That was among the bright spots for Armstrong during a challenging 2015 when the company’s coal sales fell to 7.7 million tons from a record 9.4 million tons in 2014. Through March, Armstrong had committed sales of 5.6 million tons for 2016, but company officials are hopeful of locking in additional tons as the year progresses.

During a March 23 conference call with analysts to discuss the latest earnings, Armstrong officials said the company posted revenue of $82.2 million in the fourth quarter, down from $105.7 million a year earlier. Armstrong had total 2015 revenue of $360.9 million, compared with $441.8 million in 2014.

“Despite all of the bad news coming out, coal remains necessary and is not going away,” declared Hord Armstrong, the company’s executive chairman and namesake. “We believe the Illinois Basin is the best basin to be in, based on the cost of mining coal and transportation.” All of Armstrong’s mines are located in western Kentucky.

Armstrong also is confident that most of the potential coal-to-natural gas switching by U.S. electric utilities already has occurred, at least in the company’s market.

Gas prices that dipped below $2/MMBtu helped gas to displace more than 100 million tons of coal last year, according to Martin Wilson, the company’s president and CEO. That led to a coal inventory buildup of 197 million tons, or about a 10-day supply, at the end of December.

Burning off the daunting stockpile will take time, especially with mostly mild weather in the winter and early spring. “It’s going to take awhile to burn down these stockpiles before the utilities can start looking at their positions for the remainder of the year,” he observed.

While Armstrong hopes to sell more coal this year, headwinds persist. “With inventories being what they are and gas prices being what they are and the lack of an export market, softness in demand, steel production down and excess storage of natural gas, we would need some things to happen,” he said. “To get incremental tons, there would have to be some other unpredictable things occur, whether it be weather or destruction of the market with other producers. All the headwinds are there.”

In the meantime, Armstrong is redoubling efforts to trim expenses wherever possible. At the end of 2015, the company idled its Midway surface mine in Ohio County and cut back its Parkway underground mine in neighboring Muhlenberg County to one production shift. Prep plants serving the two mines also were idled. In addition, shifts at all the company’s mines have been reduced to eight hours a day from the previous nine.

Armstrong has committed sales of 4.3 million tons for 2017 and is looking for more.

The last thing Armstrong and other ILB producers need is more competition, but that is happening with increasing efforts by Pittsburgh No. 8 seam producers in Northern Appalachia to compete in the ILB’s traditional market, Wilson said. However, “they have transportation issues coming from farther away.”

Armstrong’s estimated capital expenditures for 2016 are in the range of $8 million to $12 million, versus just less than $19 million in 2015. Liquidity remains strong at $84 million at the close of 2015, or about $9 million higher than at the end of 2014.