 Other 621 2,730 - -------------------------------------------------------------------------- ---------- ---------- 9,674 5,796 Other current assets 1,180 691 - -------------------------------------------------------------------------- ---------- ---------- Total current assets 30,976 90,560 - -------------------------------------------------------------------------- ---------- ---------- Property, plant and equipment: Land and mineral rights 10,572 10,990 Plant and equipment 66,231 94,989 - -------------------------------------------------------------------------- ---------- ---------- 76,803 105,979 Less accumulated depreciation and depletion 40,245 69,029 - -------------------------------------------------------------------------- ---------- ---------- 36,558 36,950 Investment in independent power projects 45,225 62,386 Investment in Dominion Terminal Associates (DTA) 4,672 5,475 Workers' compensation bond 4,748 4,140 Prepaid pension cost 3,897 3,748 Excess of trust assets over pneumoconiosis benefit obligation 5,255 10,891 Security deposits 10,148 - Other assets 818 1,456 - -------------------------------------------------------------------------- ---------- ---------- Total Assets $ 142,297 $ 215,606 ========================================================================== ========== ========== (Continued) Westmoreland Coal Company and Subsidiaries Consolidated Balance Sheets (Unaudited) - Continued December 31, 1999 1998 - -------------------------------------------------------------------------- ---------- ---------- (in thousands) Liabilities and Shareholders' Equity Current liabilities: Current installments of long-term debt $ 220 $ 200 Accounts payable and accrued expenses: Trade 2,010 4,213 Taxes, other than income taxes 3,932 3,893 Workers compensation 3,200 3,800 Postretirement medical costs 10,130 11,066 Reorganization expenses 400 7,900 Consent judgment payment obligation - 39,006 Other accrued expenses 970 3,143 Reclamation costs 100 100 Income taxes - 2,185 - -------------------------------------------------------------------------- ---------- ---------- Total current liabilities 20,962 75,506 - -------------------------------------------------------------------------- ---------- ---------- Long-term debt, less current installments 1,343 1,562 Accrual for workers compensation 15,072 17,338 Accrual for postretirement medical costs 78,643 73,143 1974 UMWA Pension Plan obligations 11,879 13,776 Accrual for reclamation costs, less current portion 2,537 3,046 Other liabilities 1,930 2,370 Minority interest 6,874 7,020 Commitments and contingent liabilities Shareholders' equity Preferred stock of $1.00 par value Authorized 5,000,000 shares; Issued and outstanding 208,708 shares in 1999 and 209 575 575,000 shares in 1998 Common stock of $2.50 par value Authorized 20,000,000 shares; Issued and outstanding 7,067,663 shares in 1999 and 17,669 17,413 6,965,328 shares in 1998 Other paid-in capital 67,315 94,630 Accumulated deficit (82,136) (90,773) - -------------------------------------------------------------------------- ---------- ---------- Total shareholders' equity 3,057 21,845 - -------------------------------------------------------------------------- ---------- ---------- Total Liabilities and Shareholders' Equity $ 142,297 $ 215,606 ========================================================================== ========== ==========
Westmoreland Coal Company and Subsidiaries Consolidated Statements of Operations (Unaudited) Years Ended December 31, 1999 1998 1997 - -------------------------------------------------------- --------- --------- --------- (in thousands)
Revenues: Coal $ 38,539 $ 44,010 $ 47,182 Independent power projects - equity in earnings 34,492 64,465 17,770 Dominion Terminal Associates ("DTA") - equity in earnings (losses) (1,464) 94 880 - -------------------------------------------------------- --------- --------- --------- 71,567 108,569 65,832 - -------------------------------------------------------- --------- --------- --------- Cost and expenses: Cost of sales - coal 33,637 37,472 42,063 Depreciation, depletion and amortization 1,571 2,289 1,715 Selling and administrative 9,660 7,040 5,932 Heritage costs 18,737 31,449 16,673 Pension expense (benefit) (including termination gain of $1,512,000 in 1997) (149) 111 (5,547) Unusual charges (credits) - 2,000 (27,214) Doubtful accounts recoveries (174) (1,028) (1,410) DTA impairment charge - 12,164 - - -------------------------------------------------------- --------- --------- --------- 63,282 91,497 32,212 - -------------------------------------------------------- --------- --------- --------- Operating income 8,285 17,072 33,620 Other income (expense): Gains on sales of assets 433 475 969 Interest expense (1,135) (190) (320) Interest income 2,052 - - Minority interest (854) (775) (1,092) Other income (expense) (226) 1,999 713 - -------------------------------------------------------- --------- --------- --------- 270 1,509 270 - -------------------------------------------------------- --------- --------- --------- Income from continuing operations before reorganization items and income taxes 8,555 18,581 33,890 Reorganization items: Legal and consulting fees - (9,872) (2,484) Interest expense - (5,188) - Interest income - 3,594 1,552 - -------------------------------------------------------- --------- --------- --------- Income before income taxes 8,555 7,115 32,958 Income tax (expense) benefit 82 (3,787) - - -------------------------------------------------------- --------- --------- --------- Income from continuing operations 8,637 3,328 32,958 Discontinued operations: Operating loss - - (1,284) Impairment and loss on disposal - - (3,518) - -------------------------------------------------------- --------- --------- --------- Loss from discontinued operations - - (4,802) Cumulative effect of change in accounting principle - (9,876) - - -------------------------------------------------------- --------- --------- --------- Net income (loss) 8,637 (6,548) 28,156 Less preferred stock dividends in arrears 1,776 4,888 4,888 ======================================================== ========= ========= ========= Net