[ x ]
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the quarterly period ended: June 30, 2011
or
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[ ]
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Commission file number: 001-3473
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“COAL KEEPS YOUR LIGHTS ON”
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![]() ![]() |
“COAL KEEPS YOUR LIGHTS ON”
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HALLADOR ENERGY COMPANY
(www.halladorenergy.com)
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Colorado
(State of incorporation)
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84-1014610
(IRS Employer Identification No.)
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1660 Lincoln Street, Suite 2700, Denver, Colorado
(Address of principal executive offices)
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80264-2701
(Zip Code)
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Issuer's telephone number: 303.839.5504
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Fax: 303.832.3013
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o Large accelerated filer
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o Accelerated filer
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o Non-accelerated filer (do not check if a small reporting company)
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þ Smaller reporting company
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June 30,
2011
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December 31, 2010
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ASSETS
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Current assets:
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Cash and cash equivalents
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$ | 17,532 | $ | 10,277 | ||||
Certificates of deposit
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1,291 | |||||||
Prepaid Federal income taxes
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3,853 | |||||||
Accounts receivable
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6,260 | 5,450 | ||||||
Coal inventory
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3,505 | 2,100 | ||||||
Parts and supply inventory
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2,193 | 2,411 | ||||||
Other
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1,114 | 850 | ||||||
Total current assets
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30,604 | 26,232 | ||||||
Coal properties, at cost:
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Land, buildings and equipment
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123,862 | 114,476 | ||||||
Mine development
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62,756 | 59,351 | ||||||
186,618 | 173,827 | |||||||
Less - accumulated DD&A
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(35,171 | ) | (28,435 | ) | ||||
151,447 | 145,392 | |||||||
Investment in Savoy
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10,816 | 7,717 | ||||||
Investment in Sunrise Energy
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2,919 | 2,375 | ||||||
Other assets
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6,681 | 4,948 | ||||||
$ | 202,467 | $ | 186,664 | |||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
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Current liabilities:
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Current portion of bank debt
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$ | 10,000 | $ | 10,000 | ||||
Accounts payable and accrued liabilities
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10,156 | 8,809 | ||||||
Income taxes
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1,556 | |||||||
Interest rate swaps, at estimated fair value
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339 | 692 | ||||||
Total current liabilities
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22,051 | 19,501 | ||||||
Long-term liabilities:
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Bank debt, net of current portion
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12,500 | 17,500 | ||||||
Deferred income taxes
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23,558 | 17,435 | ||||||
Asset retirement obligations
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1,191 | 1,150 | ||||||
Other
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4,345 | 4,345 | ||||||
Total long-term liabilities
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41,594 | 40,430 | ||||||
Total liabilities
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63,645 | 59,931 | ||||||
Commitments and Contingencies
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Stockholders’ equity:
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Preferred stock, $.10 par value, 10,000 shares authorized;
none issued
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Common stock, $.01 par value, 100,000 shares authorized;
28,136 and 27,924 shares outstanding, respectively
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281 | 279 | ||||||
Additional paid-in capital`
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84,888 | 84,073 | ||||||
Retained earnings
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53,609 | 42,381 | ||||||
Accumulated other comprehensive income
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44 | |||||||
Total stockholders’ equity
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138,822 | 126,733 | ||||||
$ | 202,467 | $ | 186,664 |
Six months ended
June 30,
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Three months ended
June 30,
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2011
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2010
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2011
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2010
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Revenue:
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Coal sales
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$ | 66,101 | $ | 66,650 | $ | 32,136 | $ | 31,695 | ||||||||
Equity income - Savoy
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3,123 | 303 | 1,681 | 113 | ||||||||||||
Equity income - Sunrise Energy
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544 | 119 | ||||||||||||||
Other
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1,757 | 13 | (272 | ) | (124 | ) | ||||||||||
71,525 | 66,966 | 33,664 | 31,684 | |||||||||||||
Costs and expenses:
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Cost of coal sales
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36,793 | 38,332 | 17,919 | 18,883 | ||||||||||||
DD&A
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6,736 | 5,642 | 3,382 | 2,885 | ||||||||||||
SG&A
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3,490 | 2,596 | 1,791 | 1,456 | ||||||||||||
Interest (1)
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706 | 1,048 | 342 | 486 | ||||||||||||
47,725 | 47,618 | 23,434 | 23,710 | |||||||||||||
Income before income taxes
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23,800 | 19,348 | 10,230 | 7,974 | ||||||||||||
Less income taxes
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(9,067 | ) | (7,740 | ) | (3,775 | ) | (3,190 | ) | ||||||||
Net income
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$ | 14,733 | $ | 11,608 | $ | 6,455 | $ | 4,784 | ||||||||
Net income per share:
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Basic
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$ | 0.52 | $ | 0.42 | $ | 0.23 | $ | 0.17 | ||||||||
Diluted
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$ | 0.51 | $ | 0.41 | $ | 0.23 | $ | 0.17 | ||||||||
Weighted average shares outstanding:
