• Hallador Energy Company Reports Third Quarter 2024 Financial and Operating Results

    Источник: Nasdaq GlobeNewswire / 12 ноя 2024 15:05:01   America/Chicago

    - Signs Non-Binding Term Sheet with Leading Global Data Center Developer to Supply Power for 10+ years -
    - Q3 Total Revenue of $105.0 Million -
    - Q3 Net Income of $1.6 Million or $0.04 Earnings per Share -
    - Q3 Operating Cash Flow of ($12.9) Million -
    - Q3 Adjusted EBITDA of $9.6 Million -

    TERRE HAUTE, Ind., Nov. 12, 2024 (GLOBE NEWSWIRE) -- Hallador Energy Company (Nasdaq: HNRG) (“Hallador” or the “Company”), today reported its financial results for the third quarter ended September 30, 2024.

    “During the quarter, we reached an important milestone in our transformation to an independent power producer as we signed a non-binding term sheet with a leading global data center developer,” said Brent Bilsland, President and Chief Executive Officer. “Our team is working diligently to finalize definitive agreements with this partner and the relevant utility that will support the delivery of our energy and capacity to the large load end user. The proposed transaction involves selling the energy and capacity to the end-user through a utility or cooperative, which would be an “in front of the meter” transaction in contrast to the “behind the meter” structures that have created recent regulatory challenges for others. If we are successful in executing definitive agreements, the proposed transaction would contract the majority of our plant’s energy and capacity at prices higher than the forward curve for more than a decade to come.

    “While we have not yet reached binding agreements, we are encouraged by our progress with this partner and by the strong interest we continue to see from other potential counterparties in our energy and capacity offerings, which have been bolstered by Indiana’s efforts to attract datacenters and other high density power users with its business-friendly climate and favorable tax policy. We believe we hold a considerable portion of the remaining unsold accredited capacity in MISO Zone 6, covering Indiana and parts of western Kentucky and we are well positioned to take advantage of the significant demand for our capacity.”

    Bilsland continued, “Additionally, we have made considerable strides in strengthening our balance sheet in recent months. Subsequent to quarter end, we executed a $60 million prepaid power purchase agreement (PPA) and utilized $20 million of the proceeds to pay down bank term debt and $34 million to pay down the revolver. At the end of October our bank debt balance was $23.5 million compared to $91.5 million outstanding at the end of 2023. Between our strengthened balance sheet and an improving environment for both coal and power sales, we are poised to exit 2024 on strong footing which should allow us to capitalize on the long-term multi-year growth opportunities ahead.”

    Third Quarter 2024 Highlights

    • Hallador returned to growth on both the top and bottom line compared to the second quarter.
       
      • Total revenue increased 12% to $105 million, driven by a 21% increase in electric sales to $71.7 million. This marks a near Company record for electric sales revenue mix, as Hallador continues to emphasize electric sales as an independent power producer.
         
      • Net income increased to $1.6 million compared to $(10.2) million in the second quarter, with adjusted EBITDA up significantly to $9.6 million compared to $(5.8) million as the Company returned to profitability through improved power pricing and lower costs per MWh at its Merom Power Plant.
         
    • The Company is now strengthening its balance sheet (post quarter-end) without equity dilution.
       
      • Total bank debt was $70.0 million at September 30, 2024, compared to $45.5 million at June 30, 2024 and $91.5 million at December 31, 2023.
         
      • Total liquidity was $34.9 million at September 30, 2024 compared to $60.7 million at June 30, 2024 and $26.2 million at December 31, 2023.
         
      • Subsequent to quarter-end, the Company secured a $60 million prepaid PPA and utilized $20 million of the proceeds to pay down bank term debt and $34 million to pay down its revolver. At October 31, 2024, total bank debt was $23.5 million and total liquidity was $53.8 million.
         
      • The Company did not utilize its ATM program in the third quarter or subsequent to quarter-end.
         
    • Hallador continues to focus on forward sales to secure its energy position.
       
      • At quarter-end, Hallador had total forward energy, capacity and coal sales to 3rd party customers of $937.2 million through 2029, up from $871.7 at the end of the second quarter.
         
      • Hallador signed a non-binding term sheet with a leading global data center developer to support the delivery of energy and capacity to a large load end user customer for 10+ years. The completion of the proposed transaction is subject to, among other matters, the negotiation and execution of definitive agreements and there can be no assurance that definitive agreements will be entered into or that the proposed transaction will be consummated on the terms or timeframe currently contemplated, or at all.
                 
