SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): Aug. 11, 1995
Westmoreland Coal Company
(Exact name of registrant as specified in its charter)
Delaware 0-752 23-1128670
(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification No.)
incorporation)
700 The Bellevue, 200 South Broad Street
Philadelphia, Pennsylvania 19102
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (215) 545-2500
Item 5. Other Events.
On August 11, 1995, a letter was mailed to the Company's
shareholders.
Item 7. Exhibits.
Letter to shareholders dated August 11, 1995.
Press release dated June 20, 1995.
Press release dated July 21, 1995.
Press release dated July 26, 1995.
EXHIBIT INDEX
Sequentially
Exhibit Description of Exhibit Numbered
Number Page
1 Letter to shareholders dated August 11, 1995 4
2 Press release dated June 20, 1995 10
3 Press release dated July 21, 1995 11
4 Press release dated July 26, 1995 19
SIGNATURE
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.
WESTMORELAND COAL COMPANY
Date: August 22, 1995 By:_____________________________
Theodore E. Worcester
Vice President and General Counsel
August 11, 1995
Dear Fellow Shareholder:
Continuing our policy of trying to provide you directly with timely
information about Westmoreland's progress and status, I would like to update
you on a number of developments since our June 6, 1995 Annual Shareholders
Meeting. By the way, you should have received mailed copies of my
presentation at the Shareholders Meeting. If you or anyone else you know who
is interested have not, please let us know and we will get a copy off
promptly. We hear that some people who hold our stock in street name have
not been receiving our communications, and we want to be sure that all who
are interested do get our letters. The problem, however, is a little like
asking the people in the back row if they can hear you!
Second Quarter Financial Results
We have recently released our second quarter 1995 financial results and filed
Form 10-Q. A copy of the news release which summarizes the second quarter
results is attached, but let me recap certain key items for you here.
Westmoreland's net loss was $10.4 million in the second quarter of 1995
compared to a net loss of $1.7 million in the second quarter of 1994. Net loss
applicable to common shareholders was $11.7 million, compared to a net loss
applicable to common shareholders of $2.9 million in the second quarter of
last year. The difference between net loss and net loss applicable to common
shareholders is the recognition of dividends payable to preferred
shareholders, even if a preferred stock dividend was not declared.
The Company's operating loss was $10.8 million in the second quarter,
compared to an operating loss of $0.6 million in the same period in 1994, and
due primarily to further significant earnings deterioration at the Virginia
Operations. Coal Operations lost $13.6 million in the current period
compared to an operating loss of $0.3 million in the 1994 period. These
losses were offset somewhat by operating income of $2.8 million from
Westmoreland Energy, Inc., our independent power subsidiary, an improvement
of $3.1 million over the second quarter of 1994.
Year to date results and other important information may be found in the
attached second quarter news release.
Coal Operations
Contributing to the $13.3 million of increased losses for the Coal Operations
segment was, of course, the elimination of earnings of Criterion Coal Company
sold in December, 1994 and the Hampton Division sold in January, 1995
($4.1 million of operating income in the second quarter of 1994 from the two
properties). But the elimination of those earnings underscores, as we have
said before, the substantial problem the Virginia Division represents for the
Company and highlights the further earnings deterioration at the Virginia
Division totaling $9.6 million in the second quarter (an operating loss of
$8.4 million in the second quarter of 1995 compared to operating income of
$1.2 million in the second quarter of 1994). This deterioration was related
to higher per ton production costs, reduced sales and increased depreciation
expense. These in turn were driven by worsened mining conditions, the
deferral of certain above market priced shipments, and accelerated
recognition of the depreciating value of the Virginia Division's assets in
light of the expiration of the high priced Duke tonnage in 1996.
As we stated in the Annual Report and then reiterated at the Annual
Meeting, such losses cannot be tolerated, and accordingly, we had been exploring
options with various parties that could allow us to preserve the remaining value
of the Virginia Division's assets. In light of second quarter results, we
announced on June 20, 1995 that we would idle some or all of the Virginia
Division and lay off substantially all of its employees beginning August 23,
1995 while we pursued these other options. A copy of the June 20 news release
announcing these layoffs pursuant to the federal WARN Act is attached.
