WESTMORELAND COAL CO
8-K, 2000-03-17
BITUMINOUS COAL & LIGNITE MINING
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                                    Form 8-K

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D. C. 20549

                       PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

                Date of Report(Date of earliest event reported):
                                  March 17, 2000


                            WESTMORELAND COAL COMPANY
                            -------------------------
             (Exact name of registrant as specified in its charter)


          DELAWARE                       0-752                    23-1128670
          --------                       -----                    ----------
(State or other jurisdiction       (Commission File           (I.R.S. Employer
    of incorporation or                  Number              Identification No.)
       organization)


2 North Cascade Avenue, 14th Floor, Colorado Springs, Colorado       80903
- --------------------------------------------------------------       -----
(Address of principal executive offices)                          (Zip Code)

Registrant's telephone number,
   including area code:                            719-442-2600
                                                   ------------

Item 5.     Other Events

     The Company reported net income from continuing  operations of $8.6 million
for the full  year  ended  December  31,  1999  compared  with net  income  from
continuing operations of $3.3 million for 1998.

Item 7. Financial Statements and Exhibits

            (c) Exhibits

            Exhibit 99.2 -- Press release dated March 17, 2000.


                                 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: March 17, 2000                /s/ Robert J. Jaeger
                                    --------------------------
                                    By: Robert J. Jaeger
                                    Senior Vice President-Finance
                                    and Treasurer

<PAGE 1>
Exhibit 99.2

                       ----------------------------------
                       Westmoreland Reports 1999 Year End
                           Net Income from Continuing
                           Operations of $8.6 Million
                       ----------------------------------

Colorado  Springs,  CO - March 17, 2000 -- Westmoreland Coal Company (AMEX: WLB)
today  reported net income from  continuing  operations  of $8.6 million for the
full year ended  December  31, 1999  compared  with net income  from  continuing
operations of $3.3 million for 1998.

Impacting 1999 results were an expected  decrease in revenues that resulted from
reduced sales at Westmoreland  Resources,  Inc. ("WRI") because of an eight week
scheduled maintenance outage at a major customer's facility,  anticipated losses
at Dominion Terminal  Associates ("DTA") due to a full year of continued decline
in the export coal  market,  an expected  reduction  in equity in earnings  from
Westmoreland  Energy compared to 1998 due to the sale of the Rensselaer Project,
and expenses of almost $22 million  connected with retiree medical  obligations,
or "heritage costs." Results for 1998 were negatively  impacted by approximately
$10.0 million in reorganization  fees, and a $12.2 million charge related to the
company's investment in DTA.

Positively  affecting  net  income  from  continuing  operations  was the strong
performance  of  the  Company's  remaining   independent  power  operations  and
significant  interest income.  Equity in earnings of independent  power projects
totaled over $34.0  million and included a gain of  approximately  $17.0 million
from the sale of the Rensselaer  project during the first quarter.  WRI produced
approximately 5.5 million tons of coal.

After  recognition  (for  financial  statement  presentation  purposes)  of $1.8
million for undeclared,  unpaid preferred  dividends,  net income  applicable to
common  shareholders  in 1999 was $6.9 million or $0.97 per share  compared to a
net loss applicable to common  shareholders of $11.4 million, or $1.64 per share
in 1998. Positively affecting the calculation of net income applicable to common
shareholders  were the two  tender  offers  for  preferred  (depositary)  shares
conducted  in 1999.  The tender  offers  resulted in the  retirement  of 366,292
shares of preferred  stock  (1,465,167  depositary  shares),  and a reduction of
accumulated  but  undeclared,  unpaid  preferred  dividends  from $20.8  million
immediately  prior to the first offering to $8.9 million  immediately  following
the  second  offering,  and a  reduction  of  the  ongoing  quarterly  preferred
dividends from $1.2 million to $444,000.  Shareholders'  equity was also reduced
by $27.8 million as a result of the two offerings.  As of December 31, 1999, the
Company had  shareholders'  equity of $3.1  million  compared  to  shareholders'
equity of $21.8 million as of December 31, 1998.

