Royal Gold Reports Record Results for First Quarter Fiscal Year 2013
![Royal Gold Reports Record Results for First Quarter Fiscal Year 2013](https://www.goldseiten.de/media/goldseiten-news.jpg)
- Record royalty revenue of $77.9 million, a 21% increase
year-over-year - Record Adjusted EBITDA 1 of $71.0 million,
a 23% increase year-over-year - Record cash flow from operations of $53.5 million, a 16% increase
year-over-year
Royal Gold, Inc. (NASDAQ:RGLD) (TSX:RGL) today announced net
income attributable to Royal Gold stockholders of $24.8 million, or $0.42per basic share, on record royalty revenue of $77.9 million for the
first quarter of fiscal 2013. This compares to net income attributable
to Royal Gold stockholders of $22.5 million, or $0.41 per basic share,
on royalty revenue of $64.5 million for the first quarter of fiscal 2012.
Adjusted EBITDAfor the first quarter of fiscal 2013 was a
record $71.0 million representing 91% of revenue, an increase of 23%
compared to Adjusted EBITDA of $57.6 million or 89% of revenue for the
prior year period. Cash flow from operations for the quarter was $53.5
million compared with $46.2 million for the first quarter of fiscal 2012.
The 21% increase in revenue for the quarter was largely driven by
increased production at Andacollo, Peñasquito, and Voisey′s Bay, the
Company′s cornerstone assets, in addition to production growth at
Mulatos, Las Cruces, Holt, Wolverine, and Canadian Malartic. These
increases were partially offset during the period by production declines
at Cortez and Leeville and lower average metal prices. The average price
of gold for the quarter was $1,652 per ounce compared with $1,702 per
ounce for the comparable period, a decrease of 3%.
As of September 30, 2012, the Company had a working capital surplus of
$352.5 million. Current assets were $371.8 million (including $302
million in cash and equivalents), compared to current liabilities of
$19.3 million, resulting in a current ratio of approximately 19 to 1. In
addition to available working capital, the Company had $350 million
available under its revolving line of credit.
In October 2012, Royal Gold completed an offering of 5.25 million shares
of common stock. Proceeds from the offering were $472.5 million before
expenses. The Company intends to use the proceeds from this offering for
the acquisition of additional royalty or similar interests and general
corporate purposes.
Tony Jensen, President and CEO, commented, 'Our assets continue to
deliver strong financial results and it is particularly gratifying to
see several properties have success in ramping up production towards
design capacities. We anticipate further incremental production
increases from Andacollo, Peñasquito, and Canadian Malartic in the
coming quarters. This is also an important time for Royal Gold to have
sufficient resources to respond to new business opportunities. Our
offering in October, coupled with cash on hand and our undrawn credit
facility, puts us in a strong position, with over $1.0 billion of
liquidity to further expand our portfolio.?
PROPERTY HIGHLIGHTS
Highlights at certain of the Company′s principal producing and
development properties during the quarter ended September 30, 2012 are
listed below:
Producing Properties
Andacollo ? Teck reported record production during the quarter
primarily due to increased mill throughput as a result of the
commissioning of the pre-crushing circuit. The plant began to reach
design capacity during the end of the quarter with throughput of just
over 54,000 tonnes per day in September versus design capacity of 55,000
tonnes per day.
Canadian Malartic ? Osisko reported record gold production during
the quarter. The mill processed ore at an average rate of 40,834 tonnes
per day and, post quarter end, the mill achieved throughput rates
consistently above 50,000 tonnes per day. Osisko reported that the
second pebble crusher is scheduled to be installed and commissioned in
the fourth quarter and that they expect the operation to move towards
the design rate of 55,000 tonnes per day at that point.
Cortez ? Barrick continued to prioritize production from their
higher grade Cortez Hills operations that is not covered by our royalty
interest. As a result, production decreased during the period. Royal
Gold expects production to remain at these lower levels until Barrick
returns to steady state mining at the Pipeline Complex.