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Basic
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28,089 | 27,782 | 28,133 | 27,782 | ||||||||||||
Diluted
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28,617 | 28,510 | 28,587 | 28,563 | ||||||||||||
_________________________________
(1) Included in interest expense for 2011 and 2010 were credits of $354 and $330, respectively, for the change in the estimated fair value of our interest rate swaps. Such credit amounts for the second quarter 2011 and 2010 were $166 and $191, respectively.
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See accompanying notes.
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2011
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2010
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Operating activities:
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Cash provided by operating activities
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$ | 27,861 | $ | 23,280 | ||||
Investing activities:
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Capital expenditures for coal properties
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(12,558 | ) | (18,204 | ) | ||||
Capital expenditures for unproved oil and gas properties
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(1,567 | ) | ||||||
Proceeds from CDs
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1,291 | |||||||
Other
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155 | 92 | ||||||
Cash used in investing activities
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(12,679 | ) | (18,112 | ) | ||||
Financing activities:
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Payments of bank debt
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(5,000 | ) | (5,000 | ) | ||||
Dividends
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(3,505 | ) | ||||||
Stock option buy out for cash
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(679 | ) | ||||||
Tax benefit from stock-based compensation | 595 | |||||||
Other
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(17 | ) | (162 | ) | ||||
Cash used in financing activities
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(7,927 | ) | (5,841 | ) | ||||
Increase (decrease) in cash and cash equivalents
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7,255 | (673 | ) | |||||
Cash and cash equivalents, beginning of period
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10,277 | 15,226 | ||||||
Cash and cash equivalents, end of period
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$ | 17,532 | $ | 14,553 | ||||
Shares
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Common Stock
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Additional
Paid-in Capital
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Retained Earnings
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AOCI*
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Total
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Balance January 1, 2011
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27,924 | $ | 279 | $ | 84,073 | $ | 42,381 | $ | 126,733 | |||||||||||||||
Stock-based compensation
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1,139 | 1,139 | ||||||||||||||||||||||
Exercise of employee stock options for shares
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181 | 1 | 1 | |||||||||||||||||||||
Taxes paid for shares issued to employees
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(41 | ) | (470 | ) | (470 | ) | ||||||||||||||||||
Stock issued on vesting of RSUs
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110 | 1 | 1 | |||||||||||||||||||||
Taxes paid on vesting of RSUs
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(38 | ) | (449 | ) | (449 | ) | ||||||||||||||||||
Tax benefit from stock-based compensation | 595 | 595 | ||||||||||||||||||||||
Dividends
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(3,505 | ) | (3,505 | ) | ||||||||||||||||||||
Increase in value of marketable securities
available for sale
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44 | 44 | ||||||||||||||||||||||
Net income
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14,733 | 14,733 | ||||||||||||||||||||||
Balance June 30, 2011
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28,136 | $ | 281 | $ | 84,888 | $ | 53,609 | $ | 44 | $ | 138,822 | |||||||||||||
Net income | $14,733 | |||
OCI | 44 | |||
Comprehensive income | $14,777 |
(1)
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General Business
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2011
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Current assets
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$ | 16,324 | |||
Oil and gas properties, net
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19,192 | ||||
$ | 35,516 | ||||
Total liabilities
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$ | 11,560 | |||
Partners' capital
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23,956 | ||||
$ | 35,516 |
2011 | 2010 | ||||||||
Revenue
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$ | 15,325 | $ | 5,385 | |||||
Expenses
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(8,426 | ) | (4,715 | ) | |||||
Net income
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$ | 6,899 | $ | 670 |
2011
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Current assets
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$ | 2,006 | |||
Oil and gas properties, net
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5,373 | ||||
$ | 7,379 | ||||
Total liabilities
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$ | 1,540 | |||
Partners' capital
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5,839 | ||||
$ | 7,379 |
2011
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Revenue
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$ | 2,217 | |||
Expenses
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(1,128 | ) | |||
Net income
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$ | 1,089 |
June 30,
2011
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December 31,
2010
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Other long-term assets:
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Undeveloped oil and gas leases
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$
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2,734
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$
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1,232
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Advance coal royalties
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2,171
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1,863
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Deferred financing costs, net
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455
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616
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Marketable equity securities available for sale (restricted)*
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1,130
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Cash (restricted)*
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1,200
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Other
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191
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37
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$
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6,681
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$
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4,948
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----------------------
*Held by Sunrise Indemnity, Inc., our wholly-owned captive insurance company.
