Hallador Energy pany(HNRG)

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Hallador Energy pany(HNRG) - 2023 Q3 - Quarterly Report
2023-11-06 22:19
[PART I - FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) [Financial Statements (Unaudited)](index=3&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS%20(Unaudited)) This section presents the unaudited condensed consolidated financial statements for Hallador Energy Company as of September 30, 2023, and for the three and nine-month periods then ended - **Key Financial Highlights (Nine Months Ended Sep 30, 2023)** | Metric | Amount (in thousands) | Change YoY | | :--- | :--- | :--- | | **Total Revenue** | $515,296 | +145.5% | | **Income from Operations** | $75,280 | N/A (from loss) | | **Net Income** | $55,041 | N/A (from loss) | | **Diluted EPS** | $1.52 | N/A (from -$0.38) | | **Cash from Operations** | $79,527 | +470.7% | - Following the Merom Power Plant acquisition in October 2022, the company now operates and reports through two segments: Coal Operations and Electric Operations, with prior periods recast to reflect this change[21](index=21&type=chunk) [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Presents the company's financial position, detailing assets, liabilities, and equity as of September 30, 2023, and December 31, 2022 - **Balance Sheet Summary (as of Sep 30, 2023 vs. Dec 31, 2022)** | Account | Sep 30, 2023 (in thousands) | Dec 31, 2022 (in thousands) | | :--- | :--- | :--- | | **Total Current Assets** | $92,327 | $138,519 | | **Total Assets** | $585,186 | $630,554 | | **Total Current Liabilities** | $171,589 | $239,602 | | **Total Liabilities** | $313,497 | $415,530 | | **Total Stockholders' Equity** | $271,689 | $215,024 | [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Details the company's revenues, expenses, and net income for the three-month periods ended September 30, 2023, and 2022 - **Statement of Operations Summary (Q3 2023 vs Q3 2022)** | Metric | Q3 2023 (in thousands) | Q3 2022 (in thousands) | | :--- | :--- | :--- | | **Total Revenue** | $165,768 | $85,084 | | Coal Sales | $97,420 | $83,562 | | Electric Sales | $67,403 | $0 | | **Income from Operations** | $23,803 | $5,395 | | **Net Income** | $16,075 | $1,612 | | **Diluted EPS** | $0.44 | $0.05 | [Condensed Consolidated Statements of Cash Flows](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Summarizes the cash inflows and outflows from operating, investing, and financing activities for the nine-month periods ended September 30, 2023, and 2022 - **Cash Flow Summary (Nine Months Ended Sep 30, 2023 vs 2022)** | Activity | 2023 (in thousands) | 2022 (in thousands) | | :--- | :--- | :--- | | **Net cash from Operating Activities** | $79,527 | $13,935 | | **Net cash used in Investing Activities** | ($48,684) | ($37,586) | | **Net cash (used in) provided by Financing Activities** | ($30,553) | $28,305 | [Condensed Consolidated Statements of Stockholders' Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders%27%20Equity) Outlines changes in stockholders' equity, including net income and other comprehensive income, for the nine-month periods ended September 30, 2023, and 2022 - Total stockholders' equity increased from **$215.0 million** at December 31, 2022, to **$271.7 million** at September 30, 2023, primarily driven by **$55.0 million** in net income for the nine-month period[14](index=14&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Provides detailed explanations of significant accounting policies, financial instruments, and other material disclosures supporting the financial statements - On August 2, 2023, the company amended its credit agreement, resulting in a new term loan of **$65 million** maturing in March 2026 and a new revolver of **$75 million** maturing in July 2026, accounted for as a debt extinguishment[27](index=27&type=chunk) - As of September 30, 2023, the company had remaining coal sales performance obligations of approximately **$426.1 million** for fixed-price contracts and electric energy and capacity obligations totaling **$312 million** and **$204 million**, respectively, through 2028[47](index=47&type=chunk)[51](index=51&type=chunk) - The Merom Power Plant acquisition was accounted for as an asset acquisition, recording a significant contract liability of **$184.5 million** for a below-market Power Purchase Agreement, amortized into revenue over the contract term[74](index=74&type=chunk)[75](index=75&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=18&type=section&id=ITEM%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management discusses the strong financial performance in the first nine months of 2023, with a