Dolores ? Pan American reported that they continue to finalize
construction of a new heap leach pad, complete a new reserve model and
life of mine plan, and evaluate mill options to improve recoveries and
increase production.
Holt ? St Andrew Goldfields reported strong production for the
quarter, largely driven by higher grades, and that production was
sustained at design capacity for the entire period.
Las Cruces ? Strong mill performance at Las Cruces resulted in
increased production for the quarter. Las Cruces is approaching its
designed mill capacity of 6,000 tonnes per day.
Leeville ? A portion of the mine production at Leeville was
derived from an area outside of our royalty interest resulting in a
decrease in royalty revenue over the prior period.
Mulatos ? Alamos reported that they achieved record quarterly
crusher throughput, averaging 15,200 tonnes per day despite the rainy
season. The significantly higher gold production during the quarter
versus the comparable period was primarily due to new production from
the gravity mill.
Peñasquito ?Goldcorp reported that record production of
gold and other metals during the quarter was driven by strong grades in
the deeper portion of the current phase of mining. However, mill
throughput continued to be limited at an average rate of about 102,000
tonnes per day due to water shortages, compared to the design capacity
is 130,000 tonnes per day. Work continues on the drilling of additional
water wells and optimization of tailings operations to sustain the
necessary water supply. Goldcorp stated that water availability is
expected to be sufficient to achieve their annual guidance of between
370,000 and 390,000 ounces of gold for 2012.
Voisey′s Bay ? Increased metal sales reflected higher shipments
of copper concentrate during the quarter. The variability in Vale′s
shipping schedule will continue to result in uneven metal sales
quarter-over-quarter. Vale reported that the Long Harbour
hydrometallurgical facility is 75% complete.
Wolverine ?Yukon Zinc stated that production increased
during the quarter with an average output of 1,300 tonnes per day,
compared to the design capacity of 1,700 tonnes per day. Work is also
continuing on integrating new mining equipment, increasing mill
concentrate grade and recoveries, and completing construction of the
tailings dam to reach its ultimate height.
Development Properties
Mt. Milligan ? Thompson Creek reported that, as of September 30,
2012, construction progress on the Mt. Milligan project was 65% complete
with overall progress 79% complete. They also reiterated that the
overall project remains on schedule, with commencement of commercial
production expected in the fourth quarter of calendar 2013.
Pascua-Lama ? Barrick reported that they have taken actions to
strengthen the Pascua-Lama project management and mitigate cost
pressures as a combination of factors has increased the project capital
cost and extended the construction schedule. At the end of the July 2012
quarter, pre-stripping was underway, the ore transfer tunnel was 40%
complete, the power line in Chile was 50% complete, the plant concrete
placement and steel erection was underway, and the camp was being
expanded to handle peak construction activity. Initial gold production
is now expected in mid-2014.
Additional Property Information
First quarter fiscal 2013 production and revenue for the Company′s
principal royalty interests are shown in Table 1 and historical
production data is shown in Table 2. For more detailed information about
each of our principal royalty properties, please refer to the Company′s
most recent Annual Report on Form 10-K, our Quarterly Reports on Form
10-Q and Current Reports on Form 8-K filed with the SEC and available on
the SEC′s website located at www.sec.gov,
or our website located at www.royalgold.com.
CORPORATE PROFILE
Royal Gold is a precious metals royalty company engaged in the
acquisition and management of precious metals royalties and similar
interests. The Company owns royalties on 201 properties on six
continents, including royalties on 39 producing mines and 26 development
stage projects. Royal Gold is publicly traded on the NASDAQ Global
Select Market under the symbol 'RGLD,? and on the Toronto Stock Exchange
under the symbol 'RGL.? The Company′s website is located at www.royalgold.com.
