Hallador Energy Company Reports Full-Year 2021 Financial and Operating Results
March 28 2022 - 5:04PM
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
Energy’s 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.
Reconciliation of GAAP "Cash provided by operating activities"
to non-GAAP "Adjusted EBITDA" (in thousands).
|
|
December 31, |
|
|
|
2021 |
|
|
2020 |
|
|
|
|
|
|
|
|
|
|
Cash provided by operating
activities |
|
$ |
47,974 |
|
|
$ |
52,576 |
|
Gain on extinguishment of
debt |
|
|
10,000 |
|
|
|
— |
|
Current income taxes |
|
|
— |
|
|
|
(598 |
) |
Loss from Hourglass Sands |
|
|
110 |
|
|
|
262 |
|
Cash distribution - Sunrise
Energy |
|
|
— |
|
|
|
(1,125 |
) |
Bank interest expense |
|
|
8,510 |
|
|
|
10,666 |
|
Working capital period
changes |
|
|
(21,949 |
) |
|
|
(14,040 |
) |
Other amortization |
|
|
5,640 |
|
|
|
5,760 |
|
Adjusted
EBITDA |
|
$ |
50,285 |
|
|
$ |
53,501 |
|
|
|
|
|
|
|
|
|
|
Cash used in investing
activities |
|
|
(27,525 |
) |
|
|
(18,190 |
) |
|
|
|
|
|
|
|
|
|
Cash used in financing
activities |
|
|
(26,691 |
) |
|
|
(35,626 |
) |
Forward-Looking Statements
This release contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended
(the “Securities Act”), and Section 21E of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”). Statements that
are not strictly historical statements constitute forward-looking
statements and may often, but not always, be identified by the use
of such words such as “expects,” “believes,” “intends,”
“anticipates,” “plans,” “estimates,” “guidance,” “target,”
“potential,” “possible,” or “probable” or statements that certain
actions, events or results “may,” “will,” “should,” or “could” be
taken, occur or be achieved. Forward-looking statements are
based on current expectations and assumptions and analyses made by
Hallador and its management in light of experience and perception
of historical trends, current conditions and expected future
developments, as well as other factors appropriate under the
circumstances that involve various risks and uncertainties that
could cause actual results to differ materially from those
reflected in the statements. These risks include, but are not
limited to, those set forth in Hallador's annual report on Form
10-K for the year ended December 31, 2021 and other Securities and
Exchange Commission filings. Hallador undertakes no obligation to
revise or update publicly any forward-looking statements except as
required by law.
Conference Call
As previously announced, the Company will host a live conference
call on Tuesday, March 29, 2022 at 2:00 p.m. Eastern Time. For
US callers dial (844)-200-6205 and use access code
559178.
A replay of the conference call will be available for seven
days. For US callers to listen to the replay, dial (866)
813-9403 and use access code 327283.
The conference call will also be available via a live
listen-only webcast on the Company’s website at
www.halladorenergy.com.
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 |
Hallador Energy (NASDAQ:HNRG)
Historical Stock Chart
From Apr 2024 to May 2024
Hallador Energy (NASDAQ:HNRG)
Historical Stock Chart
From May 2023 to May 2024