Hallador Energy Company Reports Record Net Income and Adjusted EBITDA for First 9-Months of 2023; Secures $325 Million in Future Energy and Capacity Sales
06 Novembro 2023 - 10:46PM
Hallador Energy Company (NASDAQ – HNRG) reports first nine
months 2023 and third-quarter net income of $55.0 million and $16.1
million, $1.66 and $0.49 basic earnings per share, operating cash
flow of $79.5 million and $35.3 million, and adjusted EBITDA
of $105.2 million and $35.9 million, all respectively.
Brent Bilsland, President and Chief Executive Officer, stated,
"High coal sales prices coupled with large coal shipment volumes
lead to record coal revenue. Our well-contracted sales book
supported our revenue growth despite operational challenges,
increasing our cost per ton during the quarter. Record
profitability and continued debt reduction have helped de-lever our
balance sheet to 0.71 times adjusted EBITDA and increase liquidity
to $66.4 million. On the Hallador Power side, our sales
team performed well, securing $325 million in energy and
capacity sales at excellent prices for the 2024-2028 timeframe,
creating a profitable foundation for many years to come.”
Below are highlights for the third quarter of 2023:
- The Company reported net income of $16.1 million and
operating cash flow of $35.3 million on the continued strength of
shipments of higher-priced coal contracts and another full quarter
of operations at the Merom Generating Station.
- The Company closed on a $140 million credit facility on
August 2, 2023, extending the maturity to 2026.
- Bank Debt was reduced by $12.5 million during the quarter,
bringing our outstanding balance to $61.8 million in addition
to $11.2 million in Letters of Credit as of September 30,
2023.
- The continued efforts to reduce debt, coupled with higher
adjusted EBITDA, resulted in our debt-to-adjusted EBITDA ratio
falling to 0.71X as of September 30, 2023, and our liquidity
growing to $66.4 million as of September 30, 2023.
- The Merom Generating Station continues to show positive
results and increased interest from customers, evidenced by our
signing of $325 million in new future energy and capacity sales
during the quarter and subsequently.
- 3.3 million MWh of Energy sold for years 2026-2028 at an
average price of $56 per MWh, totaling $186.0 million.
- Capacity sales for years 2024-2028 at an average price of
approximately $220 per MWd, totaling $139 million.
- The Company continues to be well-positioned with
contracted coal tons and electric generation (on a segment basis,
before intercompany eliminations).
|
|
2023(Q4) |
|
|
2024 |
|
|
2025 |
|
|
2026 |
|
|
2027 |
|
|
2028 |
|
|
Total |
|
Coal |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Priced tons (in millions) |
|
|
2.4 |
|
|
|
3.4 |
|
|
|
1.3 |
|
|
|
0.5 |
|
|
|
0.5 |
|
|
|
- |
|
|
|
8.1 |
|
Average price per ton |
|
$ |
54.30 |
|
|
$ |
51.10 |
|
|
$ |
50.80 |
|
|
$ |
56.00 |
|
|
$ |
56.00 |
|
|
$ |
- |
|
|
|
|
|
Contracted coal revenue (in
millions) |
|
$ |
130.32 |
|
|
$ |
173.74 |
|
|
$ |
66.04 |
|
|
$ |
28.00 |
|
|
$ |
28.00 |
|
|
$ |
- |
|
|
$ |
426.10 |
|
% Priced |
|
|
100 |
% |
|
|
49 |
% |
|
|
19 |
% |
|
|
7 |
% |
|
|
7 |
% |
|
|
0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Committed & unpriced tons
(in millions) - 3rd party |
|
|
- |
|
|
|
- |
|
|
|
1.0 |
|
|
|
1.0 |
|
|
|
1.0 |
|
|
|
- |
|
|
|
3.0 |
|
Committed & unpriced tons
(in millions) - Merom |
|
|
- |
|
|
