Foresight Energy LP (FELP) Misses Q3 EPS by 9c; Trims Qtr. Distribution; CFO Martinez Resigns

Foresight Energy LP (NYSE: FELP) reported Q3 EPS of $0.06, $0.09 worse than the analyst estimate of $0.15. Revenue for the quarter came in at $253.1 million versus the consensus estimate of $282.07 million.

The third quarter was significant for Foresight as we realized Adjusted EBITDA of $91.1 million in this very difficult coal environment," said Robert D. Moore, Foresight’s President and Chief Executive Officer. "We continue to make progress on the integration of Foresight and Murray’s operations and are evaluating additional synergy opportunities. Further, during the quarter we were able to increase our 2016 committed position to 19.5 million tons.”

Foresight also announced that the Board of Directors of its General Partner reduced its quarterly cash distribution to $0.17 per unit for common unitholders, while suspending its distribution on all subordinated units.

The Board of Directors’ decision to reduce the distribution reflects the difficult business environment for coal including, but not limited to, oversupply in virtually all domestic and international basins, intense competition from natural gas, and soft domestic utility demand. “The decision to cut the distribution reflects the Board’s disciplined long-term approach to creating value for unitholders and will allow Foresight to prudently manage its liquidity during this uncertain period,” said Christoper Cline, Founder and Chairman of the Board of Directors. “As the low-cost provider and most productive underground coal mining company, we believe Foresight is better positioned to navigate this difficult period in the coal markets.”

Foresight Energy also announced that Oscar Martinez, Foresight’s Senior Vice President and Chief Financial Officer, will resign on November 13. His departure is part of the integration plan that combined the corporate functions of Foresight and Murray Energy Corporation resulting from the partnership formed earlier this year.

“I would like to thank Oscar for his leadership and contributions to our success,” said Chris Cline, founder of Foresight. “He helped maintain our cost leadership and fund our capital investment during a period in which Foresight more than doubled in size.”

Foresight also announced that James Murphy, Chief Accounting Officer, will assume the duties of Principal Financial Officer effective November 6.

“Jim brings a deep level of dedication and knowledge to this role and I look forward to working closely with him and the rest of our finance and accounting team,” said Robert Moore, Foresight’s President and Chief Executive Officer. “I also wish to thank Oscar for his dedication to the integration process and for his commitment to the success of this partnership.”

The distribution is payable on November 25, 2015 for common unitholders of record on November 13, 2015. According to the Partnership Agreement, the distribution to the common unitholders below the minimum quarterly distribution will result in an arrearage of $0.1675 per unit. Such arrearage will carry forward to future quarters and must be paid to common unitholders before Foresight can make any distributions from operating surplus to the subordinated unitholder. The subordinated units do not accrue arrearages.

For earnings history and earnings-related data on Foresight Energy LP (FELP) click here.

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