GlobeNewswire Inc | Nov 2, 2020 05:30PM EST

November 02, 2020

TERRE HAUTE, Ind., Nov. 02, 2020 (GLOBE NEWSWIRE) -- Hallador Energy Company (NASDAQ HNRG) today reported net incomeof $1.9million, $.06Per Share.

Brent Bilsland, President and Chief Executive Officer, stated, "We are intensely focused on creating positive cash flow to aggressively pay down debt. Year to date, we have paid down $33 million and are on pace to reduce our total bank debt by 20% - 25% for the year."

-- During Q3 2020, shipments improved over Q2 levels and our costs of $29.30 per ton remained within our expectations. -- In the first nine months of 2020, bank debt was reduced by $33million, and operating cash flow was $34.1million. Coal inventories decreased $4.5 million in Q3. We anticipate shipments increasing in Q4 and inventory levels to continue to decline, further improving operating cash flow. -- As of September 30, 2020, both our liquidity and our leverage ratio improved to $52.7million and 2.46X, respectively. Leveragewascomfortably within our covenant of 3.5X.

Solid Sales Position Through 2022

-- Due to the impacts and economic uncertainty of COVID-19, the Company is continuing to suspendsales guidance, but still carries a strong contracted sales position through 2022.

Contracted Estimated Tons Priced Year (millions)* per ton 2020 (Q4) 2.1 $40.00 2021 5.0 $39.30 2022 5.3 $40.20 12.4

* Contracted tons are subject to adjustment due to the exercise of customer options to either take additional tons or reduce tonnage if such options exist in the customer contract. Our actual shipments for the remainder of 2020 are estimated to be 1.7 million tons as we expect our customers to defer or carryover 400,000 tons from 2020 to 2021 from the contracted tons noted above, resulting in contracted and carryover tons of 5.4million for 2021.

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, 2020 2019 2020 2019 Net Income (loss) $1,923 $(3,723) $(1,483) $(67) Total Revenues $65,128 $83,096 $179,747 $244,719 Tons Sold 1,585 2,118 4,355 6,055 Average Price per Ton $40.85 $39.13 $40.68 $39.51 Bank Debt $146,925 $172,000 $146,925 $172,000 Operating Cash Flow $15,810 $12,612 $34,109 $36,323 Adjusted EBITDA* $17,077 $10,451 $44,151 $52,109 Adjusted Free Cash Flow $11,557 $1,100 $24,651 $21,695 **

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 Nine Months Ended September 30, September 30, 2020 2019 2020 2019 Net income (loss) $1,923 $(3,723) $(1,483) $(67) Income tax benefit (461) (3,473) (3,255) (3,318) Loss from Hourglass Sands 64 47 205 438 (Income) loss from equity 119 184 (1,167) 350 method investmentsDD&A 9,313 11,774 30,151 35,598 Asset impairment 1,799 ? 1,799 ? ARO accretion 348 320 1,024 943 Loss (gain) on disposal 38 1 38 (99) of assetsLoss (gain) on marketable ? 14 (14) (334) securitiesInterest Expense 2,329 3,558 10,877 13,546 Other amortization 1,452 1,323 4,274 3,614 Change in fair value of (138) - 775 ? fuel hedgesStock-based compensation 291 426 927 1,438 Adjusted EBITDA $17,077 $10,451 $44,151 $52,109

Reconciliation of GAAP "net income" to non-GAAP "adjusted free cash flow" (in thousands).

Three Months Ended Nine Months Ended September 30, September 30, 2020 2019 2020 2019 Net income (loss) $1,923 $(3,723) $(1,483) $(67) (Income) loss fromequity method 119 184 (1,167) 350 investmentsDeferred income tax (387) (3,047) (2,657) (2,741) benefitDD&A 9,315 11,778 30,159 35,612 Asset impairment 1,799 ? 1,799 ? ARO accretion 348 320 1,024 943 Deferred financing 610 543 1,686 1,628 costs amortizationChange in fair value (995) 162 981 3,018 of interest rate swapsChange in fair value (138) ? 775 ? of fuel hedgesLoss (gain) on 38 1 38 (99) disposal of assetsMaintenance capex (1,365) (5,537) (7,413) (18,373) Stock-basedcompensation less 290 419 909 1,424 taxes paidAdjusted Free Cash $11,557 $1,100 $24,651 $21,695 Flow

Conference Call

As previously announced our earnings conference call for financial analysts and investors will be held on Tuesday, November 3, 2020, 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 10148523.

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 RelationsPhone: (303) 839-5504