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Hallador Energy Co (HNRG) SEC Filing 10-Q Quarterly Report for the period ending Thursday, March 31, 2022

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HNRG Quarterly Reports

Hallador Energy Co

CIK: 788965 Ticker: HNRG

 EXHIBIT 99.1

 

Hallador Energy Company Reports Full-Year 2021 Financial and Operating Results

 

 

TERRE HAUTE, Ind., March 28, 2022 -- Hallador Energy Company (NASDAQ – HNRG) today reported net loss of $3.8 million, ($.12) per share. 

 

Brent Bilsland, President and Chief Executive Officer, stated, "The announcement of the acquisition of the Merom Generation Station is an absolute game changer for Hallador Energy Company.  This transaction is an example of how Hallador can help its customers transition to renewables.  Providing critical capacity to them in the near term, to maintain grid reliability, while creating a path to renewables through a PPA in the future.”

 

  On February 15th, 2022, Hallador Energy announced its new wholly owned subsidiary, Hallador Power Company, LLC, will acquire Hoosier Energys 1-Gigawatt Merom Generating Station (Merom), located in Sullivan County, Indiana, in return for assuming certain decommissioning costs and environmental responsibilities.

 

  The transaction, which includes a 3.5-year power purchase agreement (PPA), is scheduled to close in mid-July 2022 upon obtaining required governmental and financial approvals.

 

  We expect Hallador Power to contribute little to Hallador Energy profits in 2022.  However, this acquisition is significant starting next year as we believe Hallador Power will double Hallador Energy's adjusted EBITDA starting in 2023.

 

 

At the end of the plant's useful life, Hallador and Hoosier expect to finalize a PPA to allow for renewable energy.

 

 

In 2021, we generated $48.0 million in operating cash flow which we utilized to pay down our bank debt by $26.0 million.  

 

  As of December 31, 2021, our bank debt was $111.7 million, bringing our liquidity to $35.9 million and our leverage ratio to 2.34X, within our covenant of 3.0X.  

 

  On March 25, 2022, we executed an amendment to our credit facility to maintain our leverage covenant at 3.0X.

 

  We anticipate adding even more liquidity to our balance sheet to facilitate the acquisition of the Merom Generating Station in mid-July of this year.

 

 

Success in executing 5.8 million tons of new coal sales contracts were made in 2021:

 

  Increasing 2022 volumes to 6.8 million tons.

 

  Increasing 2023 volumes to 7.0 million tons (assumes completion of Merom acquisition)

 

  Improvement of 2023 average sales price by $3.29 over 2022.


 

 

 Solid Sales Position Through 2023 and Beyond:

 

   

Contracted

 

Estimated

   

tons

 

price

Year

 

(millions)*

 

per ton

2022 (annual)

 

6.8

 

$ 39.81

2023 (annual)

 

5.3

 

$ 43.10

         

2024 - 2027 (total)

 

6.3

 

**

Total

 

18.4

   

 

*     Contracted tons are subject to adjustment in instances of force majeure and exercise of customer options to either take additional tons or reduce tonnage if such option exists in the customer contract
**   Unpriced or partially priced tons

 

The table below represents some of our critical metrics (in thousands except for per ton data):

 

   

December 31,

 
   

2021

   

2020

 

Net loss

  $ (3,754 )   $ (6,220 )

Total revenues

  $ 247,666     $ 244,241  

Tons sold

  $ 6,173     $ 5,968  

Average price per ton

  $ 39.51     $ 40.56  

Bank debt

  $ 111,738     $ 137,738  

Operating cash flow

  $ 47,974     $ 52,576  

Adjusted EBITDA

  $ 50,285     $ 53,501  

--------------------------------

*Defined as operating cash flows plus gain on extinguishment of our PPP loan debt, plus current income tax expense, 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 years ended December 31, 2021 and 2020, respectively.

 

 

 

The following information was filed by Hallador Energy Co (HNRG) on Tuesday, March 29, 2022 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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Inside Hallador Energy Co's 10-Q Quarterly Report:

Financial Statements, Disclosures and Schedules

Inside this 10-Q Quarterly Report

Document And Entity Information
Condensed Consolidated Balance Sheets (Unaudited)
Condensed Consolidated Balance Sheets (Unaudited) (Parentheticals)
Condensed Consolidated Statements Of Cash Flows (Unaudited)
Condensed Consolidated Statements Of Operations (Unaudited)
Condensed Consolidated Statements Of Stockholders' Equity (Unaudited)
Note 1 - General Business
Note 1 - General Business (Details Textual)
Note 10 - Leases
Note 10 - Leases (Details Textual)
Note 10 - Leases (Tables)
Note 10 - Leases - Future Minimum Lease Payments (Details)
Note 10 - Leases - Information Related To Leases (Details)
Note 11 - Self-Insurance
Note 11 - Self-Insurance (Details Textual)
Note 12 - Net Loss Per Share
Note 12 - Net Loss Per Share (Tables)
Note 12 - Net Loss Per Share - Computation Of Net Income(Loss) Allocated To Common Shareholders (Details)
Note 13 - Fair Value Measurements
Note 13 - Fair Value Measurements (Details Textual)
Note 13 - Fair Value Measurements (Tables)
Note 13 - Fair Value Measurements - Change In Fair Value Of The Fuel Hedges And Interest Rate Swaps (Details)
Note 13 - Fair Value Measurements - Financial Assets And Liabilities Measured On A Recurring Basis At Fair Value (Details)
Note 14 - Equity Method Investments
Note 14 - Equity Method Investments (Details Textual)
Note 15 - Subsequent Events
Note 15 - Subsequent Events (Details Textual)
Note 2 - Long-Lived Asset Impairments
Note 2 - Long-Lived Asset Impairments (Details Textual)
Note 3 - Inventory
Note 3 - Inventory (Details Textual)
Note 4 - Other Long-Term Assets
Note 4 - Other Long-Term Assets (Tables)
Note 4 - Other Long-Term Assets - Other Long-Term Assets (Details)
Note 5 - Bank Debt
Note 5 - Bank Debt (Details Textual)
Note 5 - Bank Debt (Tables)
Note 5 - Bank Debt - Bank Debt, Less Debt Issuance Costs (Details)
Note 5 - Bank Debt - Maximum Leverage Ratio (Details)
Note 6 - Accounts Payable And Accrued Liabilities
Note 6 - Accounts Payable And Accrued Liabilities (Tables)
Note 6 - Accounts Payable And Accrued Liabilities - Accounts Payable And Accrued Liabilities (Details)
Note 7 - Revenue
Note 7 - Revenue 1 (Details Textual)
Note 7 - Revenue 2 (Details Textual)
Note 8 - Income Taxes
Note 8 - Income Taxes (Details Textual)
Note 9 - Stock Compensation Plans
Note 9 - Stock Compensation Plans (Details Textual)
Note 9 - Stock Compensation Plans (Tables)
Note 9 - Stock Compensation Plans - Rsu Activity (Details)
Note 9 - Stock Compensation Plans - Rsu Activity (Details) (Parentheticals)
Note 9 - Stock Compensation Plans - Vesting Of Non-Vested Rsu Grants (Details)
Significant Accounting Policies (Policies)
Ticker: HNRG
CIK: 788965
Form Type: 10-Q Quarterly Report
Accession Number: 0001437749-22-013322
Submitted to the SEC: Mon May 23 2022 4:59:41 PM EST
Accepted by the SEC: Mon May 23 2022
Period: Thursday, March 31, 2022
Industry: Bituminous Coal And Lignite Mining

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