Hallador Energy Company (NASDAQ – HNRG) reported a net loss of $1.0 million ($0.03 per share) for Q1 2021, a significant improvement compared to a loss of $3.7 million in Q1 2020. Adjusted EBITDA decreased to $11.4 million from $13.9 million year-over-year. The company faced shipment delays due to severe cold weather, impacting cash flow, but projected an increase in coal sales by 400,000 tons for the year. Production costs fell to $28.88 per ton from $31.67 in Q1 2020. As of March 31, 2021, bank debt stood at $136.1 million, with a leverage ratio of 2.78X.
Positive
Improved production costs to $28.88/ton in Q1 2021 from $31.67 in Q1 2020.
Sale increase projections of 400,000 tons for the year due to market conditions.
Adjusted Free Cash Flow of $5.4 million during Q1 2021.
Negative
Net loss of $1.0 million in Q1 2021 compared to a $3.7 million loss in Q1 2020.
Total revenues decreased to $46.7 million from $62.5 million year-over-year.
Shipments dropped to 1.2 million tons in Q1 due to delays, impacting cash flow.
Insights
Analyzing...
TERRE HAUTE, Ind., May 03, 2021 (GLOBE NEWSWIRE) -- Hallador Energy Company (NASDAQ – HNRG) today reported net loss of $1.0 million, ($.03) per share, adjusted EBITDA of $11.4 million.
Brent Bilsland, President and Chief Executive Officer, stated, "We are pleased that our cost structure was dramatically lower in the 1st quarter of 2021. This increased productivity has yet to be turned into cash as shipments were interrupted due to the coldest February in 30 years. Though the cold weather has delayed our cash flow, it has led to continued improvements in market conditions which allowed us to increase our sales by 400,000 tons for the year."
●
Q1 2021 production costs were $28.88/ton, significantly lower than Q4 2020 costs of $33.87 and Q1 2020 costs of $31.67.
○
Oaktown costs were $27.21 for Q1 2021 and $29.92 for Q1 2020.
■
Shipments were an anemic 1.2 million tons in Q1, due to transportation delays caused by severe weather. Thus, ~180,000 tons of Q1 shipments will now be delivered during the 2nd and 3rd quarter of this year.
■
Increased productivity coupled with shipment delays caused coal inventory to rise which will be needed to meet increased shipments for the balance of the year.
●
Hallador generated $5.4 million in Adjusted Free Cash Flow during the quarter.
○
As of March 31, 2021, our bank debt was $136.1 million, bringing our liquidity to $27.9 million and our leverage ratio to 2.78X, well within our covenant of 3.25X.
●
Solid Sales Position Through 2022
○
We added ~400,000 contracted tons to our position during the quarter and expect to add additional tons later in the year as markets recover and gas prices continue to increase.
Contracted
Estimated
Tons
Priced
Year
(millions)*
per ton
2021 (Q2 - Q4)
4.5
$39.25
2022
5.1
$39.35
9.6
* 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.
The table below represents some of our critical metrics (in thousands except for per ton data):
Three Months Ended
March 31,
2021
2020
Net loss
$
(1,032
)
$
(3,660
)
Total Revenues
$
46,695
$
62,483
Tons Sold
1,174
1,526
Average Price per Ton
$
39.08
$
40.58
Bank Debt
$
136,050
$
168,050
Operating Cash Flow
$
2,973
$
16,256
Adjusted EBITDA*
$
11,419
$
13,899
Adjusted Free Cash Flow **
$
5,370
$
6,813
*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).
Three Months Ended
March 31,
2021
2020
Net loss
$
(1,032
)
$
(3,660
)
Income tax benefit
(1,729
)
(2,176
)
Loss from Hourglass Sands
80
78
Income from equity method investments
—
(55
)
Depreciation, depletion and amortization
10,307
10,623
Asset retirement obligations accretion
363
333
Gain on marketable securities
—
(14
)
Interest Expense
1,898
5,714
Other amortization
1,489
1,426
Change in fair value of fuel hedges
(239
)
1,311
Stock-based compensation
282
319
Adjusted EBITDA
$
11,419
$
13,899
Reconciliation of GAAP "net income" to non-GAAP "adjusted free cash flow" (in thousands).
Three Months Ended
March 31,
2021
2020
Net loss
$
(1,032
)
$
(3,660
)
Income from equity method investments
—
(55
)
Deferred income tax benefit
(1,729
)
(1,652
)
Depreciation, depletion and amortization
10,307
10,627
Asset retirement obligations accretion
363
333
Deferred financing costs amortization
611
467
Change in fair value of interest rate swaps
(848
)
2,593
Change in fair value of fuel hedges
(239
)
1,311
Maintenance capex
(2,343
)
(3,470
)
Stock-based compensation less taxes paid
280
319
Adjusted Free Cash Flow
$
5,370
$
6,813
Conference Call
As previously announced our earnings conference call for financial analysts and investors will be held on Tuesday, May 4, 2021 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 0155565.
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
FAQ
What were Hallador Energy's Q1 2021 financial results?
Hallador Energy reported a net loss of $1.0 million and adjusted EBITDA of $11.4 million for Q1 2021.
How did production costs change for HNRG in Q1 2021?
Production costs decreased to $28.88 per ton in Q1 2021, down from $31.67 in Q1 2020.
What was the impact of severe weather on HNRG's shipments?
Severe weather caused shipment delays, leading to only 1.2 million tons shipped in Q1 2021.
What is Hallador Energy's debt situation as of March 31, 2021?
As of March 31, 2021, Hallador had bank debt of $136.1 million and a leverage ratio of 2.78X.
What are Hallador Energy's sales projections for the year?
Hallador Energy expects to increase coal sales by 400,000 tons for the year.
An email has been sent to your address with instructions for changing your password.
There is no user registered with this email.
Sign Up
To create a free account, please fill out the form below.
Thank you for signing up!
A confirmation email has been sent to your email address. Please check your email and follow the instructions in the message to complete the registration process. If you do not receive the email, please check your spam folder or contact us for assistance.
Welcome to our platform!
Oops!
Something went wrong while trying to create your new account. Please try again and if the problem persist, to receive support.