Sale of Duke Power Coal Supply Agreement
On July 31, 1995 we reached an agreement with Duke Power Company
whereby Duke will buy out the remaining term of the coal supply agreement which
we originally entered into with them on January 1, 1986. Since Duke was the
Virginia Division's sole remaining customer, we promptly idled all operations
at the Division. Pursuant to the WARN Act, all affected employees will be
paid through August 23, 1995, and will receive severance benefits. The
Company expects to defray a significant cash portion of this severance cost
by offering an Early Retirement Incentive Program to non-classified employees.
Most of the cost of the Program will be funded from the non-classified
employee pension plan surplus. Westmoreland will receive approximately $23
million in cash from Duke when the contract sale closes which is now expected
in mid-August.
Remaining Virginia Division Assets
We also identified a number of parties who are interested in other Virginia
Division assets. On July 31, 1995 we announced that we had entered into
negotiations with A.T. Massey Coal Company, Inc., concerning the sale of the
remaining assets of the Virginia Division and Pine Branch Mining Incorporated
("Pine Branch"), a small surface mining subsidiary which provided coal to the
Division. These discussions are ongoing as we write this letter, and it is
our hope that the discussions with A.T. Massey or others will result in a
definitive agreement of sale in the near future.
The benefits to the Company from the sale of the Duke Agreement and the
Virginia Division assets will be the elimination of the operating losses we have
endured from the operations there, the transfer of certain liabilities, and the
generation of additional cash for the Company's cash needs and for
reinvestment. They do not, however, resolve our heritage cost problem.
More on this below.
Recognition of Liabilities
The idling of the Virginia Division in connection with the sale of its assets
will require Westmoreland to recognize, for accounting purposes, certain
liabilities. As previously discussed in the 1994 Form 10-K and Annual Report,
the second quarter 1995 Form 10-Q, and in my discussion with you at the 1995
Annual Shareholders Meeting, the recognition of these liabilities will be
material and may prevent the payment of preferred dividends, possibly as early
as October 1, 1995. However, the total amount of the liabilities to be
recognized and their impact on shareholders' equity cannot be definitively
determined until, among other things, the ongoing negotiations for the sale
of the remaining Virginia Division assets and Pine Branch are completed.
We will continue to keep you advised regarding this issue.
Liquidity
We noted in the attached second quarter news release that continuing
increased losses at the Virginia Division on top of the ongoing cash costs
related to post-retirement medical and workers' compensation benefits had
created a significant drain on the Company's operating cash. We indicated that
this, coupled with the scheduled funding requirements related to the Roanoke
Valley II independent power project in October and the anticipated near term
sale of Cleancoal Terminal Company, could result in the Company's liquidity
resources becoming inadequate to meet operating requirements through December
31, 1995.
We now expect the sale of the Duke contract, the idling of the Virginia
Division, and the anticipated sale of its remaining assets will resolve this
issue for the near term. However, as I pointed out in detail at the Annual
Meeting, the Company still faces an annual cash shortfall going forward driven
by its substantial heritage costs, i.e., post-retirement medical and workers'
compensation benefits. The projected shortfall has increased from $15-$20
million to $18-$23 million per year as a result of the following two new
developments.
Retiree Health Benefit Plan Security. We have recently been
advised by the Trustees of the 1992 United Mine Workers of America
Benefit Plans that pursuant to The Coal Industry Retiree Health
Benefit Act of 1992 (the "Coal Act"), coal companies will be required to
provide security for future payments to the UMWA Benefit Trust
Fund. The Trustees have set the level of security to be provided by
Westmoreland at approximately $22 million, to be provided by bond,
letter of credit, or cash. The Company has elected to create a cash
escrow security fund by depositing approximately $2.5 million per
year for 9 years, plus an annual finance fee of 2.5% on the remaining
unfunded balance. The first installment, estimated to be
approximately $2.9 million, will be due in January, 1996. While this
additional cash payment is a significant burden on Westmoreland, it
represents the least onerous method available for funding this
requirement.