Cash used in operating  activities  was $23.5  million in 1999  compared to cash
provided  of  $55.9  million  in 1998.  1999  was  impacted  by the  payment  of
pre-petition liabilities,  catch-up payments for retiree health benefits and the
payment of reorganization and proxy contest expenses. In contrast, 1998 includes
cash received from the Rensselaer  restructuring at WEI and from the termination
of the salaried  pension plan,  and reflects the deferral of health care benefit
payments  during  bankruptcy.  Cash  used in  financing  activities  in 1999 was
primarily  for the  purchase  of  preferred  stock.  Consolidated  cash and cash
equivalents  as of December  31, 1999 totaled  $20.1  million,  including  $12.1
million at WRI.  Cash at WRI,  an  80%-owned  subsidiary,  is  available  to the
Company through  dividends.  The Company also had restricted cash, which was not
classified as cash or cash equivalents, of $14,896,000 at December 31, 1999.

Annual Meeting of Shareholders
- ------------------------------
The Company will hold its Annual Meeting of Shareholders beginning at 10:00 a.m.
on Friday,  June 9, 2000 at the Antlers  Adam's Mark Hotel in Colorado  Springs,
Colorado.  An Annual Report,  proxy  materials and voting  instructions  will be
mailed to all common  shareholders and holders of depositary  shares eligible to
vote at the meeting.

1999 Form 10-K
- --------------
Westmoreland  expects to file its 1999 Form 10-K with the SEC on or about  March
23,  2000.  Shareholders  may  request a copy by  contacting  the Company at the
following  address:  Westmoreland  Coal Company,  2 North Cascade  Avenue,  14th
Floor,   Colorado   Springs,   CO,  80903.  The  Form  10-K  is  also  available
electronically through the SEC EDGAR system.

Westmoreland  Coal Company is a  diversified  energy  company  headquartered  in
Colorado  Springs,  Colorado.  It is currently  engaged in western  Powder River
Basin coal mining through its 80%-owned subsidiary Westmoreland Resources,  Inc.
and  independent   power   production   through  its  wholly  owned   subsidiary
Westmoreland  Energy,  Inc.  The Company  also holds a 20%  interest in Dominion
Terminal  Associates,  a coal  shipping and terminal  facility in Newport  News,
Virginia.

          Certain  statements in this report which are not  historical
          facts or information are "forward-looking statements" within
          the meaning of Section 27A of the Securities Act of 1933 and
          Section  21E  of  the  Securities   Exchange  Act  of  1934,
          including,  but not limited to, the information set forth in
          Management's  Discussion and Analysis of Financial Condition
          and Results of Operations.  Any statements  contained herein
          that are not statements of historical  fact may be deemed to
          be forward-looking  statements.  For example,  words such as
          "may,"   "will,"    "should,"    "estimates,"    "predicts,"
          "potential,"     "continue,"     "strategy,"     "believes,"
          "anticipates,"  "plans,"  "expects,"  "intends," and similar
          expressions   are   intended  to  identify   forward-looking
          statements.  Such  forward-looking  statements involve known
          and unknown risks, uncertainties and other factors which may
          cause the actual results, levels of activity, performance or
          achievements  of the  Company,  or industry  results,  to be
          materially  different  from any  future  results,  levels of
          activity,  performance or achievements  expressed or implied
          by such  forward-looking  statements.  Such factors include,
          among others,  the following:  general economic and business
          conditions;  the  ability of the  Company to  implement  its
          business  strategy;  the Company's access to financing;  the
          Company's  ability to  successfully  identify  new  business
          opportunities;  the Company's ability to achieve anticipated
          cost  savings  and  profitability  targets;  changes  in the
          industry;  competition; the Company's ability to utilize its
          tax net  operating  losses;  the ability to reinvest  excess
          cash at an acceptable  rate of return;  weather  conditions;
          the  availability  of  transportation;  price of alternative
          fuels; costs of coal produced by other countries; demand for
          electricity;  the effect of regulatory and legal proceedings
          and other factors  discussed in Item 1 of the Company's Form
          10-K.  As a result of the foregoing  and other  factors,  no
          assurance  can  be  given  as  to  the  future  results  and
          achievement  of the  Company.  Neither  the  Company nor any
          other  person  assumes  responsibility  for the accuracy and
          completeness of these statements.

THE ATTACHED  FINANCIAL RESULTS should be read in conjunction with the Company's
COMPLETE financial statements contained in the 1999 Form 10-K.

