Westmoreland Coal Company (WLBPZ) saw its loss narrow to $8.52 million, or $0.46 a share for the quarter ended Sep. 30, 2016. In the previous year period, the company reported a loss of $46.56 million, or $2.59 a share.
Revenue during the quarter grew 5.97 percent to $370.68 million from $349.80 million in the previous year period. Gross margin for the quarter expanded 855 basis points over the previous year period to 24.80 percent. Operating margin for the quarter period stood at positive 4.64 percent as compared to a negative 4.38 percent for the previous year period.
Operating income for the quarter was $17.21 million, compared with an operating loss of $15.31 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $71.20 million compared with $47.97 million in the prior year period. At the same time, adjusted EBITDA margin improved 550 basis points in the quarter to 19.21 percent from 13.71 percent in the last year period.
"We delivered record high quarterly adjusted EBITDA. These results were driven by solid demand and demonstrate the benefits of our diverse portfolio, ability to execute, and the strength of our business model. Similar to other quarters, we generated impressive free cash flow as a result of our focus on cost containment, cash flow initiatives, and capital spending management," said Westmoreland chief executive officer, Kevin Paprzycki. "During the quarter, we also acted quickly to better position Coal Valley when Newcastle pricing increased. We hedged 100% of the 2017 Coal Valley production at prices that will result in breakeven cash flow. This compares very favorably to the projected $10 million cash drag in 2016. We are aggressively evaluating all alternatives for these operations including potential monetization."
Operating cash flow improves significantly
Westmoreland Coal Company has generated cash of $84.24 million from operating activities during the nine month period, up 303.41 percent or $63.36 million, when compared with the last year period.
The company has spent $147.36 million cash to meet investing activities during the nine month period as against cash outgo of $47.45 million in the last year period. It has incurred net capital expenditure of $24.44 million on net basis during the nine month period, down 56.57 percent or $31.84 million from year ago period.
Cash flow from financing activities was $68.33 million for the nine month period, up 54.43 percent or $24.08 million, when compared with the last year period.
Cash and cash equivalents stood at $28.91 million as on Sep. 30, 2016, down 1.44 percent or $0.42 million from $29.34 million on Sep. 30, 2015.
Working capital turns negative
Working capital of Westmoreland Coal Company has turned negative to $43.52 million on Sep. 30, 2016 from positive $41.15 million on Sep. 30, 2015. Current ratio was at 0.89 as on Sep. 30, 2016, down from 1.12 on Sep. 30, 2015.
Days sales outstanding went down to 44 days for the quarter compared with 48 days for the same period last year.
Days inventory outstanding has decreased to 21 days for the quarter compared with 41 days for the previous year period.
Debt moves up
Westmoreland Coal Company has witnessed an increase in total debt over the last one year. It stood at $1,125.75 million as on Sep. 30, 2016, up 6.91 percent or $72.80 million from $1,052.95 million on Sep. 30, 2015. Total debt was 65.46 percent of total assets as on Sep. 30, 2016, compared with 60.93 percent on Sep. 30, 2015.
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