<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 June 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. Employer
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 (August 4, 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 JUNE 30, 2000
TABLE OF CONTENTS
PART I
<TABLE>
<CAPTION>
ITEM I. FINANCIAL STATEMENTS
<S> <C> <C>
Consolidated Statements of Operations - Three and Six Months
Ended June 30, 2000 and 1999............................................................1
Consolidated Balance Sheets -
June 30, 2000 and December 31, 1999.....................................................2
Consolidated Statements of Cash Flows - Six Months
Ended June 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................................................10
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 SIX MONTHS
ENDED ENDED
JUNE 30, JUNE 30,
2000 1999 2000 1999
-------- -------- --------- ---------
(unaudited) (unaudited)
<S> <C> <C> <C> <C>
Coal sales and related revenue $ 54,842 $ 57,271 $ 112,651 $ 114,223
Expenses:
Cost of operations and selling expenses 48,386 53,114 98,790 103,448
Depreciation, depletion and amortization 4,457 4,447 8,885 8,839
General and administrative 1,702 2,010 3,327 3,945
Loss on impairment -- 3,461 -- 3,461
Financial restructuring fees 85 -- 521 --
Non-recurring charges -- -- 158 --
-------- -------- --------- ---------
Total expenses 54,630 63,032 111,681 119,693
Operating income (loss) 212 (5,761) 970 (5,470)
Interest, net (4,213) (3,854) (8,268) (7,479)
Other income, net 795 831 1,737 1,421
-------- -------- --------- ---------
Loss before income taxes (3,206) (8,784) (5,561) (11,528)
Income tax benefit 430 -- 580 200
-------- -------- --------- ---------
Net loss (2,776) (8,784) (4,981) (11,328)
Less mandatorily redeemable preferred stock dividends (368) (351) (738) (703)
Less mandatorily redeemable preferred stock accretion (150) (150) (300) (300)
-------- -------- --------- ---------
Net loss available to common
stockholders $ (3,294) $ (9,285) $ (6,019) $ (12,331)
======== ======== ========= =========
</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
JUNE 30, DECEMBER 31,
2000 1999
--------- ------------
Current assets: (unaudited)
<S> <C> <C>
Cash and cash equivalents $ 5 $ 7
Accounts receivable:
Trade 19,277 21,696
Affiliates 56 41
Inventories 2,508 3,169
Current portion of long-term notes receivable 868 608
Prepaid expenses and other 2,813 2,593
Deferred income taxes 4,645 4,645
--------- ---------
Total current assets 30,172 32,759
Properties:
Coal lands and mineral rights 66,009 62,135
Machinery and equipment 71,556 72,199
--------- ---------
137,565 134,334
Less allowances for depreciation, depletion and amortization 44,162 37,956
--------- ---------
93,403 96,378
Other assets:
Assets held for sale 9,000 9,000
Advance minimum royalties 7,031 6,122
Goodwill, net of accumulated amortization of
$4,973 and $4,094 in 2000 and 1999, respectively 19,116 19,995
Other intangible assets, net of accumulated amortization of
$2,045 and $1,614 in 2000 and 1999, respectively 4,867 5,298
Notes receivable 3,191 3,102
Other assets 5,206 5,597
Deferred income taxes 1,282 702
--------- ---------
Total assets $ 173,268 $ 178,953
========= =========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable:
Trade $ 8,521 $ 9,932
Affiliates 641 667
Cash overdraft 556 83
Accrued interest 4,640 537
Accrued expenses and other 6,409 8,784
Accrued leasehold termination 1,962 3,726
Accrued reclamation expenses 1,485 3,502
Current maturities of long-term debt 2,143 2,309
--------- ---------
Total current liabilities 26,357 29,540
Long-term debt 164,809 161,489
Other liabilities:
Accrued reclamation expenses 16,878 16,913
Other 5,458 6,264
--------- ---------
Total liabilities 213,502 214,206
Commitments and contingencies -- --
Mandatorily redeemable preferred stock 27,634 26,596
Stockholders' deficit:
Preferred stock 23,000 23,000
Common stock -- --
Paid-in capital 52,486 52,486
Paid-in capital - common stock warrants -- --
Treasury stock (5,100) (5,100)
Accumulated deficit (138,254) (132,235)
--------- ---------
Total stockholders' deficit (67,868) (61,849)
--------- ---------
