TORONTO, ONTARIO--(Marketwire - Nov. 14, 2012) - 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 and nine months ended September 30, 2012. All figures are in U.S. dollars unless otherwise stated.
Third quarter 2012 tons sold decreased by 6.5% and production decreased by 22.0% over third quarter 2011 to 311,506 tons and 231,902 respectively. Third quarter revenues decreased by 0.9%, as a result of the decrease in tonnage sold. Lipari generated earnings before interest, taxes, depreciation, depletion and amortization ("EBITDA") of $3.7 million during the third quarter of 2012. Adjusted EBITDA, after accounting for a change in the fair value of warrants, lease expenses and other adjustments, was $4.7 million during the third quarter of 2012.
"We are cautious yet optimistic about our third quarter results, as our tons sold increased by 25% and our EBITDA increased by $1.6 million over the second quarter of 2012. We are continuing to plan our production around demand in an effort to maintain a higher working capital," said John Liperote, CEO of Lipari Energy, Inc.
| Selected Third Quarter 2012 Operating and Financial Highlights | ||||||
| Year-Over-Year | ||||||
| Q3 2012 | Q3 2011 | % Change | ||||
| Tons produced | 231,902 | 297,464 | (22.0 | %) | ||
| Tons sold | 311,506 | 333,256 | (6.5 | %) | ||
| Average sales price per ton | $ | 74.04 | $ | 69.83 | 6.0 | % |
| Cash cost per ton | $ | 49.99 | $ | 46.52 | 7.5 | % |
| Total operating cost per ton | $ | 67.93 | $ | 63.58 | 6.8 | % |
| ($ in 000s, except per share amounts) | ||||||
| Revenues | $ | 23,064 | $ | 23,270 | (0.9 | %) |
| Gross margin | $ | 1,902 | $ | 2,081 | (8.6 | %) |
| EBITDA | $ | 3,704 | $ | 3,140 | 18.0 | % |
| Adjusted EBITDA | $ | 4,727 | $ | 4,030 | 17.3 | % |
| Net income | $ | 658 | $ | 644 | 2.2 | % |
| Earnings per share-basic and diluted | $ | 0.01 | $ | 0.01 | NMF | |
- 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 inventory charges.
- Total operating cost per ton sold includes all cost of sales inclusive of depreciation, depletion and amortization.
Review of Operating Performance
During the third quarter of 2012, Lipari's operations sold 311,506 tons of high quality thermal coal, a 6.5% decrease over the prior year's quarter of 333,256 tons. The average realized sales price per ton of coal sold was $74.04 per ton, a 6.0% increase over the prior year's average realized price of $69.83 per ton. Overall demand for coal continues to be reduced by lower natural gas prices and a slower economy.
| Balance Sheet Highlights | ||||||
| ($ in 000s) | Sep 30, 2012 | Dec 31, 2011 | ||||
| Cash, equivalents, and restricted cash | $ | 6,162 | $ | 7,541 | ||
| Accounts receivable | $ | 11,221 | $ | 8,229 | ||
| Net working | $ | 9,445 | $ | 11,359 | ||
| Total assets | $ | 65,628 | $ | 66,927 | ||
| Total debt | $ | 7,145 | $ | 7,147 | ||
| Total liabilities | $ | 19,914 | $ | 20,038 | ||
| Shareholders equity | $ | 45,714 | $ | 46,889 | ||
| Total liabilities and shareholders' equity | $ | 65,628 | $ | 66,927 | ||
| assets less current liabilities | ||||||
Selected Operating and Financial Highlights for the nine months ended September 30, 2012
| ($ in 000s, except per share amounts) | 2012 | 2011 | Year-Over-Year % Change | ||||||
| Tons produced | 665,574 | 890,253 | (25.2 | %) | |||||
| Tons sold | 777,677 | 913,537 | (14.9 | %) | |||||
| Average sales price per ton | $ | 72.36 | $ | 71.63 | 1.0 | % | |||
| Cash cost per ton | $ | 51.55 | $ | 43.38 | 18.8 | % | |||
| Total operating cost per ton | $ | 64.52 | $ | 62.19 | 3.7 | % | |||
| ($ in 000s, except per share amounts) | |||||||||
| Revenues | $ | 56,271 | $ | 65,437 | (14.0 | %) | |||
| Gross margin | $ | 1,504 | $ | 8,620 | (82.6 | %) | |||
| EBITDA | $ | 6,027 | $ | 4,230 | 42.5 | % | |||
| Adjusted EBITDA | $ | 8,337 | $ | 15,409 | (45.9 | %) | |||
| Net loss | $ | (1,305 | ) | $ | (3,496 | ) | NMF | ||
| Earnings (loss) per share-basic and diluted | $ | (0.03 | ) | $ | (0.08 | ) | NMF | ||
- 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 inventory charges.
- Total operating cost per ton sold includes all cost of sales inclusive of depreciation, depletion and amortization.
Production and Sales Contract Portfolio
Lipari has sales commitments in place for 100% of its planned 2012 production and approximately 90% of its planned 2013 production at prices averaging approximately $72 per ton in 2012 and $77 per ton in 2013. The Company currently plans to keep production at levels to meet contracted tonnages.
Interim Consolidated Financial Statements and Management's Discussion and Analysis for the three months ending September 30, 2012 have been posted on SEDAR and are available at www.liparienergy.com.
Core Values
Lipari places job safety as their number one priority. "A safe environment is the Company's way of giving back to our employees, as we continue to add safety improvement to our equipment and mine sites," said Richard Liperote, President of Lipari Energy, Inc.
Use of Non-IFRS Financial Measures
Our financial results are prepared in accordance with International Financial Reporting Standards (IFRS). This document refers to EBITDA and Adjusted EBITDA, which are not measures recognized under IFRS. EBITDA is earnings attributable to shareholders before interest and financing expenses, income taxes, depreciation, depletion and amortization. Adjusted EBITDA equals EBITDA exclusive of loss on debt extinguishment, IPO 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):
| (unaudited, $ in 000s) | Quarter Ended | Nine Months | |||||||||||
| Sep 30 | Ended Sep 30 | ||||||||||||
| 2012 | 2011 | 2012 | 2011 | ||||||||||
| Net income (loss) | $ | 658 | $ | 643 | $ | (1,305 | ) | $ | (3,496 | ) | |||
| Depreciation, depletion and amortization | 3,049 | 3,057 | 8,279 | 9,355 | |||||||||
| Interest expense | 73 | 62 | 245 | 1,164 | |||||||||
| Income tax provision (benefit) | (76 | ) | (623 | ) | (1,193 | ) | (2,793 | ) | |||||
| EBITDA | $ | 3,704 | $ | 3,140 | $ | 6,027 | $ | 4,230 | |||||
| Loss on debt extinguishment | - | - | - | 8,869 | |||||||||
| IPO costs | - | - | - | 4,151 | |||||||||
| Warrant expense | - | - | - | 719 | |||||||||
| Stock compensation expense | 17 | 86 | 130 | 977 | |||||||||
| Equipment lease expense | 1,005 | 1,075 | 2,875 | 2,234 | |||||||||
| Change in fair value of warrants | 2 | (270 | ) | (695 | ) | (6,019 | ) | ||||||
| Non-compliance charge | - | - | - | 250 | |||||||||
| Adjusted EBITDA | $ | 4,727 | $ | 4,030 | $ | 8,337 | $ | 15,409 | |||||
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, 2011, 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.
Contact Information:
Richard Liperote
President
606.877.1800
www.liparienergy.com