• Hallador Energy Company Reports Second Quarter 2024 Financial and Operating Results

    来源: Nasdaq GlobeNewswire / 06 8月 2024 16:58:44   America/New_York

    - Q2 Total Revenue of $90.9 Million -
    - Q2 Net Loss of $10.2 Million or $(0.27) Earnings per Share -
    - Q2 Operating Cash Flow of $23.5 Million -
    - Q2 Adjusted EBITDA loss of $(5.8) Million -

    TERRE HAUTE, Ind., Aug. 06, 2024 (GLOBE NEWSWIRE) -- Hallador Energy Company (Nasdaq: HNRG) (“Hallador” or the “Company”), today reported its financial results for the second quarter ended June 30, 2024.

    Brent Bilsland, President and Chief Executive Officer, stated, “We made progress during the quarter towards our strategic and deliberate path to transform Hallador and capture increased value as we advance our products and services up the value chain. Since acquiring the Merom Power Plant in 2022, we have expanded our offerings from fuel production to wholesale electricity sales, and we are now moving further up the chain to begin powering the industrial end user, including through a signed Memorandum of Understanding (MOU) with Hoosier and WIN REMC earlier this year. Since that time, we have carried out a data center targeted Request for Proposal (RFP) that has received a robust response and is in active negotiations, further strengthening our conviction that power is in critical demand and that we possess a crucial component to the success of these data centers.”

    “In the near term, we are facing a challenging market for spot electricity sales. Record natural gas production last year, combined with the second warmest winter in 25 years, has led to a surplus in natural gas inventory. This imbalance has driven down both gas and electricity prices, resulting in an energy market where pricing was above our cost structure only 40% of the time during the first half of the year.”

    “In response to the current environment, we have focused on strengthening our balance sheet by reducing debt and improving our total liquidity to $60.7 million at quarter-end. This was driven in-part by the receipt of a $45 million prepayment during the quarter for an 11-month forward power sale, representing 22% of our projected annual output. As natural gas inventories decrease and prices recover later this year, as we currently expect, we are well positioned to navigate the current environment and drive future power sales that can reshape Hallador’s financial profile.”

    Second Quarter 2024 Highlights

    • The Company generated $23.5 million in operating cash flow during the second quarter, which partially supported repayment of debt and funding capex.
      • Total bank debt was $45.5 million with total liquidity of $60.7 million at June 30, 2024. This compares to total bank debt of $91.5 million and total liquidity of $26.2 million at December 31, 2023.
      • The Company’s leverage ratio was 2.12x at June 30, 2024, compared to 1.32x at December 31, 2023.
      • Capital expenditures were $13.2 million for the second quarter and $28.0 million year-to-date. The Company remains on track with its targeted $43 million capital expenditure budget for 2024.
    • Hallador continues to emphasize electric sales as an independent power producer.
      • Electric Sales were $56.8 million compared to $71.0 million in the year-ago period. The decrease was driven by the buildup of natural gas inventory levels in the broader market reducing the demand for and pricing of electric power.  
      • Coal Sales were $32.8 million compared to $88.6 million in the year-ago period. The decrease was driven by lower demand due to lower natural gas prices.
    • The Company continues to focus on forward sales to hedge its energy position.
      • At quarter-end, Hallador had total forward energy and capacity sales to 3rd party customers of $871.7 million through 2029.
      • The Company signed an 11-month, $45 million forward power purchase agreement (PPA) during the quarter with one of the largest global asset managers.
      • Negotiations continue to advance in response to the Company’s data center targeted RFP, with the potential to sign a long-term contract.
      
