Oxford Resource Partners, LP Reports Second Quarter 2013 Financial Results

  Oxford Resource Partners, LP Reports Second Quarter 2013 Financial Results

Successfully completes refinancing, closes on $175 million of new credit
facilities

PR Newswire

COLUMBUS, Ohio, Aug. 6, 2013

COLUMBUS, Ohio, Aug. 6, 2013 /PRNewswire/ --Oxford Resource Partners, LP
(NYSE: OXF) (the "Partnership" or "Oxford") today announced second quarter
2013 financial results.

Adjusted EBITDA^1 was $13.9 million for the second quarter of 2013 compared to
$14.7 million for the second quarter of 2012. Adjusted EBITDA declined due to
the planned lower sales volume from the Partnership's Illinois Basin
operations. The second quarter 2013 cash margin of $8.28 per ton was a slight
improvement over the second quarter 2012 cash margin of $8.26 per ton. Coal
sales revenue increased 2.6% to $51.21 per ton, but was offset by an increase
in cash cost of coal sales of 3.1% to $42.93 per ton as a result of the lower
Illinois Basin production.

Net loss for the second quarter of 2013 was $4.1 million compared to a net
loss of $1.4 million for the second quarter of 2012. Net loss for the second
quarter of 2013 included: $2.1 million in expense representing the change in
fair value of warrants and $2.8 million in fees associated with the
Partnership's debt refinancing, $0.8 million of deferred financing fees
related to the prior credit facility that were written-off, a $5.9 million net
gain primarily related to the sale of certain oil and gas rights and $0.7
million of impairment and restructuring expenses. Of these items, $3.6 million
were non-cash costs. Net loss for the second quarter of 2012 included: a $5.7
million net gain primarily related to the sale of certain oil and gas rights
and $5.3 million of impairment and restructuring expenses. Of these items,
$4.4 million were non-cash costs. Excluding these items, Adjusted Net Loss^2
would have been $3.5 million for the second quarter of 2013 compared to $1.9
million for the second quarter of 2012.

"We successfully completed our refinancing in June which greatly increases our
financial flexibility," said Oxford's President and Chief Executive Officer
Charles C. Ungurean. "By extending the maturity of our debt and increasing
availability under our revolver, we have enhanced our liquidity, giving us a
runway to execute our strategic plan. We continue to focus on increasing
productivity across our operations and, with our improved liquidity, are in a
stronger position to participate when coal markets improve."

Business Update

Oxford's projected sales volume is almost fully committed and priced for 2013,
underscoring the strength of its long-term customer relationships and its
strategic importance in its core region. For 2014, projected sales volume is
81% committed (with 49% of the projected sales volume priced and 32% of the
projected sales volume unpriced).

As a leading low-cost producer of thermal coal and the largest producer of
surface mined coal in Ohio, Oxford is focused on its core Northern Appalachian
operations. Continued rationalization of the Partnership's Illinois Basin
operations has allowed for the transfer of excess equipment to the Northern
Appalachian mines, which has reduced capital spending. Based on current
market conditions, the Partnership expects to idle production at its Illinois
Basin operations and conclude its restructuring activities by the end of
2013. 

Refinancing

As previously reported, during the second quarter the Partnership closed on
$175 million of new credit facilities that replaced its previous term loan and
revolving credit facility, thereby extending the maturity profile of the
Partnership's debt and increasing availability under its revolver. The new
facilities, secured by substantially all of the assets of the Partnership and
its wholly owned subsidiaries, consist of a first lien $75 million term loan
and $25 million revolving credit facility, and a second lien $75 million term
loan (with an option for an additional $10 million term loan if requested by
the Partnership and approved by the second lien lenders). The financing
agreements for both facilities contain customary financial and other
covenants, and also preclude the making of distributions during the terms of
the facilities. The first lien facility matures in September 2015 with an
option to extend to June 2016, and the second lien facility matures in
December 2015 with an option to extend to September 2016, if certain
conditions are met. As of June 30, 2013, the blended cash interest rate for
both credit facilities was 9.53%.

