Colorado
|
001-3473
|
84-1014610
|
(State or Other Jurisdiction
of Incorporation)
|
(Commission
File Number)
|
(IRS Employer
Identification No.)
|
1660 Lincoln Street, Suite 2700, Denver Colorado
|
80264-2701
|
|
(Address of principal executive offices)
|
(Zip Code)
|
Registrant’s telephone number, including area code: 303-839-5504
|
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
|
o
|
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
|
o
|
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
|
o
|
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
|
o
|
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
|
|
(a)
|
Financial Statements of Business Acquired
|
a.
|
See Financial Statements in Exhibit 99.1 hereto.
|
(b)
|
Pro Forma Financial Information
|
a.
|
See Pro Forma Financial Information in Exhibit 99.2 hereto.
|
(d)
|
Exhibits
|
Date: October 24, 2014
|
HALLADOR ENERGY COMPANY
By: /s/ W. ANDERSON BISHOP
W. Anderson Bishop, CFO
|
December 31,
|
December 31,
|
June 30,
|
||||||||||
2012
|
2013
|
2014
|
||||||||||
|
|
(Unaudited)
|
||||||||||
ASSETS
|
||||||||||||
CURRENT ASSETS:
|
||||||||||||
Cash
|
$ | 2,442 | $ | 308 | $ | 853 | ||||||
Accounts receivable
|
6,012 | 11,359 | 13,112 | |||||||||
Accounts receivable from affiliate
|
8,109 | 7,848 | 6,475 | |||||||||
Notes receivable from affiliate
|
14,092 | 69,569 | 64,511 | |||||||||
Advance royalties
|
195 | 909 | 312 | |||||||||
Materials and supplies inventory
|
12,391 | 13,300 | 13,228 | |||||||||
Coal inventory
|
25,400 | 26,172 | 40,395 | |||||||||
Prepaid expenses and other current assets
|
2,354 | 437 | 1,522 | |||||||||
Income tax receivable
|
1,362 | 1,944 | ||||||||||
Current deferred tax asset
|
347 | 309 | ||||||||||
Total current assets
|
72,704 | 132,155 | 140,408 | |||||||||
ADVANCE ROYALTIES
|
3,854 | 1,852 | 2,007 | |||||||||
PROPERTY AND EQUIPMENT -- Net
|
303,753 | 299,299 | 277,733 | |||||||||
TOTAL ASSETS
|
$ | 380,311 | $ | 433,306 | $ | 420,148 | ||||||
LIABILITIES AND SHAREHOLDER'S EQUITY
|
||||||||||||
CURRENT LIABIILITIES:
|
||||||||||||
Accounts Payable
|
$ | 7,588 | $ | 13,521 | $ | 10,932 | ||||||
Notes payable to affiliate
|
56,634 | 68,675 | 92,210 | |||||||||
Payable to affiliate
|
902 | 952 | 1,180 | |||||||||
Accrued expenses
|
9,010 | 7,256 | 20,308 | |||||||||
Accrued taxes
|
1,436 | 1,244 | 10,429 | |||||||||
Current maturities of long term debt
|
12,000 | |||||||||||
Total current liabilities
|
75,570 | 103,648 | 135,059 | |||||||||
LONG-TERM NOTES PAYABLE TO AFFILIATE
|
197,000 | 233,000 | 220,000 | |||||||||
ASSET RETIREMENT OBLIGATION
|
10,017 | 11,826 | 12,145 | |||||||||
DEFERRED TAX LIABILITY
|
40,768 | 41,890 | 19,260 | |||||||||
Total liabilities
|
323,355 | 390,364 | 386,464 | |||||||||
COMMITMENTS AND CONTINGENCIES (Note 5, 6, and 11)
|
