Hallador Energy Company Reports Fourth Quarter and Full Year 2024 Financial and Operating Results

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- Q4 2024 Total Revenue of $94.2 Million; FY'24 Total Revenue of $404.4 Million -

- Q4 2024 Operating Cash Flow up Materially to $32.5 Million; FY'24 Operating Cash Flow of $65.9 Million -

- Q4 2024 Adjusted EBITDA up ~3x YoY to $6.2 Million; FY'24 Adjusted EBITDA of $16.8 Million -

TERRE HAUTE, Ind., March 17, 2025 (GLOBE NEWSWIRE) -- Hallador Energy Company (Nasdaq: HNRG) ("Hallador” or the "Company”) today reported its financial results for the fourth quarter and full year ended December 31, 2024.

"2024 was a transformative year for Hallador as we continued our evolution from a bituminous coal producer to a vertically integrated independent power producer ("IPP”), while also advancing our products and services up the energy value chain,” said Brent Bilsland, President and Chief Executive Officer. "This deliberate transition aligns with market trends and reflects our conviction in the superior economics of the IPP business model. In fall 2024, we reached an important milestone in our transformation by signing a non-binding term sheet with a leading global data center developer on a transaction that would, if completed, sell a majority of our power production and accredited capacity at enhanced margins for more than a decade to come. We are making meaningful progress toward finalizing definitive agreements for this transaction within the exclusivity period that runs from January through early June 2025, further strengthened by our partner's commitment to pay up to $5 million during this period. While navigating these complex transactions requires coordination across multiple stakeholders and while there can be no assurance that definitive agreements will be entered into, we remain encouraged by our partner's commitment and believe this strategic partnership will drive long-term value for our shareholders.”

"The ongoing industry shift from dispatchable generators, such as coal and natural gas, to non-dispatchable resources like wind and solar, has increased the value of our Hallador Power subsidiary due to the enhanced reliability, resilience and consistency that we provide over the less predictable non-dispatchables. At the same time, the retirement of coal-based generation has reduced demand for coal supply, impacting the value of our Sunrise Coal subsidiary. In anticipation of these market dynamics, we proactively reduced production volume and shifted our focus away from the higher cost coal reserves, which lowered our operational cash costs in the fourth quarter. These strategic actions along with lower long-term coal price projections resulted in a fourth-quarter non-cash write-down of Sunrise Coal's carrying value by approximately $215 million, which underscores the foresight of our transition to power generation in the coming years.”

Bilsland continued, "Looking ahead, our focus remains on maximizing the value of our Merom Power Plant while actively pursuing opportunities to acquire additional dispatchable generators that can add durability, scale, and geographic expansion to our electric operations. Additionally, we are forging strong relationships with sophisticated counterparties to secure favorable collateral terms and effectively manage our forward power sales in 2025 and 2026, which we believe will enhance our financial flexibility in the short to medium term. During 2024, we also reduced our bank debt by more than 50% to $44 million at year-end. We are excited about our continued transformation from a commodity-focused coal producer to an IPP with a secure fuel supply, a strategy we believe will unlock expanding energy market margins, drive sustainable growth, and enhance cash flow generation for our shareholders.”

