Reports First Quarter 2007 Results

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NATIONAL COAL CORP. REPORTS FIRST QUARTER 2007 RESULTS

• Revenues for first quarter 2007 total approximately $19 million, down 7.3% from $20.5 million realized in the first quarter 2006 and 11.6% from $21.5 million in the fourth quarter 2006.
• Coal sales total approximately 368,000 tons, a 1% decrease versus 372,000 tons sold in the same period last year and an 9.4% decrease versus 406,000 tons sold last quarter.
• Coal production for the first quarter 2007 totaled 300,792 tons, down 5.6% from 318,607 tons produced in the same prior-year period.
• Cost of sales decreased by 15.1% and 16.6% from the first quarter and fourth quarter of 2006, respectively. On a per ton basis, cost of sales decreased from $55.70 per ton in Q1 2006 to $47.77 per ton this quarter, or 14.2%.
• Total operating expenses decreased $3.3 million, or 12.5% from the same prior-year period.

Knoxville, Tenn. – (May 15, 2007) – National Coal Corp. (Nasdaq: NCOC), a Central Appalachian coal producer, reports that during the three months ended March 31, 2007, it generated total revenues of $19.0 million primarily through the sale of 368,332 tons of coal. In the same period, the Company produced 300,792 tons and purchased 129,472 tons of coal.  In the first quarter of 2006, the Company reported revenues of $20.5 million which were based on the sale of 372,109 tons of coal. That same quarter, National Coal produced 318,607 tons and purchased 106,215 tons of coal.

This quarter, National Coal reports decreased net and operating losses as compared to the first quarter 2006 and the fourth quarter 2006.  The operating loss for the period ended March 31, 2007 decreased to $4.3 million, relative to the loss of $6.2 million reported in the same prior-year period, a decrease of $1.9 million. Further, it is a $0.9 million decrease from the $5.2 million operating loss reported in the fourth quarter of 2006.  Net loss for the period ended March 31, 2007 decreased 22% to $6.0 million as opposed to the $7.7 million loss reported in the same prior-year period. The reported net loss for the first quarter 2007 is also down 20% relative to the $7.5 million loss reported in the fourth quarter of 2006.

Adjusted EBITDA totaled approximately $0.03 million compared to a negative $2.0 million in the year-ago quarter and a negative $1.3 million during the fourth quarter of 2006.

In the first quarter 2007, relative to the first quarter of 2006, the Company experienced an 11.5% decrease in sales price per ton.  Also, when compared to the fourth quarter of 2006, the sales price per ton has decreased by 7%.  In response to declining prices, the Company has focused its efforts on reducing production costs at least equal to the percentage decline in sales prices.  In the first quarter 2007, the Company achieved 15.1% and 16.6% decreases in costs of sales versus the first and fourth quarters of 2006, respectively.  A primary factor, representing 55% of the decrease from the first quarter 2006 to the first quarter 2007, is a $1.8 million charge related to the repair of the highwall miner damaged in March 2006.

“Our efforts are paying off and it’s evident in the results of this quarter,” explained Daniel Roling, President and CEO of National Coal.  “We’ve made improvements designed to reduce costs and have completed the investments needed to increase production capacity.  As a result, we are now well-positioned to increase our production when the time is right.  Over the past year the entire industry has experienced rising inventories and declining sales prices.  At electric utilities, coal stockpiles declined from their earlier highs because of the late winter weather.  Looking forward, we are hopeful of a more balanced market going into the summer months.  For our part, we have sustained, and will continue to sustain, ourselves by focusing on containing costs in preparation for the future.”

On March 2, 2007 National Coal sold three million shares of its common stock at the February 28, 2007 closing consolidated bid price of $4.65 per share.  Two institutional investors purchased 2.8 million shares and Daniel Roling purchased the remaining 200,000 shares.  Proceeds from the sale were approximately $14.0 million and will be used for potential internal and external growth opportunities and to fund general operating and working capital needs. 

As of March 31, 2007, National Coal controlled approximately 35.9 million estimated recoverable tons of coal. Mining complexes operating at National Coal include two underground mines, two surface mines, and one highwall mine. In addition, the Company has two active preparation plants and two active unit train loading facilities that are served by the CSX and Norfolk Southern railroads. National Coal also holds permits to open five mines close to current operations.

About National Coal Corp. 

Headquartered in Knoxville, Tenn., National Coal Corp., through its wholly-owned subsidiary, National Coal Corporation, is engaged in coal mining in East Tennessee and Southeastern Kentucky.  Currently, National Coal employs about 240 people and produces coal from mines in Tennessee and in Kentucky.  National Coal sells steam coal to electric utilities in the Southeastern United States.  For more information visit www.nationalcoal.com.

Information about Forward Looking Statements

This release contains “forward-looking statements” that include information relating to future events and future financial and operating performance.  Examples of forward looking-statements include anticipated benefits of improvements and an anticipated more balanced coal market in the future.  Forward-looking statements should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications of the times at, or by which, that performance or those results will be achieved.  Forward-looking statements are based on information available at the time they are made and/or management’s good faith belief as of that time with respect to future events, and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. Important factors that could cause these differences include, but are not limited to: (i) the worldwide demand for coal; (ii) the price of coal; (iii) the price of alternative fuel sources; (iv) the supply of coal and other competitive factors; (v) the costs to mine and transport coal; (vi) the ability to obtain new mining permits; (vii) the costs of reclamation of previously mined properties; (viii) the risks of expanding coal production; (ix) the ability to bring new mining properties on-line on schedule; (x) industry competition; (xi) our ability to continue to execute our growth strategies; and (xii) general economic conditions.  These and other risks are more fully described in the Company’s filings with the Securities and Exchange Commission including the Company’s most recently filed Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, which should be read in conjunction herewith for a further discussion of important factors that could cause actual results to differ materially from those in the forward-looking statements.  Forward-looking statements speak only as of the date they are made.  You should not put undue reliance on any forward-looking statements.  We assume no obligation to update forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking information, except to the extent required by applicable securities laws.  If we do update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements.