TORONTO, ONTARIO -- (Marketwired) -- 05/15/13 -- Lipari Energy, Inc. (TSX: LIP) ("Lipari" or the "Company"), a thermal coal producer with current operations and additional development properties in the Central Appalachian region of the United States, is pleased to announce its operating results for the three months ended March 31, 2013. All figures are in U.S. dollars unless otherwise stated.
First quarter 2013 tons sold increased by 36.6% and production increased by 21.9% over first quarter 2012 to 296,376 tons and 279,168 tons, respectively. First quarter revenues increased by 41.3%, as a result in the increase in tonnage sold and average sales price per ton. Lipari generated earnings before interest, taxes, depreciation, depletion and amortization ("EBITDA") of $4.15 million during the first quarter of 2013. Adjusted EBITDA, after accounting for a change in mine closure costs, lease expenses and other adjustments, was $5.88 million during the first quarter of 2013.
"We are pleased with the increase in production of approximately 22% during the first quarter of 2013 over the same period in 2012, accomplished in the face of growing headwinds and challenges to coal producers. Operating cost per ton decreased by approximately $13 per ton and our cash cost per ton declined 9.4% in comparison to the same period in 2012. We also continue to maintain a low debt ratio as we continue to prospect and develop our mineral reserve base," said John Liperote, CEO of Lipari.
Selected First Quarter 2013 Operating and Financial Highlights
Year-Over-
Year
Q1 2013 Q1 2012 % Change
---------------------------------------------
Tons produced 279,168 229,000 21.9%
Tons sold 296,376 216,977 36.6%
Average sales price per ton $74.55 $72.05 3.5%
Cash cost per ton produced(1) $48.17 $53.14 (9.4%)
Total operating cost per ton
sold(2) $65.03 $77.70 (16.3%)
($ in 000s, except per share amounts)
Revenues $22,094 $15,632 41.3%
Gross margin $2,819 ($1,228) NMF
EBITDA $4,147 $280 1,381.1%
Adjusted EBITDA $5,882 $621 847.2%
Net income (loss) $1,331 ($1,753) NMF
Earnings(loss) per share-basic
and diluted $0.03 ($0.04) NMF
(1) Cash cost per ton produced includes all costs associated with the
operation of our mines, preparation plant and rail load out facility
inclusive of royalty expenses, less changes in inventory.
(2) Total operating cost per ton sold includes all cost of sales inclusive
of depreciation, depletion and amortization.
Review of Operating Performance
During the first quarter of 2013, Lipari's operations sold 296,376 tons of high quality thermal coal, a 36.6% increase over the prior year's quarter of 216,977 tons. The average realized sales price per ton of coal sold was $74.55 per ton, a 3.5% increase over the prior year's quarter average realized price of $72.05 per ton. Tonnages deferred from 2012 were loaded during the current period and increased the Company's shipments for the quarter.
Balance Sheet Highlights
($ in 000s) Mar 31, 2013 Dec 31, 2012 ---------------------------------------------------------------------------- Cash, equivalents, and restricted cash $14,350 $13,946 Accounts receivable $6,438 $6,944 Net working capital(1) $7,942 $6,205 Total assets $60,164 $61,210 Total debt $5,633 $6,407 Total liabilities $19,640 $22,043 Shareholders' equity $40,523 $39,167 Total liabilities and shareholders' equity $60,164 $61,210 (1) Current assets less current liabilities
Production and Sales Contract Portfolio
Lipari has sales commitments in place for 100% of its planned 2013 production and approximately 47% of its planned 2014 production at prices averaging approximately $77 per ton for 2013 and $79 per ton for 2014. The Company currently plans to maintain production at levels to meet contracted tonnages during 2013.
Interim Consolidated Financial Statements and Management's Discussion and Analysis for the three months ending March 31, 2013 and 2012 have been posted on SEDAR and are available at www.liparienergy.com.
Use of Non-IFRS Financial Measures
Our financial results are prepared in accordance with International Financial Reporting Standards (IFRS). This document refers to Net Working Capital, EBITDA and Adjusted EBITDA, which are not measures recognized under IFRS. Net Working Capital is the Company's current assets less current liabilities. EBITDA is earnings attributable to shareholders before interest and financing expenses, income taxes, depreciation, depletion and amortization. Adjusted EBITDA equals EBITDA exclusive of other income, mine closure costs, warrant expense, stock compensation expense, equipment lease expense, and change in fair value of warrants. We disclose these measures, which have been derived from our financial statements and applied on a consistent basis, because we believe it is of assistance in understanding the results of our operations and financial position and are meant to provide further information about our financial results to investors. Management believes that Adjusted EBITDA is a valuable indicator of the Company's ability to generate liquidity by producing operating cash flow to fund working capital needs, service debt obligations and fund capital expenditures.
The table below presents EBITDA and Adjusted EBITDA and reconciles these non-IFRS measures from net income (loss):
Three Months
Ended March 31
($ in 000s) 2013 2012
----------------------------------------------------------------------------
Net income (loss) $1,331 ($1,753)
Depreciation, depletion and amortization 2,421 2,573
Interest expense 65 83
Income tax provision (benefit) 330 (623)
------------------------------
EBITDA $4,147 $280
Other income (201) -
Mine closure costs 988 -
Stock compensation expense 24 86
Equipment lease expense 924 909
Change in fair value of warrants - (654)
------------------------------
Adjusted EBITDA $5,882 $621
------------------------------
About Lipari Energy:
Lipari is a thermal coal producer with current operations and additional development properties in the Central Appalachian region of the United States. Lipari has been in production since 2008 and has diversified surface and highwall mining operations. Lipari coal sales are predominantly to utilities through a mix of forward contracts and short-term sales. Lipari's growth strategy includes continued growth of its organic reserves through its enhanced drilling program, as well as from its focused and disciplined approach to strategic acquisitions. Lipari's corporate office is located in London, Kentucky.
This news release and the information contained herein does not constitute an offer of securities for sale in the United States and securities may not be offered or sold in the United States absent registration or exemption from registration.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION: This news release contains "forward-looking information" that includes information relating to future events and future financial and operating performance, including management's assessment of Lipari's future outlook. Forward-looking information should not be read as a guarantee of future performance or results and will not necessarily be accurate indications of the times at, or by which, that performance or those results will be achieved. Forward-looking information is based on information available at the time it is made and/or management's good faith belief as of that time with respect to future events, and such information is subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking information. Important factors that could cause these differences include but are not limited to: changes in contracted sales, the business of the Company may suffer as a result of uncertainty surrounding the coal market; the Company may be adversely affected by other economic, business, and/or competitive factors; the worldwide demand for coal; the price of coal; the price of alternative fuel sources; the supply of coal and other competitive factors; the costs to mine and transport coal; the ability to obtain new mining permits; the costs of reclamation of previously mined properties; the risks of expanding coal production; the ability to bring new mines on line on schedule; industry competition; the Company's ability to continue to execute its growth strategies; and general economic conditions. These and other risks are more fully described in the Company's filings with the Canadian Securities Administrators, including its Annual Information Form for the year ended December 31, 2012, available on SEDAR at www.sedar.com. You should not put undue reliance on any forward-looking information. We assume no obligation to update forward-looking information to reflect actual results, changes in assumptions or changes in other factors affecting forward looking information, except to the extent required by applicable securities laws. If we do update one or more forward-looking information, no inference should be drawn that we will make additional updates with respect to those or other forward-looking information.
Contacts:
Lipari Energy, Inc.
Richard Liperote
President
606.877.1800
www.liparienergy.com