Increased Workers' Compensation Bond. We have also been
notified by the Commonwealth of Virginia that we will be required to
post an additional $750,000 of surety bonds to continue the existing
self-insurance program for Virginia workers' compensation claims.
These surety bonds must be obtained by September, 1995. This
requirement, like the Benefit Trust Fund security requirement
discussed above, places an additional cash burden on the Company.
Westmoreland Energy
Our independent power subsidiary, Westmoreland Energy Inc. ("WEI")
continues to focus on increasing the value of existing operating projects and
growing through new development opportunities. The existing projects'
management are completing long-term strategic plans aimed at revenue
enhancement and cost reduction. Those plans evaluate and recommend the
marketing, operating and financing solutions that can maximize value during this
time of change from a regulated to a competitive electrical power market.
WEI is also implementing a strategy for both short and long-term growth. Of
highest interest are projects where the synergy of power production can be
blended with that of coal mining. Using its solid fuel expertise, WEI is
developing a waste wood and waste coal facility in Illinois which could begin
construction in the next few years. WEI continues to work on a long-term
mine-mouth merchant plant concept. The low cost of this type of plant makes
it feasible during this time of industry restructuring.
On August 9, 1995 The Roanoke Valley I Partnership received a favorable
decision from the Circuit Court of the City of Richmond, Virginia in the dispute
between the Partnership and Virginia Power over the interpretation of the Forced
Outage Day provisions in the power sales agreement between the parties. The
Court denied Virginia Power's motion to dismiss the Partnership's amended
complaint. This decision reversed an earlier decision in which the Court had
granted a motion to dismiss an earlier complaint filed by the Partnership.
This case will now proceed with pre-trial preparations. We continue to
believe our position is correct and we will keep you advised of developments.
Future Plans
Naturally, we intend to rigorously manage both our retiree medical costs and
our workers' compensation claims to minimize, wherever possible, the cash
demands created by these obligations. We continue to look for new and
innovative ways to do this.
We are also working hard to reduce other costs and improve the performance
of our solid operating assets. Relocation of a downsized corporate headquarters
to less expensive and more strategic offices is one example and is on track for
completion by mid-September.
Most crucial, however, is the rapid acquisition of new sources of significant
income. This presents a formidable challenge to the Company, comprised of
identifying appropriate opportunities and then finding the capital to finance
them, all on a very expedited basis. While this work has begun, it will take
all our resources to achieve once the Virginia Division transactions are closed.
As previously reported, we must take all these steps in the effort to generate
enough cash to meet existing requirements through 1996 and beyond. It is
impossible to assure you at this time that this can be accomplished, but we are
doing everything we can to make it happen.
Two New Directors
In a related development, we were pleased to announce that the Board of
Directors elected Thomas W. Ostrander and James W. Sight to the Board at its
regularly scheduled meeting on July 26, 1995. Messrs. Ostrander and Sight bring
skills particularly relevant to the challenges currently faced by the Company,
as more fully set forth in the attached copy of the news release issued
following their election.
The election of Messrs. Ostrander and Sight is the initial fulfillment of the
plan that we formulated in 1992 and further outlined in the 1994 Annual Report
and the 1995 Proxy Statement. The plan temporarily enlarges the Board from
seven to nine members and provides for a two year transition period (1995-1997)
during which two of our current Directors will reach mandatory retirement age
each year,
and be succeeded by two additional new Directors. By the 1997 Annual
Shareholders Meeting, the Board will once again have a total of seven members.
We continue to value the support you have given us as we work through our
strategy to turn the Company around and secure its future. While we face
additional challenges, we have accomplished significant steps toward our goals.
Your continued support is very important to us, and as always, we encourage you
to contact us to discuss matters of interest to you regarding your Company.
