<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------
FORM 10-Q
-------------------
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission File Number 333-39643
ANKER COAL GROUP, INC.
(Exact Name Of Registrant As Specified in Its Charter)
Delaware 52-1990183
------------------------------- ----------------
(State or other jurisdiction of (I.R.S. Employee
incorporation or organization) Identification No.)
2708 Cranberry Square
Morgantown, West Virginia 26508
-------------------------------
(Address Of Principal Executive Offices)
(304) 594-1616
-----------------------------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes _X_ No ___
Indicate the number of outstanding shares of each of the registrant's
classes of common stock, as of the latest practicable date: Common Stock, $0.01
per share par value, 7,083 shares (November 3, 2000)
<PAGE> 2
TABLE OF ADDITIONAL REGISTRANT GUARANTORS
<TABLE>
<CAPTION>
JURISDICTION OF I.R.S. EMPLOYER ADDRESS AND TELEPHONE NUMBER OF REGISTRANT
EXACT NAME OF REGISTRANT GUARANTOR INCORPORATION OR IDENTIFICATION GUARANTOR'S
AS SPECIFIED IN ITS CHARTER ORGANIZATION NUMBER PRINCIPAL EXECUTIVE OFFICES
--------------------------- ------------ ------ ---------------------------
<S> <C> <C> <C>
Anker Energy Corporation Delaware 51-0217205 2708 Cranberry Square
Morgantown, West Virginia 26508
(304) 594-1616
Anker Group, Inc. Delaware 13-2961732 2708 Cranberry Square
Morgantown, West Virginia 26508
(304) 594-1616
Anker Power Services, Inc. West Virginia 55-0700346 2708 Cranberry Square
Morgantown, West Virginia 26508
(304) 594-1616
Anker Virginia Mining Company, Inc. Virginia 54-1867395 2708 Cranberry Square
Morgantown, West Virginia 26508
(304) 594-1616
Anker West Virginia Mining Company, Inc. West Virginia 55-0699931 2708 Cranberry Square
Morgantown, West Virginia 26508
(304) 594-1616
Bronco Mining Company, Inc. West Virginia 22-2094405 2708 Cranberry Square
Morgantown, West Virginia 26508
(304) 594-1616
Hawthorne Coal Company, Inc. West Virginia 55-0742562 2708 Cranberry Square
Morgantown, West Virginia 26508
(304) 594-1616
Heather Glen Resources, Inc. West Virginia 55-0746946 2708 Cranberry Square
Morgantown, West Virginia 26508
(304) 594-1616
Juliana Mining Company, Inc. West Virginia 55-0568083 2708 Cranberry Square
Morgantown, West Virginia 26508
(304) 594-1616
King Knob Coal Co., Inc. West Virginia 55-0488823 2708 Cranberry Square
Morgantown, West Virginia 26508
(304) 594-1616
Marine Coal Sales Company Delaware 13-3307813 645 West Carmel Drive
Carmel, Indiana 46032
(317) 844-6628
Melrose Coal Company, Inc. West Virginia 55-0746947 2708 Cranberry Square
Morgantown, West Virginia 26508
(304) 594-1616
New Allegheny Land Holding Company, Inc. West Virginia 31-1568515 2708 Cranberry Square
Morgantown, West Virginia 26508
(304) 594-1616
Patriot Mining Company, Inc. West Virginia 55-0550184 2708 Cranberry Square
Morgantown, West Virginia 26508
(304) 594-1616
Simba Group, Inc. Delaware 55-0753900 2708 Cranberry Square
Morgantown, West Virginia 26508
(304) 594-1616
Upshur Property, Inc. Delaware 95-4484172 2708 Cranberry Square
Morgantown, West Virginia 26508
(304) 594-1616
Vantrans, Inc. Delaware 22-2093700 2708 Cranberry Square
Morgantown, West Virginia 26508
(304) 594-1616
Vindex Energy Corporation West Virginia 55-0753903 2708 Cranberry Square
Morgantown, West Virginia 26508
(304) 594-1616
</TABLE>
ii
<PAGE> 3
ANKER COAL GROUP, INC.
FORM 10-Q
FOR THE QUARTER ENDED SEPTEMBER 30, 2000
TABLE OF CONTENTS
PART I
<TABLE>
<S> <C> <C>
ITEM I. FINANCIAL STATEMENTS
Consolidated Statements of Operations - Three and Nine Months
Ended September 30, 2000 and 1999.......................................................1
Consolidated Balance Sheets -
September 30, 2000 and December 31, 1999................................................2
Consolidated Statements of Cash Flows - Nine Months
Ended September 30, 2000 and 1999.......................................................3
Notes to Consolidated Financial Statements.......................................................4
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS..............................................................4-10
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK................................................11
PART II
ITEM 1. LEGAL PROCEEDINGS.........................................................................................11
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.................................................................11
ITEM 3. DEFAULTS UPON SENIOR SECURITIES...........................................................................11
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.......................................................11
ITEM 5. OTHER INFORMATION.........................................................................................11
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K..........................................................................11
SIGNATURE PAGES....................................................................................................12-30
</TABLE>
NOTE CONCERNING FORWARD-LOOKING INFORMATION
This report contains statements which constitute forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995.
These statements include statements regarding our intent, belief or current
expectations for performance, our ability to continue to implement our business
plan or related industry developments. Readers are cautioned that any such
forward-looking statements are not guarantees of future performance and involve
risks and uncertainties. Readers are further cautioned that our actual results,
levels of activity, performance or achievements, or industry results may differ
materially from those described or implied in the forward-looking statements as
a result of various factors, many of which are beyond our control. These factors
include, but are not limited to: general economic and business conditions; our
ability to continue to implement our business plan and achieve anticipated coal
production levels and cost savings; the availability of liquidity and capital
resources; our ability to secure new mining permits; changes in the coal
production and electricity generation industries; weather; adverse geologic
conditions; variations in coal seam thickness; variations in rock and soil
overlying the coal deposit; risks inherent in mining; a disruption in or an
increase in the cost of transportation services; renewal or non-renewal of our
long-term coal supply contracts; early modification or termination of our
long-term coal supply contracts; competition within the coal production and
electricity generation industries; regulatory uncertainties; price fluctuations;
and labor disruptions. In addition to these factors, our business is subject to
other risks. For a description of these risks, please see Amendment No. 2 to
Form S-4 (Registration No. 333-92067) filed with the Securities and Exchange
Commission on February 4, 2000.