|
2.9 |
|
|
|
2.9 |
|
|
|
2.9 |
|
|
|
2.9 |
|
|
|
2.9 |
|
|
|
14.5 |
|
Total contracted tons (in
millions) |
|
|
2.4 |
|
|
|
6.3 |
|
|
|
5.2 |
|
|
|
4.4 |
|
|
|
4.4 |
|
|
|
2.9 |
|
|
|
25.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% Coal Sold* |
|
|
100 |
% |
|
|
90 |
% |
|
|
74 |
% |
|
|
63 |
% |
|
|
63 |
% |
|
|
41 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average cost per ton of coal
was $42.57 for the nine months ending September 30, 2023 ($43.25
after eliminating for intercompany sales to Merom) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Coal Capex Budget (in
millions) |
|
$ |
10.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
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|
|
|
|
Power |
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
Energy |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
Contracted MWh (in
millions) |
|
|
0.4 |
|
|
|
1.6 |
|
|
|
1.7 |
|
|
|
1.6 |
|
|
|
1.3 |
|
|
|
0.4 |
|
|
|
7.0 |
|
Contracted price per MWh |
|
$ |
34.00 |
|
|
$ |
34.00 |
|
|
$ |
34.00 |
|
|
$ |
56.00 |
|
|
$ |
56.00 |
|
|
$ |
56.00 |
|
|
|
|
|
Contracted revenue (in
millions) |
|
$ |
13.60 |
|
|
$ |
54.40 |
|
|
$ |
57.80 |
|
|
$ |
89.60 |
|
|
$ |
72.80 |
|
|
$ |
24.19 |
|
|
$ |
312.39 |
|
% Energy Sold* |
|
|
27 |
% |
|
|
27 |
% |
|
|
28 |
% |
|
|
27 |
% |
|
|
22 |
% |
|
|
7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
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|
|
|
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|
|
Capacity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average monthly contracted
capacity |
|
|
828 |
|
|
|
670 |
|
|
|
450 |
|
|
|
508 |
|
|
|
550 |
|
|
|
354 |
|
|
|
|
|
% Capacity Contracted** |
|
|
100 |
% |
|
|
78 |
% |
|
|
52 |
% |
|
|
59 |
% |
|
|
64 |
% |
|
|
41 |
% |
|
|
|
|
Average contracted capacity
price per MWd |
|
$ |
146 |
|
|
$ |
178 |
|
|
$ |
200 |
|
|
$ |
226 |
|
|
$ |
225 |
|
|
$ |
224 |
|
|
|
|
|
Contracted capacity revenue
(in millions) |
|
$ |
11.00 |
|
|
$ |
43.65 |
|
|
$ |
32.92 |
|
|
$ |
41.89 |
|
|
$ |
45.26 |
|
|
$ |
28.88 |
|
|
$ |
203.60 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Energy &
Capacity Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contracted Power Revenue (in
millions) |
|
$ |
24.60 |
|
|
$ |
98.05 |
|
|
$ |
90.72 |
|
|
$ |
131.49 |
|
|
$ |
118.06 |
|
|
$ |
53.07 |
|
|
$ |
515.99 |
|
Contracted Power Revenue per
MWh* |
|
$ |
41.33 |
|
|
$ |
43.34 |
|
|
$ |
44.49 |
|
|
$ |
67.82 |
|
|
$ |
67.79 |
|
|
$ |
67.69 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2023 average cost per MWh was
$33.43 for the nine months ending September 30, 2023 ($27.45
assuming intercompany sales of coal were sold at cost) |
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
Power Capex Budget (in
millions) |
|
$ |
20.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL CONTRACTED
REVENUE (IN MILLIONS) |
|
$ |
154.92 |
|
|
$ |
271.79 |
|
|
$ |
156.76 |
|
|
$ |
159.49 |
|
|
$ |
146.06 |
|
|
$ |
53.07 |
|
|
$ |
942.09 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*Based on coal production of 7.0 million tons and 6.0 million MWh
annually. |
|
**Based on a MISO accreditation of 860MW per day. Accreditations
are adjusted annually based on 3-year rolling performance
metrics. |
|
The table below represents some of our critical metrics (in
thousands except for per-ton data):
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
|
September 30, |