Note: Management′s conference call reviewing the first quarter
results will be held todayat 10:00 a.m. Mountain Time (noon
Eastern Time) and will be available by calling (800) 603-2779 (North
America) or (973) 200-3960(international), access #42043945. The
call will be simultaneously broadcast on the Company′s website at www.royalgold.com
under the 'Presentations? section. A replay of this webcast will be
available on the Company′s website approximately two hours after the
call ends.
Cautionary 'Safe Harbor? Statement Under the Private Securities
Litigation Reform Act of 1995: With the exception of historical
matters, the matters discussed in this press release are forward-looking
statements that involve risks and uncertainties that could cause actual
results to differ materially from projections or estimates contained
herein. Such forward-looking statements include statements about the
Company′s assets continuing to deliver strong financial results;
properties reaching full-design capacity; further production increases
at Andacollo, Peñasquito and Canadian Malartic; sufficient resources to
respond to new business opportunities; use of proceeds of the recent
common stock offering, and the operators′ expectation of construction,
ramp up, production, throughput, mine life, water availability and other
developments at various mines. Factors that could cause actual results
to differ materially from the projections include, among others,
precious metals, copper and nickel prices; performance of and production
at the Company's royalty properties; decisions and activities of the
operators of the Company's various properties; unanticipated grade,
geological, metallurgical, processing or other problems the operators of
the mining properties may encounter; delays in the operators securing or
their inability to secure necessary governmental permits; changes in
operator′s project parameters as plans continue to be refined; economic
and market conditions; the ability of the various operators to bring
projects into production as expected; and other subsequent events; as
well as other factors described in the Company's Annual Report on Form
10-K, Quarterly Report on Form 10-Q, and other filings with the
Securities and Exchange Commission. Most of these factors are beyond the
Company′s ability to predict or control. The Company disclaims any
obligation to update any forward-looking statement made herein. Readers
are cautioned not to put undue reliance on forward-looking statements.
1 The Company defines Adjusted EBITDA, a non-GAAP financial
measure, as net income plus depreciation, depletion and amortization,
non-cash charges, income tax expense, interest and other expense, and
any impairment of mining assets, less non-controlling interests in
operating income from consolidated subsidiaries, interest and other
income, and any royalty portfolio restructuring gains or losses (see
Schedule A).
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TABLE 1 | ||||||||||||||
First Quarter Fiscal 2013 | ||||||||||||||
Royalty Production and Revenue for Principal Royalty Interests | ||||||||||||||
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PROPERTY | ? | ROYALTY | ? | OPERATOR | ? | METAL(S) | ? | THREE MONTHS ENDED | ? | THREE MONTHS ENDED | ||||
SEPTEMBER 30, 2012 | ? | SEPTEMBER 30, 2011 | ||||||||||||
