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Oxford Resource Partners, LP Reports Third Quarter 2013 Financial Results



  Oxford Resource Partners, LP Reports Third Quarter 2013 Financial Results

PR Newswire

COLUMBUS, Ohio, Nov. 5, 2013

COLUMBUS, Ohio, Nov. 5, 2013 /PRNewswire/ -- Oxford Resource Partners, LP
(NYSE: OXF) (the "Partnership" or "Oxford") today announced third quarter 2013
financial results.

Adjusted EBITDA^1 was $11.0 million for the third quarter of 2013 compared to
$14.2 million for the third quarter of 2012.  Adjusted EBITDA declined due to
the planned lower sales volume from the Partnership's Illinois Basin
operations.  Production was approximately 40,000 tons less than expected,
primarily due to an overburden collapse in August which trapped a highwall
miner, rendering it inoperable.  The third quarter 2013 cash margin of $6.40
per ton decreased 21.9 percent, or $1.79 per ton, over the third quarter 2012
cash margin of $8.19 per ton.  Coal sales revenue increased 2.6 percent to
$50.74 per ton, but was offset by a 7.6 percent increase in cash cost of coal
sales to $44.34 per ton as a result of the lower production.

Net loss for the third quarter of 2013 was $5.1 million compared to a net loss
of $3.0 million for the third quarter of 2012.  Net loss for the third quarter
of 2013 included a gain of $2.7 million relating to the change in fair value
of warrants, a $1.1 million net gain primarily related to insurance proceeds
from the lost mining equipment, and $0.2 million of restructuring expenses. 
Net loss for the third quarter of 2012 included $0.4 million in net loss on
the disposal of mining equipment and $0.2 million of impairment and
restructuring expenses.  Excluding these items, Adjusted Net Loss^2 would have
been $8.8 million for the third quarter of 2013 compared to $2.5 million for
the third quarter of 2012. 

"We had a challenging third quarter as the production from one of our two
highwall miners was disrupted for close to a month," said Oxford's President
and Chief Executive Officer Charles C. Ungurean. "Fortunately, we were able to
expeditiously replace the highwall miner and resume production.  Looking
forward, we remain committed to successfully navigating through this market
downturn by closely managing our capital expenditures and liquidity, and
leveraging the assets redeployed from the Illinois Basin to our Northern
Appalachian operations."

Business Update

Oxford's projected sales volume is fully committed and priced for the balance
of 2013, underscoring the strength of its long-term customer relationships and
the strategic importance in its core region.  For 2014, Oxford has 5.0 million
tons of sales committed, of which 3.3 million tons are priced and 1.7 million
tons are 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 all production at its
Illinois Basin operations by the end of 2013 and finish redeploying equipment
during the first quarter of 2014.

Liquidity

As of September 30, 2013, the Partnership had $2.7 million of cash and $8.5
million in available borrowing capacity on its revolving credit line under the
new credit facilities closed in the second quarter.  The Partnership continues
to pursue the sale of a shovel, which is its remaining piece of excess
Illinois Basin equipment to be sold.

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 6.3 million
tons and sell between 6.6 million tons and 6.8 million tons of thermal coal. 
The average selling price is projected to be $50.75 per ton to $51.25 per ton,
with an anticipated average cost of $43.75 per ton to $44.25 per ton.

Adjusted EBITDA is expected to be in the range of $42 million to $45 million.

The Partnership anticipates capital expenditures of between $22 million and
$25 million, net of reinvested insurance proceeds.

