(The following story by Roger Harris appeared on the Knoxville News-Sentinel website on May 20, 2010.)
KNOXVILLE, Tenn. — National Coal Corp. said today its wholly-owned subsidiary NC Railroad Inc has sold a short-line railroad that runs between Oneida and Devonia, Tenn. to R.J. Corman Railroad Property LLC for $3 million.
Knoxville-based National Coal previously used the 42-miles of rail line to service New River Tract mine and a preparation plant in Devona.
Last month, National Coal sold the New River Tract and other assets to Ranger Energy Investments LLC for $11.8 million and used the proceeds to payoff down debt.
The sale comes on the heels of a first quarter loss of $5.8 million, or 17 cents per share, compared to a loss of $5.7 million for the same period last year.
In a financial statement released Monday, National Coal reported revenue for the quarter ended March 31 were down 19.1 percent from a year ago to $16.2 million as tons of coal sold fell 27.5 percent to 201,684 tons, down from 278,081 tons sold in the first quarter of 2009.
National Coal said in a statement that its first quarter results were hurt when its largest customer ”exercised its rights of force majeure under a coal supply contract due to freezing weather in the Southeastern United States, which resulted in the suspension of shipments of approximately 40,000 tons of coal.”
As the economy improves, National Coal could see increased prices for coal and increased demand, President and CEO Daniel Roling said.
“At present we are moving forward with our plans to begin construction of our new mine number 12, which will produce a high quality specialty coal. This mine should help us achieve one of our key goals — lowering our costs. Even though we are focused on our organic growth prospects, we remain mindful of the challenge to refinance our debt.”