[Q2 2025 Financial and Operating Results](index=1&type=section&id=Hallador%20Energy%20Company%20Reports%20Second%20Quarter%202025%20Financial%20and%20Operating%20Results) [Management Commentary](index=1&type=section&id=Management%20Commentary) Management reported strong Q2 results with increased revenue and net income, driven by improved coal cost efficiency and active pursuit of a long-term PPA - The company delivered strong Q2 results, including increased revenue and net income, despite a scheduled outage at a generating unit and seasonal softness in the energy market[2](index=2&type=chunk) - Coal operations benefited from improved cost efficiency and stronger recovery rates, leading to higher inventory levels that position the company for a strong second half[2](index=2&type=chunk) - Hallador is seeing increased momentum in its strategy to secure a long-term PPA, engaging with a broad range of potential partners, including utilities, in a market with ramping demand for accredited capacity and baseload power[2](index=2&type=chunk) [Second Quarter 2025 Highlights](index=1&type=section&id=Second%20Quarter%202025%20Highlights) Q2 2025 highlights include **10% revenue growth** to **$102.9 million**, **$8.2 million net income**, and **$11.4 million operating cash flow** Q2 2025 Key Financial Metrics (YoY, $ in Millions) | Metric | Q2 2025 | Change (YoY) | | :--- | :--- | :--- | | Total Revenue | $102.9 Million | +10% | | Net Income | $8.2 Million | Increase from loss | | Adjusted EBITDA | $3.4 Million | Increase from loss | | Operating Cash Flow | $11.4 Million | - | Debt and Liquidity (as of June 30, 2025, $ in Millions) | Metric | Q2 2025 | Q1 2025 | Q4 2024 | | :--- | :--- | :--- | :--- | | Total Bank Debt | $45.0 Million | $23.0 Million | $44.0 Million | | Total Liquidity | $42.0 Million | $69.0 Million | $37.8 Million | - In June 2025, the company amended its credit agreement to enhance operating flexibility by redefining covenants and deferring a debt repayment from October 2025 to January 2026[5](index=5&type=chunk) - Capital expenditures for Q2 2025 were **$13.1 million**, nearly flat compared to **$13.2 million** in the same period last year[6](index=6&type=chunk) [Financial Summary and Outlook](index=2&type=section&id=Financial%20Summary%20and%20Outlook) [Financial Summary](index=2&type=section&id=Financial%20Summary) Q2 2025 saw total revenue rise to **$102.9 million**, a turnaround to **$8.2 million net income**, and positive **$3.4 million Adjusted EBITDA** Q2 Financial Summary ($ in Millions) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Electric Sales | $60.0 | $60.0 | | Coal Sales - 3rd Party | $38.1 | $32.8 | | **Total Sales and Operating Revenue** | **$102.9** | **$93.8** | | **Net Income (Loss)** | **$8.2** | **($10.2)** | | Operating Cash Flow | $11.4 | $23.5 | | **Adjusted EBITDA** | **$3.4** | **($5.8)** | [Reconciliation of GAAP to non-GAAP "Adjusted EBITDA"](index=3&type=section&id=Reconciliation%20of%20GAAP%20to%20non-GAAP%20Adjusted%20EBITDA) This section reconciles GAAP Net Income to non-GAAP Adjusted EBITDA, showing a positive **$3.4 million** in Q2 2025 from **$8.2 million net income** Adjusted EBITDA Reconciliation - Q2 (In $ Thousands) | Line Item | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | **NET INCOME (LOSS)** | **$8,248** | **($10,204)** | | Interest expense | $3,819 | $3,735 | | Income tax expense (benefit) | — | ($3,011) | | Depreciation, depletion and amortization | $5,542 | $13,649 | | EBITDA | $17,609 | $4,169 | | Other Adjustments | ($14,211) | ($9,965) | | **Adjusted EBITDA** | **$3,398** | **($5,796)** | [Forward Sales Position](index=2&type=section&id=Solid%20Forward%20Sales%20Position) Hallador holds a strong forward sales position with **$1.0 billion** in total contracted third-party revenues through 2029 - At quarter-end, Hallador had total forward energy, capacity, and coal sales to 3rd party customers of **$1.0 billion** through 2029[7](index=7&type=chunk) Total Contracted Revenue (Consolidated, in Millions) | Year | 2025 | 2026 | 2027 | 2028 | 2029 | Total | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | $197.33 | $361.59 | $290.53 | $124.58 | $17.24 | $991.27 | [Condensed Consolidated Financial Statements](index=5&type=section&id=Condensed%20Consolidated%20Financial%20Statements) [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets increased to **$409.5 million**, total liabilities to **$287.4 million**, and equity to **$122.2 million** Balance Sheet Summary (in thousands) | Account | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Total current assets | $139,874 | $104,858 | | Total assets | $409,513 | $369,120 | | Total current liabilities | $209,255 | $152,903 | | Total liabilities | $287,360 | $264,835 | | Total stockholders' equity | $122,153 | $104,285 | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q2 2025 total revenues reached **$102.9 million**, resulting in **$8.2 million net income** or **$0.19 diluted EPS**, a significant improvement year-over-year Statement of Operations Summary - Q2 (in thousands) | Account | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Total sales and operating revenues | $102,889 | $93,825 | | Total operating expenses | $91,019 | $101,111 | | Income (Loss) from Operations | $11,870 | ($7,286) | | **Net Income (Loss)** | **$8,248** | **($10,204)** | | **Diluted EPS** | **$0.19** | **($0.27)** | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For H1 2025, operating cash flow was **$49.8 million**, with **$24.9 million** used in investing and **$4.7 million** in financing, ending with **$32.4 million** cash Cash Flow Summary - Six Months Ended June 30 (in thousands) | Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $49,783 | $39,891 | | Net cash used in investing activities | ($24,897) | ($25,570) | | Net cash used in financing activities | ($4,669) | ($10,716) | | **Cash, cash equivalents, and restricted cash, end of period** | **$32,370** | **$10,728** | [Other Information](index=4&type=section&id=Other%20Information) [About Hallador Energy Company & Contact Information](index=4&type=section&id=About%20Hallador%20Energy%20Company%20%26%20Contact%20Information) Hallador Energy is an Indiana-based vertically-integrated IPP, operating the Merom Generating Station and Sunrise Coal for power and fuel production - Hallador Energy is a vertically-integrated IPP with two core businesses: Hallador Power Company, LLC (electricity production) and Sunrise Coal, LLC (fuel production and supply)[14](index=14&type=chunk) [Conference Call and Forward-Looking Statements](index=4&type=section&id=Conference%20Call%20and%20Forward-Looking%20Statements) A conference call is scheduled for August 11, 2025, to discuss results, with the report also containing forward-looking statements - Management will host a conference call and webcast on August 11, 2025, at 5:00 p.m. Eastern time to discuss the financial and operational results[13](index=13&type=chunk) - The press release includes forward-looking statements concerning the company's ability to secure a long-term PPA and unlock asset value, which are subject to risks and uncertainties[12](index=12&type=chunk)