Conference Call

The Partnership will host a conference call at 10:00 a.m. Eastern Time today
(November 5, 2013) to review its third quarter 2013 financial results.  To
participate in the call, dial (800) 299-8538 or (617) 786-2902 for
international callers and provide passcode 67232474.  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 2:00 p.m. Eastern Time on November 5, 2013, and may be accessed
at (888) 286-8010 or (617) 801-6888 for international callers.  The replay
passcode is 43125494.  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 and the Illinois Basin.  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,"
"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 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 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 NINE MONTHS ENDED SEPTEMBER 30, 2013 AND 2012
(in thousands, except for unit data)
                               Three Months Ended       Nine Months Ended
                               September 30             September 30
                               2013         2012        2013        2012
REVENUES:
  Coal sales                   $            $           $           $  
                                84,742       95,027      255,226     279,806
  Other revenue                2,844        2,187       9,211       7,223
        Total revenues         87,586       97,214      264,437     287,029
COSTS AND EXPENSES:
  Cost of coal sales:
        Produced coal          68,175       72,896      202,159     221,101
        Purchased coal         5,881        6,274       17,774      16,121
              Total cost of
              coal sales
              (excluding 
               depreciation,
               depletion and   74,056       79,170      219,933     237,222
               amortization)
  Cost of other revenue        455          499         1,228       1,285
  Depreciation, depletion and  12,017       13,110      37,760      39,019
  amortization 
  Selling, general and         3,051        3,901       13,056      11,475
  administrative expenses
  Impairment and               150          206         1,012       13,843
  restructuring expenses
  (Gain) loss on disposal of   (1,107)      357         (6,594)     (4,156)
  assets, net
        Total costs and        88,622       97,243      266,395     298,688
        expenses
INCOME (LOSS) FROM OPERATIONS  (1,036)      (29)        (1,958)     (11,659)
INTEREST AND OTHER EXPENSES:
  Interest income              1            1           3           7
  Interest expense             (6,808)      (3,012)     (14,146)    (8,522)
  Change in fair value of      2,714        -           565         -
  warrants
        Total interest and     (4,093)      (3,011)     (13,578)    (8,515)
        other expenses
NET LOSS                       (5,129)      (3,040)     (15,536)    (20,174)
Net loss attributable to       (470)        (274)       (1,120)     (371)
noncontrolling interest
Net loss attributable to
Oxford Resource
  Partners, LP unitholders     (5,599)      (3,314)     (16,656)    (20,545)
Net loss allocated to general  (112)        (66)        (333)       (410)
partner
Net loss allocated to limited  $            $           $           $  
partners                        (5,487)      (3,248)     (16,323)    (20,135)
Net loss per limited partner
unit:
  Basic                        $            $           $           $      
                                (0.22)       (0.16)      (0.74)      (0.97)
  Diluted                      $            $           $           $      
                                (0.22)       (0.16)      (0.74)      (0.97)
Weighted average number of
limited partner units
outstanding:
  Basic                        24,587,411   20,717,734  22,159,610  20,702,042
  Diluted                      24,587,411   20,717,734  22,159,610  20,702,042
Distributions paid per unit:
  Limited partners:
        Common                 $            $           $           $    
                                -            0.4375        -         1.3125
        Subordinated           $            $           $           $    
                                -            0.1000        -         0.6375
  General partner              $            $           $           $    
                                -            0.2688        -         0.9750

 

OXFORD RESOURCE PARTNERS, LP AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF SEPTEMBER 30, 2013 AND DECEMBER 31, 2012
(in thousands, except for unit data)
                                         As of               As of
                                         September 30,       December 31,
                                         2013                2012
ASSETS 
CURRENT ASSETS:
  Cash and cash equivalents              $                   $          
                                          2,738               3,977
  Accounts receivable                    28,489              19,792
  Inventory                              12,065              12,554
  Advance royalties                      4,155               4,461
  Prepaid expenses and other assets      1,767               2,046
  Assets held for sale                   -                   6,106
     Total current assets                49,214              48,936
PROPERTY, PLANT AND EQUIPMENT, NET       150,143             158,483
ADVANCE ROYALTIES, LESS CURRENT PORTION  6,194               4,861
INTANGIBLE ASSETS, NET                   1,251               1,442
OTHER LONG-TERM ASSETS                   24,224              7,177
     Total assets                        $          231,026  $        220,899
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
  Accounts payable                       $                   $          26,893
                                          24,332
  Current portion of long-term debt      5,929               102,970
  Current portion of reclamation and     5,937               3,869
  mine closure costs
  Accrued taxes other than income taxes  1,175               1,213
  Accrued payroll and related expenses   2,507               1,629
  Other liabilities                      2,529               2,491
     Total current liabilities           42,409              139,065
LONG-TERM DEBT                           152,491             41,557
RECLAMATION AND MINE CLOSURE COSTS       28,267              25,144
WARRANTS                                 7,314               -
OTHER LONG-TERM LIABILITIES              3,730               3,806
     Total liabilities                   234,211             209,572
PARTNERS' CAPITAL (DEFICIT):
  Limited partners (20,836,584 and
  20,751,190 units outstanding
     as of September 30, 2013 and        (5,706)             9,593
     December 31, 2012, respectively) 
  General partner (423,494 units outstanding as of
  September 30, 2013
     and December 31, 2012)              (2,343)             (2,010)
         Total Oxford Resource Partners, (8,049)             7,583
         LP (deficit) capital
  Noncontrolling interest                4,864               3,744
     Total partners' (deficit) capital   (3,185)             11,327
     Total liabilities and partners'     $          231,026  $        220,899
     capital 

 

