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Section 1: 8-K (8-K)

hnrg-8k-05072019

UNITED STATES 

SECURITIES AND EXCHANGE COMMISSION 

Washington, D.C. 20549 



FORM 8-K 

 CURRENT REPORT 

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 

Date of Report (Date of earliest event reported): May 7, 2019 (May 6, 2019) 

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Hallador Energy Company

(Exact name of registrant as specified in its charter) 



 

 

Colorado

001-34743

84-1014610

(State or other jurisdiction

of incorporation)

(Commission

File Number)

(IRS Employer

Identification No.)



1660 Lincoln Street, Suite 2700, Denver, Colorado 80264-2701

(Address, including zip code, of principal executive offices)



Registrant’s telephone number, including area code: (303) 839-5504 



Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: 



 



 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))



Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). 

Emerging growth company    

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange  Act.     



Securities registered pursuant to Section 12(b) of the Act:  





 

 

 

 

Title of each class

 

Trading Symbol

 

Name of each exchange

on which registered

Common Shares, $.01 par value

 

HNRG

 

Nasdaq


 





Item 2.02 - Results of Operation and Financial Condition



On May 6, 2019, Hallador Energy Company reported its first quarter 2019 results on Form 10-Q and issued a press release announcing such results.  A copy of the press release is attached hereto as Exhibit 99.1.    

Item 9.01 – Financial Statements and Exhibits 

(d)Exhibits

99.1 Hallador Energy Reports 2019 1st Quarter Results of $.23 Per Share Citing Increased Coal Volumes and Revenue  

SIGNATURE 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.   



 

 

 

 

 

 



 

 

 

 

 

 



 

 

 

 

 

 

May 7, 2019

 

 

 

By:

 

/s/LAWRENCE D. MARTIN



 

 

 

 

 

Lawrence D. Martin

CFO




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Section 2: EX-99.1 (HNRG-05062019)

exh_99.1



EXHIBIT 99.1



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Press Release





HALLADOR ENERGY REPORTS 2019 1st QUARTER RESULTS OF $.23 PER SHARE CITING INCREASED COAL VOLUMES AND REVENUE





DENVER, May 6, 2019 - Hallador Energy Company (Nasdaq: HNRG) reports financial and operating results for the quarter ended March 31, 2019.   Hallador filed its Form 10-Q after the markets closed today.



Brent Bilsland, President and Chief Executive Officer, commented, “Hallador generated $14.7MM in Adjusted Free Cash Flow in the 1st quarter of 2019.  Considering that these results came from a company with a ~$150MM market cap and is 79% sold out for the next four years, represents exceptional value.” 



Highlights for the quarter include:



·

Q1 2019 NET INCOME UP 228% VS. Q1 2018



o

$7.0 million, $0.23 per share for the quarter ended March 31, 2019.



·

GROWING CUSTOMER BASE HAS LED TO 25% INCREASE IN COAL VOLUMES Q1 2019 VS. Q1 2018



o

Throughout 2018 and 1st Quarter 2019, our Sunrise Coal subsidiary grew from 9 customers in 3 states to 17 customers in 8 states.  This growth in customers has increased our sales volume from 6.6 million tons in 2017 to a projected 8.2 million tons in 2019.



o

2.1 million tons of coal sold in Q1 2019, up from 1.7 million tons in Q1 2018



·

79% SOLD FOR 4 YEARS = GREAT FREE CASH FLOW VISABILITY



o

Sunrise coal continued to make sales during the quarter.  When looking at 2019 through 2022, 25.3 million tons are sold.  Thus, ~79% of our sales are contracted over the next four years at our new ~8.0 million-ton annualized pace.



·

THE STATE OF INDIANA HAS CHOSEN COAL



o

On April 24, 2019, the Indiana Utility Regulatory Commission (IURC) approved an Indiana utility’s request to upgrade environmental controls at a power plant we serve.  Additionally, the IURC denied the same utility’s request to close three coal units we serve and replace them with new combined cycle gas facilities.



·

We believe, the IURC’s decision is a material statement demonstrating that existing coal plants are lower cost than new natural gas plants in Indiana.



o

Furthermore, out of concern for the trend of increasing electricity rates, the Indiana legislature created a committee to study Indiana’s energy policy and release their findings by December 2020.


 



·

HALLADOR TO RELOCATE CORPORATE HEADQUARTERS



o

Effective June 1, 2019, Hallador will relocate corporate headquarters from Denver, Colorado to Terre Haute, Indiana, where the majority of the assets are currently managed.



