Walter Energy, Inc. - Shareholder/Analyst Call

Walter Energy, Inc. reported unaudited consolidated earnings and production results for the first quarter ended March 31, 2013. For the period, the company's revenues were $491,343,000 against $631,563,000 a year ago. Revenues declined from the first quarter of 2012, due to industry-wide lower metallurgical coal prices. Operating loss was $63,620,000 against operating income of $84,076,000 a year ago. Loss before income tax expense was $115,483,000 against income before income tax expense of $49,293,000 a year ago. Net loss was $49,444,000 or $0.79 per basic and diluted share against net income of $40,616,000 or $0.65 per basic and diluted share a year ago. Cash flows used in operating activities were $19,398,000 against cash flows provided by operating activities of $70,854,000 a year ago. Additions to property, plant and equipment were amounted to $34,027,000 against $120,845,000 a year ago. Earnings before interest, income taxes, and depreciation and depletion (EBITDA) were $17,675,000 against $143,576,000 a year ago. Adjusted EBITDA was $31,953,000 against $143,576,000 a year ago. Adjusted net loss was $40,144,000 or $0.64 per share against adjusted net income of $40,616,000 a year ago. Met coal production was 2.8 MMTs in the first quarter of 2013, comprised of 2.3 MMTs of HCC and 0.5 MMTs of low-vol PCI. Met coal production increased 12% from the 2.5 MMTs produced in the fourth quarter of 2012. First quarter 2013 met coal production in the company's U.S. Operations segment increased to 1.7 MMTs compared to 1.5 MMTs in the fourth quarter 2012, despite the impact of two longwall moves during the quarter. Canadian and U.K. Operations segment increased met coal production to 1.0 MMTs compared to 0.9 MMTs in the fourth quarter 2012. Thermal coal production was also lower in the first quarter, down 20%, from the fourth quarter, primarily due to difficult mining conditions at the company's North River mine. These conditions and the related reduced production resulted in an increase to cash cost of sales of approximately $37 per MT during first quarter 2013 compared to the fourth quarter of 2012. As previously announced, the company expects to close this mine earlier than previously planned and anticipates this closure to occur before year-end. The company expects that the performance of the mine will return to more normal levels for the remainder of its life. The company expects to lower its per ton met coal cost of production and cost of sales in the second quarter of 2013 by more than 5%. Overall earnings, adjusted EBITDA and cash flows are expected to significantly improve in the second quarter compared to the first quarter. The company expects total met coal production to be around 11 million tons for the year 2013. This assumes that it maintains original expectations that are high quality, higher-margin hard coking coal mines, specifically, Mine 7, Mine 4 and Wolverine will operate at capacity. For the full year 2013, the company has lowered its capital spending estimate to approximately $170 million from the original estimate of $220 million. The company expects that tax rate for the full year in the current environment will be at or around the 40% level.

Walter Energy, Inc. announced that its Board of Directors has declared a regular quarterly dividend of $0.125 per common share payable on June 7, 2013, to shareholders of record as of the close of business on May 10, 2013.