iii
<PAGE> 4
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ANKER COAL GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS)
<TABLE>
<CAPTION>
THREE MONTHS NINE MONTHS
ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30,
2000 1999 2000 1999
----- ----- ----- ----
(unaudited) (unaudited)
<S> <C> <C> <C> <C>
Coal sales and related revenue $ 58,358 $ 59,958 $ 170,738 $ 173,711
Expenses:
Cost of operations and selling expenses 52,448 53,971 151,238 157,419
Depreciation, depletion and amortization 4,417 4,591 13,302 13,430
General and administrative 1,752 1,964 5,079 5,575
Loss on impairment -- 1,065 -- 4,526
Financial restructuring fees 21 872 542 1,206
Unusual charges -- -- 158 --
--------- --------- --------- ---------
Total expenses 58,638 62,463 170,319 182,156
Operating (loss) income (280) (2,505) 419 (8,445)
Interest, net (4,213) (3,711) (12,481) (10,911)
Other income, net 1,266 1,270 3,274 3,161
--------- --------- --------- ---------
Loss before income taxes (3,227) (4,946) (8,788) (16,195)
Income tax benefit 200 -- 780 200
--------- --------- --------- ---------
Net loss (3,027) (4,946) (8,008) (15,995)
Less mandatorily redeemable preferred stock dividends (370) (352) (1,108) (1,055)
Less mandatorily redeemable preferred stock accretion (150) (150) (450) (450)
Less common stock available for repurchase accretion -- (142) -- (421)
--------- --------- --------- ---------
Net loss available to common
stockholders $ (3,547) $ (5,590) $ (9,566) $ (17,921)
========= ========= ========= =========
</TABLE>
The accompanying notes are an integral
part of the consolidated financial statements.
1
<PAGE> 5
ANKER COAL GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
<TABLE>
<CAPTION>
ASSETS
SEPTEMBER 30, DECEMBER 31,
2000 1999
--------- ---------
(unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 6 $ 7
Accounts receivable:
Trade 21,607 21,696
Affiliates 22 41
Inventories 1,340 3,169
Current portion of notes receivable 1,038 608
Prepaid expenses and other 3,292 2,593
Deferred income taxes 4,645 4,645
--------- ---------
Total current assets 31,950 32,759
Property, plant and equipment:
Coal lands and mineral rights 66,853 62,135
Machinery and equipment 71,674 72,199
--------- ---------
138,527 134,334
Less allowances for depreciation, depletion and amortization 47,639 37,956
--------- ---------
90,888 96,378
Other assets:
Assets held for sale 9,000 9,000
Advance minimum royalties 7,243 6,122
Goodwill, net of accumulated amortization of $5,413 and $4,094 in 2000
and 1999, respectively 18,676 19,995
Other intangible assets, net of accumulated amortization of $2,262 and $1,614
in 2000 and 1999, respectively 4,650 5,298
Notes receivable 3,134 3,102
Other assets 4,655 5,597
Deferred income taxes 1,482 702
--------- ---------
Total assets $ 171,678 $ 178,953
========= =========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable:
Trade $ 9,351 $ 9,932
Affiliates 598 667
Cash overdraft 384 83
Accrued interest 9,148 537
Accrued expenses and other 5,985 8,784
Accrued leasehold termination 1,411 3,726
Accrued reclamation costs 996 3,502
Current maturities of long-term debt 2,143 2,309
--------- ---------
Total current liabilities 30,016 29,540
Long-term debt 162,619 161,489
Accrued reclamation costs 16,887 16,913
Other liabilities 5,417 6,264
--------- ---------
Total liabilities 214,939 214,206
Commitments and contingencies -- --
Mandatorily redeemable preferred stock 28,154 26,596
Stockholders' deficit:
Preferred stock 23,000 23,000
Common stock -- --
Paid-in capital 52,486 52,486
Treasury stock (5,100) (5,100)
Accumulated deficit (141,801) (132,235)
--------- ---------
Total stockholders' deficit (71,415) (61,849)
--------- ---------
Total liabilities and stockholders' deficit $ 171,678 $ 178,953
========= =========
</TABLE>
The accompanying notes are an integral
part of the consolidated financial statements.
2
<PAGE> 6
ANKER COAL GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
NINE MONTHS
ENDED
SEPTEMBER 30,
2000 1999
--------- ---------
(UNAUDITED)
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (8,008) $ (15,995)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Loss on impairment and financial restructuring fees -- 4,526
Depreciation, depletion and amortization 13,302 13,430
Amortization of discount on senior notes 189 --
Amortization of unrealized gain on debt restructuring (2,090) --
Deferred taxes (780) --
Gain on sale of properties (472) (77)
Debt issuance costs related to debt restructuring 542 756
Changes in operating assets and liabilities:
Accounts receivable 108 2,456
Inventories, prepaid expenses and other 1,130 1,315
Advance minimum royalties (1,121) (1,893)
Accounts payable, accrued expenses and other 3,017 (4,061)
Accrued interest 4,799 2,945
Accrued reclamation costs (2,532) (3,121)
Other assets 618 794
Other liabilities (847) (1,824)
--------- ---------
Net cash provided by (used in) operating activities $ 7,855 $ (749)
--------- ---------
Cash flows from investing activities:
Purchases of property, plant and equipment $ (6,812) $ (5,222)
Proceeds from sales of property, plant and equipment 1,333 1,690
Payments received on notes receivable 126 544
Issuance of notes receivable (325) --
--------- ---------
Net cash used in investing activities $ (5,678) $ (2,988)
--------- ---------
Cash flows from financing activities:
Proceeds from revolving line of credit and long-term
debt $ 40,068 $ 187,538
Principal payments on revolving line of credit and
long-term debt (41,817) (180,658)
Cash overdraft 301 (2,183)
Debt issuance costs (730) (954)
--------- ---------
Net cash (used in) provided by financing activities $ (2,178) $ 3,743
--------- ---------
(Decrease)/Increase in cash and cash equivalents $ (1) $ 6
Cash and cash equivalents at beginning of period 7 15
--------- ---------
Cash and cash equivalents at end of period $ 6 $ 21
========= =========
</TABLE>
The accompanying notes are an integral
part of the consolidated financial statements.