The first lien facility bears interest at LIBOR (floor of 1.50%) plus 6.75% or
at the Reference Rate (floor of 3.00%) plus 6.25%. As of June 30, 2013, the
blended cash interest rate on borrowings outstanding under the first lien
facility was 8.32%.

The second lien facility bears interest at LIBOR (floor of 1.25%) plus 9.75%
or at the Reference Rate (floor of 3.00%) plus 11.75%. As of June 30, 2013,
the blended cash interest rate on borrowings outstanding under the second lien
facility was 11.00%. The second lien facility also provides for PIK
(paid-in-kind) interest at a rate of 5.75% which is added to the outstanding
principal balance on a quarterly basis. In conjunction with the second lien
facility, certain second lien lenders and their affiliates received warrants
entitling them to purchase at $0.01 per unit both common and subordinated
units representing in the aggregate on a fully diluted basis 15% of the then
outstanding units in each class. The warrants were valued at $7.9 million at
issuance and recorded as a discount to the second lien debt.

Liquidity

As of June 30, 2013, the Partnership had $6.0 million of cash and $8.0 million
in available borrowing capacity on its revolving credit line. The Partnership
continues to pursue the sale of excess Illinois Basin equipment which had a
net book value of $3.9 million at the end of the second quarter.

2013 Guidance

The Partnership provides the following updated guidance for 2013 based on its
current industry outlook:

The Partnership expects to produce between 6.1 million tons and 6.4 million
tons and sell between 6.6 million tons and 6.9 million tons of thermal coal.
The average selling price is projected to be $50.50 per ton to $52.00 per ton,
with an anticipated average cost of $43.00 per ton to $44.50 per ton.

Adjusted EBITDA is expected to be in the range of $45 million to $48 million.

The Partnership anticipates capital expenditures of between $22 million and
$25 million.

Conference Call

The Partnership will host a conference call at 10:00 a.m. Eastern Time today
(August 6, 2013) to review its second quarter 2013 financial results. To
participate in the call, dial (877) 299-4454 or (617) 597-5447 for
international callers and provide passcode 60722828. The call will also be
webcast live on the Internet in the Investor Relations section of the
Partnership's website at www.OxfordResources.com.

An audio replay of the conference call will be available for seven days
beginning at 12:00 p.m. Eastern Time on August 6, 2013, and may be accessed at
(888) 286-8010 or (617) 801-6888 for international callers. The replay
passcode is 14146069. The webcast will also be archived on the Partnership's
website at www.OxfordResources.com for 30 days following the call.

About Oxford Resource Partners, LP

Oxford Resource Partners, LP is a low-cost producer of high-value steam coal
in Northern Appalachia. Oxford markets its coal primarily to large electric
utilities with coal-fired, base-load scrubbed power plants under long-term
coal sales contracts. The Partnership is headquartered in Columbus, Ohio.

For more information about Oxford Resource Partners, LP (NYSE: OXF), please
visit www.OxfordResources.com. Financial and other information about the
Partnership is routinely posted on and accessible at www.OxfordResources.com.

Forward-Looking Statements

Except for historical information, statements made in this press release are
"forward-looking statements." All statements, other than statements of
historical facts, included in this press release that address activities,
events or developments that the Partnership expects, believes or anticipates
will or may occur in the future are forward-looking statements, including the
statements and information set forth under the headings "Business Update,"
"Refinancing," "Liquidity" and "2013 Guidance."

