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Section 1: 8-K (8-K)

hnrg20190805

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): August 8, 2019 (August 5, 2019) 

 

Picture 8

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.)

 

 

 

1183 East Canvasback Drive, Terre Haute, Indiana 47802

(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 Operations and Financial Condition

 

On August 5, 2019, Hallador Energy Company reported its second 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 2nd QUARTER FINANCIAL AND OPERATING RESULTS 

 

 

 

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.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

August 8, 2019

 

 

 

By:

 

/s/LAWRENCE D. MARTIN

 

 

 

 

 

 

Lawrence D. Martin

CFO

 

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Section 2: EX-99 (EX-99)

Exh_99

Exhibit 99.1

Picture 2

 

Press Release

 

 

HALLADOR ENERGY REPORTS 2019 2nd QUARTER FINANCIAL AND OPERATING RESULTS

 

 

TERRE HAUTE, August 5, 2019 - Hallador Energy Company (Nasdaq: HNRG) reports financial and operating results for the quarter ended June 30, 2019.  Hallador filed its Form 10-Q after the markets closed today.

 

Brent Bilsland, President and Chief Executive Officer, commented, “Hallador experienced unprecedented success continuing to lock in sales early for the 2020 calendar year.  Next year’s sales position is now 88% of our 8 million-ton target.  Additionally, Hallador continued to generate solid Free Cash Flow in the 2nd quarter of 2019.  These positive results were largely masked by a non-cash earnings adjustment and the seasonal mix of contract prices and deliveries.  Good things are coming for Hallador in the second half of 2019.”

 

·

Q2 2019 NET LOSS OF $3.3 MILLION, ($0.11) PER SHARE

 

o

The majority of loss was due to a $1.8 million non-cash adjustment in the fair market value of our interest rate swaps as a result of our quarterly mark to market.  However, Hallador intends to hold its interest rate swaps long-term, negating much of the effects of quarterly fluctuations in valuation.

 

o

Additionally, the seasonal nature of our contracts led to 2nd Quarter 2019 shipments being 15% less than 1st Quarter 2019.  First half 2019 shipments were 49% of our 8 million-ton annualized target.

 

o

These circumstances detract from a quarter that generated $16.4 million in adjusted EBITDA and a first half of 2019 that generated $41.7 million in adjusted EBITDA

 

 

·

77% SOLD THROUGH 2022 = GREAT FREE CASH FLOW VISABILITY

 

o

When looking at the remainder of 2019 through 2022, 21.7 million tons are sold.  Thus, we have ~77% of our sales contracted over the next three and a half years at an 8.0 million-ton annualized pace.

 

o

The reason for our continued sales success is, throughout 2018 and 1st Quarter 2019, our Sunrise Coal subsidiary grew from 9 customers in 3 states to a peak of 17 customers in 8 states.  This growth in customers has increased our sales volume from 6.6 million tons in 2017 to a projected 8.0 million tons in 2019.

 

 

 

 

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

 

 

 

 

Six Months Ended

June 30,

 

Three Months Ended

June 30,

 

 

 

2019

 

 

2018

 

2019

 

 

2018

Net Income (loss)

 

$

3,656

 

$

2,109

 

(3,344)

 

$

(23)

Total Revenues

 

$

161,623

 

$

124,107

 

72,310

 

$

57,243

Tons Sold

 

 

3,937

 

 

3,184

 

1,807

 

 

1,477

Average Price per Ton

 

$

39.71

 

$

38.85

 

39.35

 

$

38.54

Bank Debt

 

$

173,100

 

$

200,488

 

173,100

 

$

200,488

Operating Cash Flow

 

$

23,711

 

$

15,876

 

2,864

 

$

2,683

Adjusted EBITDA*

 

$

41,658

 

$

37,124

 

16,423

 

$

17,368

Adjusted Free Cash Flow **

 

$

20,595

 

$

18,933

 

5,943

 

$

8,211

 

 

 

 

 

 

 

 

 

 

 

 

*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).

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended

June 30,

 

 

Three Months Ended

June 30,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

Net income (loss)

 

$

3,656

 

$

2,109

 

$

(3,344)

 

$

(23)

Income tax expense (benefit)

 

 

155

 

 

43

 

 

191

 

 

(123)

Loss from Hourglass Sands

 

 

391

 

 

557

 

 

140

 

 

421

Loss from equity method investments

 

166

 

 

156

 

 

132

 

 

73

DD&A

 

 

23,824

 

 

21,949

 

 

12,092

 

 

11,120

ARO accretion

 

 

623

 

 

573

 

 

314

 

 

291

Loss (gain) on impairment & disposal of assets

 

(100)

 

 

572

 

 

 (100)

 

 

40

Loss (gain) on marketable securities

 

 

(348)

 

 

194

 

 

(45)

 

 

40

Interest Expense

 

 

9,988

 

 

7,023

 

 

5,369

 

 

4,315

Other amortization

 

 

2,291

 

 

1,582

 

 

1,156

 

 

820

Stock-based compensation

 

 

1,012

 

 

2,366

 

 

518

 

 

394

Adjusted EBITDA

 

$

41,658

 

$

37,124

 

$

16,423

 

$

17,368

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended

June 30,

 

 

Three Months Ended

June 30,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

Net income (loss)

 

$

3,656

 

$

2,109

 

$

(3,344)

 

$

(23)

Loss from equity method investments

 

 

166

 

 

156

 

 

132

 

 

73

Deferred income tax expense (benefit)

 

 

306

 

 

265

 

 

113

 

 

(104)

DD&A

 

 

23,834

 

 

21,949

 

 

12,096

 

 

11,120

ARO accretion

 

 

623

 

 

573

 

 

314

 

 

291

Deferred financing costs amortization

 

 

1,085

 

 

940

 

 

542

 

 

483

Change in fair value of interest rate swaps

 

 

2,856

 

 

844

 

 

1,843

 

 

1,002

Loss (gain) on impairment & disposal of assets

 

(100)

 

 

572

 

 

(100)

 

 

40

Maintenance capex

 

 

(12,836)

 

 

(10,830)

 

 

(6,164)

 

 

(5,058)

Stock-based compensation less taxes paid

 

 

1,005

 

 

2,355

 

 

511

 

 

387

Adjusted Free Cash Flow

 

$

20,595

 

$

18,933

 

$

5,943

 

$

8,211

 

Conference Call

 

As previously announced our earnings conference call for financial analysts and investors will be held on Tuesday, August 6, 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 10130750.

 

Hallador is headquartered in Terre Haute, Indiana 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 website at www.halladorenergy.com.

 

Contact:  Investor Relations

Phone:  (303) 839-5504

 

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