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Six months
ended
June 30,
2011
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Six months
ended
June 30,
2010
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Other income:
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MSHA reimbursements
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$
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1,900
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$
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Exploration and dry hole costs
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(628
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)
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(209
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)
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Oil and gas sales, net of expenses
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108
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76
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Other
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377
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146
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$
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1,757
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$
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13
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2011
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2010
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Revenue:
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Oil
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$
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12,277
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$
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3,590
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Gas
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291
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414
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NGLs (natural gas liquids)
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254
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66
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Contract drilling
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2,277
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798
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Other
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226
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517
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Total revenue
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15,325
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5,385
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Costs and expenses:
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LOE (lease operating expenses)
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1,799
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881
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Contract drilling costs
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1,468
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706
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DD&A (depreciation, depletion & amortization)
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1,679
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1,185
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G&G (geological and geophysical) costs
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490
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642
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Dry hole costs
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906
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497
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Impairment of unproved properties
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1,410
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207
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Other exploration costs
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188
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74
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G&A (general & administrative)
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486
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523
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Total expenses
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8,426
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4,715
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Net income
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$
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6,899
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$
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670
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The information below is not in thousands:
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Oil production in barrels
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131,500
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50,000
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Average oil prices/barrel for the period
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$
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93.36
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$
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72.00
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Section
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Section
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Section
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Section
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Section
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Proposed
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104(a)
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104(b)
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104(d)
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107(a)
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110(b)(2)
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MSHA
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Month
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Citations
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Orders
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Citation/Orders
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Orders
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Violations
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Assessments
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(in thousands)
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January
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1
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0
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0
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0
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0
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$10.00
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February
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2
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0
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0
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0
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0
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11.00
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March
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2
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0
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0
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0
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0
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7.70
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April | 4 | 0 | 0 | 0 | 0 | 6.00 | |||||||
May | 3 | 0 | 0 | 0 | 0 | 16.00 | |||||||
June | 2 | 0 | 0 | 0 | 0 | 30.00 |
31
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SOX 302 Certifications (1)
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32
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SOX 906 Certification (1)
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(1) Filed herewith.
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HALLADOR ENERGY COMPANY
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Date: August 5, 2011
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/s/W. Anderson Bishop
Anderson Bishop, CFO and CAO
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1.
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I have reviewed this quarterly report on Form 10-Q of Hallador Energy Company;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c)
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Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)
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Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent function):
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a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
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b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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/S/VICTOR P. STABIO
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August 5, 2011
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Victor P. Stabio, CEO
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1.
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I have reviewed this quarterly report on Form 10-Q of Hallador Energy Company;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c)
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Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)
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Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent function):
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a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
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b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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/S/W. Anderson Bishop
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August 5, 2011
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W. Anderson Bishop, CFO
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(1)
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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August 5, 2011
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By:
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/S/Victor P. Stabio
Victor P. Stabio, CEO
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||
/S/W. Anderson Bishop
W. Anderson Bishop, CFO
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