? | ? | ? | ? | Royalty | ? | Reported | ? | Royalty | ? | Reported | ||||
Andacollo 2,3 | ? | 75% NSR | ? | Teck | ? | Gold | ? | 19.70 | ? | 15,937 oz. | ? | 16.84 | ? | 13,286 oz. |
Peñasquito 3 | ? | 2.0% NSR | ? | Goldcorp | ? |
| ? | 11.15 | ? |
| ? | 5.83 | ? |
|
Voisey's Bay 3 | ? | 2.7% NSR | ? | Vale | ? |
| ? | 9.20 | ? |
| ? | 7.23 | ? |
|
Holt | ? |
| ? | St Andrew Goldfields | ? | Gold | ? | 4.56 | ? | 12,870 oz. | ? | 3.59 | ? | 9,397 oz. |
Robinson 3 | ? |
| ? | KGHM | ? |
| ? | 3.75 | ? |
| ? | 3.69 | ? |
|
Mulatos 4 | ? | 1.0% to 5.0% NSR | ? | Alamos | ? | Gold | ? | 3.50 | ? | 42,310 oz. | ? | 2.40 | ? | 29,476 oz. |
Cortez 5 | ? |
| ? | Barrick | ? | Gold | ? | 2.78 | ? | 25,751 oz. | ? | 5.11 | ? | 42,855 oz. |
Las Cruces 3 | ? | 1.5% NSR | ? | Inmet | ? | Copper | ? | 2.46 | ? | 46.2M lbs. | ? | 1.31 | ? | 23.8 M lbs. |
Canadian Malartic 6 | ? | 1.0% to 1.5% NSR | ? | Osisko | ? | Gold | ? | 2.14 | ? | 91,737 oz. | ? | 1.31 | ? | 60,826 oz. |
Leeville | ? |
| ? | Newmont | ? | Gold | ? | 2.07 | ? | 68,026 oz. | ? | 3.07 | ? | 101,240 oz. |
Wolverine 3,7 | ? |
| ? | Yukon Zinc | ? |
| ? | 1.29 | ? |
| ? | - 8 | ? | - 8 |
Dolores | ? |
| ? | Pan American Silver | ? |
| ? | 1.14 | ? |
| ? | 1.42 | ? |
|
Other Royalty Properties 9 | ? | ? | ? | ? | ? | Various | ? | 14.12 | ? | N/A | ? | 12.67 | ? | N/A |
Total Royalty Revenue | ? | ? | ? | ? | ? | 77.86 | ? | ? | ? | 64.47 | ? | ? | ||
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FOOTNOTES
1 | ? | Reported production relates to the amount of metal sales that are subject to our royalty interests for the periods ended September 30, 2012 and September 30, 2011, as reported to us by the operators of the mines. |
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2 | The royalty rate is 75% until 910,000 payable ounces of gold have been produced ? 50% thereafter. There have been approximately 114,000 cumulative payable ounces produced as of September 30, 2012. Gold is produced as a by-product of copper. | |
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3 | Revenues consist of provisional payments for concentrates produced during the current period and final settlements for prior production periods. | |
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4 | The Company′s royalty is subject to a 2.0 million ounce cap on gold production. There have been approximately 943,000 ounces of cumulative production, as of September 30, 2012. NSR sliding-scale schedule (price of gold per ounce ? royalty rate): $0.00 to $299.99 ? 1.0%; $300 to $324.99 ? 1.50%; $325 to $349.99 ? 2.0%; $350 to $374.99 ? 3.0%; $375 to $399.99 ? 4.0%; $400 or higher ? 5.0%. | |
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5 | Royalty percentages: GSR1 and GSR2 ? 0.40 to 5.0% (sliding-scale); GSR3 ? 0.71%; NVR1 ? 0.39%. | |
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6 | NSR sliding-scale schedule (price of gold per ounce ? royalty rate): $0.00 to $350 ? 1.0%; above $350 ? 1.5%. | |
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7 | Gold royalty rate is based on the price of silver per ounce. NSR sliding-scale schedule (price of silver per ounce ? royalty rate): Below $5.00 ? 0.0%; $5.00 to $7.50 ? 3.778%; >$7.50 ? 9.445%. | |
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8 | Royalty revenue did not commence until the quarter ended December 31, 2011 at the Wolverine mine. | |