||||||||||||
SHAREHOLDER'S EQUITY
|
||||||||||||
Common stock, no par value
|
||||||||||||
1,000 shares authorized; 100 shares issued and outstanding
|
1 | 1 | 1 | |||||||||
Additional paid-in-capital
|
14,977 | 14,997 | 24,499 | |||||||||
Retained earnings
|
40,969 | 27,199 | 9,184 | |||||||||
55,947 | 42,197 | 33,684 | ||||||||||
NONCONTROLLING INTEREST
|
1,009 | 745 | ||||||||||
Total equity
|
56,956 | 42,942 | 33,684 | |||||||||
TOTAL LIABILITIES AND SHAREHOLDER EQUITY
|
$ | 380,311 | $ | 433,306 | $ | 420,148 |
For the year ended
December 31,
|
For the six months ended
June 30,
|
|||||||||||||||
2012
|
2013
|
2013
|
2014
|
|||||||||||||
(Unaudited)
|
||||||||||||||||
REVENUES
|
$ | 235,816 | $ | 292,956 | $ | 135,242 | $ | 167,081 | ||||||||
COST OF REVENUES
|
231,444 | 306,854 | 146,098 | 160,635 | ||||||||||||
GROSS PROFIT
|
4,372 | (13,898 | ) | (10,856 | ) | 6,446 | ||||||||||
OPERATING EXPENSES
|
4,163 | 4,078 | 1,259 | 33,847 | ||||||||||||
OPERTATING INCOME (LOSS)
|
209 | (17,976 | ) | (12,115 | ) | (27,401 | ) | |||||||||
OTHER INCOME (EXPENSES):
|
||||||||||||||||
Interest expense
|
(10,123 | ) | (10,289 | ) | (5,002 | ) | (6,034 | ) | ||||||||
Interest income
|
179 | 472 | 125 | 393 | ||||||||||||
Other
|
(65 | ) | (62 | ) | 38 | 324 | ||||||||||
Other expense --- net
|
(10,009 | ) | (9,879 | ) | (4,839 | ) | (5,317 | ) | ||||||||
LOSS BEFORE INCOME TAX
|
(9,800 | ) | (27,855 | ) | (16,954 | ) | (32,718 | ) | ||||||||
INCOME TAX BENEFIT
|
(7,617 | ) | (14,187 | ) | (8,624 | ) | (14,716 | ) | ||||||||
NET LOSS
|
(2,183 | ) | (13,668 | ) | (8,330 | ) | (18,002 | ) | ||||||||
LESS NET (LOSS) INCOME ATTRIBUTABLE TO THE
|
||||||||||||||||
NONCONTROLLING INTEREST
|
(83 | ) | (264 | ) | (163 | ) | 13 | |||||||||
NET LOSS ATTRIBUTABLE TO VECTREN FUELS, INC.
|
||||||||||||||||
AND SUBSIDIARIES
|
(2,100 | ) | (13,404 | ) | (8,167 | ) | (18,015 | ) | ||||||||
RETAINED EARNINGS - Beginning of year
|
62,319 | 40,969 | 40,969 | 27,199 | ||||||||||||
DISTRIBIUTIONS TO PARENT
|
(19,250 | ) | (366 | ) | ||||||||||||
RETAINED EARNINGS - End of year
|
$ | 40,969 | $ | 27,199 | $ | 32,802 | $ | 9,184 | ||||||||
For the year ended
December 31,
|
For the six months ended
June 30,
|
|||||||||||||||
2012
|
2013
|
2013
|
2014
|
|||||||||||||
(Unaudited)
|
||||||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
||||||||||||||||
Net loss
|
$ | (2,183 | ) | $ | (13,668 | ) | $ | (8,330 | ) | $ | (18,002 | ) | ||||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
|
||||||||||||||||
Depreciation and amortization
|
42,226 | 51,376 | 24,230 | 30,199 | ||||||||||||
Loss on sale of property and equipment
|
114 | 113 | 32,209 | |||||||||||||
Deferred income taxes
|
4,232 | 1,160 | ||||||||||||||
Other noncash charges - net
|
701 | 884 | 163 | 1,116 | ||||||||||||