net income of $55.0 million and operating cash flow of $79.5 million, highlighting key events including a credit facility amendment, debt repayment, and future energy sales - Net income for Q3 was **$16.1 million**, contributing to a year-to-date net income of **$55.0 million**, with operating cash flow of **$79.5 million** for the nine months used for **$48.7 million** in capital expenditures and **$23.5 million** in debt repayment[84](index=84&type=chunk) - The company successfully amended its credit facility, extending maturity into 2026 and improving its leverage ratio to **0.71x**, well within the **2.25x** covenant[85](index=85&type=chunk)[93](index=93&type=chunk) - Secured **$325 million** of new energy and capacity sales for the years 2024-2028, including **3.3 million MWh** of energy at an average of **$56/MWh** and **$139 million** in capacity sales[88](index=88&type=chunk) [Overview and Forward Sales Position](index=19&type=section&id=OVERVIEW) Provides an overview of the company's financial performance for Q3 2023 and outlines its forward sales position for coal and power segments through 2026 - **Q3 2023 Key Metrics** | Metric | Value | Note | | :--- | :--- | :--- | | **Net Income** | $16.1 million | - | | **Coal Shipped** | 2.1 million tons | Avg. price $65.43/ton (segment) | | **Coal Operating Costs** | $46.54 per ton | +$5.02/ton vs Q2 2023 | | **Operating Cash Flow** | $35.3 million | - | | **Bank Debt Reduction** | $12.5 million | - | | **Power Production** | 1.3 million MWh | - | - **Forward Sales Position Summary (Segment Basis)** | Segment | 2024 | 2025 | 2026 | | :--- | :--- | :--- | :--- | | **Coal (% Sold)** | 90% | 74% | 63% | | **Power - Energy (% Sold)** | 27% | 28% | 27% | | **Power - Capacity (% Contracted)** | 78% | 52% | 59% | [Liquidity and Capital Resources](index=22&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) Analyzes the company's cash flow generation, debt levels, and capital expenditure plans, highlighting its financial flexibility - Cash provided by operations was **$79.5 million** for the first nine months of 2023, a significant increase from **$13.9 million** in the same period of 2022, driven by higher coal sales margins[98](index=98&type=chunk) - As of September 30, 2023, bank debt was reduced to **$61.8 million**, and the company had an additional borrowing capacity of **$63.8 million**[98](index=98&type=chunk) - The projected capital expenditure budget for the remainder of 2023 is **$30 million**[98](index=98&type=chunk) [Results of Operations by Segment](index=23&type=section&id=RESULTS%20OF%20OPERATIONS) Details the financial performance of the Coal Operations and Electric Operations segments, including revenue, income, and key operational metrics - **Coal Operations Performance (Q3 2023 vs Q3 2022)** | Metric | Q3 2023 | Q3 2022 | | :--- | :--- | :--- | | **Operating Revenues** | $134.9M | $84.5M | | **Income from Operations** | $24.8M | $6.1M | | **Average Price/Ton** | $65.43 | $49.01 | | **Average Cost/Ton** | $46.54 | $37.46 | - Coal operations revenue increased **60%** in Q3 2023 vs Q3 2022 due to a **$16/ton** increase in average sales price and **0.3 million** additional tons sold, while operating expenses rose by **$9.08/ton** due to higher-cost mines and inflation[101](index=101&type=chunk)[102](index=102&type=chunk) - The Electric Operations segment, which began in Q4 2022, generated **$67.5 million** in revenue in Q3 2023 but had a loss from operations of **($2.7) million**, impacted by the amortization of contract liabilities and assets from the Merom acquisition[109](index=109&type=chunk)[110](index=110&type=chunk)[111](index=111&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=27&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) This section states that there have been no material changes from the market risk disclosures provided in the company's 2022 Annual Report on Form 10-K - There were no material changes to the company's market risk disclosures compared to the 2022 Annual Report on Form 10-K[122](index=122&type=chunk) [Controls and Procedures](index=27&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Management, including the CEO, CFO, and CAO, evaluated the company's disclosure controls and procedures and concluded that they were effective as of the end of the period - An evaluation of disclosure controls and procedures, supervised by the CEO, CFO, and CAO, concluded that these controls are effective[124](index=124&type=chunk) - No changes were made to the internal control over financial reporting during the quarter ended September 30, 2023, that have materially affected, or are reasonably likely to materially affect, these controls[125](index=125&type=chunk) [PART II - OTHER INFORMATION](index=28&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) [Mine Safety Disclosures](index=28&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) This section directs readers to Exhibit 95.1 of the Form 10-Q for a detailed listing of the company's mine safety violations - A listing of the company's mine safety violations is provided in Exhibit 95.1 to this Form 10-Q[126](index=126&type=chunk) [Exhibits](index=28&type=section&id=ITEM%206.