3
<PAGE> 7
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. ACCOUNTING POLICIES
The unaudited interim consolidated financial statements of Anker Coal
Group, Inc. and its subsidiaries presented herein have been prepared in
accordance with the rules and regulations of the Securities and Exchange
Commission for reporting on Form 10-Q and do not include all of the information
and note disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles. In the opinion of
management, these consolidated financial statements contain all adjustments
(consisting of normal recurring accruals) necessary to present fairly the
consolidated financial position, results of operations and cash flows of Anker
Coal Group, Inc. and its subsidiaries. These unaudited interim consolidated
financial statements should be read in conjunction with the other disclosures
contained herein and with our audited consolidated financial statements and
notes thereto contained in our Form 10-K for the year ended December 31, 1999.
Operating results for interim periods are not necessarily indicative of results
that may be expected for the entire fiscal year.
The preparation of financial statements in conformity with generally
accepted accounting principles necessarily requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting periods. Actual results could differ from these estimates.
2. INCOME TAXES
Income taxes are provided for financial reporting purposes based on
management's best estimate of the effective tax rate expected to be applicable
for the full calendar year. Anker Coal Group, Inc. and its subsidiaries have
established a full valuation allowance on the net operating loss carryforwards,
capital loss carryforwards and contribution carryforwards on the basis that it
is more likely than not that these assets will not be realized.
3. INVENTORIES
Coal inventories are stated at the lower of average cost or market and
amounted to approximately $1.2 million and $2.9 million at September 30, 2000
and December 31, 1999, respectively. Supply inventories are stated at the lower
of cost (first in, first out) or market and amounted to approximately $182,000
and $241,000 at September 30, 2000 and December 31, 1999, respectively.
4. SUBSIDIARY GUARANTEES
Anker Coal Group, Inc. is a holding company with no assets other than
the investments in its subsidiaries. Our 14.25% Series B Second Priority Senior
Secured Notes Due 2007 are guaranteed by all of our subsidiaries. Our
subsidiaries are all wholly-owned subsidiaries and have fully and
unconditionally guaranteed the 14.25% notes on a joint and several basis.
Accordingly, we have determined that the presentation of condensed financial
information is not material to investors since all of our subsidiaries guarantee
the 14.25% notes.
5. RECLASSIFICATIONS
Certain amounts have been reclassified in prior year financial
statements to conform with current year presentations.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
CASH FLOWS
Our cash and cash equivalents remained relatively constant from
December 31, 1999 to September 30, 2000. During the nine month period ended
September 30, 2000, we generated cash from our operations of $7.9 million. These
funds were provided primarily from cash generated from inventories, prepaid
expenses and other of $1.1 million, net income before depreciation, depletion
and amortization of $5.3 million, and increases in accounts payable, accrued
expenses (including interest) and other of $7.8 million. These amounts were
partially offset by payments of advance minimum royalties of $1.1 million,
reclamation liabilities of $2.5 million, and other liabilities of $847,000, and
were further reduced by the amortization of $2.1 million of unrealized gain on
debt restructuring.
4
<PAGE> 8
We used $5.7 million in our investing activities primarily for the
purchase of $6.8 million of property, plant and equipment, including $4.1
million of mine development costs. The cash used in our investing activities was
partially offset by $1.3 million generated from the sale of property, plant and
equipment.
We used $2.2 million in our financing activities. These funds were
primarily used to make required principal payments of $1.6 million on our term
loan, required payments of $166,000 on our other long-term debt and $730,000 of
debt issuance costs. These amounts used in our financing activities were
partially offset by an increase in our cash overdraft position of approximately
$300,000.
LONG-TERM DEBT
We have two long-term debt facilities. The first is a loan and security
agreement dated November 21, 1998 with Foothill Capital Corporation, as agent,
and other lenders. Our loan agreement with Foothill provides us with a credit
facility of up to $55.0 million. This facility consists of a commitment for a
$40.0 million working capital revolver and a term loan with an original
principal amount of $15.0 million. Commitments under the credit facility will
expire in 2005. The Foothill credit facility is secured by substantially all of
our present and future assets.
In September, 2000, we entered into an amendment to the Foothill credit
facility under which the lenders agreed to provide us with a $6.3 million
supplemental term loan to be used to fund, in part, the October 1, 2000 interest
payment due on our 14.25% notes. We elected to use this supplemental facility to
fund the October 1, 2000 interest payment rather than exercising our option to
issue additional 14.25% notes to WLR Recovery Fund L.P. (successor to Rothschild
Recovery Fund, L.P.). This supplemental term loan was provided to us within the
$40.0 million limit of the working capital revolver, and did not increase the
maximum borrowing amount of $55.0 million under the Foothill credit facility.
Accordingly, the maximum amount of the working capital revolver has been reduced
by $6.3 million from $40.0 million to $33.7 million. The maximum amount of the
revolver will be restored as principal payments under the supplemental term loan
are made. The supplemental term loan was advanced to us on October 2, 2000, the
date on which the October 1, 2000 interest payment was due under our 14.25%
notes. In addition to the supplemental term loan, the amendment to the Foothill
facility increased the concentration limits with respect to certain accounts
receivable. Under the increased limits, we do not expect to have any significant
future concentration limit exclusions from our borrowing base.
Borrowing availability under the working capital revolver is limited to
85% of eligible accounts receivable and 65% of eligible inventory. Borrowings
under the revolver bear interest, at our option, at either 1% above the prime
interest rate or at 3 3/4% above the adjusted Eurodollar rate. The original term
loan bears interest at 2 1/2% above the prime interest rate. This term loan is
payable in monthly installments of principal of approximately $179,000, plus
interest, through 2002 and in a final balloon payment due on December 1, 2002 in
an amount that will equal the then remaining principal balance of the term loan
(which we estimate will be approximately $6.6 million). The supplemental term
loan bears interest at 2 1/2% above the prime interest rate and is payable in
monthly installments of principal and interest starting on January 1, 2001 and
continuing through December 1, 2003. The scheduled monthly principal payment
under the supplemental term loan is $140,000 from January 1, 2001 through June
1, 2002 and $210,000 from July 1, 2002 through December 1, 2003.