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9 | 'Other? includes all of the Company′s non-principal producing royalties for the periods ended September 30, 2012 and 2011. Individually, no royalty included within 'Other? contributed greater than 5% of our total royalty revenue for any of the periods. | |
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TABLE 2 | ||||||||||||||
Historical Production | ||||||||||||||
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PROPERTY2 | ? | ROYALTY | ? | OPERATOR | ? | METAL(S) | ? | REPORTED PRODUCTION 1 | ||||||
? | ? | ? | ? | June 30, | ? | March 31, | ? | December 31, | ? | September 30, | ||||
Andacollo | ? | 75% NSR | ? | Teck | ? | Gold | ? | 11,908 oz. | ? | 13,174 oz. | ? | 13,070 oz. | ? | 13,286 oz. |
Peñasquito | ? | 2.0% NSR | ? | Goldcorp | ? |
| ? |
| ? |
| ? |
| ? |
|
Voisey's Bay | ? | 2.7% NSR | ? | Vale | ? |
| ? |
| ? |
| ? |
| ? |
|
Holt | ? |
| ? | St Andrew Goldfields | ? | Gold | ? | 11,469 oz. | ? | 8,839 oz. | ? | 11,461 oz. | ? | 9,397 oz. |
Robinson | ? | 3.0% NSR | ? | KGHM | ? |
| ? |
| ? |
| ? |
| ? |
|
Mulatos | ? | 1.0% to 5.0% NSR | ? | Alamos | ? | Gold | ? | 46,077 oz. | ? | 50,493 oz. | ? | 43,223 oz. | ? | 29,476 oz. |
Cortez | ? |
| ? | Barrick | ? | Gold | ? | 26,845 oz. | ? | 23,362 oz. | ? | 23,609 oz. | ? | 42,855 oz. |
Las Cruces | ? | 1.5% NSR | ? | Inmet | ? | Copper | ? | 37.3M lbs. | ? | 29.9M lbs. | ? | 28.1M lbs. | ? | 23.8M lbs. |
Canadian Malartic | ? |
| ? | Osisko | ? | Gold | ? | 91,734 oz. | ? | 90,845 oz. | ? | 54,141 oz. | ? | 60,826 oz. |
Leeville | ? | 1.8% NSR | ? | Newmont | ? | Gold | ? | 36,582 oz. | ? | 64,291 oz. | ? | 102,946 oz. | ? | 101,240 oz. |
Wolverine | ? |
| ? | Yukon Zinc | ? |
| ? |
| ? |
| ? |
| ? | - |
Dolores | ? |
| ? | Pan American Silver | ? |
| ? |
| ? |
| ? |
| ? |
|
1 | ? | Reported production relates to the amount of metal sales that are subject to our royalty interests for the stated period, as reported to us by the operators of the mines. |
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2 | See individual property footnotes on page 6. | |
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ROYAL GOLD, INC. | ||||||||
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September 30, | June 30, | |||||||
2012 | 2012 | |||||||
ASSETS | ||||||||
Cash and equivalents | $ | 302,037 | $ | 375,456 | ||||
Royalty receivables | 64,735 | 53,946 | ||||||
Income tax receivable | - | 11,046 | ||||||
Prepaid expenses and other current assets | ? | 5,075 | ? | ? | 4,760 | ? | ||
Total current assets | 371,847 | 445,208 | ||||||
? | ||||||||
Royalty interests in mineral properties, net | 1,989,692 | 1,890,988 | ||||||
Available for sale securities | 20,044 | 15,015 | ||||||
Other assets | ? | 21,776 | ? | ? | 21,834 | ? | ||
Total assets | $ | 2,403,359 | ? | $ | 2,373,045 | ? | ||
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LIABILITIES | ||||||||
Accounts payable | $ | 3,087 | $ | 2,615 | ||||
Dividends payable | 8,966 | 8,947 | ||||||
Income tax payable | 1,702 | - | ||||||
Other current liabilities | ? | 5,572 | ? | ? | 3,647 | ? | ||
Total current liabilities | 19,327 | 15,209 | ||||||
? | ||||||||
Debt | 295,440 | 293,248 | ||||||
Net deferred tax liabilities | 179,769 | 178,716 | ||||||
Uncertain tax positions | 20,095 | 19,469 | ||||||