%20EXHIBITS) This section provides a list of all exhibits filed with the Form 10-Q, including the amended loan agreement, CEO/CFO/CAO certifications, mine safety disclosures, and various XBRL data files - Key exhibits filed include the Amended and Restated Loan Agreement dated August 2, 2023 (Exhibit 10.1), SOX 302 and 906 certifications, and Mine Safety Disclosures (Exhibit 95.1)[127](index=127&type=chunk) [Signatures](index=29&type=section&id=SIGNATURES) [Signatures](index=29&type=section&id=SIGNATURES) The report is duly signed and authorized by Lawrence D. Martin, Chief Financial Officer, and R. Todd Davis, Chief Accounting Officer, on behalf of Hallador Energy Company, dated November 6, 2023 - The Form 10-Q was signed on November 6, 2023, by Lawrence D. Martin (CFO) and R. Todd Davis (CAO)[131](index=131&type=chunk)
Hallador Energy pany(HNRG) - 2023 Q2 - Quarterly Report
2023-08-07 21:04
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number:001-34743 HALLADOR ENERGY COMPANY (www.halladorenergy.com) Colorado (State of incorporation) 84-1014610 (IRS Employer Identification No.) 1183 East Canvasback Drive, Terre Haute, ...
Hallador Energy pany(HNRG) - 2023 Q1 - Quarterly Report
2023-05-08 20:57
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number:001-34743 "COAL KEEPS YOUR LIGHTS ON" "COAL KEEPS YOUR LIGHTS ON" HALLADOR ENERGY COMPANY (www.halladorenergy.com) Colorado (State of incorporation) (IRS Employer Identification ...
Hallador Energy pany(HNRG) - 2022 Q4 - Earnings Call Transcript
2023-03-17 21:48
Financial Data and Key Metrics Changes - The adjusted EBITDA for the year was $56.2 million, with a net income of $18.1 million, translating to $0.57 per basic share and $0.55 per diluted share [4][14] - Bank debt decreased by $26.5 million, ending the year at $85.2 million, with a leverage ratio of 2.05x [4][19] Business Line Data and Key Metrics Changes - The average coal sales price increased from $39.51 per ton in 2021 to $45.64 per ton in 2022, with expectations of approximately $58.7 per ton in 2023 [6] - Full-year margins improved to $8.35 per ton in 2022 from $7.35 per ton in 2021, with fourth-quarter margins at $10.41 per ton [6] Market Data and Key Metrics Changes - The company anticipates shipping up to 3 million tons of coal annually from its mines directly to Merom starting in 2024, which is expected to produce approximately 6.5 million megawatt hours for sale in the MISO wholesale energy market [7][8] - The liquidity at the end of 2022 stood at $32.1 million, indicating a strong financial position [19] Company Strategy and Development Direction - The acquisition of the Merom Generation Station is seen as transformational, providing new revenue opportunities and flexibility in coal production [17][18] - The company plans to focus on reducing bank debt and aims to be net debt-free by the end of Q1 2024, with a target cash balance of around $100 million [26][44] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the power markets remaining elevated due to declining capacity reserve margins and increasing grid emergency events [8] - The company expects to experience periods of volatility in earnings due to market conditions but believes in the long-term profit potential of its operations [44][124] Other Important Information - The 2023 capital expenditure budget is set at $69 million, with $35 million allocated for maintenance CapEx [9] - The company is required to invest over $45 million in environmental controls to operate Merom beyond 2025 [8][72] Q&A Session Summary Question: How does the company frame its ongoing liquidity needs? - The company aims to achieve net debt-free status by Q1 2024 and maintain a cash balance around $100 million [26] Question: What is the expected contribution of Merom to EBITDA? - The Merom plant contributed approximately $5.5 million to the adjusted EBITDA of $56.2 million for 2022 [30] Question: How much coal is earmarked for Merom in the upcoming years? - The company plans to take as much coal as possible to Merom, with expectations of converting up to 3 million tons into electricity [27] Question: What are the expectations for costs in 2023? - The company anticipates a decrease in production costs due to easing commodity prices and improved operational efficiencies [112][113] Question: Will the company consider acquiring more power plants? - The company is open to evaluating additional power plant acquisitions as opportunities arise, especially given the expected retirement of a significant portion of the U.S. coal fleet [94]