Total liabilities and stockholders' deficit $ 173,268 $ 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>
SIX MONTHS
ENDED
JUNE 30,
2000 1999
-------- ---------
(UNAUDITED)
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (4,981) $ (11,328)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Loss on impairment and financial restructuring fees -- 3,461
Depreciation, depletion and amortization 8,885 8,839
Amortization of discount on senior notes 126 --
Amortization of unrealized gain on debt restructuring (1,349) --
Deferred taxes (580) --
(Gain) loss on sale of properties (233) 27
Debt issuance costs related to debt restructuring 451 --
Changes in operating assets and liabilities:
Accounts receivable 2,404 2,467
Inventories, prepaid expenses and other 316 (1,127)
Advance minimum royalties (909) (1,428)
Accounts payable, accrued expenses and other 3,496 (272)
Accrued reclamation (2,052) (2,159)
Other liabilities (806) (1,855)
-------- ---------
Net cash provided by (used in)
operating activities $ 4,768 $ (3,375)
-------- ---------
Cash flows from investing activities:
Purchases of properties $ (5,193) $ (4,079)
Proceeds from sales of properties 629 184
Payments received on notes receivable 66 491
Issuance of notes receivable (25) 61
Other assets 156 --
-------- ---------
Net cash used in investing activities $ (4,367) $ (3,343)
-------- ---------
Cash flows from financing activities:
Proceeds from revolving line of credit and long-term
debt $ 38,166 $ 129,809
Principal payments on revolving line of credit and
long-term debt (38,403) (120,239)
Cash overdraft 473 (2,151)
Debt issuance costs (639) (708)
-------- ---------
Net cash (used in) provided by
financing activities $ (403) $ 6,711
-------- ---------
Decrease in cash and cash equivalents $ (2) $ (7)
Cash and cash equivalents at beginning of period 7 15
-------- ---------
Cash and cash equivalents at end of period $ 5 $ 8
======== =========
</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 (the Company) 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 Company's consolidated financial position, results of operations and
cash flows. 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. The Company has established a full valuation
allowance on the net operating loss carryforwards, capital loss carryforwards
and contribution carryforwards as the Company currently believes 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 $2.4 million and $2.9 million at June 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 $143,000 and
$241,000 at June 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 (PIK (paid-in-kind) through April 1, 2000) 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 June 30, 2000. During the six month period ended June 30,
2000, we generated cash from our operations of $4.8 million. These funds were
provided primarily from cash generated by the collection of accounts receivable
of $2.4 million, net income before depreciation, depletion and amortization of
$3.9 million and increases in accounts payable, accrued expenses and other
expenses of $3.5 million. These amounts were partially offset by payments of
advance minimum royalties of $909,000, reclamation liabilities of $2.1 million
and other liabilities of $806,000, and were further reduced by the amortization
of $1.3 million of unrealized gain on debt restructuring.
4
<PAGE> 8
We used $4.3 million in our investing activities primarily for the
purchase of $5.2 million of properties, including mine development costs. The
cash used in our investing activities was partially offset by $629,000 generated
from the sale of properties.
We used $403,000 in our financing activities. These funds were
primarily used to make required principal payments of $536,000 on our term loan,
required payments of $166,000 on our other long-term debt and $639,000 of
financial restructuring fees. These amounts used in our financing activities
were partially offset by approximately $938,000 of additional net borrowings and
cash overdraft.
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 2002. The credit facility is secured by substantially all of our
present and future assets.