    Financial Summary ($ in Millions and Unaudited) 
     Q2 2023  Q1 2024  Q2 2024 
    Electric Sales$71.0  $58.8  $56.8 
    Coal Sales - 3rd Party$88.6  $49.6  $32.8 
    Other Revenue$1.6  $1.3  $1.3 
    Total Revenue$161.2  $109.7  $90.9 
    Net Income (Loss)$16.9  $(1.7) $(10.2)
    Operating Cash Flow$18.1  $16.4  $23.5 
    Adjusted EBITDA*$35.3  $6.8  $(5.8)
                

    * Non-GAAP financial measure, defined as operating cash flows less effects of certain subsidiary and equity method investment activity, plus bank interest, less effects of working capital period changes, plus other amortization

    Adjusted EBITDA should not be considered an alternative to net income, income from operations, cash flows from operating activities or any other measure of financial performance presented in accordance with GAAP. Our method of computing Adjusted EBITDA may not be the same method used to compute similar measures reported by other companies.

    Management believes the non-GAAP financial measure, Adjusted EBITDA, is an important measure in analyzing our liquidity and is a key component of certain material covenants contained within our Credit Agreement, specifically a maximum leverage ratio and a debt service coverage ratio.  Noncompliance with the leverage ratio or debt service coverage ratio covenants could result in our lenders requiring the Company to immediately repay all amounts borrowed.  If we cannot satisfy these financial covenants, we would be prohibited under our Credit Agreement from engaging in certain activities, such as incurring additional indebtedness, making certain payments, and acquiring and disposing of assets.  Consequently, Adjusted EBITDA is critical to the assessment of our liquidity.  The required amount of Adjusted EBITDA is a variable based on our debt outstanding and/or required debt payments at the time of the quarterly calculation based on a rolling prior 12-month period.

    Reconciliation of the non-GAAP financial measure, Adjusted EBITDA, to cash provided by operating activities, the most comparable GAAP measure, is as follows (in thousands) for the three and six months ended June 30, 2024 and 2023, respectively.


     
    Reconciliation of GAAP "Cash provided by (used in) operating activities" to non-GAAP "Adjusted EBITDA" 
    (In $ Thousands and Unaudited)
     
     Three Months Ended  Six Months Ended 
     June 30,  June 30, 
     2024  2023  2024  2023 
    Cash provided by operating activities$23,522  $18,131  $39,891  $44,243 
    Current income tax expense —   61   —   493 
    Loss from Hourglass Sands —   1   1   2 
    Loss from Sunrise Indemnity 6   —   12   — 
    Distribution from Sunrise Energy —   —   —   (625)
    Bank and convertible note interest expense 3,326   2,517   6,859   5,204 
    Working capital period changes (30,305)  12,546   (43,480)  16,390 
    Other long-term asset and liability changes (466)  (253)  (1,403)  (704)
    ASC 606 Capacity Adjustment (2,455)  —   (3,703)  — 
    Cash paid on asset retirement obligation reclamation (37)  566   602   931 
    Other amortization 613   1,728   2,248   3,378 
    Adjusted EBITDA$(5,796) $35,297  $1,027  $69,312 
                    
    Cash (used in) provided by investing activities$(10,720) $(17,081) $(25,570) $(30,548)
                    
    Cash (used in) provided by financing activities$(8,446) $(1,029) $(10,716) $(13,751)
                    

    Solid Forward Sales Position - Segment Basis, Before Intercompany Eliminations (unaudited):

     2024  2025  2026  2027  2028  2029  Total 
    Power                           
    Energy                           
    Contracted MWh (in millions) 1.75   2.48   1.83   1.78   1.09   0.27   9.20 
    Average contracted price per MWh$36.22  $35.70  $55.37  $54.65  $52.98  $51.00     
    Contracted revenue (in millions)$63.39  $88.54  $101.33  $97.28  $57.75  $13.77  $422.06 
                                
    Capacity                           
    Average daily contracted capacity MWh 772   801   744   623   454   100     
    Average contracted capacity price per MWd$207  $198  $230  $226  $225  $230     
    Contracted capacity revenue (in millions)$29.40  $57.89  $62.46  $51.39  $37.39  $3.47  $242.00 
                                
    Total Energy & Capacity Revenue                           
                                
    Contracted Power revenue (in millions)$92.79  $146.43  $163.79  $148.67  $95.14  $17.24  $664.06 
                                