The outstanding balance of the original term loan was $11.3 million and
$12.9 million as of September 30, 2000 and December 31, 1999, respectively. The
decrease in the outstanding balance of the original term loan resulted from
making the scheduled monthly installment payments. As of September 30, 2000, our
borrowings under the working capital revolver were less than $50,000. However,
we did have greater usage of the revolver during the quarter from time to time,
and the maximum outstanding balance of the revolver during such period was
approximately $500,000. Availability under the working capital revolver was
approximately $16.7 million and $17.2 million as of September 30, 2000 and
December 31, 1999, respectively. The decline in availability is primarily
attributable to lower coal production and shipments. Future changes in coal
production and shipments and the resulting changes in inventory and accounts
receivable will impact future revolving credit availability.
The loan agreement with Foothill contains covenants that, among other
matters, restrict or limit our ability to pay interest and dividends, incur
indebtedness, acquire or sell assets and make capital expenditures. In
particular, the loan agreement requires that we maintain specified minimum
levels of earnings before interest, taxes, depreciation and amortization,
referred to as EBITDA, as defined in the loan agreement, during the term of the
loan. Beginning with the fiscal quarter ending March 31, 2000, and for each
subsequent fiscal quarter, we must have EBITDA of at least $12.0 million at the
end of each fiscal quarter for the immediately preceding four fiscal quarters.
For the four fiscal quarters ended September 30, 2000, our EBITDA, as defined in
the loan agreement, was $21.1 million.
5
<PAGE> 9
In addition to the EBITDA requirement, the loan agreement with Foothill
prohibits us from making capital expenditures in any fiscal year in excess of
$12.0 million. The loan agreement also provides that, in order to advance funds
to the guarantors and us, the borrowers under the loan agreement must have
borrowing availability of at least $5.0 million after giving effect to the
advances and for the 30 days immediately preceding the advances. The borrowing
availability must be at least $10.0 million if the advanced funds are to be used
to prepay or purchase our 14.25% notes. As of September 30, 2000, borrowing
availability under the loan agreement was approximately $16.7 million. Thus, the
maximum amount which the borrowers could have advanced to us on that date was
approximately $11.7 million. With respect to the term loan, in addition to
regularly scheduled installment principal and interest payments, the loan
agreement requires that we apply the first $5.0 million of proceeds from
designated asset sales to the repayment of the original term loan. As of
September 30, 2000, no amounts had been applied to this requirement. Proceeds
used to repay the term loan cannot be reborrowed.
Our second long-term debt facility is the indenture governing our
14.25% notes. As of September 30, 2000, the principal amount outstanding under
our 14.25% notes was approximately $126.7 million, which is unchanged from the
principal amount outstanding at June 30, 2000. The indenture contains covenants
that restrict or limit our ability to, among other things, sell assets, pay
dividends, redeem stock and incur additional indebtedness. Under the indenture,
we may not sell assets unless we receive fair market value and at least 75% of
the consideration is in cash or assets to be used in our coal mining business.
The indenture also limits our ability to use asset sale proceeds. Specifically,
the indenture permits us to use the first $1.0 million of asset sale proceeds
for general corporate purposes. We may use proceeds in excess of $1.0 million
for permitted purposes, including retiring senior secured debt and making
capital expenditures. To the extent we do not use asset sale proceeds in excess
of $1.0 million for permitted purposes, we must use 60% of those proceeds to
redeem notes at a purchase price generally equal to the principal amount thereof
plus accrued and unpaid interest. We may use the remaining 40% for general
corporate purposes. The indenture also prohibits us from making restricted
payments, such as cash dividends and stock redemptions, unless several
requirements are met. Except for permitted debt, which includes senior debt up
to $55.0 million, debt existing as of October 1, 1999, indebtedness represented
by capital lease obligations, mortgage financings or purchase money obligations,
and other specified debt, the indenture prohibits us from incurring additional
indebtedness unless we meet a fixed charge ratio test.
We are currently in compliance with the covenants and restrictions in
the loan agreement with Foothill, as discussed above, as well as the indenture
governing the 14.25% notes. In the event we were to fail to be in compliance
with any one or more of the covenants under our loan agreement with Foothill,
Foothill would have various rights and remedies which it could exercise,
including the right to (1) prohibit us from borrowing under the revolving credit
facility, (2) accelerate all outstanding borrowings and (3) foreclose on the
collateral securing the loan. Similarly, if we were not in compliance with the
covenants in the indenture, if we defaulted on a payment of our other senior
secured indebtedness or if our other senior secured indebtedness were
accelerated as a result of a default under that indebtedness, including the loan
agreement with Foothill, the trustee and the noteholders would have various
rights and remedies, including the right to call our outstanding notes and,
except as limited by the intercreditor agreement with Foothill, to foreclose on
the collateral that secures the 14.25% notes.
CAPITAL EXPENDITURES AND OTHER COMMITMENTS AND CONTINGENCIES
We previously budgeted approximately $6.7 million for capital
expenditures for 2000. We currently expect to make capital expenditures of
approximately $9.5 million in 2000, $4.1 million of which has been incurred for
mine development with an additional $350,000 budgeted for such costs during the
remainder of 2000. As discussed in our Form 10-K for the year ended December 31,
1999, and our Form 10-Qs for the quarters ended March 31, 2000 and June 30,
2000, our contract miner has encountered adverse roof conditions in the areas
which are being developed to reach the western portion of our coal reserve in
Barbour County. Of the $4.1 million of mine development capital expenditures,
$3.8 million have been made through September 30, 2000 for our Barbour County
operation in order to access the western portion of our reserve and to properly
develop the mainline entries for the expected life of that deep mine. If our
contract miner is unable to control the roof conditions and increase production
from this mine, continued lower-than-expected production could have an adverse
effect on our borrowing availability, liquidity, financial condition and results
of operations. Please see "- Barbour County Operation" below for a more detailed
discussion of the status of the roof conditions and future plans for this mining
operation. We expect to pay for all such additional expenditures from operating
cash and borrowings under our credit facilities.