Hallador Energy pany(HNRG) - 2022 Q4 - Annual Report
2023-03-16 21:11
Part I [Business](index=4&type=section&id=Item%201.%20Business) The company operates in coal mining and electricity generation, with a focus on the Illinois Basin and significant regulatory oversight - On October 21, 2022, Hallador acquired the one Gigawatt Merom Generating Station from Hoosier Energy, creating a new electric operations segment[152](index=152&type=chunk) - The coal mining and electricity generation industries are heavily regulated, leading to **significant compliance costs**[12](index=12&type=chunk)[13](index=13&type=chunk) - The company mines coal exclusively in the Illinois Basin (ILB) using the **continuous (room-and-pillar) mining technique**[68](index=68&type=chunk)[70](index=70&type=chunk) - As of December 31, 2022, the company employed **980 full-time employees**, with the entire workforce being union-free[72](index=72&type=chunk) Regulation and Laws The company's operations are subject to stringent federal and state regulations that increase costs and impact coal demand - The Inflation Reduction Act of 2022 raised the Black Lung excise tax to up to **$1.10/ton** for underground-mined coal and **$0.55/ton** for surface-mined coal[29](index=29&type=chunk) - The Abandoned Mine Lands Program fee was reauthorized through September 2034 at **$0.224/ton** for surface-mined and **$0.096/ton** for underground-mined coal[35](index=35&type=chunk) - Regulations like the Cross-State Air Pollution Rule (CSAPR) and Mercury and Air Toxic Standards (MATS) have led to retirements of coal-fired units, reducing coal demand[40](index=40&type=chunk)[41](index=41&type=chunk) - Future regulation of GHG emissions could further increase costs and negatively impact demand for coal[42](index=42&type=chunk)[43](index=43&type=chunk) U.S. Coal Industry The company operates exclusively in the strategically located Illinois Basin, competing with major producers in a highly competitive market - Hallador's subsidiary, Sunrise Coal, LLC, mines coal exclusively in the **Illinois Basin (ILB)**[68](index=68&type=chunk) - The company utilizes the **continuous (room-and-pillar) mining technique**, where rooms are cut into the coal bed[70](index=70&type=chunk) - Key competitors in the U.S. coal industry include **Peabody Energy Corporation (BTU)** and **Alliance Resource Partners (ARLP)**[71](index=71&type=chunk) Human Capital The company employs a non-union workforce and prioritizes employee health, safety, and retention through competitive benefits - At December 31, 2022, the company had **980 full-time employees**, all of whom are union-free[72](index=72&type=chunk) - The company maintains its own private mine rescue team and provides employees access to a **private health and wellness clinic**[73](index=73&type=chunk)[74](index=74&type=chunk) [Risk Factors](index=15&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks from customer concentration, regulatory changes, ESG pressures, and declining coal demand Risks Related to our Business Key business risks include high customer concentration, challenges integrating the Merom acquisition, and restricted access to capital from ESG pressures - In 2022, **90% of coal revenue** was derived from five customers, and **100% of electric revenue** came from a single customer[82](index=82&type=chunk) - The Merom Generating Station acquisition may not achieve expected benefits and includes **environmental costs that could exceed estimates**[85](index=85&type=chunk) - As of December 31, 2022, the company was in compliance with its debt covenants, with a debt service coverage ratio of **1.49** and a leverage ratio of **2.05**[91](index=91&type=chunk)[92](index=92&type=chunk) - Investor and lender focus on **ESG matters** could negatively impact access to capital and increase costs[95](index=95&type=chunk)[96](index=96&type=chunk) Risks Related to our Industry The coal industry faces declining demand from utilities, intense competition, and costly environmental regulations targeting climate change - The domestic electric utility industry is reducing coal consumption due to competition from **natural gas and renewable energy**[105](index=105&type=chunk)[106](index=106&type=chunk)[108](index=108&type=chunk) - Climate change presents significant