    Financial Summary ($ in Millions and Unaudited)            
                 
     Q3 2023    Q1 2024    Q2 2024 Q3 2024
    Electric Sales$67.4  $58.8  $56.8  $71.7 
    Coal Sales - 3rd Party$97.4  $49.6  $32.8  $31.7 
    Other Revenue$1.0  $1.3  $1.3  $1.6 
    Total Revenue$165.8  $109.7  $90.9  $105.0 
    Net Income (Loss)$16.1  $(1.7) $(10.2) $1.6 
    Operating Cash Flow$35.3  $16.4  $23.5  $(12.9)
    Adjusted EBITDA*$35.9  $6.8  $(5.8) $9.6 

    _____________________
    *   Non-GAAP financial measure, defined as operating cash flows 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 the minimum quarterly EBITDA. Noncompliance with the 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 three and nine months ended September 30, 2024 and 2023, respectively.

                
    Reconciliation of GAAP "Cash provided by (used in) operating activities" to non-GAAP "Adjusted EBITDA"
    (In $ Thousands and Unaudited)
                
     Three Months Ended     Nine Months Ended
     September 30,  September 30, 
     2024  2023  2024  2023 
    Cash provided by operating activities$(12,906) $35,284  $26,985  $79,527 
    Current income tax expense —   (178)  —   315 
    Loss from Hourglass Sands —   1   1   3 
    Loss from Sunrise Indemnity —   —   12   — 
    Distribution from Sunrise Energy —   —   —   (625)
    Bank and convertible note interest expense 2,254   2,428   9,113   7,632 
    Working capital period changes 18,821   (8,285)  (24,659)  8,105 
    Other long-term asset and liability changes 51   (210)  (1,352)  (914)
    ASC 606 Capacity Adjustment —   3,703   (3,703)  3,703 
    Cash paid on asset retirement obligation reclamation 218   1,355   820   2,286 
    Other amortization 1,119   1,822   3,367   5,200 
    Adjusted EBITDA$9,557  $35,920  $10,584  $105,232 
                
    Cash (used in) provided by investing activities$(10,663) $(18,136) $(36,233) $(48,684)
                
    Cash (used in) provided by financing activities$22,482  $(16,802) $11,766  $(30,553)
                    


    Solid Forward Sales Position - Segment Basis, Before Intercompany Eliminations (unaudited):
                  
     2024 2025 2026 2027 2028 2029 Total
    Power                           
    Energy                           
    Contracted MWh (in millions) 0.81   2.56   1.83   1.78   1.09   0.27   8.34 
    Average contracted price per MWh$35.51  $35.81  $55.37  $54.65  $53.07  $51.33     
    Contracted revenue (in millions)$28.76  $91.67  $101.33  $97.28  $57.85  $13.86  $390.75 
                                
    Capacity                           
    Average daily contracted capacity MW 716   801   744   623   454   100     
    Average contracted capacity price per MW$205  $198  $230  $226  $225  $230     
    Contracted capacity revenue (in millions)$13.54  $57.89  $62.46  $51.39  $37.39  $3.47  $226.14 
                                
    Total Energy & Capacity Revenue                           
                                
    Contracted Power revenue (in millions)$42.30  $149.56  $163.79  $148.67  $95.24  $17.33  $616.89 
                                
    Coal                           
    Priced tons - 3rd party (in millions) 0.66   1.78   1.50   1.50   0.50   —   5.94 
    Avg price per ton - 3rd party$48.02  $50.04  $56.17  $57.17  $59.00  $—     
    Contracted coal revenue - 3rd party (in millions)$31.69  $89.07  $84.26  $85.76  $29.50  $—  $320.28 
                                
    Committed and unpriced tons - 3rd party (in millions) —   1   1   1   —   —   3 
                                
    Total contracted tons - 3rd party (in millions) 0.66   2.78   2.50   2.50   0.50   —   8.94 
                                
    TOTAL CONTRACTED REVENUE (IN MILLIONS) - CONSOLIDATED$73.99  $238.63  $248.05  $234.43  $124.74  $17.33  $937.17 
                                
    Priced tons - Merom (in millions) 0.27   2.30   2.30   2.30   2.30   —   9.47 
    Avg price per ton - Merom$51.00  $51.00  $51.00  $51.00  $51.00  $—     
    Contracted coal revenue - Merom (in millions)$13.77  $117.30  $117.30  $117.30  $117.30  $—  $482.97 
                                
    TOTAL CONTRACTED REVENUE (IN MILLIONS) - SEGMENT$87.76  $355.93  $365.35  $351.73  $242.04  $17.33  $1,420.14 
                                

    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 include, without limitation, those relating to our ability to execute definitive agreements with respect to the non-binding term sheet with a leading global data center developer. 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, 2023, 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 and Webcast

    Hallador management will host a conference call on Tuesday, November 12, 2024 at 5:00 p.m. Eastern time to discuss its financial and operational results, followed by a question-and-answer period.