Changes in operating assets and liabilities:
|
||||||||||||||||
Accounts receivable
|
6,334 | (5,347 | ) | (12,722 | ) | (381 | ) | |||||||||
Accounts receivable from affiliate
|
3,368 | 261 | ||||||||||||||
Advance royalties
|
1,486 | 1,288 | (482 | ) | 442 | |||||||||||
Coal inventory
|
(12,350 | ) | (772 | ) | 2,085 | (14,222 | ) | |||||||||
Material and supplies inventory
|
(473 | ) | (909 | ) | ||||||||||||
Prepaid expenses and other current assets
|
(2,227 | ) | 1,917 | (1,601 | ) | 931 | ||||||||||
Income tax receivable
|
573 | (582 | ) | |||||||||||||
Accounts payable
|
(3,789 | ) | 5,933 | 639 | (2,588 | ) | ||||||||||
Payables to affiliates
|
(66 | ) | 50 | 34 | 213 | |||||||||||
Accrued expenses
|
231 | (1,754 | ) | (896 | ) | 2,826 | ||||||||||
Accrued taxes
|
275 | (192 | ) | (46 | ) | 9,184 | ||||||||||
Asset retirement obligation
|
(174 | ) | (82 | ) | ||||||||||||
Other
|
(162 | ) | (745 | ) | ||||||||||||
Net cash provided by operating activities
|
38,278 | 39,676 | 2,912 | 41,182 | ||||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES
|
||||||||||||||||
Proceeds from sale of property and equipment
|
80 | 215 | 100 | 300 | ||||||||||||
Purchase of property and equipment
|
(63,942 | ) | (46,242 | ) | (20,820 | ) | (32,002 | ) | ||||||||
Collection of notes receivable from affiliate
|
130,407 | 47,371 | ||||||||||||||
Notes receivable from affiliate
|
(130,666 | ) | (102,848 | ) | ||||||||||||
Net cash used in investing activities
|
(64,121 | ) | (101,504 | ) | (20,720 | ) | (31,702 | ) | ||||||||
CASH FLOWS FROM FINANCING ACTIVITIES
|
||||||||||||||||
Equity from parent
|
20 | 9,502 | ||||||||||||||
Principal payments on notes payable to affiliate
|
(80,018 | ) | (95,577 | ) | (47,002 | ) | ||||||||||
Borrowings on notes payable to affiliate
|
127,382 | 155,617 | 16,838 | 28,608 | ||||||||||||
Distributions to parent
|
(19,250 | ) | (346 | ) | ||||||||||||
Other
|
(528 | ) | (43 | ) | ||||||||||||
Net cash provided by(used in) financing activities
|
28,114 | 59,694 | 16,330 | (8,935 | ) | |||||||||||
NET INCREASE (DECREASE) IN CASH
|
2,271 | (2,134 | ) | (1,478 | ) | 545 | ||||||||||
CASH - Beginning of year
|
171 | 2,442 | 2,442 | 308 | ||||||||||||
CASH - End of year
|
$ | 2,442 | $ | 308 | $ | 964 | $ | 853 | ||||||||
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
|
||||||||||||||||
Cash payments for interest
|
$ | 11,726 | $ | 10,261 | $ | 5,036 | $ | 5,922 | ||||||||
Income taxes
|
$ | (12,184 | ) | $ | (14,765 | ) | $ | (6,418 | ) | $ | (3,544 | ) | ||||
Non cash disclosures:
|
||||||||||||||||
Capital expenditures included in accounts payable
|
$ | 3,456 | $ | 5,193 | $ | 1,453 | $ | 3,214 | ||||||||
Additions to mining property related to asset retirement obligation
|
$ | 1,257 | $ | 1,257 |
December 31,
|
December 31,
|
June 30,