regulatory and financial risks, as ESG focus could **reduce demand and funding for fossil fuels**[109](index=109&type=chunk)[110](index=110&type=chunk)[112](index=112&type=chunk) - Obtaining necessary governmental permits is complex, while securing **surety bonds for reclamation** has become increasingly difficult and costly[121](index=121&type=chunk)[137](index=137&type=chunk) - The industry faces operational challenges from **inflation**, which increases material costs, and a **shortage of skilled labor**[135](index=135&type=chunk)[139](index=139&type=chunk) [Unresolved Staff Comments](index=29&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments - None[144](index=144&type=chunk) [Properties](index=29&type=section&id=Item%202.%20Properties) Information regarding the company's properties is detailed in Item 7, Management's Discussion and Analysis - The discussion of the company's properties is located in **"Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations"**[144](index=144&type=chunk) [Legal Proceedings](index=29&type=section&id=Item%203.%20Legal%20Proceedings) The company reports no material legal proceedings - None[145](index=145&type=chunk) [Mine Safety Disclosures](index=29&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) A detailed listing of mine safety violations is provided in Exhibit 95 of the Form 10-K - A detailed listing of mine safety violations is provided in **Exhibit 95** to this Form 10-K[146](index=146&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=30&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's stock trades on NASDAQ, with significant insider ownership and a broad base of beneficial owners - The company's common stock trades on the NASDAQ Capital Market under the symbol **HNRG**[147](index=147&type=chunk) - As of March 10, 2023, there were 249 shareholders of record, with an estimated **over 5,000 street name holders**[148](index=148&type=chunk) - Officers, directors, and their affiliates hold **31.7%** of the company's common stock[147](index=147&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=30&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) The 2022 acquisition of the Merom plant created a new electric segment, driving higher cash flow and debt reduction - The company now has two reportable segments: **coal operations** and **electric operations** following the Merom power plant acquisition[153](index=153&type=chunk) - In summer 2022, the company signed 2.2 million tons of new coal sales contracts at an average price of **~$125 per ton**[155](index=155&type=chunk) - Bank debt was **reduced by $26.5 million** during 2022, ending the year at $85.2 million[158](index=158&type=chunk) - Cash provided by operations increased to **$54.2 million** in 2022 from $48.0 million in 2021, due to higher operating margins[188](index=188&type=chunk) Mining Properties The Oaktown Mining Complex is the company's primary asset, with 66.3 million tons of reserves and 6.4 million tons of production in 2022 Summary Mineral Reserves (as of Dec 31, 2022) | Mine | Proven (M tons) | Probable (M tons) | Total (M tons) | | :--- | :--- | :--- | :--- | | Oaktown Fuels No. 1 | 36.2 | 0.5 | 36.7 | | Oaktown Fuels No. 2 | 28.5 | 1.1 | 29.6 | | **Total** | **64.7** | **1.6** | **66.3** | Oaktown Mining Complex Production (Saleable Tons) | Year | Million Tons | | :--- | :--- | | 2022 | 6.4 | | 2021 | 5.6 | | 2020 | 5.2 | Our Coal Contracts Revenue is highly concentrated among five customers, with 7.5 million tons contracted for 2023 and options to supply its own power plant - In 2022, **90% of coal revenue** came from five customers, including subsidiaries of CenterPoint Energy, Alcoa, AES Corp, and Duke Energy[181](index=181&type=chunk)[182](index=182&type=chunk) - Beginning in 2024, the company has the option to sell up to **3.0 million tons** of its coal annually to its Merom power plant[185](index=185&type=chunk) Forward Contracted Sales (as of Dec 31, 2022) | Year | Contracted Tons (millions) | Est. Price per Ton | | :--- | :--- | :--- | | 2023 | 7.5 | $58.70 | | 2024 - 2027 (total) | 7.3 | Unpriced/Partially Priced | | **Total** | **14.8** | | Liquidity and Capital Resources Operating cash flow of $54.2 million funded debt reduction and capex, with a $69 million capex budget planned for 2023 - Cash provided by operations was **$54.2 million** in 2022, compared to $48.0 million in 2021[188](index=188&type=chunk) - The 2023 capital expenditure budget is **$69 million**, allocated as $34 million for coal and $35 million for electric operations[189](index=189&type=chunk) - Bank debt was reduced to **$85.2 million** as of December 31, 2022, with a subsequent maturity