Sincerely,
Christopher K. Seglem
--------------------------------------------------------------------------------
Westmoreland Announces Cutbacks; Company
Seeks to Eliminate Losses in Virginia
--------------------------------------------------------------------------------
Philadelphia, PA -- June 20, 1995 -- Westmoreland Coal Company (NYSE:WCX)
yesterday issued notices, pursuant to the Worker Adjustment and Retraining
Notification ("WARN") Act, to its employees and to the employees of its wholly
owned subsidiary, Pine Branch Mining Incorporated ("Pine Branch"), working in
LeeCounty and Wise County, Virginia that on August 23, 1995, it will close the
Holton Low Splint Mine, which employs 25 people, and that during the fourteen
day period beginning August 23, 1995, it expects to implement a further
significant layoff at its other Virginia facilities. Although the notices were
issued for all Westmoreland and Pine Branch employees working in Virginia,
the letters of notification, which were signed by Ronald W. Stucki, Senior
Vice President-Operations, also state: "The Company is working on tentative
plans which could result in the retention of a reduced workforce to continue
to operate certain facilities." Mr. Stucki also stated today: "During the
last quarter of 1994 and the first quarter of 1995, Westmoreland lost a
combined total of over $13 Million from its Virginia Division and Pine Branch
operations. We are hopeful that during the next sixty days we will be able to
reach an agreement, either with our employees or with a third party purchaser of
our Virginia assets, on terms which will allow for the continued operation of
our facilities. However, we issued these notices yesterday because we wanted
to prepare our employees for certain scenarios among several alternatives
which are currently under consideration and to comply with our obligations
under the WARN Act. We are working hard to develop the best alternative
available for Westmoreland's long-term success and to implement it promptly.
We will keep our employees and the community informed of additional information
on this issue, as soon as it become available."
###
For information contact: R. Page Henley, Jr. (215) 545-2500
-------------------------------------------------------
Westmoreland Announces
Second Quarter 1995 Results
-------------------------------------------------------
Philadelphia, PA -- July 21, 1995 -- Westmoreland Coal Company (NYSE:WCX)
today announced its second quarter 1995 financial results.
Second Quarter 1995 Financial Results
Westmoreland Coal Company's net loss was $10.4 million in the second quarter
of 1995 compared to a net loss of $1.7 million in the second quarter of 1994.
Net loss applicable to common shareholders was $11.7 million, or a loss of $1.68
per share, in the second quarter of 1995 compared to a net loss applicable to
common shareholders of $2.9 million, or a loss of $0.42 per share, in the
second quarter of 1994. The difference between net loss and net loss applicable
to common shareholders is the result of the recognition of dividends payable to
preferred shareholders, even if a preferred stock dividend was not declared.
The Company's operating loss was $10.8 million in the second quarter of 1995
compared to a $0.6 million operating loss in the same period in 1994.
Operating income for the Independent Power Operations segment improved by $3.1
million ($2.8 million of operating income in the second quarter of 1995
compared to an operating loss of $0.3 million in the second quarter of 1994).
The operating loss of the Coal Operations segment was $13.6 million in the
current period compared to an operating loss of $0.3 million in the 1994 period.
Major factors contributing to the $13.3 million of increased losses for the
Coal Operations segment included (1) earnings deterioration at the Virginia
Division totalling $9.6 million (an operating loss of $8.4 million in the second
quarter of 1995 compared to operating income of $1.2 million in the second
quarter of 1994) and (2) the elimination of earnings of Criterion Coal Company
sold in December 1994 and the Hampton Division sold in January 1995 ($4.1
million of operating income in the second quarter of 1994 from both properties).
The deterioration at the Virginia Division is related to reduced sales, higher
per ton production costs and increased depreciation expense.
Coal revenues in the second quarter of 1995 were $39.5 million from 2.0 million
tons sold compared to $107.0 million from 4.3 million tons sold in the second
quarter of 1994. The decrease was due to (1) the sale of the assets of
Criterion Coal Company in 1994 and the Hampton Division early in 1995,
(2) reduced sales by the Virginia Division and (3) a significant reduction in
brokered coal sales and the elimination of export coal sales.