|
|||||||||||
2012
|
2013
|
2014
|
|||||||||||
Inventory:
|
(Unaudited)
|
||||||||||||
Finished coal
|
$ | 19,467 | $ | 15,573 | $ | 27,775 | |||||||
In-pit coal
|
5,933 | 10,599 | 12,620 | ||||||||||
$ | 25,400 | $ | 26,172 | $ | 40,395 | ||||||||
Cost
|
|||||||||||||
2012
|
2013
|
2014
|
|||||||||||
(Unaudited)
|
|||||||||||||
Building
|
$ | 38,888 | $ | 52,704 | $ | 52,977 | |||||||
Equipment
|
223,169 | 253,276 | 272,684 | ||||||||||
Mining property
|
10,295 | 10,495 | 9,667 | ||||||||||
Mining development cost
|
143,982 | 180,974 | 162,752 | ||||||||||
Mines development in process
|
27,505 | ||||||||||||
Construction-in-process
|
13,832 | ||||||||||||
Railroad equipment and property
|
23,303 | 23,288 | 23,288 | ||||||||||
Accumulated depreciation
|
(177,221 | ) | (221,438 | ) | (243,635 | ) | |||||||
$ | 303,753 | $ | 299,299 | $ | 277,733 |
2012
|
2013
|
2014
|
|||||||||||||||||||||||
Current
|
Long-Term
|
Current
|
Long-Term
|
Current
|
Long-Term
|
||||||||||||||||||||
(Unaudited)
|
|||||||||||||||||||||||||
Notes payable to Vectren Capital, interest at Parent's daily cost of funds, which was 1.28% at December 31, 2013, collateralized by substantially all of the Company's assets, due on demand (A)
|
$ | 56,634 | $ | $ | 68,675 | $ | $ | 92,210 | $ | ||||||||||||||||
Notes payable to Vectren Capital, 3.98% weighted average, interest only monthly, collateralized by real estate, mortgage, and substantially all of the company's assets, due at various dates from March 11, 2014 to March 11, 2019 (B)
|
197,000 | 12,000 | 233,000 | 220,000 | |||||||||||||||||||||
$ | 56,634 | $ | 197,000 | $ | 80,675 | $ | 233,000 | $ | 92,210 | $ | 220,000 |
(A)
|
At December 31, 2013, the short-term borrowing limit on the credit facility was $238,000.
|
(B)
|
Consolidated maturities of long-term debt during the five years following 2013 are $12,000 in 2014, $70,000 in 2015, $88,000 in 2016, $65,000 in 2017 and $10,000 thereafter.
|
2012
|
2013
|
||||||||
Current:
|
|||||||||
Federal
|
$ | (9,505 | ) | $ | (12,501 | ) | |||
State
|
(2,344 | ) | (2,893 | ) | |||||
(11,849 | ) | (15,394 | ) | ||||||
Deferred:
|
|||||||||
Federal
|
3,666 | 1,044 | |||||||
State
|
566 | 163 | |||||||
4,232 | 1,207 | ||||||||
Income tax benefit
|
$ | (7,617 | ) | $ | (14,187 | ) |
2012
|
2013
|
||||||||
Deferred tax assets:
|
|||||||||
Mine reclamation
|
$ | 1,227 | $ | 1,646 | |||||
Property tax
|
273 | 235 | |||||||
Prepaid expenses
|
74 | 74 | |||||||
Total deferred tax asset
|
1,574 | 1,955 | |||||||
Deferred tax liabilities:
|
|||||||||
Property and equipment
|
(41,995 | ) | (43,536 | ) | |||||
Prepaid expenses
|
|||||||||
Total deferred tax liability
|
(41,995 | ) | (43,536 | ) | |||||
Total net deferred tax liability
|
$ | (40,421 | ) | $ | (41,581 | ) |
2012
|
2013
|
|||||||||||||||