These statements are based on certain assumptions made by the Partnership
based on its management's experience and perception of historical trends,
current conditions, expected future developments and other factors the
Partnership's management believes are appropriate under the circumstances.
Such statements are subject to a number of assumptions, risks and
uncertainties, many of which are beyond the Partnership's control, which may
cause actual results to differ materially from those implied or expressed by
the forward-looking statements. These risks, uncertainties and contingencies
include, but are not limited to, the following: productivity levels, margins
earned and the level of operating costs; weakness in global economic
conditions or in customers' industries; changes in governmental regulation of
the mining industry or the electric power industry and the increased costs of
complying with those changes; decreases in demand for electricity and changes
in coal consumption patterns of U.S. electric power generators; the
Partnership's dependence on a limited number of customers; the Partnership's
inability to enter into new long-term coal sales contracts at attractive
prices and the renewal and other risks associated with the Partnership's
existing long-term coal sales contracts, including risks related to
adjustments to price, volume or other terms of those contracts; difficulties
in collecting the Partnership's receivables because of credit or financial
problems of major customers, and customer bankruptcies, cancellations or
breaches to existing contracts or other failures to perform; the Partnership's
ability to acquire additional coal reserves; the Partnership's ability to
respond to increased competition within the coal industry; fluctuations in
coal demand, prices and availability due to labor and transportation costs and
disruptions, equipment availability, governmental regulations, including those
pertaining to carbon dioxide emissions, and other factors; significant costs
imposed on the Partnership's mining operations by extensive and frequently
changing environmental laws and regulations, and greater than expected
environmental regulations, costs and liabilities; legislation and regulatory
and related judicial decisions and interpretations including issues pertaining
to climate change and miner health and safety; a variety of operational,
geologic, permitting, labor and weather-related factors, including those
pertaining to both our mining operations and our underground coal reserves
that we do not operate; limitations in the cash distributions the Partnership
receives from its majority-owned subsidiary, Harrison Resources, LLC, and the
ability of Harrison Resources, LLC to acquire additional reserves on
economical terms from CONSOL Energy Inc. in the future; the potential for
inaccuracies in estimates of the Partnership's coal reserves, which could
result in lower than expected revenues or higher than expected costs; the
accuracy of the assumptions underlying the Partnership's reclamation and mine
closure obligations; liquidity constraints, including those resulting from the
cost or unavailability of financing due to current capital markets conditions;
risks associated with major mine-related accidents; results of litigation,
including claims not yet asserted; the Partnership's ability to attract and
retain key management personnel; greater than expected shortage of skilled
labor; the Partnership's ability to maintain satisfactory relations with
employees; and failure to obtain, maintain or renew security arrangements,
such as surety bonds or letters of credit, in a timely manner and on
acceptable terms.

The Partnership undertakes no obligation to publicly update or revise any
forward-looking statements. Readers should not place undue reliance on
forward-looking statements, which reflect management's views only as of the
date hereof. Further information on risks and uncertainties is available in
the Partnership's periodic reports filed with the U.S. Securities and Exchange
Commission or otherwise publicly disseminated by the Partnership.

^1 The definition of Adjusted EBITDA, which is a non-GAAP financial measure,
and a reconciliation thereof to Net Loss, a comparable GAAP financial measure,
are included in a table presented near the end of this press release.

^2 The definition of Adjusted Net Loss, which is a non-GAAP financial measure,
and a reconciliation thereof to Net Loss, a comparable GAAP financial measure,
are included in a table presented near the end of this press release.



