The company, which sold 117,107 tons of coal during the quarter, reported a quarterly net income of $248,967. National reported adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) of $3.4 million for the quarter, compared to $1.2 million for the second quarter of 2009.
Despite the recent difficulties faced by National, it is now ready to receive the benefits of a strengthened balance sheet and asset sales, company president and chief executive Daniel A Roling said.
“This was an important quarter for us as we took significant steps to strengthen our balance sheet, and successfully tackled a number of short-term challenges,” Roling said.
“We are beginning to see the positive effects of these changes, namely in the improvement of our net income and EBITDA figures. In addition, we are moving ahead with the start-up of our mine 12 operations.”
“We are still working on, and remain committed to, the resolution of our biggest challenge which is refinancing our debt, which matures December 15, 2010.
“However, that said and with all else considered, our balance sheet is evidence of the ground we have been gaining during this difficult time.”
The company completed an asset sale that included a preparation plant and rail loadout facility located in Devonia, Tennessee, an active underground mine, two inactive mines, related property, plant and equipment, coal inventories located on the properties, associated permits, and a coal supply agreement for an aggregate sales price of $11.8 million.
It also sold the short line railroad which served the New River operations and was owned by its wholly owned subsidiary NC Railroad for $3.0 million, and it disposed of an idle superior highwall mining system for $4.1 million.
As a result of these transactions, the company received gross proceeds of $14.0 million and realized a net gain on the sale of assets of $3.6 million during the second quarter of 2010.
However, an impairment loss was recorded during the first quarter of 2010 which reduced the net gain to $2.5 million for the six months ended June 30, 2010.
In addition, cash and cash equivalents increased $4.1 million during the second quarter to $5.3 million at June 30, 2010, while accounts payable declined $8.3 million to $5.3 million during the same period.
National has engaged the services of a financial advisory firm to evaluate possible strategic and financing transactions.
Among these alternatives, the company has been pursuing a restructuring of its debt, the issuance of common stock in exchange for the purchase and cancellation of its debt, transactions in which the company would issue preferred or additional common stock for cash, and merger transactions with other coal producers.