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 term loan
bears interest at 2 1/2% above the prime interest rate and is payable in monthly
installments of principal and interest through 2002.
The outstanding balance of the term loan was $11.6 million and $12.9
million as of July 31, 2000 and December 31, 1999, respectively. The decrease in
the outstanding balance of the term loan resulted from making the scheduled
monthly installment payments. As of July 31, 2000, we had no borrowings under
the working capital revolver. However, we did use the revolver during the
quarter from time to time, and the maximum outstanding balance of the revolver
during the period was approximately $1.0 million. Availability under the working
capital revolver was approximately $14.1 million and $17.2 million as of July
31, 2000 and December 31, 1999, respectively. The decline in availability is
primarily attributable to lower coal production and shipments and to the
exclusion of $1.1 million from our borrowing base resulting from the offset of
certain accounts payable against certain accounts receivable. 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 June 30, 2000, our EBITDA, as defined in the
loan agreement, was $18.0 million.
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 July 31, 2000, borrowing
availability under the loan agreement was approximately $14.1 million. Thus, the
maximum amount which the borrowers could have advanced to us on that date was
approximately $9.1 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 term loan. As of July 31, 2000,
no amounts had been applied to the $5.0 million 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 July 31, 2000, the principal amount outstanding under our
14.25% notes was approximately $126.7 million, which is unchanged from the
principal amount outstanding at March 31, 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
5
<PAGE> 9
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. 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 $10.4 million in 2000, which exceeds our budget by $3.7 million.
Of this additional $3.7 million, $2.6 million relates to additional mine
development costs for our Barbour County operations. As discussed in our Form
10-K for the year ended December 31, 1999, and our Form 10-Q for the quarter
ended March 31, 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. In order to access this portion of our reserve and to
properly develop the mainline entries for the expected life of the mine, we must
make these additional capital expenditures. 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. The
remaining $1.1 million of the additional $3.7 million of capital expenditures
for 2000 relates to buyouts of leased equipment. 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
to make advance minimum royalty payments under our current leases of
approximately $4.4 million in 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 in 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.
As reflected in our Form 10-K, 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. Potomac Electric Power
Company has been a continuous customer of ours for seventeen years, and we are
working closely with this customer to secure coal sales for the year 2001. We
cannot assure you, however, that we will be successful in our efforts to secure
these sales. If we are unable to obtain the sales to Potomac Electric Power
Company, or any other customer, our borrowing availability, liquidity, financial
condition and results of operations would be adversely affected.
6
<PAGE> 10
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 on October 1, 2000, we must pay all future interest payments on our
14.25% notes in cash. The interest payment on our 14.25% notes due on October 1,
2000 will be approximately $9.0 million. As mentioned above, the maximum amount
the borrowers could have advanced to us as of July 31, 2000, was approximately
$9.1 million. However, this amount will change based on future coal production,
coal shipments, accounts receivable and inventory, and could be either higher or
lower on October 1, 2000. We have the option to raise up to $6.3 million of the
funds needed for the October 1, 2000 interest payment by selling additional
14.25% notes to WLR Recovery Fund L.P. (formerly Rothschild Recovery Fund,
L.P.). The price of the notes issued to WLR Recovery Fund L.P. would be based on
95% of the average closing bid price of the notes over a specified period of
time prior to October 1, 2000. WLR Recovery Fund L.P.'s agreement to purchase
the additional 14.25% notes from us is subject to various conditions, including
the absence of a material adverse change in our financial condition, results of
operations, business, properties or prospects since October, 1999. We are
continuing to evaluate whether or not to exercise this option. If we elect to
exercise this option, we must give notice of such exercise on or before August
22, 2000. In addition to this option, we are working with Foothill to secure
additional borrowings under our existing credit facility that would enable us,
when combined with our projected cash balance, to have sufficient funds to make
this interest payment. However, we cannot assure you that the funds from WLR
Recovery Fund L. P. or Foothill will be available to us. We will have to pay the
portion of the October 1, 2000 interest payment that is not covered by the sale
of additional new notes to WLR Recovery Fund L. P. or the borrowings from
Foothill, and all interest payments after October 1, 2000, 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
$21.0 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 identified at the outset of 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 JUNE 30, 2000 COMPARED TO THE THREE MONTHS ENDED
JUNE 30, 1999
COAL SALES AND RELATED REVENUES. Coal sales and related revenue were
$54.8 million for the three months ended June 30, 2000 compared to $57.3 million
for the three months ended June 30, 1999, a decrease of 4.4%. This decrease is
the result of a $6.7 million decrease in revenue generated from our
company-produced coal operations in the second quarter of 2000 compared to the
same period in 1999. This decline was primarily the result of 277,000 fewer tons
of company-produced coal having been sold in the second quarter of 2000 as
opposed to the same period in 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, ash and waste fuel operations in the
second quarter of 2000 as compared to the second quarter of 1999. The increase
in these revenues was primarily due to higher sales volume.