Financial Performance - Total revenue for Q2 2025 increased by 10% year-over-year to $102.9 million, driven by a strong increase in coal sales to $38.1 million [1][5][7] - Net income for Q2 2025 was $8.2 million, translating to earnings per share of $0.19, a significant improvement from a net loss of $10.2 million in Q2 2024 [1][7][21] - Adjusted EBITDA for Q2 2025 rose to $3.4 million, compared to a loss of $5.8 million in the same quarter last year [1][7][21] Cash Flow and Liquidity - Operating cash flow for Q2 2025 was $11.4 million, which was utilized to partially fund capital expenditures of $13.1 million [1][4][6] - Total liquidity at the end of Q2 2025 was $42.0 million, down from $69.0 million at the end of Q1 2025 [5][7] Debt and Financing - Total bank debt increased to $45.0 million as of June 30, 2025, up from $23.0 million at March 31, 2025, primarily due to a higher revolver balance related to planned maintenance [5][7] - The company amended its credit agreement in June 2025 to enhance operating flexibility, deferring certain covenant requirements and moving a scheduled debt repayment to January 2026 [5][7] Operational Highlights - The company experienced operational resilience despite seasonal softness in the energy market and a scheduled outage at one of its generating units [2][5] - Hallador is actively pursuing long-term power purchase agreements (PPAs) and has engaged with various potential partners, indicating a positive outlook for future revenue generation [2][5] Strategic Positioning - Hallador has a solid forward sales position with total forward energy, capacity, and coal sales to third-party customers amounting to $1.0 billion through 2029 [7][12] - The company is focused on unlocking the full value of its dispatchable generation assets while evaluating strategic acquisitions and enhancements [2][5]