    Coal                           
    Priced tons - 3rd party (in millions) 1.26   1.78   0.50   0.50   —   —   4.04 
    Avg price per ton - 3rd party$50.08  $50.04  $55.50  $55.50  $—  $—     
    Contracted coal revenue - 3rd party (in millions)$63.10  $89.07  $27.75  $27.75  $—  $—  $207.67 
                                
    Committed and unpriced tons - 3rd party (in millions) —   1   1   1   —   —   3 
    Total contracted tons - 3rd party (in millions) 1.26   2.78   1.50   1.50   —   —   7.04 
                                
    TOTAL CONTRACTED REVENUE (IN MILLIONS) - CONSOLIDATED$155.89  $235.50  $191.54  $176.42  $95.14  $17.24  $871.73 
                                
    Priced tons - Merom (in millions) 0.60   2.30   2.30   2.30   2.30   —   9.80 
    Avg price per ton - Merom$51.00  $51.00  $51.00  $51.00  $51.00  $—     
    Contracted coal revenue - Merom (in millions)$30.60  $117.30  $117.30  $117.30  $117.30  $—  $499.80 
                                
    TOTAL CONTRACTED REVENUE (IN MILLIONS) - SEGMENT$186.49  $352.80  $308.84  $293.72  $212.44  $17.24  $1,371.53 
                                

    Forward-Looking Statements

    This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Statements that are not strictly historical statements constitute forward-looking statements and may often, but not always, be identified by the use of such words such as "expects," "believes," "intends," "anticipates," "plans," "estimates," "guidance," "target," "potential," "possible," or "probable" or statements that certain actions, events or results "may," "will," "should," or "could" be taken, occur or be achieved. Forward-looking statements are based on current expectations and assumptions and analyses made by Hallador and its management in light of experience and perception of historical trends, current conditions and expected future developments, as well as other factors appropriate under the circumstances that involve various risks and uncertainties that could cause actual results to differ materially from those reflected in the statements. These risks include, but are not limited to, those set forth in Hallador's annual report on Form 10-K for the year ended December 31, 2023, and other Securities and Exchange Commission filings. Hallador undertakes no obligation to revise or update publicly any forward-looking statements except as required by law.

    Conference Call and Webcast

    Hallador management will host a conference call Tuesday, August 6, 2024 at 5:00 p.m. Eastern time to discuss its financial and operational results, followed by a question-and-answer period.

    Date: Tuesday, August 6, 2024
    Time: 5:00 p.m. Eastern time
    United States local: (404) 975-4839
    United States toll-free: (833) 470-1428
    Access code: 933229
    Webcast: HNRG Q2 2024 Earnings Call

    The conference call will also be broadcast live and available for replay in the investor relations section of the Company’s website at www.halladorenergy.com.

     
    Hallador Energy Company 
    Condensed Consolidated Balance Sheets 
    (in thousands, except per share data) 
    (unaudited)
     
     June 30,  December 31, 
     2024  2023 
    ASSETS       
    Current assets:       
    Cash and cash equivalents$6,446  $2,842 
    Restricted cash 4,282   4,281 
    Accounts receivable 19,098   19,937 
    Inventory 32,595   23,075 
    Parts and supplies 39,459   38,877 
    Prepaid expenses 2,027   2,262 
    Total current assets 103,907   91,274 
    Property, plant and equipment:       
    Land and mineral rights 115,486   115,486 
    Buildings and equipment 531,413   537,131 
    Mine development 164,475   158,642 
    Finance lease right-of-use assets 19,869   12,346 
    Total property, plant and equipment 831,243   823,605 
    Less - accumulated depreciation, depletion and amortization (349,462)  (334,971)
    Total property, plant and equipment, net 481,781   488,634 
    Investment in Sunrise Energy 2,305   2,811 
    Other assets 7,176   7,061 
    Total assets$595,169  $589,780 
            