Federal taxes at statutory amount
|
$ | (3,401 | ) | (35.00 | )% | $ | (9,657 | ) | (35.00 | )% | ||||||
State taxes
|
(802 | ) | (8.25 | ) | (2,138 | ) | (7.75 | ) | ||||||||
Effect of:
|
||||||||||||||||
Depletion
|
(4,047 | ) | (42.00 | ) | (3,498 | ) | (13.00 | ) | ||||||||
Federal tax effect of state accruals
|
281 | 3.00 | 748 | 3.00 | ||||||||||||
Mine Safety & Health Administration penalties
|
304 | 3.00 | 271 | 1.00 | ||||||||||||
Other differences
|
48 | 87 | ||||||||||||||
$ | (7,617 | ) | (79.25 | )% | $ | (14,187 | ) | (51.75) | % |
2012
|
2013
|
2014
|
|||||||||||
(Unaudited)
|
|||||||||||||
Beginning balance
|
$ | 9,640 | $ | 10,017 | $ | 11,826 | |||||||
Revisions in estimated cash flows
|
1,257 | ||||||||||||
Accretion due to passage of time
|
551 | 634 | 331 | ||||||||||
Liabilities settled
|
(174 | ) | (82 | ) | (12 | ) | |||||||
Ending balance
|
$ | 10,017 | $ | 11,826 | $ | 12,145 |
2014
|
2015
|
2016
|
|||||||||||
Coal sales - SIGECO
|
$ | 2,500 | $ | 2,000 | $ | 500 | |||||||
Coal sales - non-affiliated customers
|
4,000 | 4,500 | 1,500 |
2012
|
2013
|
2014
|
|||||||||||
(Unaudited)
|
|||||||||||||
Sales
|
$ | 115,507 | $ | 103,681 | $ | 68,595 | |||||||
Interest income
|
179 | 472 | 393 | ||||||||||
Interest expense
|
10,123 | 10,289 | 6,033 | ||||||||||
Rental expense
|
26 | 24 | 11 | ||||||||||
2012
|
2013
|
2014
|
|||||||||||
(Unaudited)
|
|||||||||||||
Accounts receivable from affiliate
|
$ | 8,109 | $ | 7,848 | $ | 6,475 | |||||||
Notes receivable from affiliate
|
14,092 | 69,569 | 64,511 | ||||||||||
Notes payable to affiliate
|
253,634 | 313,675 | 312,210 | ||||||||||
Payable to affiliates
|
902 | 952 | 1,180 |
Historical | Pro Forma | |||||||||||||||
Hallador
|
Vectren Fuels, Inc. (a)
|
Adjustments
|
Combined
|
|||||||||||||
ASSETS
|
||||||||||||||||
Current assets:
|
||||||||||||||||
Cash and cash equivalents
|
$ | 21,025 | $ | 853 | $ | (853 | ) a | $ | 22,525 | |||||||
2,000 | a | |||||||||||||||
(500 | ) c | |||||||||||||||
Marketable securities
|
1,753 | 1,753 | ||||||||||||||
Accounts receivable from Vectren
|
6,475 | (6,475 | ) a | |||||||||||||
Notes receivable from Vectren
|
64,511 | (64,511 | ) a | |||||||||||||
Accounts receivable | 10,653 | 13,112 | 23,765 | |||||||||||||
Prepaid income taxes
|
340 | 466 | b | 806 | ||||||||||||
Coal inventory
|
6,448 | 40,395 | 46,843 | |||||||||||||
Inventory – parts
|
2,609 | 13,228 | 15,837 | |||||||||||||
Advance royalties
|
312 | 312 | ||||||||||||||
Prepaid expenses
|
82 | 1,522 | 1,604 | |||||||||||||
Total current assets
|
42,910 | 140,408 | (69,873 | ) | 113,445 | |||||||||||
Coal properties, at cost:
|
||||||||||||||||
Land and mineral rights
|
27,704 | 9,667 | (9,667 | ) a | 126,892 | |||||||||||
99,188 | a | |||||||||||||||
Buildings and equipment
|