OXFORD RESOURCE PARTNERS, LP AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2013 AND 2012
(in thousands, except for unit data)
                               Three Months Ended       Six Months Ended
                               June 30,                 June 30,
                               2013         2012        2013        2012
REVENUES:
  Coal sales                   $         $        $          $  
                               85,691       89,966     170,484    184,779
  Other revenue                2,434        1,982       6,367       5,036
        Total revenues         88,125       91,948      176,851     189,815
COSTS AND EXPENSES:
  Cost of coal sales:
        Produced coal          66,556       68,259      133,984     148,205
        Purchased coal         5,292        6,644       11,893      9,847
              Total cost of
              coal sales
              (excluding
               depreciation,
               depletion and   71,848       74,903      145,877     158,052
               amortization)
  Cost of other revenue        370          359         773         786
  Depreciation, depletion and  12,810       12,227      25,743      25,909
  amortization
  Selling, general and         5,847        3,529       10,005      7,574
  administrative expenses
  Impairment and               721          5,282       862         13,637
  restructuring expenses
  (Gain) loss on disposal of   (5,905)      (5,690)     (5,487)     (4,513)
  assets, net
        Total costs and        85,691       90,610      177,773     201,445
        expenses
INCOME (LOSS) FROM OPERATIONS  2,434        1,338       (922)       (11,630)
INTEREST AND OTHER EXPENSES:
  Interest income              1            5           2           6
  Interest expense             (4,416)      (2,792)     (7,338)     (5,510)
  Change in fair value of      (2,149)      -           (2,149)     -
  warrants
        Total interest and     (6,564)      (2,787)     (9,485)     (5,504)
        other expenses
NET LOSS                       (4,130)      (1,449)     (10,407)    (17,134)
Net loss attributable to       (380)        (6)         (650)       (97)
noncontrolling interest
Net loss attributable to
Oxford Resource
  Partners, LP unitholders     (4,510)      (1,455)     (11,057)    (17,231)
Net loss allocated to general  (89)         (29)        (221)       (344)
partner
Net loss allocated to limited  $         $        $         $  
partners                       (4,421)     (1,426)    (10,836)    (16,887)
Net loss per limited partner
unit:
  Basic                        $        $       $       $    
                               (0.21)      (0.07)     (0.52)      (0.82)
  Diluted                      $        $       $       $    
                               (0.21)      (0.07)     (0.52)      (0.82)
Weighted average number of
limited partner units
outstanding:
  Basic                        21,093,448   20,704,386  20,779,901  20,696,917
  Diluted                      21,093,448   20,704,386  20,779,901  20,696,917
Distributions paid per unit:
  Limited partners:
        Common                 $       $         $       $  
                                -          0.43750     -        0.87500
        Subordinated           $       $         $       $  
                                -          0.10000     -        0.53750
  General partner              $       $         $       $  
                                -          0.26875     -        0.70625



OXFORD RESOURCE PARTNERS, LP AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF JUNE 30, 2013 AND 2012
(in thousands, except for unit data)
                                             As of         As of December 31,
                                             June 30,      2012
                                             2013
ASSETS
CURRENT ASSETS:
  Cash and cash equivalents                 $   6,043  $       
                                                           3,977
  Accounts receivable                       26,941        19,792
  Inventory                                 11,849        12,554
  Advance royalties                          3,453         4,461
  Prepaid expenses and other assets         7,015         2,046
  Assets held for sale                       -             6,106
     Total current assets                   55,301        48,936
PROPERTY, PLANT AND EQUIPMENT, NET           155,628       158,483
ADVANCE ROYALTIES, LESS CURRENT PORTION      6,976         4,861
INTANGIBLE ASSETS, NET                       1,315         1,442
OTHER LONG-TERM ASSETS                       29,060        7,177
     Total assets                           $ 248,280    $      220,899
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
  Accounts payable                          $  24,891   $      
                                                           26,893
  Current portion of long-term debt         11,688        102,970
  Current portion of reclamation and mine    6,292         3,869
  closure costs
  Accrued taxes other than income taxes     1,278         1,213
  Accrued payroll and related expenses      1,941         1,629
  Other liabilities                         1,625         2,491
     Total current liabilities              47,715        139,065
LONG-TERM DEBT                               156,292       41,557
RECLAMATION AND MINE CLOSURE COSTS           28,870        25,144
WARRANTS                                     10,028        -
OTHER LONG-TERM LIABILITIES                  3,782         3,806
     Total liabilities                      246,687       209,572
COMMITMENTS AND CONTINGENCIES                -             -
PARTNERS' CAPITAL:
  Limited partners (20,817,351 and           (570)         9,593
  20,751,190units outstanding
     as of June 30, 2013 and December31,
     2012, respectively)
  General partner (423,494 units outstanding (2,231)       (2,010)
  as of June 30, 2013
     and December31, 2012)
          Total Oxford Resource Partners, LP (2,801)       7,583
          (deficit) capital
  Noncontrolling interest                   4,394         3,744
     Total partners' capital                1,593         11,327
     Total liabilities and partners'         $ 248,280    $      220,899
     capital