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





 

 

 

 

 

 



 

 

Quarters Ended March 31,



 

 

2019

 

 

2018

Net Income

 

$

7,000 

 

$

2,132 

Total Revenues

 

$

89,313 

 

$

66,864 

Tons Sold

 

 

2,130 

 

 

1,707 

Average Price per Ton

 

$

40.02 

 

$

39.13 

Bank Debt

 

$

168,450 

 

$

190,737 

Operating Cash Flow

 

$

20,847 

 

$

13,193 

Adjusted EBITDA*

 

$

25,235 

 

$

19,756 

Adjusted Free Cash Flow **

 

$

14,652 

 

$

10,722 

_____________________________________

 

 

 

 

 

 

*Defined as EBITDA plus stock-based compensation and ARO accretion, less the effects of our equity method investments and Hourglass Sands.

**Defined as net income plus deferred income taxes, DD&A, ARO accretion, and stock compensation, less maintenance capex and the effects of our equity method investments.





EBITDA, adjusted EBITDA, and adjusted free cash flow should not be considered alternatives 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 EBITDA, adjusted EBITDA, and adjusted free cash flow may not be the same method used to compute similar measures reported by other companies.



Management believes that the presentation of such additional financial measures provides useful information to investors regarding our performance and results of operations because these measures, when used in conjunction with related GAAP financial measures, (i) provide additional information about our core operating performance and ability to generate and distribute cash flow, (ii) provide investors with the financial and analytical framework upon which management bases financial, operation, compensation, and planning decisions, and (iii) present measurements that investors, rating agencies, and debt holders have indicated are useful in assessing our results.



Reconciliation of GAAP “net income” to non-GAAP “adjusted EBITDA” (in thousands).





 

 

 

 

 

 

 



 

 

Quarters Ended March 31,

 



 

 

2019

 

 

2018

 

Net income

 

$

7,000 

 

$

2,132 

 

Income tax expense (benefit)

 

 

(36)

 

 

166 

 

Loss from Hourglass Sands

 

 

251 

 

 

136 

 

Loss from equity method investments

 

 

34 

 

 

83 

 

DD&A

 

 

11,732 

 

 

10,829 

 

ARO accretion

 

 

309 

 

 

282 

 

Loss on disposal of assets

 

 

 - 

 

 

532 

 

Loss (gain) on marketable securities

 

 

(303)

 

 

154 

 

Interest Expense

 

 

4,619 

 

 

2,708 

 

Other amortization

 

 

1,135 

 

 

762 

 

Stock-based compensation

 

 

494 

 

 

1,972 

 

Adjusted EBITDA

 

$

25,235 

 

$

19,756 

 



 

 

 

 

 

 

 


 



 

Reconciliation of GAAP “net income” to non-GAAP “adjusted free cash flow” (in thousands).



 

 

 

 

 

 

 



 

 

 

Quarters Ended March 31,

 



 

 

2019

 

 

2018

 

Net Income

 

$

7,000 

 

$

2,132 

 

Loss from equity method investments

 

 

34 

 

 

83 

 

Deferred income tax expense

 

 

193 

 

 

369 

 

DD&A

 

 

11,738 

 

 

10,829 

 

ARO accretion

 

 

309 

 

 

282 

 

Deferred financing costs amortization

 

 

543 

 

 

457 

 

Change in fair value of interest rate swaps

 

 

1,013 

 

 

(158)

 

Loss on disposal of assets

 

 

- 

 

 

532 

 

Maintenance capex

 

 

(6,672)

 

 

(5,772)

 

Stock-based compensation less taxes paid

 

 

494 

 

 

1,968 

 

Adjusted Free Cash Flow

 

$

14,652 

 

$

10,722 

 





Conference Call



As previously announced our earnings conference call for financial analysts and investors will be held on Tuesday, May 7, 2019, at 2:00 pm eastern time.  Dial-in numbers for the live conference call are as follows:



Toll-free (888) 347-5317

Canadian Callers Toll-free (855) 669-9657

Conference ID #: Hallador Energy Company HNRG Call



An audio replay of the conference call will be available for one week. To access the audio replay, dial US Toll-Free (877) 344-7529; Canada Toll-Free (855) 669-9658 and request to be connected to replay access code 10130749.



Hallador is headquartered in Denver, Colorado and through its wholly owned subsidiary, Sunrise Coal, LLC, produces coal in the Illinois Basin for the electric power generation industry. To learn more about Hallador or Sunrise, visit our websites at www.halladorenergy.com.



Contact:Rebecca Palumbo

Investor Relations

Phone:(303) 839-5504 ext. 316




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