extension to May 2024[190](index=190&type=chunk) Results of Operations The company shifted to a net income of $18.1 million in 2022, driven by higher coal margins and the new electric segment Quarterly Coal Margin Analysis (2022) | Metric | 1st 2022 | 2nd 2022 | 3rd 2022 | 4th 2022 | | :--- | :--- | :--- | :--- | :--- | | Avg Price/Ton | $41.40 | $40.23 | $49.01 | $50.87 | | Avg Cost/Ton | $39.54 | $31.83 | $37.46 | $40.46 | | **Margin/Ton** | **$1.86** | **$8.39** | **$11.55** | **$10.41** | Quarterly Net Income (Loss) (2022, in thousands) | Quarter | Net Income (Loss) | | :--- | :--- | | Q1 2022 | $(10,134) | | Q2 2022 | $(3,386) | | Q3 2022 | $1,612 | | Q4 2022 | $30,013 | [Financial Statements and Supplementary Data](index=43&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) The company's financials reflect a major transformation in 2022, with assets and revenues growing significantly after the Merom acquisition Consolidated Balance Sheets Total assets grew to $630.6 million and liabilities to $415.5 million, driven by the Merom power plant acquisition Consolidated Balance Sheet Highlights (in thousands) | Account | Dec 31, 2022 | Dec 31, 2021 | | :--- | :--- | :--- | | Total Current Assets | $138,519 | $39,239 | | Total Property, Plant and Equipment, net | $480,462 | $302,824 | | **Total Assets** | **$630,554** | **$353,980** | | Total Current Liabilities | $239,602 | $64,626 | | Total Long-term Liabilities | $175,928 | $103,119 | | **Total Liabilities** | **$415,530** | **$167,745** | | **Total Stockholders' Equity** | **$215,024** | **$182,235** | Consolidated Statements of Operations The company achieved a net income of $18.1 million in 2022, a turnaround from a $3.8 million loss in 2021 Consolidated Statement of Operations Highlights (in thousands) | Account | 2022 | 2021 | | :--- | :--- | :--- | | Total Sales and Operating Revenues | $361,991 | $247,666 | | Income (Loss) from Operations | $30,430 | $(6,044) | | **Net Income (Loss)** | **$18,105** | **$(3,754)** | | **Diluted EPS** | **$0.55** | **$(0.12)** | Consolidated Statements of Cash Flows Net cash from operations was $54.2 million, primarily used for capital expenditures and significant debt repayments Consolidated Cash Flow Highlights (in thousands) | Account | 2022 | 2021 | | :--- | :--- | :--- | | Net cash provided by operating activities | $54,169 | $47,974 | | Net cash used in investing activities | $(53,365) | $(27,525) | | Net cash used in financing activities | $(207) | $(26,691) | | **Increase (decrease) in cash** | **$597** | **$(6,242)** | Notes to Consolidated Financial Statements Notes detail the Merom asset acquisition accounting, credit agreement amendments, and issuance of convertible notes - The Merom power plant acquisition was accounted for as an asset acquisition with total consideration of **$181.1 million**[339](index=339&type=chunk)[341](index=341&type=chunk) - The company issued a total of **$29 million** in senior unsecured convertible notes in 2022, with $10 million converted to equity[342](index=342&type=chunk)[343](index=343&type=chunk) - As of Dec 31, 2022, the company had remaining coal sales performance obligations of approximately **$593 million** under fixed-price contracts[304](index=304&type=chunk)[305](index=305&type=chunk) [Controls and Procedures](index=68&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal controls over financial reporting were effective as of year-end 2022 - Management concluded that **disclosure controls and procedures were effective** as of the end of the period[353](index=353&type=chunk) - Management's evaluation of ICFR **excluded the recently acquired Hallador Power Company, LLC (Merom plant)**[355](index=355&type=chunk) - Management concluded that **ICFR was effective** as of December 31, 2022, with an unqualified opinion from Grant Thornton LLP[356](index=356&type=chunk) [Other Information](index=71&type=section&id=Item%209B.%20Other%20Information) A March 2023 credit agreement amendment converted debt, extended maturities, and increased the 2023 capex covenant - On March 13, 2023, the company amended its credit agreement to convert **$35 million** of its revolver into a term loan and extend maturities[367](index=367&type=chunk) - The amendment increased the 2023 capital expenditure covenant to **$75 million** and transitioned interest rates from LIBOR to SOFR[367](index=367&type=chunk)[368](index=368&type=chunk) Part III [Directors, Executive Officers, Corporate Governance, Executive Compensation, Security Ownership, and Certain Relationships](index=71&type=section&id=Items%2010-14) Required information for Items 10-14 is incorporated by reference from the company's forthcoming definitive proxy statement - Information for Items 10, 11, 12, 13, and 14 is **incorporated by reference** from the company's definitive proxy statement[372](index=372&type=chunk) Part IV [Exhibits and Financial Statement Schedules](index=72&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section provides an index to financial statements and a list of all exhibits filed with the Form 10-K - This section contains the index to financial statements and a **list of exhibits** filed with the report[374](index=374&type=chunk)[375](index=375&type=chunk)