OXFORD RESOURCE PARTNERS, LP AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2013 AND 2012
(in thousands)
                                                     Six Months Ended June 30,
                                                     2013          2012
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss                                             $ (10,407)    $ (17,134)
Adjustments to reconcile net loss to net cash from
operating activities:
Depreciation, depletion and amortization             25,743        25,909
Impairment and restructuring expenses                862           13,637
Change in fair value of warrants                     2,149         -
Interest rate swap adjustment to market              (12)          69
Non-cash interest expense                            347           -
Amortization and write-off of deferred financing     2,114         879
costs
Non-cash equity-based compensation expense           739           476
Accretion of reclamation and mine closure costs      1,058         805
Amortization of below-market coal sales contracts    (60)          (422)
(Gain) loss on disposal of assets, net               (5,487)       (4,513)
Changes in assets and liabilities:
Accounts receivable                                  (7,149)       (3,766)
Inventory                                            705           (3,100)
Advance royalties                                    (1,981)       361
Other assets                                         (973)         (327)
Accounts payable                                     (2,002)       2,083
Reclamation and mine closure costs                   (4,138)       (5,369)
Accrued taxes other than income taxes                65            (382)
Accrued paryoll and related expenses                 312           (1,070)
Other liabilities                                    (951)         (1,851)
Net cash from operating activities                 934           6,285
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment                   (5,694)       (9,993)
Purchase of coal reserves and land                   (14)          (51)
Mine development costs                               (1,940)       (1,672)
Proceeds from sale of assets                         6,249         7,962
Insurance proceeds                                   14            -
Change in restricted cash                            (6,537)       (1,889)
Net cash from investing activities                 (7,922)       (5,643)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds on borrowings                               150,000       -
Payments on borrowings                               (45,009)      (4,039)
Advances on line of credit                           28,888        31,000
Payments on line of credit                           (104,000)     (14,000)
Debt issuance costs                                  (9,354)       (1,086)
Collateral for reclamation bonds                     (11,471)      -
Capital contributions from partners                  -             6
Distributions to partners                            -             (14,938)
Distributions to noncontrolling interest             -             -
Net cash from financing activities                 9,054         (3,057)
NET CHANGE IN CASH AND CASH EQUIVALENTS              2,066         (2,415)
CASH AND CASH EQUIVALENTS, beginning of period       3,977         3,032
CASH AND CASH EQUIVALENTS, end of period             $   6,043   $    617



OXFORD RESOURCE PARTNERS, LP AND SUBSIDIARIES
UNAUDITED RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA^1
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2013 AND 2012
(in thousands)
                        Three Months Ended          Six Months Ended
                        June 30,                    June 30,
                        2013          2012          2013           2012
Net loss               $          $          $            $  
                        (4,130)      (1,449)      (10,407)      (17,134)
Adjustments:
  Interest expense,
  net of interest       4,415         2,787         7,336          5,504
  income
  Depreciation,
  depletion and         12,810        12,227        25,743         25,909
  amortization
  Change in fair        2,149         -             2,149          -
  value of warrants
  Impairment and
  restructuring         721           5,282         862            13,637
  expenses
  (Gain) loss on
  disposal of           (5,905)       (5,690)       (5,487)        (4,513)
  assets, net
  Amortization of
  below-market coal     (8)           (205)         (60)           (422)
  sales contracts
  Non-cash
  equity-based          416           214           739            476
  compensation
  expense
  Non-cash
  reclamation and       550           424           1,058          805
  mine closure costs
  Non-recurring
  costs:
  Debt refinancing      2,849         -             3,059          -
  expenses
  Other                 -             1,141         (2,100)        1,465
Adjusted EBITDA         $          $          $           $   
                        13,867       14,731       22,892        25,727
  Adjusted EBITDA is a non-GAAP financial measure used by management to gauge
  operating performance. We define Adjusted EBITDA as net income or loss
  before deducting interest, income taxes, depreciation, depletion,
  amortization, change in fair value of warrants, impairment and restructuring
  expenses, gain or loss on disposal of assets, amortization of below-market
  coal sales contracts, non-cash equity-based compensation expense, non-cash
  reclamation and mine closure costs, and certain non-recurring items.
1 Although Adjusted EBITDA is not a measure of financial performance
  calculated in accordance with GAAP, we believe it is useful to management
  and others, such as investors and lenders, in evaluating our financial
  performance without regard to financing methods, capital structure or income
  taxes; our ability to generate cash sufficient to pay interest on our
  indebtedness, make distributions and fund capital expenditures; and our
  compliance with certain credit facility financial covenants. Because not
  all companies calculate Adjusted EBITDA the same way, our calculation may
  not be comparable to similarly titled measures of other companies.