|
|
September 30, |
|
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
Net income (loss) |
|
$ |
16,075 |
|
|
$ |
1,612 |
|
|
$ |
55,041 |
|
|
$ |
(11,908 |
) |
Total Revenues |
|
$ |
165,768 |
|
|
$ |
85,084 |
|
|
$ |
515,296 |
|
|
$ |
209,920 |
|
Tons Sold (consolidated basis,
after eliminations) |
|
|
1,561 |
|
|
|
1,705 |
|
|
|
4,654 |
|
|
|
4,677 |
|
Average Price per Ton
(consolidated basis, after eliminations) |
|
$ |
62.41 |
|
|
$ |
49.01 |
|
|
$ |
60.29 |
|
|
$ |
43.77 |
|
Tons Sold (before
elimination) |
|
|
2,054 |
|
|
|
1,705 |
|
|
|
5,461 |
|
|
|
4,677 |
|
Average Price per Ton (segment
basis, before eliminations) |
|
$ |
65.43 |
|
|
$ |
49.01 |
|
|
$ |
62.47 |
|
|
$ |
43.77 |
|
Bank Debt |
|
$ |
61,750 |
|
|
$ |
113,725 |
|
|
$ |
61,750 |
|
|
$ |
113,725 |
|
Operating Cash Flow |
|
$ |
35,284 |
|
|
$ |
13,656 |
|
|
$ |
79,527 |
|
|
$ |
13,935 |
|
Adjusted EBITDA* |
|
$ |
35,920 |
|
|
$ |
18,378 |
|
|
$ |
105,232 |
|
|
$ |
32,511 |
|
____________* 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 will 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, 2023, and 2022,
respectively.
Reconciliation of GAAP "Cash provided by (used in)
operating activities" to non-GAAP "Adjusted EBITDA" (in
thousands).
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
|
September 30, |
|
|
September 30, |
|
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
Cash provided by (used in)
operating activities |
|
$ |
35,284 |
|
|
$ |
13,656 |
|
|
$ |
79,527 |
|
|
$ |
13,935 |
|
Current income tax (benefit)
expense |
|
|
(178 |
) |
|
|
— |
|
|
|
315 |
|
|
|
— |
|
Loss from Hourglass Sands |
|
|
1 |
|
|
|
1 |
|
|
|
3 |
|
|
|
7 |
|
Distribution from Sunrise
Energy |
|
|
— |
|
|
|
— |
|
|
|
(625 |
) |
|
|
— |
|
Bank and convertible note
interest expense |
|
|
2,428 |
|
|
|
2,360 |
|
|
|
7,632 |
|
|
|
5,840 |
|
Working capital period
changes |
|
|
(8,285 |
) |
|
|
(356 |
) |
|
|
8,105 |
|
|
|
6,299 |
|
Other long-term asset and
liability changes |
|
|
(210 |
) |
|
|
— |
|
|
|
(914 |
) |
|
|
— |
|
Cash paid on asset retirement
obligation reclamation |
|
|
1,355 |
|
|
|
1,299 |
|
|
|
2,286 |
|
|
|
2,483 |
|
Capacity revenue timing
adjustment |
|
|
3,703 |
|
|
|
— |
|
|
|
3,703 |
|
|
|
— |
|
Other amortization |
|
|
1,822 |
|
|
|
1,418 |
|
|
|
5,200 |
|
|
|
3,947 |
|
Adjusted
EBITDA |
|
|
35,920 |
|
|
|
18,378 |
|
|
|
105,232 |
|
|
|
32,511 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash used in investing
activities |
|
|
18,136 |
|
|
|
15,441 |
|
|
|
48,684 |
|
|
|
37,586 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash (used in)
provided by financing activities |
|
|
(16,802 |
) |
|
|
(105 |
) |
|
|
(30,553 |
) |
|
|
28,305 |
|
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
The call will be on Tuesday, November 7, 2023, at 2:00 pm
Eastern time and will be webcast live on our website at
www.halladorenergy.com under events.
PARTICIPANT INFORMATION United States
(Local): +1 646 904 5544 United States (Toll-Free): +1 833 470
1428 Global Dial-In Numbers:
https://www.netroadshow.com/events/global-numbers?confId=56762 Access
Code: 224373
REPLAY DETAILS: Replay Expiration Date:
Tuesday, November 14, 2023, 11:59 PM EDT United States
(Local): +1 929 458 6194 United States (Toll-Free): +1 866 813
9403 Access Code: 169196
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 |
Hallador Energy (NASDAQ:HNRG)
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