Coal sales volume declined by approximately 266,000 tons to
approximately 2.4 million tons for the quarter ended June 30, 2000, a decrease
of 10.1% from the same period in 1999. The decrease in coal sales volume is
attributable to a 277,000 ton reduction in the sale of company-produced coal and
a 133,000 ton decline in the sale of commission coal, partially offset by a
144,000 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 County mining
complex. During the second quarter of 1999, we produced
approximately 174,000 tons from this operation. Production
from our Webster County operation ceased in mid-1999 when the
reserves in the deep mine were exhausted.
o Tonnage levels at our Barbour County deep mine were 149,000
tons lower in the second quarter 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-Q for the quarter ended
March 31, 2000. Our contract miner has been working with third
party roof
7
<PAGE> 11
control specialists and using various roof control techniques
to control the roof conditions in this mine. Our contract
miner has recently reported some changes and minor
improvements in the roof conditions, but not enough to
accurately predict if future conditions will continue to
improve and enable it to increase production. If the roof
conditions do improve, future coal production from this
operation should begin to return to expected 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
production could have an adverse effect on our borrowing
availability, liquidity, financial condition and results of
operations.
While we experienced reduced production at the mines as described above,
tonnage levels during the second quarter of 2000 as compared to the same period
in 1999 increased at our deep mines in Garrett County, Maryland and Raleigh
County, West Virginia, and at our deep mining operations in Upshur County, 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 $48.4 million for the quarter ended June 30, 2000,
compared to $53.1 million for the quarter ended June 30, 1999, a decrease of
8.9%. The cost per ton of operations and selling expenses for company-produced
and brokered coal for the quarter ended June 30, 2000 was $24.68 compared to
$25.36 of such costs per ton for the quarter ended June 30, 1999, a decrease of
2.7%.
DEPRECIATION, DEPLETION AND AMORTIZATION. Depreciation, depletion and
amortization was approximately $4.4 million for both the quarter ended June 30,
2000 and the quarter ended June 30, 1999.
OTHER OPERATING EXPENSES. Other operating expenses for the quarter
ended June 30, 2000 were $1.8 million compared to $5.5 million for the quarter
ended June 30, 1999. Included in other operating expenses are general and
administrative expenses, financial restructuring fees, non-recurring charges,
and loss on impairment charges. General and administrative expenses decreased
15.0%, from $2.0 million for the quarter ended June 30, 1999 to $1.7 million for
the same period in 2000. This decrease resulted from the elimination of certain
overhead costs associated with the use of contract miners at our deep mining
operations. Financial restructuring fees of $85,000 were recorded in the quarter
ended June 30, 2000 related to the restructuring of our 14.25% notes. During the
three month period ended June 30, 1999, the Company recorded a loss on
impairment of $1.1 million related to the discontinuance of the use of certain
software resulting from the addition of contract miners at our deep mine
operations and $2.4 million relating to certain properties located in Tazewell
County, Virginia. The Company has not recorded any such impairment losses during
the three month period ended June 30, 2000.