Core Viewpoint - Hallador Energy Company will host a conference call on August 11, 2025, to discuss its financial results for the second quarter ended June 30, 2025 [1] Company Overview - Hallador Energy Company is a vertically-integrated Independent Power Producer (IPP) based in Terre Haute, Indiana [3] - The company operates two core businesses: Hallador Power Company, LLC, which produces electricity at its one-Gigawatt (GW) Merom Generating Station, and Sunrise Coal, LLC, which supplies fuel to the Merom Generating Station and other companies [3] Conference Call Details - The conference call will take place on Monday, August 11, 2025, at 5:00 p.m. Eastern time [2] - Interested parties can submit questions prior to the call via email to the investor relations team [2] - The call will be broadcast live and available for replay on the company's investor relations website [2]

Group 1 - Hallador Energy Company is under investigation by Pomerantz LLP for potential securities fraud or unlawful business practices involving its officers and/or directors [1] - On May 23, 2025, Hallador announced the termination of its exclusivity agreement with a datacenter developer regarding a power supply deal, leading to a stock price decline of $1.38 per share, or 7.33%, closing at $17.45 [3]

Core Viewpoint - Hallador Energy Company is under investigation for potential violations of federal securities laws and unlawful business practices following the termination of an exclusivity agreement with a datacenter developer, which led to a significant drop in its stock price [1][2]. Company Developments - On May 23, 2025, Hallador announced the termination of its exclusivity agreement with a datacenter developer regarding a potential power supply deal, which has raised concerns among investors [2]. - Following the announcement, Hallador's stock price decreased by $1.38 per share, representing a 7.33% decline, closing at $17.45 per share [2]. Legal Investigation - Bragar Eagel & Squire, P.C. is investigating potential claims on behalf of Hallador stockholders who may have suffered losses due to the company's actions [1][3]. - The law firm is seeking information from long-term stockholders and those who have acquired Hallador shares regarding their rights and interests in this matter [3].

Core Viewpoint - Kirby McInerney LLP is investigating potential claims against Hallador Energy Company regarding possible violations of federal securities laws and unlawful business practices [1]. Group 1: Company Developments - On May 23, 2025, Hallador disclosed the termination of its exclusivity agreement with a datacenter developer for a potential power supply deal [1]. - Hallador stated that discussions for an additional exclusivity period are ongoing, along with non-exclusive discussions with other parties [1]. - Following the announcement, Hallador's share price fell by $1.38, from $18.83 on May 22, 2025, to $17.45 on May 23, 2025 [1]. Group 2: Legal Investigation - The investigation by Kirby McInerney LLP focuses on whether Hallador and/or its officers have engaged in unlawful business practices [1]. - Investors who purchased Hallador securities and have information related to the investigation are encouraged to contact the law firm [2].

Core Points - Hallador Energy Company announced the appointment of Todd Telesz as Chief Financial Officer, effective June 23, 2025, succeeding Marjorie Hargrave [1] - Marjorie Hargrave contributed significantly to reducing operating and overhead expenses and improving financial reporting processes during her tenure [1][3] - Todd Telesz has extensive experience in the power sector, having served as CFO of Tri-State Generation and Transmission Association and CEO of Basin Electric [2] - The company aims to advance its acquisition strategy in the power market, particularly as energy cooperatives retire fossil-based generation assets [3] Company Overview - Hallador Energy Company is a vertically-integrated Independent Power Producer based in Terre Haute, Indiana, with two core businesses: Hallador Power Company, LLC, and Sunrise Coal, LLC [5] - Hallador Power Company operates the one-Gigawatt Merom Generating Station, while Sunrise Coal supplies fuel to this station and other companies [5]

Core Viewpoint - Pomerantz LLP is investigating potential securities fraud or unlawful business practices involving Hallador Energy Company and its officers or directors [1] Group 1: Company Developments - On May 23, 2025, Hallador announced the termination of its exclusivity agreement with a datacenter developer regarding a potential power supply deal, leading to ongoing discussions for a new exclusivity period and evaluations of opportunities with other parties [3] - Following the announcement, Hallador's stock price decreased by $1.38 per share, or 7.33%, closing at $17.45 per share on the same day [3] Group 2: Legal Investigation - Pomerantz LLP is actively seeking claims from investors of Hallador Energy Company, indicating a serious investigation into possible securities fraud [1] - The firm is recognized for its expertise in corporate, securities, and antitrust class litigation, having a long history of recovering significant damages for victims of securities fraud [4]

