Oxford Resource Partners, LP Reports First Quarter 2014 Financial Results

  Oxford Resource Partners, LP Reports First Quarter 2014 Financial Results

PR Newswire

COLUMBUS, Ohio, May 6, 2014

COLUMBUS, Ohio, May 6, 2014 /PRNewswire/ -- Oxford Resource Partners, LP
(NYSE: OXF) (the "Partnership" or "Oxford") today announced first quarter 2014
financial results.

First Quarter 2014 Results

Adjusted EBITDA^^1 was $9.2 million for the first quarter of 2014 compared to
$9.0 million for the first quarter of 2013. The increase was driven by a 20.0
percent increase in cash margin to $7.68 per ton for the first quarter of 2014
from $6.40 per ton for the first quarter of 2013, partially offset by a
234,000 ton decrease in tons sold attributable to the idling of the Illinois
Basin operations. Cash coal sales revenue increased 5.4 percent to $53.36 per
ton for the first quarter of 2014 from $50.65 per ton for the first quarter of
2013. For the first quarter of 2014, cash cost of coal sales increased by 3.2
percent to $45.68 per ton from $44.25 per ton for the first quarter of 2013,
primarily due to higher diesel fuel costs.

Net loss was $10.6 million for the first quarter of 2014 compared to a net
loss of $6.3 million for the first quarter of 2013. There was $3.9 million of
additional interest expense attributable to the new credit facilities for the
first quarter of 2014 over the first quarter of 2013. Adjusted Net Loss^2 was
$9.9 million for the first quarter of 2014, when excluding a $0.4 million loss
relating to the change in fair value of warrants, $0.2 million of losses on
disposal of assets and $0.1 million of restructuring expenses, and without any
adjustment for the additional interest expense. Adjusted Net Loss was $5.5
million for the first quarter of 2013, when excluding a $0.4 million loss on
disposal of assets, $0.2 million of debt refinancing expenses and $0.2 million
of impairment and restructuring expenses.

"This winter's weather has underscored the power industry's need to keep in
operation coal-fired power plants located in our markets which are scheduled
to close starting in 2015. This is exemplified by the fact that 89% of a key
customer's older coal generation targeted for retirement next year due to EPA
rules was pressed into service during the 'polar vertex' in January. In fact,
those coal-fired units ran at 46% of capacity during all of the first
quarter. While we do not supply any of these coal-fired units scheduled for
retirement, this further demonstrates that coal must be part of the long-term
energy solution," said Oxford's President and Chief Executive Officer Charles
C. Ungurean. "Coal is far less prone to price jumps or shortages, and in a
cold snap it is a bargain. Experts agree that, without these coal plants
operating, reliability of the grid could be compromised, and electricity
prices will be higher, hitting consumers hard as it did this winter, in the
peak periods of winter and summer."

Ungurean continued, "This increased coal burn, coupled with utility stockpiles
at the lowest levels we have seen in years, is translating into sales
opportunities for us. We recently received an order from a key customer for
an additional 200,000 tons this year. We are encouraged by this recent
activity and anticipate that we may see further requests for additional tons."

Business Update

Oxford's projected sales volume is 95.6% committed and priced for 2014,
underscoring the strength of its long-term customer relationships and its
strategic importance in its core region. Oxford has the ability to increase
production by up to 0.5 million tons with little additional capital investment
if additional demand materializes. For 2015, projected sales volume is 65.6
percent committed (with 11.1 percent of the projected sales volume priced and
54.5 percent of the projected sales volume unpriced).

Liquidity

As of March 31, 2014, the Partnership had $4.6 million in cash and $3.0
million in available borrowing capacity on its revolving credit line. The
Partnership also has an option under the second lien credit facility for an
additional $10 million term loan if requested by the Partnership and approved
by the issuing second lien lender.

As previously announced, subsequent to quarter-end, Oxford sold its Illinois
Basin river terminal in Kentucky and received proceeds of $2 million, thereby
further enhancing its liquidity.

2014 Guidance

The Partnership provides the following updated guidance for 2014 based on its
current industry outlook:

The Partnership expects to produce between 5.7 million tons and 6.0 million
tons and sell between 5.8 million tons and 6.1 million tons of thermal coal.
The average selling price is anticipated to be in the range of $52.25 per ton
to $53.75 per ton, with an anticipated average cost in the range of $43.80 per
ton to $45.30 per ton.

Adjusted EBITDA is expected to be in the range of $40 million to $45 million.

The Partnership anticipates capital expenditures of between $17 million and
$20 million.