                                  ###
      For further information contact Diane Jones (719) 442-2600.

<PAGE>
<TABLE>
Westmoreland Coal Company and Subsidiaries
Consolidated Balance Sheets (Unaudited)

December 31,                                                                    1999       1998
- -------------------------------------------------------------------------- ---------- ----------
                                                                                (in thousands)
<CAPTION>
<S>                                                                         <C>        <C>
Assets
Current assets:
   Cash and cash equivalents                                                $ 20,122   $ 84,073
   Receivables:
       Trade                                                                   2,156      2,566
       Excess of trust assets over pneumoconiosis benefit obligation           6,397          -
       Terminated pension plan, net                                              500        500
       Other                                                                     621      2,730
- -------------------------------------------------------------------------- ---------- ----------
                                                                               9,674      5,796
   Other current assets                                                        1,180        691
- -------------------------------------------------------------------------- ---------- ----------
       Total current assets                                                   30,976     90,560
- -------------------------------------------------------------------------- ---------- ----------
Property, plant and equipment:
       Land and mineral rights                                                10,572     10,990
       Plant and equipment                                                    66,231     94,989
- -------------------------------------------------------------------------- ---------- ----------
                                                                              76,803    105,979
       Less accumulated depreciation and depletion                            40,245     69,029
- -------------------------------------------------------------------------- ---------- ----------
                                                                              36,558     36,950

Investment in independent power projects                                      45,225     62,386
Investment in Dominion Terminal Associates (DTA)                               4,672      5,475
Workers' compensation bond                                                     4,748      4,140
Prepaid pension cost                                                           3,897      3,748
Excess of trust assets over pneumoconiosis benefit
  obligation                                                                   5,255     10,891
Security deposits                                                             10,148          -
Other assets                                                                     818      1,456
- -------------------------------------------------------------------------- ---------- ----------
       Total Assets                                                        $ 142,297  $ 215,606
========================================================================== ========== ==========
                                                                                      (Continued)
<PAGE>
Westmoreland Coal Company and Subsidiaries
Consolidated Balance Sheets (Unaudited) - Continued

December 31,                                                                    1999       1998
- -------------------------------------------------------------------------- ---------- ----------
                                                                                (in thousands)
Liabilities and Shareholders' Equity
Current liabilities:
   Current installments of long-term debt                                  $     220  $     200
   Accounts payable and accrued expenses:
     Trade                                                                     2,010      4,213
     Taxes, other than income taxes                                            3,932      3,893
     Workers compensation                                                      3,200      3,800
     Postretirement medical costs                                             10,130     11,066
     Reorganization expenses                                                     400      7,900
     Consent judgment payment obligation                                           -     39,006
     Other accrued expenses                                                      970      3,143
     Reclamation costs                                                           100        100
   Income taxes                                                                    -      2,185
- -------------------------------------------------------------------------- ---------- ----------
   Total current liabilities                                                  20,962     75,506
- -------------------------------------------------------------------------- ---------- ----------
Long-term debt, less current installments                                      1,343      1,562
Accrual for workers compensation                                              15,072     17,338
Accrual for postretirement medical costs                                      78,643     73,143
1974 UMWA Pension Plan obligations                                            11,879     13,776
Accrual for reclamation costs, less current portion                            2,537      3,046
Other liabilities                                                              1,930      2,370

Minority interest                                                              6,874      7,020

Commitments and contingent liabilities

Shareholders' equity
   Preferred stock of $1.00 par value
     Authorized 5,000,000 shares;
     Issued and outstanding 208,708 shares in 1999 and                           209        575
       575,000 shares in 1998
   Common stock of $2.50 par value
     Authorized 20,000,000 shares;
     Issued and outstanding 7,067,663 shares in 1999 and                      17,669     17,413
       6,965,328 shares in 1998
   Other paid-in capital                                                      67,315     94,630
   Accumulated deficit                                                       (82,136)   (90,773)
- -------------------------------------------------------------------------- ---------- ----------
   Total shareholders' equity                                                  3,057     21,845
- -------------------------------------------------------------------------- ---------- ----------

   Total Liabilities and Shareholders' Equity                              $ 142,297  $ 215,606
========================================================================== ========== ==========
</TABLE>

<PAGE>
<TABLE>
Westmoreland Coal Company and Subsidiaries
Consolidated Statements of Operations (Unaudited)