INTEREST EXPENSE. Interest expense was $4.2 million for the quarter
ended June 30, 2000, compared to $3.9 million for the quarter ended June 30,
1999, an increase of 7.7%. 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 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 and miscellaneous income. Other income for the quarter
ended June 30, 2000 was approximately $795,000 which was comparable to the
$831,000 for the same quarter of 1999.
INCOME TAXES. An income tax benefit of $430,000 was recorded for the
quarter ended June 30, 2000, to reflect the deferred tax benefit which resulted
from the cancellation of indebtedness income during the financial restructuring.
An income tax benefit was not recorded for the quarter ended June 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 the Company believes that it is more likely than not
that these assets will not be realized.
NET LOSS. For the quarter ended June 30, 2000, our net loss was $3.3
million compared to a net loss of $9.3 million for the quarter ended June 30,
1999, a decrease of approximately 64.5%.
SIX MONTHS ENDED JUNE 30, 2000 COMPARED TO THE SIX MONTHS ENDED JUNE 30, 1999
COAL SALES AND RELATED REVENUES. Coal sales and related revenue were
$112.7 million for the six months ended June 30, 2000 compared to $114.2 million
for the six months ended June 30, 1999, a decrease of 1.3%. This decrease is the
result of a $9.9 million decrease in revenue generated from our company-produced
coal operations in the first six months of
8
<PAGE> 12
2000 compared to the same period in 1999. This decline was primarily the result
of 329,000 fewer tons of company-produced coal having been sold in the first six
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, ash and waste fuel
operations in the first six months of 2000 as compared to the first six months
of 1999. The increase in these revenues was primarily due to higher sales
volume.
Coal sales volume declined by approximately 336,000 tons to 4.9 million
tons for the six months ended June 30, 2000, a decrease of 6.5% from the same
period in 1999. The decrease in coal sales volume is attributable to a 329,000
ton reduction in the sale of company-produced coal and a 241,000 ton decline in
the sale of commission coal, offset by a 234,000 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 County mining
complex. During the first six months of 1999, we produced
approximately 361,000 tons from this operation. Production
from our Webster County operation ceased in mid-1999 when the
reserves in the deep mine were exhausted.
o Tonnage levels at our Barbour County deep mine were 235,000
tons lower in the first six 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-Q for the quarter ended
March 31, 2000. Our contract miner has been working with third
party roof control specialists and using various roof control
techniques to control the roof conditions in this mine. Our
contract miner has recently reported some changes and minor
improvements in the roof conditions, but not enough to
accurately predict if future conditions will continue to
improve and enable it to increase production. If the roof
conditions do improve, future coal production from this
operation should begin to return to expected 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
production could have an adverse effect on our borrowing
availability, liquidity, financial condition and results of
operations.
While we experienced reduced production at the mines as described above,
tonnage levels during the first six 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 County, 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 $98.8 million for the six months ended June 30, 2000,
compared to $103.4 million for the six months ended June 30, 1999, a decrease of
4.4%. The cost per ton of operations and selling expenses for company-produced
and brokered coal for the six months ended June 30, 2000 was $24.53 compared to
$25.09 of such costs per ton for the six months ended June 30, 1999, a decrease
of 2.2%.
DEPRECIATION, DEPLETION AND AMORTIZATION. Depreciation, depletion and
amortization was approximately $8.8 million for both the six months ended June
30, 2000 and the six months ended June 30, 1999.
OTHER OPERATING EXPENSES. Other operating expenses for the six months
ended June 30, 2000 were $4.0 million compared to $7.4 million for the six
months ended June 30, 1999. Included in other operating expenses are general and
administrative expenses, financial restructuring fees, non-recurring charges,
and loss on impairment charges. General and administrative expenses decreased
15.4%, from $3.9 million for the six months ended June 30, 1999 to $3.3 million
for the same period in 2000. This decrease resulted from the elimination of
certain overhead costs associated with the use of contract miners at our deep
mining operations. Financial restructuring fees of $521,000 were recorded in the
six months ended June 30, 2000 related to the restructuring of our senior notes.