    LIABILITIES AND STOCKHOLDERS' EQUITY       
    Current liabilities:       
    Current portion of bank debt, net$17,938  $24,438 
    Accounts payable and accrued liabilities 45,890   62,908 
    Current portion of lease financing 6,204   3,933 
    Deferred revenue 84,772   23,062 
    Contract liability - power purchase agreement and capacity payment reduction 40,735   43,254 
    Total current liabilities 195,539   157,595 
    Long-term liabilities:       
    Bank debt, net 24,734   63,453 
    Convertible notes payable —   10,000 
    Convertible notes payable - related party —   9,000 
    Long-term lease financing 10,699   8,157 
    Deferred income taxes 5,614   9,235 
    Asset retirement obligations 15,335   14,538 
    Contract liability - power purchase agreement 25,076   47,425 
    Other 2,002   1,789 
    Total long-term liabilities 83,460   163,597 
    Total liabilities 278,999   321,192 
    Commitments and contingencies       
    Stockholders' equity:       
    Preferred stock, $.10 par value, 10,000 shares authorized; none issued —   — 
    Common stock, $.01 par value, 100,000 shares authorized; 42,599 and 34,052 issued and outstanding, as of June 30, 2024 and December 31, 2023, respectively 426   341 
    Additional paid-in capital 186,945   127,548 
    Retained earnings 128,799   140,699 
    Total stockholders’ equity 316,170   268,588 
    Total liabilities and stockholders’ equity$595,169  $589,780 
            


    Hallador Energy Company 
    Condensed Consolidated Statements of Operations
    (in thousands, except per share data) 
    (unaudited)
     
     Three Months Ended June 30,  Six Months Ended June 30, 
     2024  2023  2024  2023 
    SALES AND OPERATING REVENUES:               
    Electric sales$56,846  $71,017  $115,601  $163,409 
    Coal sales 32,801   88,574   82,431   183,176 
    Other revenues 1,267   1,603   2,554   2,943 
    Total sales and operating revenues 90,914   161,194   200,586   349,528 
    EXPENSES:               
    Fuel 10,439   32,641   18,498   88,614 
    Other operating and maintenance costs 35,912   41,908   73,394   74,428 
    Utilities 3,396   4,343   7,770   8,840 
    Labor 26,555   36,528   61,723   77,059 
    Depreciation, depletion and amortization 13,649   17,169   29,092   35,145 
    Asset retirement obligations accretion 399   461   798   912 
    Exploration costs 47   305   117   511 
    General and administrative 7,803   5,595   13,747   12,542 
    Total operating expenses 98,200   138,950   205,139   298,051 
                    
    INCOME (LOSS) FROM OPERATIONS (7,286)  22,244   (4,553)  51,477 
                    
    Interest expense (1) (3,735)  (3,541)  (7,672)  (7,440)
    Loss on extinguishment of debt (1,937)  —   (2,790)  — 
    Equity method investment (loss) (257)  (217)  (506)  (148)
    NET INCOME (LOSS) BEFORE INCOME TAXES (13,215)  18,486   (15,521)  43,889 
                    
    INCOME TAX EXPENSE (BENEFIT):               
    Current —   61   —   493 
    Deferred (3,011)  1,510   (3,621)  4,430 
    Total income tax expense (benefit) (3,011)  1,571   (3,621)  4,923 
                    
    NET INCOME (LOSS)$(10,204) $16,915  $(11,900) $38,966 
                    
    NET INCOME (LOSS) PER SHARE:               
    Basic$(0.27) $0.51  $(0.32) $1.18 
    Diluted$(0.27) $0.47  $(0.32) $1.08 
                    
    WEIGHTED AVERAGE SHARES OUTSTANDING               
    Basic 37,879   33,137   37,026   33,061 
    Diluted 37,879   36,708   37,026   36,696 
                    
    (1) Interest Expense:               
    Interest on bank debt$2,779  $2,055  $5,584  $4,310 
    Other interest 547   462   1,275   894 
    Amortization:               
    Amortization of debt issuance costs 409   1,024   813   2,236 
    Total amortization 409   1,024   813   2,236 
    Total interest expense$3,735  $3,541  $7,672  $7,440 
                    