See the attached Financial Highlights for additional information.
First Half 1995 Financial Results
Westmoreland Coal Company's net loss was $9.0 million in the first half of 1995
compared to a net loss of $6.5 million in the second half of 1994. Net loss
applicable to common shareholders was $11.4 million, or a loss of $1.64 per
share, in the first half of 1995 compared to a net loss applicable to common
shareholders of $8.9 million, or a loss of $1.28 per share, in the first half of
1994.
Results for the first half of 1995 included $9.5 million of gains on asset
sales. The Company's operating loss was $15.1 million higher in the 1995 period
than in 1994 mainly due to (1) $16.6 million of increased operating losses at
the Virginia Division and (2) the elimination of earnings of Criterion Company
and the Hampton Division ($6.4 million in the first half of 1994 from both
properties). This was offset by $7.8 million of improvement in operating
income at the Independent Power Operations segment.
Coal revenues for the first half of 1995 were $80.3 million from 4.0 million of
tons sold compared to $205.2 million from 8.0 million tons sold in the first
half of 1994.
Net cash used by operating activities was $7.7 million for the first half of
1995compared to net cash provided by operating activities of $13.0 million in
the first half of 1994.
See the attached Financial Highlights for additional information.
Liquidity Outlook
Due to the continuing losses at the Virginia Division, the ongoing cash costs
related to post retirement medical and workers compensation benefits, the
scheduled funding requirements related to the Roanoke Valley II independent
power project and the sale of Cleancoal Terminal Company, the Company's
liquidity resources would be inadequate to meet operating requirements
through December 31, 1995. Accordingly, management plans to address this
near-term problem by reducing costs and selling all or part of the Virginia
Division's assets and/or related businesses. Christopher K. Seglem,
Westmoreland's President and Chief Executive Officer, reported at the 1995
Annual Meeting on June 6, 1995, "As the core mining property, Virginia has
been the key variable for the Company for many years....Further losses are not
tolerable. One way or another the value of Virginia's assets must be put to
work generating cash for years to come....Over the past several months we have
met with employees, the United Mine Workers of America, Penn Virginia, Duke
Power Company, other customers, mining contractors and other operators to
determine our options, values, and the best course of action....We are now
cautiously optimistic that some reasonable value can be achieved with Virginia
for the near-term. We intend to move forward aggressively on this."
As previously reported, the Company will be required to take additional steps,
such as the acquisition of new income-producing properties, to generate enough
cash to meet its requirements through 1996 and beyond.
The Company, however, cannot give assurances at this time that these steps can
be accomplished.
Second Quarter 10-Q Filed
Westmoreland today filed its second quarter Form 10-Q with the Securities and
Exchange Commission. Shareholders interested in receiving a copy of the Form
10-Q can request a copy from Westmoreland Coal Company by writing to the
Company at the following address: Westmoreland Coal Company, Shareholder
Relations Department, 700 The Bellevue, 200 South Broad Street, Philadelphia,
PA 19102.
###
For information contact R. Page Henley, Jr. (215) 545-2500.