We also recorded $158,000 of non-recurring severance charges in the first six
months of 2000 related to management changes. There were no such financial
restructuring fees or non-recurring charges recorded in the first six months of
1999. During the first six months of 1999, the Company recorded a loss on
impairment of $1.1 million related to the discontinuance of the use of certain
software resulting from the addition of contract miners at our deep mine
operations and $2.4 million relating to certain properties located in Tazewell
County, Virginia. The Company has not recorded any such impairment losses during
the first six months of 2000.
INTEREST EXPENSE. Interest expense was $8.3 million for the six months
ended June 30, 2000 compared to $7.5 million for the six months ended June 30,
1999, an increase of 10.7%. 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.
9
<PAGE> 13
OTHER INCOME. Other income includes interest, gain or loss on sale of
fixed assets, royalties and miscellaneous income. Other income for the six
months ended June 30, 2000 was approximately $1.7 million compared to $1.4
million for the same period of 1999, an increase of approximately 21.4%. This
increase is primarily attributable to an increase in royalty income generated
from coal properties we lease to third parties.
INCOME TAXES. An income tax benefit of $580,000 was recorded for the
six months ended June 30, 2000, to reflect the deferred tax benefit which
resulted from the cancellation of indebtedness income during the financial
restructuring. An income tax benefit of $200,000 was recorded for the six months
ended June 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 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 the Company believes that
it is more likely than not that these assets will not be realized.
NET LOSS. For the six months ended June 30, 2000, our net loss was $6.0
million compared to a net loss of $12.3 million for the six months ended June
30, 1999, a decrease of approximately 51.2%.
DIVIDEND RESTRICTIONS AFFECTING SUBSIDIARIES
As of June 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 July 31, 2000, revolving
credit availability under the loan agreement was approximately $14.1 million.
Thus, the maximum amount which the borrowers could have advanced to us on that
date was approximately $9.1 million.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS
Information about market risks for the six-month period ended June 30,
2000 does not differ materially from that discussed in Item 7A of our Form 10-K
for the year ended December 31, 1999.
10
<PAGE> 14
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
No material litigation has been filed against us during the six months
ended June 30, 2000. In addition, there were no material changes during the
second 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
On or about August 4, 2000, six funds controlled by First Reserve
Corporation (collectively, the "Funds") sold a total of 1,901 shares of common
stock of Anker Coal Group, Inc. (the "Company") to members of the Company's
management. Of the 1,901 shares sold by the Funds, 1,520 shares were purchased
by William D. Kilgore, Jr., Chairman and CEO of the Company, and the remaining
381 shares were purchased by the members of the Company's management
participating in the Company's incentive stock plan. The Funds sold this common
stock to management for nominal consideration as an incentive to continue
implementing the Company's restructuring and improving its financial
performance.
As a result of this transaction, the Funds now own 49.5% of the
Company's outstanding common stock, Mr. Kilgore owns 21.5% of the common stock,
and the members of the Company's management participating in this sale of stock
collectively own 7.1% of the common stock (including shares previously issued to
them under the Company's stock incentive plan). Following this sale, on August
9, 2000, Thomas R. Denison resigned as a director of the Company. Mr. Denison
served as a representative of the Funds on the Company's board of directors.
In connection with the sale of common stock to Mr. Kilgore, the Company
and Mr. Kilgore entered into an amendment to his employment agreement. Under the
original agreement, Mr. Kilgore was entitled to a bonus which included, among
other incentives, stock options for 5% of the Company's common stock if certain
financial targets were achieved. The amendment eliminates the stock options from
the incentive bonus formula.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
Exhibit number 10.34.1, Amendment No. 1 Employment Agreement between
Anker Energy Corporation and William D. Kilgore, Jr., dated as of
July 25, 2000.
