Hallador Energy Company Reports First Quarter 2023 Financial and Operating Results
08 Maio 2023 - 8:31PM
Hallador Energy Company (NASDAQ – HNRG) today reported a net
income of $22.1 million, $.67 basic earnings per
share, and adjusted EBITDA of $34.0 million for the quarter
ended March 31, 2023.
Brent Bilsland, President and Chief Executive Officer, stated,
"We have delivered strong back-to-back quarters of increasing
EBITDA and ongoing debt reduction, which has significantly
delevered our balance sheet to 1.2 times debt to EBITDA. We
expect coal pricing for the balance of the year to remain robust,
and we are excited by additional opportunities for coal,
electricity, and capacity sales on the horizon."
Below are highlights for the first quarter of 2023:
- The Company reported profitability of $22.1 million and
operating cash flow of $26.1 million on the continued strength of
shipments of higher priced coal contracts and a full quarter of
operations at the Merom Generating Station.
- Coal Q1 2023 margins improved to $17.07 per ton, which
represents an increase of $6.66 per ton over Q4 2022 and an
increase of $15.21 per ton over Q1 2022 on the strength of ~$56 per
ton average sales prices.
- The Company produced 2.0 million tons and shipped 1.7 million
tons for the quarter.
- We continue to deleverage the Company's balance
sheet.
- Bank Debt was reduced by $10 million, bringing our outstanding
balance to $75.2 million in addition to $11.2 million in Letters of
Credit.
- The continued efforts to reduce debt resulted in our debt to
adjusted EBITDA ratio falling to 1.20X as of March 31, 2023, and
our liquidity growing to $36.0 million.
- The Merom Generating Station continues to show positive
results and increased interest from customers.
- The Company continues to be well positioned with
contracted coal tons for the next few years.
|
|
Contracted |
|
|
Estimated |
|
|
|
Tons |
|
|
Priced |
|
Year |
|
(millions)* |
|
|
per ton |
|
|
|
|
|
|
|
|
|
|
2023 |
|
|
5.8 |
|
|
$ |
57.00 |
|
2024 - 2027 (total) |
|
|
7.5 |
|
|
|
** |
|
|
|
|
13.3 |
|
|
|
|
|
_____________________*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 an option exists in the customer contract.**Of the 7.5
million tons contracted for 2024 - 2027, 2.7 million tons are
contracted for 2024 at an estimated price of $51 per ton, with
up to an additional 3.0 million tons expected to be dispatched to
the Merom Power Plant. The remaining 4.8 million tons
contracted for 2024 - 2027 are unpriced or partially
priced tons. |
The table below represents some of our critical metrics (in
thousands except for per ton data):
|
|
Three Months Ended |
|
|
|
March 31, |
|
|
|
2023 |
|
|
2022 |
|
Net income (loss) |
|
$ |
22,051 |
|
|
$ |
(10,134 |
) |
Total Revenues |
|
$ |
188,334 |
|
|
$ |
58,907 |
|
Tons Sold |
|
|
1,693 |
|
|
|
1,377 |
|
Average Price per Ton |
|
$ |
55.88 |
|
|
$ |
41.40 |
|
Bank Debt |
|
$ |
75,200 |
|
|
$ |
120,050 |
|
Operating Cash Flow |
|
$ |
26,112 |
|
|
$ |
2,977 |
|
Adjusted EBITDA* |
|
$ |
34,015 |
|
|
$ |
2,631 |
|
_____________________* Defined
as operating cash flows plus current income tax expense, less
effects of certain subsidiary and equity method investment
activity, plus bank interest, less effects of working capital and
other long-term asset and liability period changes, plus cash paid
on asset retirement obligation reclamation, 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 three
months ended March 31, 2023 and 2022, respectively.
Reconciliation of GAAP "Cash provided by (used in)
operating activities" to non-GAAP "Adjusted EBITDA" (in
thousands).
|
|
Three Months Ended |
|
|
|
March 31, |
|
|
|
2023 |
|
|
2022 |
|
Cash provided by operating activities |
|
$ |
26,112 |
|
|
$ |
2,977 |
|
Current income tax
expense |
|
|
432 |
|
|
|
— |
|
Loss from Hourglass Sands |
|
|
1 |
|
|
|
1 |
|
Distribution from Sunrise
Energy |
|
|
(625 |
) |
|
|
— |
|
Bank and convertible note
interest expense |
|
|
2,687 |
|
|
|
1,710 |
|
Working capital period
changes |
|
|
4,812 |
|
|
|
(3,856 |
) |
Other long-term asset and
liability changes |
|
|
(451 |
) |
|
|
(163 |
) |
Cash paid on asset retirement
obligation reclamation |
|
|
365 |
|
|
|
703 |
|
Other amortization |
|
|
682 |
|
|
|
1,259 |
|
Adjusted
EBITDA |
|
|
34,015 |
|
|
|
2,631 |
|
|
|
|
|
|
|
|
|
|
Cash used in investing
activities |
|
|
(13,467 |
) |
|
|
(8,951 |
) |
|
|
|
|
|
|
|
|
|
Cash (used in)
provided by financing activities |
|
|
(12,722 |
) |
|
|
7,722 |
|
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, 2022,
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
Our earnings conference call for financial analysts and
investors will be held on Tuesday, May 9, 2023, at 2:00 pm eastern
time.
The call will be webcast live on our website at
www.halladorenergy.com under events and available
for a limited time.
To participate in the
conference call, please dial:
US dial-in number (Toll Free): 1 833
470 1428Canada: +1 833 950 0062Access Code:
018965
A recording of the conference call will be available until
Tuesday, May 16, 2023.
To listen to a replay of the
conference call, please dial:
US Toll Free: 1 866 813
9403Canada: +1 226 828 7578All other locations: +44 204 525
0658Access Code: 762434
Hallador is headquartered in Terre Haute, Indiana and through
its wholly owned subsidiaries, Sunrise Coal, LLC and Hallador
Power, LLC, produces coal and electricity in the Illinois
Basin for the electric power generation industry. To learn more
about Hallador, visit our website
at www.halladorenergy.com.
Contact: |
Investor Relations |
Phone: |
(303) 839-5504 |
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