<TABLE>
<CAPTION>
WESTMORELAND COAL COMPANY
Financial Highlights - Earnings
(In Thousands Except Per Share Data)
Three Months Six Months
Ended June 30 Ended June 30
1995 1994 (1) 1995 1994 (1)
<S> <C> <C> <C> <C>
Operating income (loss)
Coal Operations:
Virginia Division $ (8,390) (2) $ 1,168 $ (15,920) (2) $ 673
Pine Branch Mining Incorporated (173) (501) (367) (1,681)
Westmoreland Resources, Inc. 627 507 1,326 1,291
Westmoreland Coal Sales Company (621) (64) (100) 563
Net corporate expenses (2,286) (2,574) (5,618) (3) (4,832)
West Virginia - Idled Operations (2,187) (2,631) (4,738) (4,906)
Hampton Division - 611 - 581
Criterion Coal Company - 3,456 - 5,800
Cleancoal Terminal Company (597) (279) (701) (709)
Total Coal Operations (13,627) (307) (26,118) (3,220)
Independent Power Operations:
Westmoreland Energy, Inc. 2,789 (4) (292) 5,239 (4) (841)
WEI - recognition of deferred income - - 1,750 -
Total Independent Power Operations 2,789 (292) 6,989 (841)
Operating loss $ (10,838) $ (599) $ (19,129) $ (4,061)
Gains on the sale of assets $ 23 $ - $ 9,538 (5) $ -
Net loss $ (10,443) (1,710) $ (8,965) $ (6,498)
Less preferred stock dividends:
Declared 1,222 - 2,444 1,222
In arrears - 1,222 - 1,222
1,222 1,222 2,444 2,444
Net loss applicable to
common shareholders $ (11,665) $ (2,932) $ (11,409) $ (8,942)
Net loss per share
applicable to common shareholders $ (1.68) $ (.42) $ (1.64) $ (1.28)
<FN>
(1) Restated to conform with current classifications and to reflect Westmoreland
Energy, Inc. as a continuing operation.
(2) Second quarter comparison adversely affected by higher per ton production
costs, 455,000 less tons sold an
$2.2 million of increased depreciation expense. First half comparison
adversely affected by higher per ton production
costs, 664,000 less tons sold and $ 3.8 million of increased depreciation
expense.
(3) Includes a $1.4 million non-cash charge for an early retirement program
related to the relocation of the corporate office.
(4) Second quarter and first half comparisons were positively impacted by the
mid-1994 start-up of ROVA I, Rensselaer and Ft. Lupton projects
(5) Includes $ 9.1 million from the sale of the Hampton Division.
The above quarterly information is prepared from the accounts of the Company
without audit.
</FN>
</TABLE>
<TABLE>
<CAPTION>
Westmoreland Coal Company
Financial Highlights - Coal Statistics
(In Thousands)
Three Months Ended Six Months Ended
June 30 June 30
1995 1994 1995 1994
<S> <C> <C> <C> <C>
TONS SOLD
Inland 2,029 3,860 3,974 7,090
Export - 412 - 908
Total Tons Sold 2,029 4,272 3,974 7,998
INLAND TONS SOLD
Virginia Division * 794 1,249 1,657 2,321
Westmoreland Resources, Inc. 1,141 1,089 2,147 2,084
Hampton Division - 265 - 522
Criterion Coal Company - 568 - 1,044
Total Westmoreland Operations 1,935 3,171 3,804 5,971
From Unaffiliated Producers 94 689 170 1,119
Total Inland Tons Sold 2,029 3,860 3,974 7,090
EXPORT TONS SOLD
Hampton Division - 94 - 143
Criterion Coal Company - 2 - 2
From Unaffiliated Producers - 316 - 763
Total Export Tons Sold - 412 - 908
TOTAL TONS SOLD 2,029 4,272 3,974 7,998
COAL SOURCES
Virginia Division * 794 1,249 1,657 2,321
Westmoreland Resources, Inc. 1,141 1,089 2,147 2,084
Hampton Division - 359 - 665
Criterion Coal Company - 570 - 1,046
Total Westmoreland Operations 1,935 3,267 3,804 6,116
From Unaffiliated Producers 94 1,005 170 1,882
Total Coal Sources 2,029 4,272 3,974 7,998
Average revenue per ton sold:
Eastern Operations $ 35.50 $ 31.27 $ 35.64 $ 34.41
Westmoreland Resources, Inc. 6.96 6.85 7.05 7.03
Weighted Average $ 19.45 $ 25.05 $ 20.20 $ 25.65
* Includes tons:
Sold by Pine Branch
Mining Incorporated 61 63 131 98
Purchased from Unaffiliated
Producers 164 207 415 359
<FN>
The above quarterly information is prepared from the accounts of the Company
without audit.