Exhibit number 10.41, Form of Incentive Compensation Letter, is filed
herewith.
Exhibit number 27, Financial Data Schedule, is filed herewith.
(b) Reports on Form 8-K.
Form 8-K, dated May 12, 2000, reporting on Item 5, regarding our
financial results for the quarter ended March 31, 2000.
11
<PAGE> 15
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: August 14, 2000
12
<PAGE> 16
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: August 14, 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 GROUP, INC.
By: /s/ P. Bruce Sparks
----------------------
Title: President
By: /s/ David D. Struth
----------------------
Title: Treasurer
Dated: August 14, 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 POWER SERVICES, INC.
By: /s/ Richard B. Bolen
---------------------------
Title: President
By: /s/ David D. Struth
---------------------------
Title: Treasurer
Dated: August 14, 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 VIRGINIA MINING COMPANY, INC.
By: /s/ Gerald Peacock
--------------------------------
Title: President
By: /s/ David D. Struth
--------------------------------
Title: Treasurer
Dated: August 14, 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 WEST VIRGINIA MINING COMPANY, INC.
By: /s/ Gerald Peacock
-------------------------------------
Title: President
By: /s/ David D. Struth
-------------------------------------
Title: Treasurer
Dated: August 14, 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.
BRONCO MINING COMPANY, INC.
By: /s/ P. Bruce Sparks
------------------------
Title: President
By: /s/ David D. Struth
------------------------
Title: Treasurer
Dated: August 14, 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.
HAWTHORNE COAL COMPANY, INC.
By: /s/ Charles C. Dunbar
----------------------------
Title: President
By: /s/ David D. Struth
----------------------------
Title: Treasurer
Dated: August 14, 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.
HEATHER GLEN RESOURCES, INC.
By: /s/ Jeffrey P. Kelley
---------------------------
Title: President
By: /s/ David D. Struth
---------------------------
Title: Treasurer
Dated: August 14, 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.
JULIANA MINING COMPANY, INC.
By: /s/ Gerald Peacock
-------------------------
Title: President
By: /s/ David D. Struth
-------------------------
Title: Treasurer
Dated: August 14, 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.
KING KNOB COAL CO., INC.
By: /s/ David D. Struth
--------------------------------
Title: President and Treasurer
Dated: August 14, 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.
MARINE COAL SALES COMPANY
By: /s/ Larry F. Kaelin
----------------------------
Title: President
By: /s/ David D. Struth
----------------------------
Title: Treasurer
Dated: August 14, 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.
MELROSE COAL COMPANY, INC.
By: /s/ David D. Struth
--------------------------------
Title: President and Treasurer
Dated: August 14, 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.
NEW ALLEGHENY LAND HOLDING COMPANY, INC.
By: /s/ David D. Struth
-------------------------------------
Title: President and Treasurer
Dated: August 14, 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.
PATRIOT MINING COMPANY, INC.
By: /s/ Gerald Peacock
--------------------------
Title: President
By: /s/ David D. Struth
--------------------------
Title: Treasurer
Dated: August 14, 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.
SIMBA GROUP, INC.
By: /s/ P. Bruce Sparks
--------------------------
Title: President
By: /s/ David D. Struth
--------------------------
Title: Treasurer
Dated: August 14, 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.
UPSHUR PROPERTY, INC.
By: /s/ Jeffrey P. Kelley
--------------------------
Title: President
By: /s/ David D. Struth
--------------------------
Title: Treasurer
Dated: August 14, 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.
VANTRANS, INC.
By: /s/ David D. Struth
-------------------------------
Title: President and Treasurer
Dated: August 14, 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.
VINDEX ENERGY CORPORATION
By: /s/ Gerald Peacock
--------------------------
Title: President
By: /s/ David D. Struth
--------------------------
Title: Treasurer
Dated: August 14, 2000
30