Other long-term liabilities | ? | 2,674 | ? | ? | 2,974 | ? | ||
Total liabilities | ? | 517,305 | ? | ? | 509,616 | ? | ||
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Commitments and contingencies | ||||||||
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EQUITY | ||||||||
Preferred stock, $.01 par value, 10,000,000 shares authorized; and 0 shares issued | - | - | ||||||
Common stock, $.01 par value, 100,000,000 shares authorized; and 58,755,634 and 58,614,221 shares outstanding, respectively | 588 | 586 | ||||||
Exchangeable shares, no par value, 1,806,649 shares issued, less 1,042,823 and 1,007,823 redeemed shares, respectively | 33,616 | 35,156 | ||||||
Additional paid-in capital | 1,660,001 | 1,656,357 | ||||||
Accumulated other comprehensive (loss) income | (8,716 | ) | (13,763 | ) | ||||
Accumulated earnings | ? | 175,925 | ? | ? | 160,123 | ? | ||
Total Royal Gold stockholders′ equity | 1,861,414 | 1,838,459 | ||||||
Non-controlling interests | ? | 24,640 | ? | ? | 24,970 | ? | ||
Total equity | ? | 1,886,054 | ? | ? | 1,863,429 | ? | ||
Total liabilities and equity | $ | 2,403,359 | ? | $ | 2,373,045 | ? | ||
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ROYAL GOLD, INC. | ||||||||
? | ? | |||||||
For The Three Months Ended | ||||||||
September 30, | September 30, | |||||||
2012 | 2011 | |||||||
Royalty revenues | $ | 77,862 | $ | 64,465 | ||||
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Costs and expenses | ||||||||
General and administrative | 6,070 | 6,298 | ||||||
Production taxes | 2,478 | 2,150 | ||||||
Depreciation, depletion and amortization | 21,500 | 17,221 | ||||||
Restructuring on royalty interests in mineral properties | ? | - | ? | ? | 1,328 | ? | ||
Total costs and expenses | ? | 30,048 | ? | ? | 26,997 | ? | ||
? | ||||||||
Operating income | 47,814 | 37,468 | ||||||
? | ||||||||
Interest and other income | 110 | 2,833 | ||||||
Interest and other expense | ? | (6,169 | ) | ? | (1,779 | ) | ||
Income before income taxes | 41,755 | 38,522 | ||||||
? | ||||||||
Income tax expense | ? | (16,461 | ) | ? | (12,381 | ) | ||
Net income | 25,294 | 26,141 | ||||||
Net income attributable to non-controlling interests | ? | (523 | ) | ? | (3,646 | ) | ||
Net income attributable to Royal Gold stockholders | $ | 24,771 | ? | $ | 22,495 | ? | ||
? | ||||||||
Net income | $ | 25,294 | $ | 26,141 | ||||
Adjustments to comprehensive income, net of tax | ||||||||
Unrealized change in market value of available for sale securities | ? | 5,046 | ? | ? | (5,304 | ) | ||
Comprehensive income | 30,340 | 20,837 | ||||||
Comprehensive income attributable to non-controlling interests | ? | (523 | ) | ? | (3,646 | ) | ||
Comprehensive income attributable to Royal Gold stockholders | $ | 29,817 | ? | $ | 17,191 | ? | ||
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Net income per share available to Royal Gold common stockholders: | ||||||||
Basic earnings per share | $ | 0.42 | ? | $ | 0.41 | ? | ||
Basic weighted average shares outstanding | ? | 59,435,867 | ? | ? | 55,183,719 | ? | ||
Diluted earnings per share | $ | 0.41 | ? | $ | 0.40 | ? | ||
Diluted weighted average shares outstanding | ? | 59,679,807 | ? | ? | 55,491,354 | ? | ||
Cash dividends declared per common share | $ | 0.15 | ? | $ | 0.11 | ? | ||
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ROYAL GOLD, INC.