</FN>
</TABLE>
<TABLE>
<CAPTION>
Westmoreland Coal Company
Consolidated Statements of Income
(In Thousands Except Per Share Data)
Three Months Ended Six Months Ended
June 30 June 30
1995 1994* 1995 1994*
<S> <C> <C> <C> <C>
Revenues:
Coal $ 39,468 $ 107,003 $ 80,256 $ 205,163
Independent Power 3,786 1,759 8,681 2,833
43,254 108,762 88,937 207,996
Costs and expenses:
Cost of coal sold 43,602 97,358 88,160 188,625
Cost of sales-Independent Power 629 684 1,007 1,311
Depreciation, depletion
and amortization 5,600 4,303 10,639 8,554
Selling and administrative 4,261 7,016 8,260 13,567
54,092 109,361 108,066 212,057
Operating loss (10,838) (599) (19,129) (4,061)
Gains on the sales of assets 23 - 9,538 -
Interest expense (339) (1,189) (681) (2,282)
Interest and other income 1,119 783 2,258 1,314
Loss before income tax expense
(benefit) and minority interest (10,035) (1,005) (8,014) (5,029)
Income taxes (benefit):
Current 349 328 844 841
Deferred (110) 268 (247) 324
239 596 597 1,165
Minority interest 169 109 354 304
Net loss (10,443) (1,710) (8,965) (6,498)
Less preferred stock dividends:
declared 1,222 - 2,444 1,222
in arrears - 1,222 - 1,222
1,222 1,222 2,444 2,444
Net loss applicable
to common shareholders $ (11,665) $ (2,932) $ (11,409) $ (8,942)
Net loss per share applicable to
common shareholders $ (1.68) $ (.42) $ (1.64) $ (1.28)
Weighted average number of
common shares outstanding 6,961 6,955 6,960 6,955
<FN>
* Restated to reflect Westmoreland Energy, Inc. as a continuing operation.
The above quarterly information is prepared from the accounts of the Company
without audit.
</FN>
</TABLE>
<TABLE>
<CAPTION>
Westmoreland Coal Company
Consolidated Statements of Cash Flows
(In Thousands)
Six Months Ended June 30
1995 1994*
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (8,965) $ (6,498)
Adjustments to reconcile net loss to net cash
provided (used) by operating activities:
Gains on the sales of assets (9,538) -
Equity earnings from independent power projects (6,076) (2,383)
Recognition of development fee income (1,750) -
Cash distributions from independent power projects 5,087 1,105
Depreciation, depletion and amortization 10,639 8,554
Decrease in accrual for pneumoconiosis benefits (195) (650)
Decrease in notes and accounts receivables, net
of allowance for doubtful accounts 9,668 14,912
Increase in inventories 2,018 2,900
Decrease in accounts payable and accrued expenses (11,557) (10,511)
Increase in accrual for postretirement
medical costs 3,037 3,683
Other (41) 1,908
Net cash provided (used) by operating activities (7,673) 13,020
Cash flows from investing activities:
Fixed assets additions (342) (2,617)
(Increase) decrease in notes receivable 1,592 (868)
Proceeds from sales of assets 10,131 85
LG&E support fee payment - (3,563)
Net cash provided (used) by investing activities 11,381 (6,963)
Cash flows from financing activities:
Hampton lease buyout premium (1,103) -
Repayment of long-term debt (2,132) (6,159)
Cash deposits to support surety bonds - (4,430)
Dividends paid to shareholders (1,222) (3,144)
Other - 4
Net cash used in financing activities (4,457) (13,729)
Net increase (decrease) in cash and
cash equivalents (749) (7,672)
Cash and cash equivalents, beginning of period 15,453 24,262
Cash and cash equivalents, end of period $ 14,704 $ 16,590
<FN>
* Restated to conform with current classifications and to reflect
Westmoreland Energy, Inc. as a continuing operation.