Hallador Energy pany(HNRG) - 2022 Q3 - Earnings Call Transcript
2022-11-16 01:57
Hallador Energy Company (NASDAQ:HNRG) Q3 2022 Earnings Conference Call November 15, 2022 2:00 PM ET Company Participants Rebecca Palumbo – Investor Relations Brent Bilsland – President and Chief Executive Officer Larry Martin – Chief Financial Officer Conference Call Participants Kevin Tracey – Oberon AM Arthur Calavritinos – ANC Capital Jeff Bronchick – Cove Street Capital Lucas Pipes – B. Riley Securities Operator Good afternoon and thank you for attending today's Hallador Energy Third Quarter 2022 Earnin ...
Hallador Energy pany(HNRG) - 2022 Q2 - Earnings Call Transcript
2022-08-16 19:48
Hallador Energy Company (NASDAQ:HNRG) Q2 2022 Earnings Conference Call August 16, 2022 2:00 PM ET Company Participants Rebecca Palumbo - Investor Relations Larry Martin - Chief Financial Officer Brent Bilsland - President and Chief Executive Officer Conference Call Participants Nick Giles - B. Riley Securities John Moran - Robotti & Company Operator Thank you for standing by and welcome to the Hallador Second Quarter 2022 Earnings Call. My name is Sam and I will be your moderator for today’s call. [Operator ...
Hallador Energy pany(HNRG) - 2022 Q2 - Quarterly Report
2022-08-15 20:24
Financial Performance - Q2 2022 net loss was $3.4 million, with operating cash flow decreasing by $2.7 million[80][82]. - Earnings per share for Q1 2022 was $(0.33), compared to $(0.03) in Q1 2021, indicating a decline in performance[102]. - Operating margins decreased by $8.3 million in the first half of 2022 compared to the same period in 2021, with margins expected to increase to approximately $20 per ton starting in Q4 2022[91]. - The effective tax rate for the six months ended June 30, 2022, was estimated at ~(2)%, significantly lower than ~25% for the same period in 2021[103]. - Management's evaluation of going concern indicates uncertainty regarding the ability to continue operations without substantial doubt[111]. Sales and Contracts - 1.6 million tons were shipped at an average sales price of $40.23 per ton, with remaining tons expected to average over $49 per ton[82][94]. - Total contracted tons for 2022 (Q3-Q4) are 4.0 million at an average price of $49 per ton, and 6.7 million tons for 2023 at an average price of $58 per ton[86][94]. - Average sales price for 2023 is projected to be approximately $17 per ton higher than the first half of 2022[87]. - The company added 2.2 million tons of new coal contracts priced over $125 per ton for delivery from Q4 2022 through 2025, expected to significantly increase margins[83]. Production and Costs - Production costs in Q2 2022 were $31.83 per ton, a decrease of $7.71 per ton from Q1 2022[82][100]. - Projected Adjusted EBITDA for 2023 is expected to exceed $160 million, up from the traditional $50 million, due to higher-priced coal contracts[87]. - Capital expenditures for the first six months of 2022 were $22.9 million, with an additional projected budget of $15 million for the remainder of the year[91]. Regulatory and Compliance - The company anticipates completing the acquisition of the Merom Power Plant in Q3 2022, subject to regulatory approvals[87]. - The company does not consider unreimbursed costs related to compliance matters to be material as of June 30, 2022[104]. - The company has identified its federal and Indiana state tax returns as major tax jurisdictions, expecting no material changes from audits[109]. Accounting and Valuation - Critical accounting estimates include coal reserves and asset retirement obligations, which could affect depreciation and impairment tests[106]. - Inventory valuation may be affected by the anticipated utilization of higher-cost coal from the Ace in the Hole mine[110]. - The fair value of interest rate swaps is based on anticipated future interest rates, which could impact financial results[108]. - The company plans to recognize certain costs related to government mandates when they can be estimated with reasonable certainty[104]. - No material changes in market risk disclosures were noted compared to the 2021 Annual Report[112].