    Date: Tuesday, November 12, 2024
    Time: 5:00 p.m. Eastern time
    Dial-in registration link: here
    Live webcast registration link: here

    The conference call will also be broadcast live and available for replay in the investor relations section of the Company’s website at www.halladorenergy.com.

          
    Hallador Energy Company
    Condensed Consolidated Balance Sheets
    (in thousands, except per share data)
    (unaudited)
          
     September 30,  December 31, 
     2024 2023
    ASSETS     
    Current assets:     
    Cash and cash equivalents$3,829  $2,842 
    Restricted cash 5,812   4,281 
    Accounts receivable 11,908   19,937 
    Inventory 31,077   23,075 
    Parts and supplies 39,663   38,877 
    Prepaid expenses 5,964   2,262 
    Assets held-for-sale 1,544   1,611 
    Total current assets 99,797   92,885 
    Property, plant and equipment:     
    Land and mineral rights 115,486   115,486 
    Buildings and equipment 529,818   537,131 
    Mine development 167,077   158,642 
    Finance lease right-of-use assets 19,869   12,346 
    Total property, plant and equipment 832,250   823,605 
    Less - accumulated depreciation, depletion and amortization (360,173)  (334,971)
    Total property, plant and equipment, net 472,077   488,634 
    Investment in Sunrise Energy 2,071   2,811 
    Other assets 5,785   5,450 
    Total assets$579,730  $589,780 
          
    LIABILITIES AND STOCKHOLDERS' EQUITY     
    Current liabilities:     
    Current portion of bank debt, net$24,095  $24,438 
    Accounts payable and accrued liabilities 42,915   62,908 
    Current portion of lease financing 6,248   3,933 
    Deferred revenue 57,293   23,062 
    Contract liability - power purchase agreement and capacity payment reduction 41,049   43,254 
    Total current liabilities 171,600   157,595 
    Long-term liabilities:     
    Bank debt, net 42,918   63,453 
    Convertible notes payable —   10,000 
    Convertible notes payable - related party —   9,000 
    Long-term lease financing 9,234   8,157 
    Deferred income taxes 5,846   9,235 
    Asset retirement obligations 15,746   14,538 
    Contract liability - power purchase agreement 13,456   47,425 
    Other 2,133   1,789 
    Total long-term liabilities 89,333   163,597 
    Total liabilities 260,933   321,192 
    Commitments and contingencies     
    Stockholders' equity:     
    Preferred stock, $.10 par value, 10,000 shares authorized; none issued —   — 
    Common stock, $.01 par value, 100,000 shares authorized; 42,599 and 34,052 issued and outstanding, as of September 30, 2024 and December 31, 2023, respectively 426   341 
    Additional paid-in capital 188,018   127,548 
    Retained earnings 130,353   140,699 
    Total stockholders’ equity 318,797   268,588 
    Total liabilities and stockholders’ equity$579,730  $589,780 
            


    Hallador Energy Company
    Condensed Consolidated Statements of Operations
    (in thousands, except per share data)
    (unaudited)
                
     Three Months Ended September 30, Nine Months Ended September 30,
     2024 2023 2024 2023
    SALES AND OPERATING REVENUES:           
    Electric sales$71,715  $67,403  $191,861  $230,812 
    Coal sales 31,662   97,420   114,093   280,596 
    Other revenues 1,667   945   4,221   3,888 
    Total sales and operating revenues 105,044   165,768   310,175   515,296 
    EXPENSES:           
    Fuel 13,176   11,345   31,674   99,959 
    Other operating and maintenance costs 33,320   65,551   106,714   139,979 
    Cost of purchased power 3,149   —   7,694   — 
    Utilities 3,185   4,507   10,955   13,347 
    Labor 26,721   37,639   88,444   114,698 
    Depreciation, depletion and amortization 13,838   16,230   42,930   51,375 
    Asset retirement obligations accretion 410   468   1,208   1,380 
    Exploration costs 62   171   179   682 
    General and administrative 6,471   6,054   20,218   18,596 
    Total operating expenses 100,332   141,965   310,016   440,016 
                
    INCOME FROM OPERATIONS 4,712   23,803   159   75,280 
                
    Interest expense (1) (2,692)  (3,030)  (10,364)  (10,470)
    Loss on extinguishment of debt —   (1,491)  (2,790)  (1,491)
    Equity method investment (loss) (234)  (177)  (740)  (325)
    NET INCOME (LOSS) BEFORE INCOME TAXES 1,786   19,105   (13,735)  62,994 
                