Conference Call

The Partnership will host a conference call at 10:00 a.m. Eastern Time today
(May 6, 2014) to review its first quarter 2014 financial results. To
participate in the call, dial (877) 280-4961 or (857) 244-7318 for
international callers and provide passcode 87378206. 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 3:00 p.m. Eastern Time on May 6, 2014, and may be accessed at
(888) 286-8010 or (617) 801-6888 for international callers. The replay
passcode is 41949757.The webcast will also be archived on the Partnership's
website at www.OxfordResources.comfor 30 days following the call.

About Oxford Resource Partners, LP

Oxford Resource Partners, LP is a low-cost producer of high-value thermal 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,"
"Liquidity" and "2014 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 mining operations and underground coal reserves that the
Partnership does 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 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.

Withholding Information for Foreign Investors

This announcement is intended to be a qualified notice under Treasury
Regulation Section 1.1446-4(b). Brokers and nominees should treat one hundred
percent (100.0%) of Partnership distributions to foreign investors, when and
if such distributions are made, as being attributable to income that is
effectively connected with a United States trade or business. Accordingly,
Partnership distributions to foreign investors would be subject to federal
income tax withholding at the highest applicable rate.

^1 ^ The definition of Adjusted EBITDA, which is a non-GAAP financial measure,
and a reconciliation thereof to Net Loss, the most 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, the most 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 MONTHS ENDED MARCH 31, 2014 AND 2013
(in thousands, except for unit data)
                                            Three Months Ended
                                            March 31,
                                            2014              2013
REVENUES:
  Coal sales                                $   76,770     $   84,793
  Other revenue                             1,234             3,933
       Total revenues                       78,004            88,726
COSTS AND EXPENSES:
  Cost of coal sales:
       Produced coal                        65,207            67,422
       Purchased coal                       519               6,601
           Total cost of coal sales
           (excluding
             depreciation, depletion and    65,726            74,023
             amortization)
  Cost of other revenue                     402               403
  Depreciation, depletion and               11,224            12,933
  amortization
  Selling, general and administrative       3,656             4,164
  expenses
  Impairment and restructuring expenses     75                141
  Loss on disposal of assets, net           204               418
       Total costs and expenses             81,287            92,082
LOSS FROM OPERATIONS                        (3,283)           (3,356)
INTEREST AND OTHER EXPENSES:
  Interest income                           1                 1
  Interest expense                          (6,870)           (2,922)
  Change in fair value of warrants          (415)             -
       Total interest and other expenses    (7,284)           (2,921)
NET LOSS                                    (10,567)          (6,277)
Net loss (income) attributable to           381               (270)
noncontrolling interest
Net loss attributable to Oxford Resource
  Partners, LP unitholders                  (10,186)          (6,547)
Net loss allocated to general partner       (202)             (131)
Net loss allocated to limited partners      $    (9,984)   $    (6,416)
Net loss per limited partner unit:
  Basic                                     $     (0.41)  $     (0.31)
  Diluted                                   (0.41)            (0.31)
Weighted average number of limited
partner
  units outstanding:
  Basic                                     24,640,399        20,756,081
  Diluted                                   24,640,399        20,756,081





OXFORD RESOURCE PARTNERS, LP AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF MARCH 31, 2014 AND DECEMBER 31, 2013
(in thousands, except for unit data)
                                          As of              As of
                                          March 31,          December 31,
                                          2014               2013
ASSETS
CURRENT ASSETS:
 Cash                                    $          $        
                                          4,636             3,089
 Accounts receivable                     27,286             25,850
 Inventory                               15,734             13,840
 Advance royalties                        2,696              2,604
 Prepaid expenses and other assets       1,678              1,737
   Total current assets                  52,030             47,120
PROPERTY, PLANT AND EQUIPMENT, NET        135,107            144,426
ADVANCE ROYALTIES, LESS CURRENT PORTION   8,847              8,800
INTANGIBLE ASSETS, NET                    1,131              1,188
OTHER LONG-TERM ASSETS                    21,332             22,821
   Total assets                          $            $      
                                          218,447            224,355
LIABILITIES AND PARTNERS' (DEFICIT)
CAPITAL
CURRENT LIABILITIES:
 Accounts payable                        $           $       
                                          24,668             23,932
 Current portion of long-term debt       9,375              7,901
 Current portion of reclamation and mine  7,420              5,996
 closure obligations
 Accrued taxes other than income taxes   1,167              1,293
 Accrued payroll and related expenses    3,423              3,389
 Other liabilities                       2,543              3,457
   Total current liabilities             48,596             45,968
LONG-TERM DEBT                            158,263            155,375
RECLAMATION AND MINE CLOSURE OBLIGATIONS  23,996             25,658
WARRANTS                                  5,014              4,599
OTHER LONG-TERM LIABILITIES               3,738              3,753
   Total liabilities                     239,607            235,353
PARTNERS' (DEFICIT) CAPITAL:
 Limited partners (20,963,676 and
 20,867,073units outstanding
   as of March 31, 2014 and December 31,  (23,039)           (13,460)
   2013, respectively)
 General partner (423,494 units
 outstanding as of
   March 31, 2014 and December31, 2013) (2,709)            (2,507)
       Total Oxford Resource Partners, LP (25,748)           (15,967)
       (deficit) capital
 Noncontrolling interest                 4,588              4,969
   Total partners' (deficit) capital     (21,160)           (10,998)
   Total liabilities and partners'        $            $      
   (deficit) capital                     218,447            224,355