Core Viewpoint - Hallador Energy Company is actively participating in three investor conferences in May and June 2025, indicating its commitment to engaging with investors and enhancing visibility in the market [1]. Company Overview - Hallador Energy Company is a vertically-integrated Independent Power Producer (IPP) based in Terre Haute, Indiana, with two main business segments: Hallador Power Company, LLC, which operates the one-Gigawatt (GW) Merom Generating Station, and Sunrise Coal, LLC, which supplies fuel to the Merom Generating Station and other clients [3]. Upcoming Conferences - The company will participate in the B. Riley Securities 25th Annual Investor Conference on May 21-22, where it will engage in an analyst-hosted roundtable and hold one-on-one meetings [4]. - Hallador will also attend the Jefferies Power Conference on June 5, conducting one-on-one meetings throughout the day [4]. - Additionally, the company is set to participate in the Northland Growth Conference, which will be held virtually on June 25, also featuring one-on-one meetings [4].

Financial Data and Key Metrics Changes - Total operating revenue increased to $117.8 million for Q1 2025 compared to $94.8 million in Q4 2024 and $111.6 million in the prior year period [14] - Net income improved to $10 million for Q1 2025 compared to net losses of $215.8 million in Q4 2024 and the prior year period [14] - Operating cash flow increased to $38.4 million for Q1 2025 compared to $32.5 million in Q4 2024 and $16.4 million in the prior year period [14] - Adjusted EBITDA increased significantly to $19.3 million for Q1 2025 compared to $6.2 million in Q4 2024 and $6.8 million in the prior year period [14] - Total bank debt reduced to $23 million as of March 31, 2025, compared to $44 million at December 31, 2024, and $77 million at March 31, 2024 [15] - Total liquidity increased to $69 million as of March 31, 2025, compared to $37.8 million at December 31, 2024, and $39.5 million at March 31, 2024 [15] Business Line Data and Key Metrics Changes - Electric sales for Q1 2025 increased to $85.9 million compared to $69.7 million in Q4 2024 and $60.7 million in the prior year period [13] - Coal sales were $54.8 million for Q1 2025 compared to $42.4 million in Q4 2024 and $66 million in the prior year period, reflecting a strategic reduction in coal production [13] Market Data and Key Metrics Changes - The forward power curves indicate increasing margins for energy produced at the Merum plant, with accredited capacity sold at prices exceeding $600 per megawatt day in the recent MISO auction [9] - Approximately 3 million megawatt hours have been contracted for the balance of 2025 at an average price of $37.20, and 3.4 million megawatt hours for 2026 at an average price of $44.43 [10] Company Strategy and Development Direction - The company is focused on a strategic shift to a vertically integrated independent power producer, leveraging strong counterparty relationships to manage price volatility [5] - Ongoing negotiations with a leading global data center developer are progressing, with the potential for long-term supply agreements [6] - The company is exploring opportunities to acquire additional dispatchable assets to enhance scale and diversify revenue streams [7] - Plans to evaluate the addition of natural gas co-firing capabilities at the Merum plant to provide fuel flexibility and manage operating expenses [8] Management's Comments on Operating Environment and Future Outlook - Management believes the trend of retiring dispatchable generators in favor of non-dispatchable resources will lead to energy market volatility, enhancing the value of their subsidiary, Howard Power [7] - The company expects to produce approximately 3.8 million tons of coal in 2025, with the potential to increase production if market conditions support it [11] - There is growing demand for reliable power, particularly as grid volatility increases, positioning the company well for sustained growth [12] Other Important Information - The company did not utilize its ATM program in the first quarter and has not used it since Q2 2024 [15] Q&A Session Summary Question: Regarding the exclusivity period with the initial counterparty - Management is evaluating whether to grant an extension for the exclusivity period or continue negotiations non-exclusively while considering other interests [20] Question: Final steps in negotiations with the initial counterparty - Most major points have been negotiated, and the focus is now on finalizing details with the hyperscaler and ensuring alignment among all parties [22] Question: Timing and capital intensity for co-firing with natural gas - The company is analyzing the feasibility of co-firing and expects to provide updates in the future, indicating that the project is very feasible [25] Question: Structure of long-term deals with hyperscalers - The negotiated structure for energy sales is on a unit contingent basis for over a decade in length [26]