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Section 1: 8-K (8-K)

hnrg20191231

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): March 10, 2020  (March 9, 2020) 

 

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 March 9, 2020, Hallador Energy Company reported its fourth quarter and full year 2019 results on Form 10-K 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 Annual 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.   

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

March 10, 2020

 

 

 

By:

 

/s/LAWRENCE D. MARTIN

 

 

 

 

 

 

Lawrence D. Martin

CFO

 

 

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Section 2: EX-99 (EX-99)

Exh_99_1

Exhibit 99.1

Picture 2

 

Press Release

 

 

HALLADOR ENERGY REPORTS 2019 ANNUAL

FINANCIAL AND OPERATING RESULTS

 

 

TERRE HAUTE, Indiana, March 9, 2020 - Hallador Energy Company (Nasdaq: HNRG) reports financial and operating results for the year ended December 31, 2019.   Hallador filed its Form 10-K after the markets closed today.

 

Brent Bilsland, President and Chief Executive Officer, commented, “After experiencing negative free cash flow at Carlisle over the past 18 months, we have decided to permanently close Carlisle which will further reduce our overall cost structure, maximize per ton margins and, reduce current and future capex by utilizing Carlisle equipment and parts at Oaktown.  As we reduce coal and parts inventories, we will generate significant cash to be utilized for debt reduction.”

 

·

$16.7 MILLION IN ADJUSTED EBITDA FOR THE QUARTER, $68.7 MILLION IN ADJUSTED EBITDA FOR THE YEAR.

·

STRONG SHIPMENTS IN Q4, PERMANENTLY CLOSING CARLISLE, SHARPENING CASH FLOW FOCUS

i.

2.0 million tons of coal were shipped in the 4th quarter, a record 8.1 million tons sold in 2019.

 

ii.

Forecasting 6.7 million tons of coal shipments going forward.

1.

2020 = 100% contracted at 6.7 million ton pace.

2.

2021 =   79% contracted at 6.7 million ton pace. 

 

iii.

Permanently closing the Carlisle Mine allowing Sunrise to:

1.

Concentrate production on our lower cost Oaktown Mines, returning cost structure to $28-$30/ton. 

2.

Move $23 million in equipment and infrastructure to Oaktown, decreasing companywide capex to ~$20 million in 2020 and leading to capex reductions in future years.

 

iv.

Generating $20 million in cash from lowering coal and parts inventories throughout 2020.

 

·

NET LOSS OF $1.7 MILLION BEFORE THE EFFECTS OF IMPAIRMENTS

o

Net Loss $59.9 million (after $77.9 million of Asset Impairments)

v.

As a result of permanently closing the Carlisle mine we recorded an impairment of $65.7 million.  Additionally, we impaired the Bulldog reserve by $9.2 million and our Hourglass Sands project by $2.9 million.  These three impairments totaled $77.9 million.

 

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

 

 

 

 

Year Ended

 

December 31,

 

 

 

2019

 

 

2018

 

Net Income (loss)

 

$

(59,854)

 

$

7,621

 

Total Revenues

 

$

323,462

 

$

293,557

 

Tons Sold

 

 

8,070

 

 

7,365

 

Average Price per Ton

 

$

39.34

 

$

39.62

 

Bank Debt

 

$

180,150

 

$

188,463

 

Operating Cash Flow

 

$

38,243

 

$

51,570

 

Adjusted EBITDA*

 

$

68,761

 

$

74,085

 

Adjusted Free Cash Flow **

 

$

29,755

 

$

35,839

 

 

 

 

 

 

 

 

 

*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).

 

 

 

 

Year Ended

 

December 31,

 

 

 

 

2019

 

 

2018

 

Net income (loss)

 

$

(59,854)

 

$

7,621

 

Income tax benefit

 

 

(22,347)

 

 

(4,075)

 

Loss from Hourglass Sands

 

 

540

 

 

1,169

 

Loss from equity method investments

 

527

 

 

187

 

DD&A

 

 

48,554

 

 

44,157

 

ARO accretion

 

 

1,272

 

 

1,167

 

Loss on impairment & disposal of assets

 

77,792

 

 

561

 

Loss (gain) on marketable securities

 

 

(593)

 

 

226

 

Interest Expense

 

 

15,998

 

 

16,288

 

Other amortization

 

 

5,039

 

 

3,614

 

Stock-based compensation

 

 

1,833

 

 

3,170

 

Adjusted EBITDA

 

$

68,761

 

$

74,085

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

Year Ended

December 31,

 

 

 

2019

 

 

2018

Net income (loss)

 

$

(59,854)

 

$

7,621

Loss from equity method investments

 

 

527

 

 

187

Deferred income tax benefit

 

 

(21,822)

 

 

(2,287)

DD&A

 

 

48,572

 

 

44,167

ARO accretion

 

 

1,272

 

 

1,167

Deferred financing costs amortization

 

 

2,095

 

 

2,024

Change in fair value of interest rate swaps

 

 

2,186

 

 

2,182

Loss on impairment & disposal of assets

 

77,792

 

 

561

Maintenance capex

 

 

(22,488)

 

 

(22,655)

Stock-based compensation less taxes paid

 

 

1,475

 

 

2,872

Adjusted Free Cash Flow

 

$

29,755

 

$

35,839

 

 

 

 

 

 

 

 

 

 

Conference Call

 

As previously announced our earnings conference call for financial analysts and investors will be held on Tuesday, March 10, 2020, 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 10138491.

 

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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