The above quarterly information is prepared from the accounts of the Company
without audit.
</FN>
</TABLE>
<TABLE>
<CAPTION>
Westmoreland Coal Company
Condensed Consolidated Balance Sheets
(In Thousands)
June 30 Dec. 31
1995* 1994
<S> <C> <C>
Assets
Current Assets:
Cash and cash equivalents $ 14,704 $ 15,453
Receivables, net 14,380 25,329
Inventories 6,311 8,604
Assets of Cleancoal Terminal Co. held for sale 5,848 -
Other current assets 890 952
Total current assets 42,133 50,338
Net property, plant and equipment 78,929 89,728
Assets of Cleancoal Terminal Co. held for sale - 6,149
Investment in Independent Power Projects 44,035 43,046
Investment in DTA 19,642 20,375
Other assets 19,790 20,103
Total assets $ 204,529 $ 229,739
Liabilities and Shareholders' Equity
Current Liabilities:
Current installments of long-term debt $ 11,074 $ 3,561
Accounts payable and accrued expenses 24,641 35,720
Accrual for postretirement medical costs 8,075 8,075
Preferred dividends payable 1,222 -
Taxes on income 4,123 4,463
Total current liabilities 49,135 51,819
Long-term debt 2,725 12,370
Accrual for pneumoconiosis benefits 14,809 15,004
Accrual for workers' compensation 22,174 21,771
Accrual for postretirement medical costs 39,442 36,405
Other liabilities 11,789 16,613
Deferred income taxes 14,485 14,732
Minority interest 10,655 10,301
Shareholders' equity 39,315 50,724
Total liabilities and shareholders' equity $ 204,529 $ 229,739
<FN>
* Prepared from the accounts of the Company without audit.
</FN>
</TABLE>
-------------------------------------------------------------
Westmoreland Coal Company
Elects Two New Directors
--------------------------------------------------------------
Philadelphia PA - July 26, 1995 - Westmoreland Coal Company (NYSE:WCX)
announced that Thomas W. Ostrander and James W. Sight were elected to its
Board of Directors at the Company's regular Board Meeting today.
Mr. Ostrander is a Managing Director of Salomon Brothers Inc where he
oversees the Eastern Industrial Coverage Group of Salomon Brothers'
Investment Bank. He was formerly associated with Kidder, Peabody & Co.,
Inc., from 1976 to 1989 where he held several positions including Managing
Director from 1986 to 1989 when he joined Salomon Brothers. He was elected
to Kidder, Peabody's Board of Directors in 1986 before it was acquired by
General Electric. He began his career with Ernst & Ernst in 1972 where he
served until 1975.
A 1972 graduate of the University of Michigan where he received a Bachelor of
Arts degree cum laude in Economics and Accounting, Mr. Ostrander received a
Master of Business Administration degree With Distinction from the Harvard
Business School in 1976. He and his wife and three children reside in New
York City and Upper Brookville, Long Island.
Mr. Sight is an active investor in public markets and shareholder of
Westmoreland Coal Company. He was brought to the Company's attention by
several of its largest preferred shareholders. He specializes in working
closely with the management of companies in which he has invested to assist
in the enhancement of shareholder value including serving as a creditor
committee member and as a director of public companies engaged in turnaround
efforts.
He is a 1977 graduate of the Wharton School of Economics of the University of
Pennsylvania. He resides in Mission, Kansas.
Christopher K. Seglem, President and Chief Executive Officer of Westmoreland
said, "We are very pleased that two such capable men as Tom Ostrander and
Jim Sight have agreed to join Westmoreland's Board. Together they bring a
wealth of skill and experience which will be of great value to the Company as
it continues its efforts to restructure."
Tom Ostrander's investment banking expertise will greatly assist us as we
proceed to evaluate acquisition opportunities and obtain necessary financing.
Jim Sight's experience with companies in work-out situations will clearly
benefit all shareholders as we work to turn the Company around."
For Information Contact: R. Page Henley, Jr. (215) 545-2500
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