We are required to pay advance minimum royalties under our coal leases.
Advance minimum royalties represent payments that we make as the coal lessee to
landowners for the right to mine coal from the landowners' property. We expect
6
<PAGE> 10
to make advance minimum royalty payments under our current leases of
approximately $4.4 million for fiscal year 2000; $3.5 million in 2001; $2.6
million in 2002; $2.6 million in 2003; and $2.6 million in 2004.
We have various office and mining equipment operating lease agreements.
The minimum annual rentals for office and mining equipment, including amounts
accrued for leasehold termination costs, is expected to be approximately $7.2
million for fiscal year 2000. Future minimum annual rentals for office and
mining equipment, including amounts accrued for leasehold termination costs, is
currently expected to be approximately $3.6 million in 2001; $1.8 million in
2002; $503,000 in 2003; and $265,000 in 2004.
NEW CONTRACTS WITH POTOMAC ELECTRIC POWER COMPANY
As reflected in our Form 10-K for the year ended December 31, 1999, our
two contracts with Potomac Electric Power Company to supply approximately 2.2
million tons of coal to its Chalk Point and Morgantown plants expire on December
31, 2000. We recently entered into two new contracts with Potomac Electric Power
Company to supply 1.5 million tons of coal to the Chalk Point, Morgantown and
Dickerson plants in 2001. In addition to the contracts for 2001, we entered into
a contract to supply between 1.3 and 2.0 million tons of coal to these Potomac
Electric Power Company plants for 2002. Due to market considerations and other
factors, we elected to commit fewer tons under these contracts than we had in
2000.
BARBOUR COUNTY OPERATION
As discussed in our Form 10-K for the year ended December 31, 1999, and
our Form 10-Qs for the quarters ended March 31, 2000 and June 30, 2000, the
contract miner for our Barbour County deep mine has encountered adverse roof
conditions in the areas which are being developed to reach the western portion
of our coal reserve. The roof conditions have required us to make substantial
unplanned capital expenditures and have significantly reduced coal production
from this mine. Our contract miner has been working with third party roof
control specialists and using various roof control techniques to improve the
roof conditions in the mine. While our contract miner has reported some changes
and minor improvements in the roof conditions, these changes and improvements
have not been substantial enough to date to accurately predict if future
conditions will improve and enable the contract miner to increase coal
production. In addition, the geologic information regarding this reserve
indicates that our contract miner has not yet reached the areas in the reserve
where roof conditions are expected to improve. Accordingly, during the fourth
quarter, our contract miner has and will continue the development work in an
effort to improve roof conditions and to reach those areas of the reserve. If
roof conditions do improve, future coal production from this operation should
begin to return to acceptable levels. However, we cannot assure you that this
will occur. If our contract miner is unable to control the roof conditions and
increase production from this mine, continued lower-than-expected coal
production will have an adverse effect on our borrowing availability, liquidity,
financial condition and results of operations.
Because of the uncertainty of the future of our existing Barbour County
mine, we have been evaluating alternative ways to supplement or replace the coal
production from this operation. Based on our evaluations, we are planning to
develop the Upper Kittanning seam which lies approximately 45 to 50 feet above
our Middle Kittanning reserve, which is the seam currently being mined by our
contract miner. We currently control approximately 20 million tons of coal in
the Upper Kittanning reserve, and will develop this seam by ramping up from our
existing workings in the Middle Kittanning seam. The initial mining in the Upper
Kittanning seam will be in an area that lies to the south of where our contract
miner is currently working, and is near an area where prior mining operations
did not encounter difficult roof conditions. If successful, this project will
enable us to utilize our existing mine infrastructure and surface facilities
that serve our Barbour County operation. During the fourth quarter, we will be
finalizing our development plans for this project. If the roof conditions and
coal production in our existing deep mine do not improve during the fourth
quarter, we plan to begin the development work to ramp up to the Upper
Kittanning seam in the first quarter of 2001. Depending on the nature of the
strata between the two coal seams and other factors, we currently estimate that
the development cost for this project will range between $750,000 and $1
million, and that the development work will take approximately three to five
months to complete. While we believe that it will be feasible to develop the
Upper Kittanning seam from our existing operation, the development and success
of a mining operation in that seam are subject to many risks and uncertainties,
many of which are beyond our control. Accordingly, we cannot assure you that we
will be able to develop and successfully mine the Upper Kittanning seam.
7
<PAGE> 11
FUTURE LIQUIDITY NEEDS AND DEBT SERVICE REQUIREMENTS
As noted in the report of our independent accountants for the year
ended December 31, 1999, we had significant losses from operations in 1999 and
1998, and we face significant future debt service requirements. Specifically,
beginning with the October 1, 2000 interest payment, all interest payments on
our 14.25% notes must be paid in cash. We funded the October 1, 2000 interest
payment of approximately $9.0 million with the proceeds of the $6.3 million
supplemental term loan provided by Foothill and cash flow from operations. We
will have to pay all future interest payments from operating cash flow,
borrowings under credit facilities, asset sale proceeds or other sources.
In 2001, we will be required to make debt service payments in excess of
$23.5 million. In order to meet these debt service obligations, we plan to
continue to implement our business plan as discussed in greater detail in our
Form 10-K for the year ended December 31, 1999. We believe that we will be able
to maintain the cost savings that have been achieved through the use of contract
miners at our deep mines, and that these cost savings will improve income from
operations (prior to depreciation, depletion and amortization) during the
remainder of 2000 and into 2001. Based on our current projections, we expect to
meet our debt service requirements in 2001 with cash flow from operations and
borrowings under our credit facilities. However, we cannot assure you that we
will be able to do this, and we may have to rely on asset sale proceeds and
other resources from third parties to meet these obligations. Our ability to pay
our debt service is subject to risks and uncertainties, including the risks and
uncertainties associated with our Barbour County operation and the other risks
and uncertainties identified in this report, and our ability to maintain cost
savings and improve income from operations, to increase coal production from our
mining operations, and to sell assets.
RESULTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 2000 COMPARED TO THE THREE MONTHS ENDED
SEPTEMBER 30, 1999
COAL SALES AND RELATED REVENUES. Coal sales and related revenue were
$58.4 million for the three months ended September 30, 2000 compared to $60.0
million for the three months ended September 30, 1999, a decrease of 2.7%. This
decrease is the result of a $2.4 million decrease in revenue generated from the
sale of company-produced coal in the third quarter of 2000 compared to the same
period in 1999. This revenue decline was primarily the result of selling 50,000
fewer tons of company-produced coal in the third quarter of 2000 compared to the
same period in 1999. The decrease in company-produced coal revenue was, however,
partially offset by an increase in revenues from our ash and waste fuel
operations in the third quarter of 2000 as compared to the third quarter of
1999. The increase in these revenues was primarily due to higher sales volume.
Coal sales volume declined by approximately 69,000 tons to
approximately 2.1 million tons for the quarter ended September 30, 2000, a
decrease of 3.2% from the same period in 1999. The decrease in coal sales volume
is attributable to a 50,000 ton reduction in the sale of company-produced coal
and a 19,000 ton decrease in the sale of brokered coal. The decrease in the
sales volume of company-produced coal was due to lower coal production, which
was attributable primarily to the following:
o We are no longer producing coal from our Webster and Preston
County mining operations. During the third quarter of 1999, we
produced approximately 83,000 and 49,000 tons, respectively,
from these operations. Production from our Webster County
operation ceased in the third quarter of 1999 when the
reserves in the deep mine were exhausted. Production from our
Preston County operation ceased in the first quarter of 2000
due to the depletion of the reserves for that operation.
o Tonnage levels at our Barbour County deep mine were 34,000
tons lower in the third quarter of 2000 than the same period
in 1999 due to poor roof conditions as discussed in our Form
10-K for the year ended December 31, 1999, and our Form 10-Qs
for the quarters ended March 31, 2000 and June 30, 2000.
Please see "Liquidity and Capital Resources - Barbour County
Operation" above for a more detailed discussion of the status
of the roof conditions and future plans for this mining
operation.
While we experienced reduced production at the mines as described above,
tonnage levels during the third quarter of 2000 as compared to the same period
in 1999 increased at our deep mining operations in Grant and Upshur Counties,
West Virginia. These increases partially offset the production decreases
discussed above.
COST OF OPERATIONS AND SELLING EXPENSES. The cost of operations and
selling expenses totaled $52.4 million for the quarter ended September 30, 2000,
compared to $54.0 million for the quarter ended September 30, 1999, a decrease
of 3.0%. The cost per ton of operations and selling expenses for
company-produced and brokered coal for the quarter ended September 30, 2000 was
$24.93 per ton compared to $24.84 per ton for the quarter ended September 30,
1999, an increase of 0.4%.
8
<PAGE> 12
DEPRECIATION, DEPLETION AND AMORTIZATION. Depreciation, depletion and
amortization was approximately $4.4 million for the quarter ended September 30,
2000 as compared to $4.6 million for the quarter ended September 30, 1999.
OTHER OPERATING EXPENSES. Other operating expenses for the quarter
ended September 30, 2000 were $1.8 million compared to $3.9 million for the
quarter ended September 30, 1999. Included in other operating expenses are
general and administrative expenses, financial restructuring fees, unusual
charges, and loss on impairment charges. General and administrative expenses
decreased 10.0%, from $2.0 million for the quarter ended September 30, 1999 to
$1.8 million for the same period in 2000. This decrease resulted from the
elimination of certain corporate overhead costs. Financial restructuring fees
related to the restructuring of our 14.25% notes were recorded in the quarter
ended September 30, 2000 in the amount of $21,000 as compared to $872,000 of
such costs in the same period of 1999. All material costs related to our
financial restructuring have now been recorded and any future costs associated
with the restructuring are not expected to be material. During the three month
period ended September 30, 1999, we recorded a loss on impairment of $1.1
million, of which $600,000 was related to the impairment of certain assets at
our Barbour County deep mine which were no longer useful in the mining
operation, and $1.0 million of additional reclamation and close down costs
associated with the close down of our Webster County operations. These
impairment charges were partially offset by $500,000 of income generated from
the disposition of certain coal reserves located in Preston and Taylor Counties,
West Virginia, for which impairment charges had previously been recorded. We
have not recorded any such impairment losses during the three month period ended
September 30, 2000.
INTEREST EXPENSE. Interest expense was $4.2 million for the quarter
ended September 30, 2000, compared to $3.7 million for the quarter ended
September 30, 1999, an increase of 13.5%. The increase in interest expense was
due to our financial restructuring. The additional interest related to the
financial restructuring was partially offset by a reduction in interest expense
incurred under our revolving credit facility due to reduced borrowings under
that facility.
OTHER INCOME. Other income includes interest, gain or loss on sale of
fixed assets, royalties, commissions and miscellaneous income. Other income for
the quarter ended September 30, 2000 was approximately $1.3 million which is
unchanged from the same quarter of 1999.
INCOME TAXES. An income tax benefit of $200,000 was recorded for the
quarter ended September 30, 2000, to reflect the deferred tax benefit which
resulted from the cancellation of indebtedness income from the financial
restructuring. An income tax benefit was not recorded for the quarter ended
September 30, 1999. The income tax benefit, or provision, for the period is
based on the effective tax rate expected to be applicable for the full year. A
full valuation allowance has been established on the remaining net operating
loss carryforwards and capital loss carryforwards because we believe that it is
more likely than not that these assets will not be realized.
NET LOSS. For the quarter ended September 30, 2000, our net loss
available to common stockholders was $3.5 million compared to a net loss of $5.6
million for the quarter ended September 30, 1999, a decrease of approximately
37.5%.