income (loss) applicable to common shareholders $ 6,861 $(11,436) $ 23,268 ======================================================== ========= ========= ========= (Continued) Westmoreland Coal Company and Subsidiaries Consolidated Statements of Operations (Unaudited) - Continued Years Ended December 31, 1999 1998 1997 - -------------------------------------------------------- --------- --------- --------- (in thousands except per share data) Income (loss) per share applicable to common shareholders: Continuing operations $ .97 $ (.22) $ 4.03 Discontinued operations - - (0.69) Cumulative effect of changes in accounting principles - (1.42) - - -------------------------------------------------------- --------- --------- --------- $ .97 $ (1.64) $ 3.34 ======================================================== ========= ========= ========= Pro forma amounts assuming the changes in accounting principles are applied retroactively: Net loss applicable to common shareholders $ - $ (1,560) $ - Loss per share applicable to common shareholders $ - $ (.22) $ - ======================================================== ========= ========= ========= Weighted average number of common shares outstanding - basic and diluted 7,040 6,965 6,965
Westmoreland Coal Company and Subsidiaries Consolidated Statements of Cash Flows (Unaudited) Years Ended December 31, 1999 1998 1997 - ------------------------------------------------------------- --------- --------- --------- (in thousands)
Cash flows from operating activities: Net income (loss) $ 8,637 $ (6,548) $ 28,156 Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Equity in earnings of independent power projects (34,492) (64,465) (17,770) Cash distributions from independent power projects 51,653 46,355 14,995 Equity in losses (earnings) from Dominion Terminal Associates 1,464 (94) (880) Cash generated by Dominion Terminal Associates facility 942 2,952 4,865 Cash contributions to Dominion Terminal Associates (1,603) (1,877) (2,883) Depreciation, depletion and amortization 1,571 2,289 1,715 Stock compensation expense 297 - - Gain on termination of pension plan - - (1,512) Unusual charges (credits) - 2,000 (27,214) DTA impairment charge - 12,164 - Gains on sales of assets (433) (475) (969) Cash from pension termination, net - 12,540 - Distribution from pneumoconiosis trust - 2,634 - Minority interest 854 775 1,092 Deferred income tax benefit - - - Impairment and loss on disposition of discontinued operations - - 3,518 Cumulative effect of change in accounting principle - 9,876 - Other 147 (358) 96 Changes in assets and liabilities: Receivables, net of allowance for doubtful accounts 2,519 213 1,392 Inventories - - 660 Prepaid pension cost (149) (220) (4,035) Excess of trust assets over pneumoconiosis benefit obligation (761) (1,825) 1,188 Accounts payable and accrued expenses (4,337) 1,690 880 Income taxes payable (2,185) 2,185 - Accrual for workers' compensation (3,474) (678) - Accrual for postretirement medical costs 4,564 (2,502) - 1974 UMWA Pension Plan (1,897) - - Consent judgment payment obligation (39,006) 39,006 - Other liabilities (300) (5,998) 15 - ------------------------------------------------------------- --------- --------- --------- Net cash provided by (used in) operating activities before reorganization items (15,989) 49,639 3,309 - ------------------------------------------------------------- --------- --------- --------- Changes in reorganization items: Trade and other liabilities subject to compromise - - 14,977 Reorganization expenses (7,500) 6,255 1,645 - ------------------------------------------------------------- --------- --------- --------- Net change in reorganization items (7,500) 6,255 16,622 - ------------------------------------------------------------- --------- --------- --------- Net cash provided by (used in) operating activities (23,489) 55,894 19,931 - ------------------------------------------------------------- --------- --------- --------- (Continued) Westmoreland Coal Company and Subsidiaries Consolidated Statements of Cash Flows (Unaudited) - Continued Years Ended December 31, 1999 1998 1997 - ------------------------------------------------------------- --------- --------- --------- (in thousands) Cash flows from investing activities: Additions to property, plant and equipment (2,069) (2,945) (174) Net proceeds from sales of investments and assets 726 511 2,757 Security deposits (10,148) - - Cash held by subsidiary disposed of - - (490) - ------------------------------------------------------------- --------- --------- --------- Net cash (used in) provided by investing activities (11,491) (2,434) 2,093 - ------------------------------------------------------------- --------- --------- --------- Cash flows from financing activities: Repayment of long-term debt (199) (51) (151) Dividends paid to minority shareholders of subsidiary (1,000) - - Exercise of stock options 66 - - Repurchase of preferred stock (27,838) - - - ------------------------------------------------------------- --------- --------- --------- Net cash used in financing activities (28,971) (51) (151) - ------------------------------------------------------------- --------- --------- --------- Net increase (decrease) in cash and cash equivalents (63,951) 53,409 21,873 Cash and cash equivalents, beginning of year 84,073 30,664 8,791 ============================================================= ========= ========= ========= Cash and cash equivalents, end of year $ 20,122 $ 84,073 $ 30,664 ============================================================= ========= ========= ========= Supplemental disclosures of cash flow information: Cash paid during the year for: Interest $ 6,076 $ 27 $ 31 Income taxes 1,606 120 -
In January 1999, the Company issued 45,000 shares of restricted stock valued at $297,000 to several employees as compensation. In September 1997, the Company completed the sale of the Corona Group Inc. ("Corona"). Corona was sold for $895,000 in notes receivable, the Company retained a 15% interest in Corona, and the purchaser assumed a contingent liability. -----END PRIVACY-ENHANCED MESSAGE-----