| ||||||||
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For The Three Months Ended | ||||||||
September 30, | September 30, | |||||||
2012 | 2011 | |||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 25,294 | $ | 26,141 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation, depletion and amortization | 21,500 | 17,221 | ||||||
Gain on distribution to non-controlling interest | (88 | ) | (3,018 | ) | ||||
Non-cash stock-based compensation expense | 2,095 | 2,198 | ||||||
Tax benefit of stock-based compensation exercises | (773 | ) | (1,567 | ) | ||||
Restructuring on royalty interests in mineral properties | - | 1,328 | ||||||
Deferred tax expense | 1,746 | 508 | ||||||
Amortization of debt discount | 2,192 | - | ||||||
Changes in assets and liabilities: | ||||||||
Royalty receivables | (10,789 | ) | (5,950 | ) | ||||
Prepaid expenses and other assets | (249 | ) | 197 | |||||
Accounts payable | 53 | 70 | ||||||
Income taxes payable | 10,309 | 9,762 | ||||||
Other liabilities | ? | 2,252 | ? | ? | (716 | ) | ||
Net cash provided by operating activities | $ | 53,542 | ? | $ | 46,174 | ? | ||
Cash flows from investing activities: | ||||||||
Acquisition of royalty interests in mineral properties | (120,035 | ) | - | |||||
Proceeds on sale of Inventory - restricted | 118 | 4,455 | ||||||
Other | ? | (17 | ) | ? | (111 | ) | ||
Net cash (used in) provided by investing activities | $ | (119,934 | ) | $ | 4,344 | ? | ||
Cash flows from financing activities: | ||||||||
Repayment of debt | - | (33,900 | ) | |||||
Common stock dividends | (8,949 | ) | (6,095 | ) | ||||
Distribution to non-controlling interests | (562 | ) | (5,380 | ) | ||||
Proceeds from the issuance of common stock | 1,711 | 2,536 | ||||||
Tax benefit of stock-based compensation exercises | ? | 773 | ? | ? | 1,567 | ? | ||
Net cash used in financing activities | $ | (7,027 | ) | $ | (41,272 | ) | ||
Net increase (decrease) in cash and equivalents | ? | (73,419 | ) | ? | 9,246 | ? | ||
Cash and equivalents at beginning of period | ? | 375,456 | ? | ? | 114,155 | ? | ||
Cash and equivalents at end of period | $ | 302,037 | ? | $ | 123,401 | ? | ||
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SCHEDULE A
Non-GAAP Financial Measures
The Company computes and discloses Adjusted EBITDA. Adjusted EBITDA is a
non-GAAP financial measure. Adjusted EBITDA is defined by the Company as
net income plus depreciation, depletion and amortization, non-cash
charges, income tax expense, interest and other expense, and any
impairment of mining assets, less non-controlling interests in operating
income of consolidated subsidiaries, interest and other income, and any
royalty portfolio restructuring gains or losses. Other companies may
define and calculate this measure differently. Management believes that
Adjusted EBITDA is a useful measure of the performance of our royalty
portfolio. Adjusted EBITDA identifies the cash generated in a given
period that will be available to fund the Company's future operations,
growth opportunities, shareholder dividends and to service the Company's
debt obligations. This information differs from measures of performance
determined in accordance with U.S. generally accepted accounting
principles ('GAAP?) and should not be considered in isolation or as a
substitute for measures of performance determined in accordance with
U.S. GAAP. Below is a reconciliation of net income to Adjusted EBITDA:
Royal Gold, Inc. | ||||||||
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For The Three Months Ended | ||||||||
September 30, | ||||||||
(Unaudited, in thousands) | ||||||||
2012 | ? | 2011 | ||||||
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Net income | $ | 25,294 | $ | 26,141 | ||||
Depreciation, depletion and amortization | 21,500 | 17,221 | ||||||
Non-cash employee stock compensation | 2,095 | 2,198 | ||||||
Restructuring on royalty interests in mineral properties | - | 1,328 | ||||||
Interest and other income | (110 | ) | (2,833 | ) | ||||
Interest and other expense | 6,169 | 1,779 | ||||||
Income tax expense | 16,461 | 12,381 | ||||||
Non-controlling interests in operating income of consolidated subsidiaries | ? | (435 | ) | ? | (628 | ) | ||
Adjusted EBITDA | $ | 70,974 | ? | $ | 57,587 | ? |
Royal Gold, Inc.
Karen Gross, 303-575-6504
Vice
President and Corporate Secretary