NINE MONTHS ENDED SEPTEMBER 30, 2000 COMPARED TO THE NINE MONTHS ENDED SEPTEMBER
30, 1999
COAL SALES AND RELATED REVENUES. Coal sales and related revenue were
$170.7 million for the nine months ended September 30, 2000 compared to $173.7
million for the nine months ended September 30, 1999, a decrease of 1.7%. This
decrease is the result of a $12.3 million decrease in revenue generated from the
sale of company-produced coal in the first nine months of 2000 compared to the
same period in 1999. This revenue decline was primarily the result of selling
379,000 fewer tons of company-produced coal in the first nine months of 2000
compared to the same period of 1999. The decrease in company-produced coal
revenue was, however, partially offset by an increase in revenues from our
brokered coal and, to a lesser extent, increased revenue from our ash and waste
fuel operations in the first nine months of 2000 as compared to the first nine
months of 1999. The increase in these revenues was primarily due to higher sales
volume.
Coal sales volume declined by approximately 165,000 tons to 6.1 million
tons for the nine months ended September 30, 2000, a decrease of 2.6% from the
same period in 1999. The decrease in coal sales volume is attributable to a
379,000 ton reduction in the sale of company-produced coal and offset by a
214,000 ton increase in the sale of brokered coal. The decrease in the sales
volume of company-produced coal was due to lower coal production, which was
attributable primarily to the following:
o We are no longer producing coal from our Webster and Preston
County mining operations. During the first nine months of
1999, we produced approximately 444,000 and 142,000 tons,
respectively, from these
9
<PAGE> 13
operations. Production from our Webster County operation
ceased in the third quarter of 1999 when the reserves in the
deep mine were exhausted. Approximately 9,000 tons were
produced from our Preston County operation in the first
quarter of 2000 prior to the depletion of the reserve base for
that operation.
o Tonnage levels at our Barbour County deep mine were 269,000
tons lower in the first nine months of 2000 due to poor roof
conditions as discussed in our Form 10-K for the year ended
December 31, 1999, and our Form 10-Qs for the quarters ended
March 31, 2000 and June 30, 2000. Please see "Liquidity and
Capital Resources - Barbour County Operation" above for a more
detailed discussion of the status of the roof conditions and
future plans for this mining operation.
While we experienced reduced production at the mines as described above,
tonnage levels during the first nine months of 2000 as compared to the same
period in 1999 increased at our deep mine in Garrett County, Maryland and at our
deep mining operations in Upshur and Grant Counties, West Virginia. These
increases partially offset the production decreases discussed above.
COST OF OPERATIONS AND SELLING EXPENSES. The cost of operations and
selling expenses totaled $151.2 million for the nine months ended September 30,
2000, compared to $157.4 million for the nine months ended September 30, 1999, a
decrease of 3.9%. The cost per ton of operations and selling expenses for
company-produced and brokered coal for the nine months ended September 30, 2000
was $24.66 per ton compared to $25.00 per ton for the nine months ended
September 30, 1999, a decrease of 1.4%.
DEPRECIATION, DEPLETION AND AMORTIZATION. Depreciation, depletion and
amortization was approximately $13.3 million for the nine months ended September
30, 2000 as compared to $13.4 million for the nine months ended September 30,
1999.
OTHER OPERATING EXPENSES. Other operating expenses for the nine months
ended September 30, 2000 were $5.8 million compared to $11.3 million for the
nine months ended September 30, 1999. Included in other operating expenses are
general and administrative expenses, financial restructuring fees, unusual
charges, and loss on impairment charges. General and administrative expenses
decreased 8.9%, from $5.6 million for the nine months ended September 30, 1999
to $5.1 million for the same period in 2000. This decrease resulted primarily
from the elimination of certain overhead costs associated with the use of
contract miners at our deep mining operations and, to a lesser extent, the
elimination of certain corporate overhead costs. Financial restructuring fees of
$542,000 were recorded in the nine months ended September 30, 2000 related to
the restructuring of our senior notes as compared to the $1.2 million of such
costs recorded in the nine months ended September 30, 1999. All material costs
related to our financial restructuring have now been recorded and any future
costs associated with the restructuring are not expected to be material. We also
recorded $158,000 of unusual charges in the first nine months of 2000 related to
severance costs associated with management changes. There were no such unusual
charges recorded in the first nine months of 1999. During the first nine months
of 1999, we recorded a loss on impairment of $4.5 million of which approximately
$500,000 was related to the impairment of certain assets at our Barbour County
deep mine which were no longer useful in the mining operation, $1.0 million of
additional reclamation and close down costs associated with the close down of
our Webster County operations, $1.1 million related to the discontinuance of
certain software resulting from the change to the use of contract miners at our
deep mine operations and $2.4 million related to certain properties located in
Tazewell County, Virginia. These impairment charges were partially offset by
$500,000 of income generated from the disposition of certain coal reserves
located in Preston and Taylor Counties, West Virginia, for which previous asset
impairment charges had been recorded. We have not recorded any such impairment
losses during the first nine months of 2000.
INTEREST EXPENSE. Interest expense was $12.5 million for the nine
months ended September 30, 2000 compared to $10.9 million for the nine months
ended September 30, 1999, an increase of 14.7%. The increase in interest expense
was due to our financial restructuring. The additional interest related to the
financial restructuring was partially offset by a reduction in interest expense
recorded under our revolving credit facility due to reduced borrowings under
that facility.
OTHER INCOME. Other income includes interest, gain or loss on sale of
fixed assets, royalties, commissions and miscellaneous income. Other income for
the nine months ended September 30, 2000 was approximately $3.3 million which is
comparable to the $3.2 million for the same period of 1999.
INCOME TAXES. An income tax benefit of $780,000 was recorded for the
nine months ended September 30, 2000, to reflect the deferred tax benefit which
resulted from the cancellation of indebtedness income from the financial
restructuring. An income tax benefit of $200,000 was recorded for the nine
months ended September 30, 1999, which reflected a refund related to a prior
year federal tax deposit. The income tax benefit, or provision, for the period
is based on the effective tax rate expected to
10
<PAGE> 14
be applicable for the full year. A full valuation allowance has been established
on the remaining net operating loss carryforwards and capital loss carryforwards
because we believe that it is more likely than not that these assets will not be
realized.
NET LOSS. For the nine months ended September 30, 2000, our net loss
available to common stockholders was $9.6 million compared to a net loss of
$17.9 million for the nine months ended September 30, 1999, a decrease of
approximately 46.4%.