OXFORD RESOURCE PARTNERS, LP AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2013 AND 2012
(in thousands)
                                               Nine Months Ended September 30,
                                               2013             2012
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss                                       $     (15,536)   $    (20,174)
Adjustments to reconcile net loss to net cash
from operating activities:
   Depreciation, depletion and amortization    37,760           39,019
   Impairment and restructuring expenses       1,012            13,843
   Change in fair value of warrants            (565)            -
   Interest rate swap and fuel contract        (12)             (194)
adjustments to market
   Non-cash interest expense                   2,238            -
   Amortization and write-off of deferred      3,040            1,527
financing costs
   Non-cash equity-based compensation expense  1,090            966
   Accretion of reclamation and mine closure   1,683            1,189
costs
   Amortization of below-market coal sales     (60)             (543)
contracts
   (Gain) loss on disposal of assets, net      (6,594)          (4,156)
   Changes in assets and liabilities:
      Accounts receivable                      (8,697)          (2,246)
      Inventory                                489              (478)
      Advance royalties                        (1,265)          442
      Other assets                             (276)            (1,981)
      Accounts payable                         (2,561)          (6)
      Reclamation and mine closure costs       (6,837)          (6,413)
      Accrued taxes other than income taxes    (38)             (392)
      Accrued payroll and related expenses     878              (315)
      Other liabilities                        (248)            (3,327)
           Net cash from operating             5,501            16,761
activities  
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment             (12,641)         (15,226)
Purchase of coal reserves and land             (14)             (51)
Mine development costs                         (2,612)          (2,760)
Proceeds from sale of assets                   6,284            8,543
Insurance proceeds                             3,035            -
Change in restricted cash                      1,429            3,092
           Net cash from investing             (4,519)          (6,402)
activities  
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings                       150,000          -
Payments on borrowings                         (56,071)         (9,417)
Advances on line of credit                     43,588           41,000
Payments on line of credit                     (119,088)        (17,000)
Debt issuance costs                            (9,517)          (1,086)
Collateral for reclamation bonds               (11,133)         -
Capital contributions from partners            -                7
Distributions to partners                      -                (20,644)
           Net cash from financing             (2,221)          (7,140)
activities  
NET CHANGE IN CASH AND CASH EQUIVALENTS        (1,239)          3,219
CASH AND CASH EQUIVALENTS, beginning of        3,977            3,032
period
CASH AND CASH EQUIVALENTS, end of period       $        2,738   $        6,251

 

OXFORD RESOURCE PARTNERS, LP AND SUBSIDIARIES
UNAUDITED RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA^1
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2013 AND 2012
(in thousands)
                                      Three Months Ended  Nine Months Ended
                                      September 30,       September 30,
                                      2013      2012      2013       2012
Net loss                              $         $         $          $    
                                       (5,129)   (3,040)   (15,536)   (20,174)
Adjustments:
 Interest expense, net of interest    6,807     3,011     14,143     8,515
 income
 Depreciation, depletion and          12,017    13,110    37,760     39,019
 amortization
 Change in fair value of warrants     (2,714)   -         (565)      -
 Impairment and restructuring         150       206       1,012      13,843
 expenses
 (Gain) loss on disposal of assets,   (1,107)   357       (6,594)    (4,156)
 net
 Amortization of below-market coal    -         (121)     (60)       (543)
 sales contracts
 Non-cash equity-based compensation   351       490       1,090      966
 expense
 Non-cash reclamation and mine        625       384       1,683      1,189
 closure costs
 Non-recurring costs:
    Debt refinancing expenses         -         -         3,059      -
    Other                             -         (227)     (2,100)    1,238
Adjusted EBITDA                       $         $         $          $      
                                       11,000    14,170    33,892     39,897

  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 NINE MONTHS ENDED SEPTEMBER 30, 2013 AND 2012
(in thousands)
                                Three Months Ended  Nine Months Ended
                                September 30,       September 30,
                                2013       2012     2013          2012
Net loss                        $          $        $   (15,536)  $   (20,174)
                                (5,129)    (3,040)
Adjustment:
 Impairment and restructuring   150        206      1,012         13,843
 expenses
 (Gain) loss on disposal of     (1,107)    357      (6,594)       (4,156)
 assets, net
 Change in fair value of        (2,714)    -        (565)         -
 warrants
 Debt refinancing expenses      -          -        3,059         -
 Write-off of deferred
 financing costs related to     -          -        808           -
 prior credit facility
Adjusted net loss               $          $        $   (17,816)  $   (10,487)
                                (8,800)    (2,477)

  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 financing
  expenses and write-off of deferred refinancing 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 NINE MONTHS ENDED SEPTEMBER 30, 2013 AND 2012
(in thousands, except per ton amounts)
                            Three Months Ended        Nine Months Ended
                            September 30,             September 30,
                            2013         2012         2013         2012
Tons sold                   1,670        1,922        5,017        5,651
Coal sales revenue per      $            $            $            $    
ton                          50.74        49.45        50.87        49.51
Amortization of
below-market coal sales     -            (0.06)       (0.01)       (0.10)
contracts per ton
Cash coal sales revenue     50.74        49.39        50.86        49.41
per ton
Cash cost of coal sales     (44.34)      (41.20)      (43.84)      (41.98)
per ton
Cash margin per ton         $            $            $            $      
                             6.40         8.19         7.02         7.43

  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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