TERRE HAUTE, Ind., Aug. 5, 2019 /PRNewswire/ -- 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
-
- 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.
- 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.
- 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
VISIBILITY
-
- 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.
- 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.
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SOURCE Hallador Energy Company