DIVIDEND RESTRICTIONS AFFECTING SUBSIDIARIES
As of September 30, 2000, there were no restrictions affecting the
ability of the subsidiaries guaranteeing our 14.25% notes to make distributions
to us or other subsidiaries, except for restrictions in our loan agreement with
Foothill and those restrictions provided by law generally, such as the
requirement of adequate capital to pay dividends under corporate law. The loan
agreement with Foothill provides that, in order to advance funds to us, the
borrowers under the loan agreement must have borrowing availability of at least
$5.0 million after giving effect to the advances of funds (or $10.0 million if
advances are for prepayment or purchases of our 14.25% notes). As of September
30, 2000, revolving credit availability under the loan agreement was
approximately $16.7 million. Thus, the maximum amount which the borrowers could
have advanced to us on that date was approximately $11.7 million.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS
Information about market risks for the nine-month period ended
September 30, 2000 does not differ materially from that discussed in Item 7A of
our Form 10-K for the year ended December 31, 1999.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
No material litigation has been filed against us during the nine months
ended September 30, 2000. In addition, there were no material changes during the
third quarter in legal proceedings previously disclosed by us.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
Exhibit number 27, Financial Data Schedule, is filed herewith.
(b) Reports on Form 8-K.
Form 8-K, filed August 16, 2000, reporting on Item 5, regarding our
financial results for the quarter ended June 30, 2000.
11
<PAGE> 15
Form 8-K, filed August 23, 2000, reporting on Item 5, regarding our
receipt of a commitment letter from Foothill Capital Corporation to
provide us with a $6.3 million supplemental term loan.
Form 8-K, filed September 12, 2000, reporting on Item 4, regarding a
change in our certifying accountant.
12
<PAGE> 16
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ANKER COAL GROUP, INC.
By: /s/ P. Bruce Sparks
----------------------
Title: President
By: /s/ David D. Struth
----------------------
Title: Treasurer
Dated: November 13, 2000
13
<PAGE> 17
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ANKER ENERGY CORPORATION
By: /s/ P. Bruce Sparks
----------------------
Title: President
By: /s/ David D. Struth
----------------------
Title: Treasurer
Dated: November 13, 2000
14
<PAGE> 18
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ANKER GROUP, INC.
By: /s/ P. Bruce Sparks
----------------------
Title: President
By: /s/ David D. Struth
----------------------
Title: Treasurer
Dated: November 13, 2000
15
<PAGE> 19
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ANKER POWER SERVICES, INC.
By: /s/ Richard B. Bolen
--------------------------
Title: President
By: /s/ David D. Struth
--------------------------
Title: Treasurer
Dated: November 13, 2000
16
<PAGE> 20
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ANKER VIRGINIA MINING COMPANY, INC.
By: /s/ Gerald Peacock
--------------------------
Title: President
By: /s/ David D. Struth
--------------------------
Title: Treasurer
Dated: November 13, 2000
17
<PAGE> 21
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ANKER WEST VIRGINIA MINING COMPANY, INC.
By: /s/ Gerald Peacock
--------------------------
Title: President
By: /s/ David D. Struth
--------------------------
Title: Treasurer
Dated: November 13, 2000
18
<PAGE> 22
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
BRONCO MINING COMPANY, INC.
By: /s/ P. Bruce Sparks
--------------------------
Title: President
By: /s/ David D. Struth
--------------------------
Title: Treasurer
Dated: November 13, 2000
19
<PAGE> 23
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
HAWTHORNE COAL COMPANY, INC.
By: /s/ Charles C. Dunbar
--------------------------
Title: President
By: /s/ David D. Struth
--------------------------
Title: Treasurer
Dated: November 13, 2000
20
<PAGE> 24
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
HEATHER GLEN RESOURCES, INC.
By: /s/ Jeffrey P. Kelley
--------------------------
Title: President
By: /s/ David D. Struth
--------------------------
Title: Treasurer
Dated: November 13, 2000
21
<PAGE> 25
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
JULIANA MINING COMPANY, INC.
By: /s/ Gerald Peacock
--------------------------
Title: President
By: /s/ David D. Struth
--------------------------
Title: Treasurer
Dated: November 13, 2000
22
<PAGE> 26
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
KING KNOB COAL CO., INC.
By: /s/ David D. Smith
--------------------------
Title: President and Treasurer
Dated: November 13, 2000
23
<PAGE> 27
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
MARINE COAL SALES COMPANY
By: /s/ Larry F. Kaelin
--------------------------
Title: President
By: /s/ David D. Struth
--------------------------
Title: Treasurer
Dated: November 13, 2000
24
<PAGE> 28
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
MELROSE COAL COMPANY, INC.
By: /s/ David D. Struth
--------------------------
Title: President and Treasurer
Dated: November 13, 2000
25
<PAGE> 29
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
NEW ALLEGHENY LAND HOLDING COMPANY, INC.
By: /s/ David D. Struth
--------------------------
Title: President and Treasurer
Dated: November 13, 2000
26
<PAGE> 30
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PATRIOT MINING COMPANY, INC.
By: /s/ Gerald Peacock
--------------------------
Title: President
By: /s/ David D. Struth
--------------------------
Title: Treasurer
Dated: November 13, 2000
27
<PAGE> 31
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
SIMBA GROUP, INC.
By: /s/ P. Bruce Sparks
--------------------------
Title: President
By: /s/ David D. Struth
--------------------------
Title: Treasurer
Dated: November 13, 2000
28
<PAGE> 32
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
UPSHUR PROPERTY, INC.
By: /s/ Jeffrey P. Kelley
--------------------------
Title: President
By: /s/ David D. Struth
--------------------------
Title: Treasurer
Dated: November 13, 2000
29
<PAGE> 33
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
VANTRANS, INC.
By: /s/ David D. Struth
--------------------------
Title: President and Treasurer
Dated: November 13, 2000
30
<PAGE> 34
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
VINDEX ENERGY CORPORATION
By: /s/ Gerald Peacock
--------------------------
Title: President
By: /s/ David D. Struth
--------------------------
Title: Treasurer
Dated: November 13, 2000
31