OXFORD RESOURCE PARTNERS, LP AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2014 AND 2013
(in thousands)
                                               Three Months Ended
                                               March 31,
                                               2014            2013
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss                                       $  (10,567)   $    (6,277)
Adjustments to reconcile net loss to net cash
from operating activities:
Depreciation, depletion and amortization       11,224          12,933
Impairment and restructuring expenses          75              141
Change in fair value of warrants               415             -
Interest rate swap adjustment to market        -               (12)
Non-cash interest expense                      1,862           -
Amortization and write-off of deferred         946             648
financing costs
Non-cash equity-based compensation expense     456             323
Non-cash reclamation and mine closure expense  565             508
Amortization of below-market coal sales        -               (52)
contracts
Loss on disposal of assets, net                204             418
Changes in assets and liabilities:
Accounts receivable                            (1,436)         (9,998)
Inventory                                      (1,894)         1,089
Advance royalties                              (139)           (930)
Restricted cash                                (554)           (926)
Other assets                                   233             (1,387)
Accounts payable                               736             542
Reclamation and mine closure obligations       (612)           (1,650)
Accrued taxes other than income taxes         (126)           58
Accrued payroll and related expenses          34              28
Other liabilities                              (1,056)         (670)
Net cash from operating activities           366             (5,214)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment             (2,430)         (2,887)
Purchase of coal reserves and land             (3)             (14)
Mine development costs                         (189)           (1,042)
Proceeds from sale of assets                   294             26
Net cash from investing activities           (2,328)         (3,917)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on borrowings                         -               (1,508)
Advances on line of credit                     6,500           12,000
Payments on line of credit                     (4,000)         -
Debt issuance costs                            9               -
Collateral for reclamation bonds               1,000           -
Net cash from financing activities           3,509           10,492
NET CHANGE IN CASH                             1,547           1,361
CASH, beginning of period                      3,089           3,977
CASH, end of period                            $    4,636  $    5,338





OXFORD RESOURCE PARTNERS, LP AND SUBSIDIARIES
UNAUDITED RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA^1
FOR THE THREE MONTHS ENDED MARCH 31, 2014 AND 2013
(in thousands)
                                                   Three Months Ended
                                                   March 31,
                                                   2014          2013
Net loss                                          $ (10,567)   $  (6,277)
Adjustments:
 Interest expense, net of interest income          6,869         2,921
 Depreciation, depletion and amortization          11,224        12,933
 Change in fair value of warrants                  415           -
 Impairment and restructuring expenses             75            141
 Loss on disposal of assets, net                   204           418
 Amortization of below-market coal sales contracts -             (52)
 Non-cash equity-based compensation expense        456           323
 Non-cash reclamation and mine closure expense     565           508
 Non-recurring costs:
 Debt refinancing expenses                         -             210
 Other                                             -             (2,100)
Adjusted EBITDA                                    $   9,241  $   9,025

^1Adjusted 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 expense, and certain non-recurring costs. 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 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 MONTHS ENDED MARCH 31, 2014 AND 2013
(in thousands)
                                        Three Months Ended
                                        March 31,
                                        2014          2013
Net loss                               $ (10,567)   $  (6,277)
Adjustment:
 Impairment and restructuring expenses  75            141
 Loss on disposal of assets, net        204           418
 Change in fair value of warrants       415           -
 Debt refinancing expenses              -             210
Adjusted Net Loss                      $  (9,873)  $  (5,508)

^2Adjusted 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 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 MONTHS ENDED MARCH 31, 2014 AND 2013
(in thousands, except per ton amounts)
                                            Three Months Ended
                                            March 31,
                                            2014              2013
Tons sold                                   1,439             1,673
Coal sales revenue per ton                  $    53.36    $    50.68
Amortization of below-market coal sales     -                 (0.03)
contracts per ton
Cash coal sales revenue per ton             53.36             50.65
Cash cost of coal sales per ton             (45.68)           (44.25)
Cash margin per ton                         $      7.68  $      6.40

^3 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 lenders, in
evaluating performance because they are widely used in the coal industry as a
measure to evaluate a company's sales performance and 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://www.oxfordresources.com
Contact: Bradley W. Harris, (614) 643-0314, ir@OxfordResources.com
 
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