155,405 | 348,949 | (348,949 | ) a | 327,836 | |||||||||||
172,431 | a | |||||||||||||||
Mine development
|
85,813 | 162,752 | (162,752 | ) a | 85,813 | |||||||||||
268,922 | 521,368 | (249,749 | ) | 540,541 | ||||||||||||
Less - accumulated DD&A
|
(87,605 | ) | (243,635 | ) | 243,635 | a | (87,605 | ) | ||||||||
181,317 | 277,733 | (6,114 | ) | 452,936 | ||||||||||||
Investment in Savoy
|
18,582 | 18,582 | ||||||||||||||
Investment in Sunrise Energy | 4,660 | 4,660 | ||||||||||||||
Other assets:
|
||||||||||||||||
Deferred financing costs, net
|
1,166 | 6,000 | a | 6,000 | ||||||||||||
(1,166 | ) b | |||||||||||||||
Advance royalties – coal
|
5,188 | 2,007 | 7,195 | |||||||||||||
Other
|
5,399 | 5,399 | ||||||||||||||
Summit Terminal
|
2,744 | 2,744 | ||||||||||||||
Marketable securities
|
2,503 | 2,503 | ||||||||||||||
Total other assets
|
17,000 | 2,007 | 4,834 | 23,841 | ||||||||||||
Total assets
|
$ | 264,469 | $ | 420,148 | $ | (71,153 | ) | $ | 613,464 | |||||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
||||||||||||||||
Current liabilities:
|
||||||||||||||||
Accounts payable and accrued liabilities
|
$ | 11,688 | $ | 41,669 | $ | (26,024 | ) a | $ | 27,333 | |||||||
Notes payable to Vectren
|
92,210 | (92,210 | ) a |
|
||||||||||||
Payables to Vectren
|
1,180 | (1,180 | ) a | |||||||||||||
Total current liabilities
|
11,688 | 135,059 | (119,414 | ) | 27,333 | |||||||||||
Long-term liabilities:
|
||||||||||||||||
Long-term debt - banks
|
16,000 | (16,000 | ) a | 350,000 | ||||||||||||
350,000 | a | |||||||||||||||
Long-term debt - Vectren
|
220,000 | (220,000 | ) a | |||||||||||||
Deferred income taxes
|
40,899 | 19,260 | (19,260 | ) a | 40,899 | |||||||||||
Asset retirement obligations
|
5,443 | 12,145 | (5,595 | ) a | 11,993 | |||||||||||
Other | 1,448 | 1.448 | ||||||||||||||
Total long-term liabilities
|
63,790 | 251,405 | 89,145 | 404,340 | ||||||||||||
Total liabilities
|
75,478 | 386,464 | (30,269 | ) | 431,673 | |||||||||||
Stockholders' equity:
|
||||||||||||||||
Preferred stock, $.10 par value, 10,000,000 shares authorized; none issued
|
||||||||||||||||
Common stock, $.01 par value, 100,000,000 shares authorized; 28,771 shares issued
|
287 | 1 | (1 | ) a | 287 | |||||||||||
Additional paid-in capital
|
89,141 | 24,499 | (24,499 | ) a | 89,141 | |||||||||||
Retained earnings
|
98,996 | 9,184 | (9,184 | ) a | 91,796 | |||||||||||
(6,000 | ) a | |||||||||||||||
(700 | ) b | |||||||||||||||
(500 | ) c | |||||||||||||||
Accumulated other comprehensive income
|
567 | 567 | ||||||||||||||
Total stockholders' equity
|
188,991 | 33,684 | (40,884 | ) | 181,791 | |||||||||||
Total liabilities and stockholders' equity
|
$ | 264,469 | $ | 420,148 | $ | (71,153 | ) | $ | 613,464 | |||||||
Historical | Pro Forma | |||||||||||||||||||
Hallador
|
Vectren Fuels,
Inc.