Fourth Quarter 2024 Highlights

  • Hallador advanced its restructuring efforts for its subsidiary Sunrise Coal, focusing on production optimization and cost reductions to strengthen its operations.
    • During 2024, the Company reduced its coal production volume by approximately 40% and shifted its focus away from the higher cost portions of its coal reserves. This optimization of coal production reduced Hallador's operational cash cost structure to better align its coal strategy to support its internal electric generation.
    • As a result of reducing coal production, optimizing its reserve base, and the declining price of contracted coal sales, Hallador realized an approximate $215 million non-cash write down in the fourth quarter associated with the carrying value of its Sunrise Coal subsidiary.
  • The Company continues to shift its revenue mix to prioritize electric sales as an independent power producer.
    • Fourth quarter electric sales were $69.7 million or 74% of total Q4 revenue, compared to $37.1 million or 31% of total Q4 revenue in the year-ago period.
    • Fourth quarter Coal sales were $23.4 million or 25% of total revenue, compared to $81.3 million or 68% of total revenue in the year-ago period.
  • Hallador continues to focus on forward sales to secure its energy position.
    • At year-end, Hallador had total forward energy, capacity and coal sales to 3rd party customers of $1.1 billion through 2029, up from $937.2 million at the end of the third quarter.
    • Subsequent to year end, Hallador signed an exclusive commitment agreement with a leading global data center developer, effective January 2, 2025. This agreement is in furtherance of the previously announced non-binding term sheet signed during the third quarter of 2024, reflecting an important milestone as both the Company and the developer seek to finalize a definitive transaction agreement to support the delivery of energy and capacity (through a utility partner) to a potential data center development within the State of Indiana. The completion of this 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.
  • The Company continues to strengthen its balance sheet.
    • Total bank debt was $44.0 million at December 31, 2024, compared to $70.0 million at September 30, 2024 and $91.5 million at December 31, 2023.
    • Total liquidity was $37.8 million at December 31, 2024 compared to $34.9 million at September 30, 2024 and $26.2 million at December 31, 2023.
 
Financial Summary ($ in Millions and Unaudited)
             
  Q1 2024 Q2 2024 Q3 2024 Q4 2024
Electric Sales $60.7  $59.4  $71.7  $69.7 
Coal Sales- 3rd Party $49.6  $32.8  $31.7  $23.3 
Other Revenue $1.3  $1.0  $1.4  $1.8 
Total Operating Revenue $111.6  $93.2  $104.8  $94.8 
Net Income (Loss) $(1.7) $(10.2) $1.6  $(215.8)
Operating Cash Flow $18.5  $26.1  $(11.2) $32.5 
Adjusted EBITDA* $6.8  $(5.8) $9.6  $6.2 

_________________________________

*   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 Income (Loss) before Income taxes, the most comparable GAAP measure, is as follows (in thousands) for the twelve months ended December 31, 2024 and 2023, respectively.

 
Reconciliation of GAAP "Income (Loss) before Income Taxes" to non-GAAP "Adjusted EBITDA"

(In $ Thousands and Unaudited)

       
     Year Ended
     December 31, 
     2024     2023 
NET INCOME (LOSS) $(226,138) $44,793 
Interest expense  13,850   13,711 
Income tax expense (benefit)  (9,404)  4,465 
Depreciation, depletion and amortization  65,626   67,211 
EBITDA  (156,066)  130,180 
Other operating revenue  (275)  10 
Stock-based compensation  4,454   3,554 
Asset impairment  215,136   - 
Asset retirement obligations accretion  1,628   1,804 
Other amortization  (46,310)  (30,613)
(Gain) loss on disposal or abandonment of assets, net  (50)  398 
Loss on extinguishment of debt  2,790   1,491 
Equity method investment (loss)  746   552 
Settlement of litigation  2,750   - 
Other reclassifications  (8,043)  - 
Adjusted EBITDA  $16,760  $107,376 
         
 
Solid Forward Sales Position - Segment Basis, Before Intercompany Eliminations (unaudited):
                         
  2025 2026 2027 2028 2029 Total
Power                        
Energy                        
Contracted MWh (in millions)  4.25   3.36   1.78   1.09   0.27   10.75 
Average contracted price per MWh $37.24  $44.43  $54.66  $52.94  $51.33     
Contracted revenue (in millions) $158.27  $149.28  $97.29  $57.70  $13.86  $476.40 
                         
Capacity                        
Average daily contracted capacity MWh  773   727   623   454   100     
Average contracted capacity price per MWd $201  $230  $226  $225  $230     
Contracted capacity revenue (in millions) $55.95  $61.12  $51.40  $37.33  $3.47  $209.27 
                         
Total Energy & Capacity Revenue                        
                         
Contracted Power revenue (in millions) $214.22  $210.40  $148.69  $95.03  $17.33  $685.67 
     

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