    Hallador Energy Company 
    Condensed Consolidated Statements of Cash Flows
    (in thousands) 
    (unaudited)
     
     Six Months Ended June 30, 
     2024  2023 
    CASH FLOWS FROM OPERATING ACTIVITIES:       
    Net income (loss)$(11,900) $38,966 
    Adjustments to reconcile net income to net cash provided by operating activities:       
    Deferred income tax (benefit) (3,621)  4,430 
    Equity loss – Sunrise Energy 506   148 
    Cash distribution - Sunrise Energy —   625 
    Depreciation, depletion, and amortization 29,092   35,145 
    Loss on extinguishment of debt 2,790   — 
    Loss (gain) on sale of assets (246)  58 
    Amortization of debt issuance costs 813   2,236 
    Asset retirement obligations accretion 798   912 
    Cash paid on asset retirement obligation reclamation (602)  (931)
    Stock-based compensation 2,247   2,001 
    Amortization of contract asset and contract liabilities (24,868)  (22,162)
    Other 1,402   704 
    Change in operating assets and liabilities:       
    Accounts receivable 839   8,461 
    Inventory (9,520)  (9,322)
    Parts and supplies (582)  (5,564)
    Prepaid expenses 2,140   282 
    Accounts payable and accrued liabilities (11,107)  (11,867)
    Deferred revenue 61,710   121 
    Net cash provided by operating activities 39,891   44,243 
    CASH FLOWS FROM INVESTING ACTIVITIES:       
    Capital expenditures (28,044)  (30,610)
    Proceeds from sale of equipment 2,474   62 
    Net cash used in investing activities (25,570)  (30,548)
    CASH FLOWS FROM FINANCING ACTIVITIES:       
    Payments on bank debt (86,500)  (37,013)
    Borrowings of bank debt 40,500   26,000 
    Payments on lease financing (2,665)  — 
    Proceeds from sale and leaseback arrangement 3,783   — 
    Issuance of related party notes payable 5,000   — 
    Payments on related party notes payable (5,000)  — 
    Debt issuance costs (76)  (1,629)
    ATM offering 34,515   — 
    Taxes paid on vesting of RSUs (273)  (1,109)
    Net cash used in financing activities (10,716)  (13,751)
    Increase (decrease) in cash, cash equivalents, and restricted cash 3,605   (56)
    Cash, cash equivalents, and restricted cash, beginning of period 7,123   6,426 
    Cash, cash equivalents, and restricted cash, end of period$10,728  $6,370 
    CASH, CASH EQUIVALENTS, AND RESTRICTED CASH:       
    Cash and cash equivalents$6,446  $2,337 
    Restricted cash 4,282   4,033 
     $10,728  $6,370 
    SUPPLEMENTAL CASH FLOW INFORMATION:       
    Cash paid for interest$6,312  $5,010 
    SUPPLEMENTAL NON-CASH FLOW INFORMATION:       
    Change in capital expenditures included in accounts payable and prepaid expense$(1,694) $426 
    Stock issued on redemption of convertible notes and interest$22,993  $— 
            

    About Hallador Energy Company

    Hallador Energy Company (Nasdaq: HNRG) is a vertically-integrated Independent Power Producer (IPP) based in Terre Haute, Indiana. The Company has two core businesses: Hallador Power Company, LLC, which produces electricity and capacity at its one Gigawatt (GW) Merom Generating Station, and Sunrise Coal, LLC, which produces and supplies fuel to the Merom Generating Station and other companies. To learn more about Hallador, visit the Company’s website at www.halladorenergy.com.

    Company Contact

    Marjorie Hargrave
    Chief Financial Officer
    (303) 917-0777
    MHargrave@halladorenergy.com

    Investor Relations Contact

    Sean Mansouri, CFA
    Elevate IR
    (720) 330-2829
    HNRG@elevate-ir.com


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