    INCOME TAX EXPENSE (BENEFIT):           
    Current —   (178)  —   315 
    Deferred 232   3,208   (3,389)  7,638 
    Total income tax expense (benefit) 232   3,030   (3,389)  7,953 
                
    NET INCOME (LOSS)$1,554  $16,075  $(10,346) $55,041 
                
    NET INCOME (LOSS) PER SHARE:           
    Basic$0.04  $0.49  $(0.27) $1.66 
    Diluted$0.04  $0.44  $(0.27) $1.52 
                
    WEIGHTED AVERAGE SHARES OUTSTANDING           
    Basic 42,598   33,140   38,455   33,088 
    Diluted 43,018   36,848   38,455   36,748 
                    


    Hallador Energy Company
    Condensed Consolidated Statements of Cash Flows
    (in thousands)
    (unaudited)
          
     Nine Months Ended September 30, 
     2024 2023
    CASH FLOWS FROM OPERATING ACTIVITIES:     
    Net income (loss)$(10,346) $55,041 
    Adjustments to reconcile net income to net cash provided by operating activities:     
    Deferred income tax (benefit) (3,389)  7,638 
    Equity loss – Sunrise Energy 740   325 
    Cash distribution - Sunrise Energy -   625 
    Depreciation, depletion, and amortization 42,930   51,375 
    Loss on extinguishment of debt 2,790   1,491 
    Loss (gain) on sale of assets (536)  78 
    Amortization of debt issuance costs 1,251   2,838 
    Asset retirement obligations accretion 1,208   1,380 
    Cash paid on asset retirement obligation reclamation (820)  (2,286)
    Stock-based compensation 3,320   2,774 
    Amortization of contract asset and contract liabilities (36,174)  (32,444)
    Other 1,352   914 
    Change in operating assets and liabilities:     
    Accounts receivable 8,029   9,197 
    Inventory (8,002)  14,874 
    Parts and supplies (786)  (8,717)
    Prepaid expenses (1,098)  1,116 
    Accounts payable and accrued liabilities (7,715)  (11,419)
    Deferred revenue 34,231   (15,273)
    Net cash provided by operating activities 26,985   79,527 
    CASH FLOWS FROM INVESTING ACTIVITIES:     
    Capital expenditures (39,606)  (48,746)
    Proceeds from sale of equipment 3,373   62 
    Net cash used in investing activities (36,233)  (48,684)
    CASH FLOWS FROM FINANCING ACTIVITIES:     
    Payments on bank debt (86,500)  (56,463)
    Borrowings of bank debt 65,000   33,000 
    Payments on lease financing (4,105)  — 
    Proceeds from sale and leaseback arrangement 3,783   — 
    Issuance of related party notes payable 5,000   — 
    Payments on related party notes payable (5,000)  — 
    Debt issuance costs (654)  (5,940)
    ATM offering 34,515   — 
    Taxes paid on vesting of RSUs (273)  (1,150)
    Net cash provided by (used in) financing activities 11,766   (30,553)
    Increase in cash, cash equivalents, and restricted cash 2,518   290 
    Cash, cash equivalents, and restricted cash, beginning of period 7,123   6,426 
    Cash, cash equivalents, and restricted cash, end of period$9,641  $6,716 
    CASH, CASH EQUIVALENTS, AND RESTRICTED CASH:     
    Cash and cash equivalents$3,829  $2,573 
    Restricted cash 5,812   4,143 
     $9,641  $6,716 
    SUPPLEMENTAL CASH FLOW INFORMATION:     
    Cash paid for interest$8,679  $8,069 
    SUPPLEMENTAL NON-CASH FLOW INFORMATION:     
    Change in capital expenditures included in accounts payable and prepaid expense$(7,825) $3,214 
    Stock issued on redemption of convertible notes and interest$22,993  $— 
            

    About Hallador Energy Company

    Hallador Energy Company (Nasdaq: HNRG) is a vertically-integrated Independent Power Producer (IPP) based in Terre Haute, Indiana. The Company has two core businesses: Hallador Power Company, LLC, which produces electricity and capacity at its one Gigawatt (GW) Merom Generating Station, and Sunrise Coal, LLC, which produces and supplies fuel to the Merom Generating Station and other companies. To learn more about Hallador, visit the Company’s website at www.halladorenergy.com.

    Company Contact

    Marjorie Hargrave
    Chief Financial Officer
    (303) 917-0777
    MHargrave@halladorenergy.com

    Investor Relations Contact

    Sean Mansouri, CFA
    Elevate IR
    (720) 330-2829
    HNRG@elevate-ir.com


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