Years Ended December 31,                                     1999      1998      1997
- -------------------------------------------------------- --------- --------- ---------
                                                                 (in thousands)
<CAPTION>
<S>                                                      <C>       <C>       <C>
Revenues:
   Coal                                                  $ 38,539  $ 44,010  $ 47,182
   Independent power projects - equity in earnings         34,492    64,465    17,770
   Dominion Terminal Associates ("DTA") - equity in
     earnings (losses)                                     (1,464)       94       880
- -------------------------------------------------------- --------- --------- ---------
                                                           71,567   108,569    65,832
- -------------------------------------------------------- --------- --------- ---------
Cost and expenses:
   Cost of sales - coal                                    33,637    37,472    42,063
   Depreciation, depletion and amortization                 1,571     2,289     1,715
   Selling and administrative                               9,660     7,040     5,932
   Heritage costs                                          18,737    31,449    16,673
   Pension expense (benefit) (including termination
     gain of $1,512,000 in 1997)                             (149)      111    (5,547)
   Unusual charges (credits)                                    -     2,000   (27,214)
   Doubtful accounts recoveries                              (174)   (1,028)   (1,410)
   DTA impairment charge                                        -    12,164         -
- -------------------------------------------------------- --------- --------- ---------
                                                           63,282    91,497    32,212
- -------------------------------------------------------- --------- --------- ---------
Operating income                                            8,285    17,072    33,620

Other income (expense):
   Gains on sales of assets                                   433       475       969
   Interest expense                                        (1,135)     (190)     (320)
   Interest income                                          2,052         -         -
   Minority interest                                         (854)     (775)   (1,092)
   Other income (expense)                                    (226)    1,999       713
- -------------------------------------------------------- --------- --------- ---------
                                                              270     1,509       270
- -------------------------------------------------------- --------- --------- ---------
Income from continuing operations before
  reorganization items and income taxes                     8,555    18,581    33,890

Reorganization items:
   Legal and consulting fees                                    -    (9,872)   (2,484)
   Interest expense                                             -    (5,188)        -
   Interest income                                              -     3,594     1,552
- -------------------------------------------------------- --------- --------- ---------
Income before income taxes                                  8,555     7,115    32,958

Income tax (expense) benefit                                   82    (3,787)        -
- -------------------------------------------------------- --------- --------- ---------
Income from continuing operations                           8,637     3,328    32,958

Discontinued operations:
   Operating loss                                               -         -    (1,284)
   Impairment and loss on disposal                              -         -    (3,518)
- -------------------------------------------------------- --------- --------- ---------
   Loss from discontinued operations                            -         -    (4,802)

Cumulative effect of change in accounting principle             -    (9,876)        -
- -------------------------------------------------------- --------- --------- ---------
Net income (loss)                                           8,637    (6,548)   28,156
Less preferred stock dividends in arrears                   1,776     4,888     4,888
======================================================== ========= ========= =========
Net income (loss) applicable to common shareholders      $  6,861  $(11,436) $ 23,268
======================================================== ========= ========= =========
                                                                           (Continued)
<PAGE>
Westmoreland Coal Company and Subsidiaries
Consolidated Statements of Operations (Unaudited) - Continued

Years Ended December 31,                                     1999      1998      1997
- -------------------------------------------------------- --------- --------- ---------
                                                  (in thousands except per share data)

Income (loss) per share applicable to common shareholders:

 Continuing operations                                   $    .97  $   (.22) $   4.03
 Discontinued operations                                        -         -     (0.69)
 Cumulative effect of changes in accounting principles          -     (1.42)        -
- -------------------------------------------------------- --------- --------- ---------
                                                         $    .97  $  (1.64) $   3.34
======================================================== ========= ========= =========
Pro forma  amounts  assuming the changes in accounting
  principles  are applied retroactively:
       Net loss applicable to common shareholders        $      -  $ (1,560) $      -
       Loss per share applicable  to common shareholders $      -  $   (.22) $      -
======================================================== ========= ========= =========
Weighted average number of common
   shares outstanding - basic and diluted                   7,040     6,965     6,965
</TABLE>

<PAGE>
<TABLE>
Westmoreland Coal Company and Subsidiaries
Consolidated Statements of Cash Flows (Unaudited)