OXFORD RESOURCE PARTNERS, LP AND SUBSIDIARIES
UNAUDITED RECONCILIATION OF NET LOSS TO ADJUSTED NET LOSS^2
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2013 AND 2012
(in thousands)
                           Three Months Ended         Six Months Ended
                           June 30,                   June 30,
                           2013          2012         2013          2012
Net loss                  $ (4,130)    $ (1,449)    $ (10,407)    $ (17,134)
Adjustment:
   Impairment and
   restructuring           721           5,282        862           13,637
   expenses
   (Gain) loss on
   disposal of assets,     (5,905)       (5,690)      (5,487)       (4,513)
   net
   Change in fair value    2,149         -            2,149         -
   of warrants
   Debt refinancing        2,849         -            3,059         -
   expenses
   Write-off of
   deferred financing
   costs related           808           -            808           -
    to prior credit
   facility
Adjusted net loss         $ (3,508)    $ (1,857)    $  (9,016)   $ 
                                                                    (8,010)
   Adjusted Net Loss is a non-GAAP financial measure used by management to
   gauge operating performance. We define Adjusted Net Loss as net income or
   loss before deducting impairment and restructuring expenses, gain or loss
   on disposal of assets, change in fair value of warrants, debt refinancing
   expenses and write-off of deferred financing costs. Although Adjusted Net
2  Loss is not a measure of financial performance calculated in accordance
   with GAAP, we believe it is useful to management and others, such as
   investors and lenders, in evaluating our financial performance without
   regard to items which are primarily non-cash and our restructuring efforts
   which are not typical operating activities. Because not all companies
   calculate Adjusted Net Loss the same way, our calculation may not be
   comparable to similarly titled measures of other companies.


OXFORD RESOURCE PARTNERS, LP AND SUBSIDIARIES
UNAUDITED OPERATING STATISTICS^3
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2013 AND 2012
(in thousands, except per ton amounts)
                           Three Months Ended         Six Months Ended
                           June 30,                   June 30,
                           2013          2012         2013          2012
Tons sold                  1,674         1,799        3,347         3,729
Coal sales revenue per     $  51.21     $ 50.00     $   50.94   $  49.55
ton
Amortization of
below-market coal sales    -             (0.11)       (0.02)        (0.11)
contracts per ton
Cash coal sales revenue    51.21         49.89        50.92         49.44
per ton
Cash cost of coal sales    (42.93)       (41.63)      (43.59)       (42.38)
per ton
Cash margin per ton        $   8.28    $  8.26    $          $  
                                                      7.33          7.06
   Per ton amounts are calculated by dividing the related amount on the
   financial statements by the number of tons sold. Although per ton amounts
   are not measures of performance calculated in accordance with GAAP, we
   believe they are useful to management and others, such as investors and
3  lenders, in evaluating performance because they are widely used in the coal
   industry as a measure to evaluate a company's sales performance or control
   over costs. Because not all companies calculate these measures the same
   way, our calculations may not be comparable to similarly titled measures of
   other companies.

SOURCE Oxford Resource Partners, LP

Website: http://oxfordresources.com
Contact: Bradley W. Harris, (614) 643-0314, ir@OxfordResources.com
 
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