Hallador Energy pany(HNRG) - 2022 Q1 - Quarterly Report
2022-05-23 20:59
Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number:001-34743 "COAL KEEPS YOUR LIGHTS ON" "COAL KEEPS YOUR LIGHTS ON" HALLADOR ENERGY COMPANY (www.halladorenergy.com) Colorado (State of incorporation) Registrant ...
Hallador Energy pany(HNRG) - 2021 Q4 - Earnings Call Transcript
2022-03-29 20:59
Financial Data and Key Metrics Changes - For the year ended December 31, 2021, the company reported a net loss of $3.8 million or $0.12 per share, with adjusted EBITDA of $50.3 million and a reduction in bank debt by $26 million, bringing total bank debt to $111.7 million [5][9] - The leverage ratio, defined as debt to EBITDA, was reported at 2.34 times, remaining within the covenant limit of 3x [9][12] Business Line Data and Key Metrics Changes - The company shipped 6.2 million tons and produced 5.8 million tons of coal in 2021, with a target production increase to 7 million tons, representing a 21% increase [7][9] - Operating cash flow for the year was $48 million, with adjusted EBITDA of $6.3 million in the fourth quarter [9][10] Market Data and Key Metrics Changes - The average sales price for coal in 2022 is expected to be approximately $31 per ton, which is 37% higher than in 2021 [10][22] - The company has forward sales totaling 5.8 million tons for the years 2022 through 2026, with 4.5 million tons to be delivered over the next three years [8][10] Company Strategy and Development Direction - The company announced the acquisition of Hoosier Energy's 1 gigawatt Merom Generating Station, which is expected to significantly enhance future earnings and contribute to a doubling of adjusted EBITDA starting next year [10][11] - The strategy includes increasing liquidity to support working capital and forward power sales, with a focus on transitioning to renewable energy while maintaining grid reliability [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, indicating that 2023 and beyond could be very beneficial for shareholders, with expectations of moving to double-digit adjusted EBITDA [12][13] - The ongoing geopolitical situation, particularly the impact of Russia's invasion of Ukraine, has shifted global energy dynamics, leading to increased demand for coal and higher power prices [12][20] Other Important Information - The company is facing inflationary pressures affecting input costs, but management believes productivity improvements are underway, with expectations for better performance in 2022 compared to 2021 [22][23] - Maintenance capital expenditures for Hallador Power in 2023 are expected to be $16 million, with additional investments required for environmental controls to extend the plant's operational life [13] Q&A Session Summary Question: What happens after the initial 3.5-year term of the power plant contract? - Management clarified that the contract includes a step-down in capacity and energy sales, with evaluations ongoing regarding environmental upgrades needed to extend the plant's operational life beyond 2025 [16][17] Question: How does the company view refinancing opportunities? - The company is looking to increase liquidity and renegotiate terms as part of the transaction, with ongoing discussions with the bank group [19][21] Question: What is the guidance for cash costs amid inflationary pressures? - Management acknowledged rising costs due to inflation but remains optimistic about productivity improvements and expects the average cost to be around $31 per ton for the year [22][23]