Years Ended December 31,                                          1999      1998      1997
- ------------------------------------------------------------- --------- --------- ---------
                                                                     (in thousands)
<CAPTION>
<S>                                                           <C>       <C>       <C>
Cash flows from operating activities:
Net income (loss)                                             $  8,637  $ (6,548) $ 28,156
    Adjustments to reconcile net income (loss) to net
    cash provided by (used in) operating activities:
        Equity in earnings of independent power projects       (34,492)  (64,465)  (17,770)
        Cash distributions from independent power projects      51,653    46,355    14,995
        Equity in losses (earnings) from Dominion Terminal
          Associates                                             1,464       (94)     (880)
        Cash generated by Dominion Terminal
          Associates facility                                      942     2,952     4,865
        Cash contributions to Dominion Terminal
          Associates                                            (1,603)   (1,877)   (2,883)
        Depreciation, depletion and amortization                 1,571     2,289     1,715
        Stock compensation expense                                 297         -         -
        Gain on termination of pension plan                          -         -    (1,512)
        Unusual charges (credits)                                    -     2,000   (27,214)
        DTA impairment charge                                        -    12,164         -
        Gains on sales of assets                                  (433)     (475)     (969)
        Cash from pension termination, net                           -    12,540         -
        Distribution from pneumoconiosis trust                       -     2,634         -
        Minority interest                                          854       775     1,092
        Deferred income tax benefit                                  -         -         -
        Impairment and loss on disposition of
           discontinued operations                                   -         -     3,518
        Cumulative effect of change in accounting principle          -     9,876         -
        Other                                                      147      (358)       96
        Changes in assets and liabilities:
                Receivables, net of allowance for
                   doubtful accounts                             2,519       213     1,392
                Inventories                                          -         -       660
                Prepaid pension cost                              (149)     (220)   (4,035)
                Excess of trust assets over pneumoconiosis
                    benefit obligation                            (761)   (1,825)    1,188
                Accounts payable and accrued expenses           (4,337)    1,690       880
                Income taxes payable                            (2,185)    2,185         -
                Accrual for workers' compensation               (3,474)     (678)        -
                Accrual for postretirement medical costs         4,564    (2,502)        -
                1974 UMWA Pension Plan                          (1,897)        -         -
                Consent judgment payment obligation            (39,006)   39,006         -
                Other liabilities                                 (300)   (5,998)       15
- ------------------------------------------------------------- --------- --------- ---------
  Net cash provided by (used in) operating activities
    before reorganization items                                (15,989)   49,639     3,309
- ------------------------------------------------------------- --------- --------- ---------
Changes in reorganization items:
  Trade and other liabilities subject to compromise                  -         -    14,977
  Reorganization expenses                                       (7,500)    6,255     1,645
- ------------------------------------------------------------- --------- --------- ---------
Net change in reorganization items                              (7,500)    6,255    16,622
- ------------------------------------------------------------- --------- --------- ---------
Net cash provided by (used in) operating activities            (23,489)   55,894    19,931
- ------------------------------------------------------------- --------- --------- ---------
                                                                                (Continued)
<PAGE>

Westmoreland Coal Company and Subsidiaries
Consolidated Statements of Cash Flows  (Unaudited) - Continued

Years Ended December 31,                                          1999      1998      1997
- ------------------------------------------------------------- --------- --------- ---------
                                                                     (in thousands)
Cash flows from investing activities:
  Additions to property, plant and equipment                    (2,069)   (2,945)     (174)
  Net proceeds from sales of investments and assets                726       511     2,757
  Security deposits                                            (10,148)        -         -
  Cash held by subsidiary disposed of                                -         -      (490)
- ------------------------------------------------------------- --------- --------- ---------
 Net cash (used in) provided by investing activities           (11,491)   (2,434)    2,093
- ------------------------------------------------------------- --------- --------- ---------

Cash flows from financing activities:
  Repayment of long-term debt                                     (199)      (51)     (151)
  Dividends paid to minority shareholders of subsidiary         (1,000)        -         -
  Exercise of stock options                                         66         -         -
  Repurchase of preferred stock                                (27,838)        -         -
- ------------------------------------------------------------- --------- --------- ---------
Net cash used in financing activities                          (28,971)      (51)     (151)
- ------------------------------------------------------------- --------- --------- ---------
Net increase (decrease) in cash and cash equivalents           (63,951)   53,409    21,873
Cash and cash equivalents, beginning of year                    84,073    30,664     8,791
============================================================= ========= ========= =========
Cash and cash equivalents, end of year                        $ 20,122  $ 84,073  $ 30,664
============================================================= ========= ========= =========

Supplemental disclosures of cash flow information:

Cash paid during the year for:
    Interest                                                  $  6,076  $     27  $     31
    Income taxes                                                 1,606       120         -
</TABLE>

In January 1999, the Company issued 45,000 shares of restricted  stock valued at
$297,000 to several employees as compensation.

In  September  1997,  the Company  completed  the sale of the Corona  Group Inc.
("Corona").  Corona  was sold for  $895,000  in notes  receivable,  the  Company
retained  a 15%  interest  in Corona,  and the  purchaser  assumed a  contingent
liability.


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