|
Prosperity Mine,
LLC
|
Adjustments
|
Combined
|
||||||||||||||||
Revenue:
|
||||||||||||||||||||
Coal
|
$ | 69,146 | $ | 167,081 | $ | $ | $ | 236,227 | ||||||||||||
Equity income - Savoy
|
4,514 | 4,514 | ||||||||||||||||||
Equity income - Sunrise Energy
|
87 | 87 | ||||||||||||||||||
Other
|
480 | 704 | 1,184 | |||||||||||||||||
74,227 | 167,785 | 242,012 | ||||||||||||||||||
Costs and expenses:
|
||||||||||||||||||||
Operating costs and expenses
|
49,101 | 130,681 | (44,878 | ) d | (4,207 | ) d | 164,423 | |||||||||||||
33,957 | d | (231 | ) d | |||||||||||||||||
DD&A
|
10,152 | 29,954 | (10,451 | ) e | (19,492 | ) f | 21,155 | |||||||||||||
2,370 | f | |||||||||||||||||||
8,622 | f | |||||||||||||||||||
Coal exploration costs
|
1,191 | 1,191 | ||||||||||||||||||
SG&A
|
4,709 | 33,847 | (32,466 | ) g | 5,765 | |||||||||||||||
(325 | ) h | |||||||||||||||||||
Interest
|
862 | 6,034 | (6,034 | ) i | 10,212 | |||||||||||||||
8,750 | i | |||||||||||||||||||
600 | i | |||||||||||||||||||
66,015 | 200,516 | (21,372 | ) | (42,413 | ) | 202,746 | ||||||||||||||
Income (loss) before income taxes
|
8,212 | (32,731 | ) | 21.372 | 42,413 | 39,266 | ||||||||||||||
Provision for income taxes | 1,618 | (14,716 | ) | 24,878 | j | 11,780 | ||||||||||||||
Net income (loss)
|
$ | 6,594 | $ | (18,015 | ) | $ | 21,372 | $ | 17,535 | $ | 27,486 | |||||||||
Net income per share: | ||||||||||||||||||||
Basic | $ | 0.22 | $ | 0.92 | ||||||||||||||||
Diluted | $ | 0.22 | $ | 0.92 | ||||||||||||||||
Weighted average shares outstanding: | ||||||||||||||||||||
Basic
|
28,763 | 28,763 | ||||||||||||||||||
Diluted
|
29,001 | 29,001 | ||||||||||||||||||
Historical | Pro Forma | |||||||||||||||||||
Hallador
|
Vectren Fuels,
Inc.
|
Prosperity Mine,
LLC
|
Adjustments
|
Combined
|
||||||||||||||||
Revenue:
|
||||||||||||||||||||
Coal
|
$ | 137,436 | $ | 292,956 | $ | $ | $ | 430,392 | ||||||||||||
Equity income - Savoy
|
5,827 | 5,827 | ||||||||||||||||||
Equity income - Sunrise Energy
|
629 | 629 | ||||||||||||||||||
Liability extinguishment
|
4,300 | 4,300 | ||||||||||||||||||
Coal storage
|
1,238 | 1,238 | ||||||||||||||||||
Other
|
768 | 674 | 1,442 | |||||||||||||||||
MSHA
|
3,672 | 3,672 | ||||||||||||||||||
153,870 | 293,630 | 447,500 | ||||||||||||||||||
Costs and expenses:
|
||||||||||||||||||||
Operating costs and expenses
|
92,893 | 255,988 | (108,244 | ) d | (6,055 | ) d | 306,328 | |||||||||||||
71,746 | d | |||||||||||||||||||
DD&A
|
18,585 | 50,866 | (19,470 | ) e | (31,396 | ) f | 40,385 | |||||||||||||
4,557 | f | |||||||||||||||||||
17,243 | f | |||||||||||||||||||
Coal exploration costs
|
2,360 | 2,360 | ||||||||||||||||||
SG&A
|
7,669 | 4,078 | 11,747 | |||||||||||||||||
Interest
|
1,547 | 10,289 | (10,289 | ) i | 20,247 | |||||||||||||||
17,500 | i | |||||||||||||||||||
1,200 | i | |||||||||||||||||||
123,054 | 321,221 | (55,968 | ) | (7,240 | ) | 381,067 | ||||||||||||||
Income (loss) before income taxes
|
30,816 | (27,591 | ) | 55,968 | 7,240 | 66,433 | ||||||||||||||
Provision for income taxes | 7,662 | (14,187 | ) | 26,455 | j | 19,930 | ||||||||||||||
Net income (loss)
|
$ | 23,154 | $ | (13,404 | ) | $ | 55,968 | $ | (19,215 | ) | $ | 46,503 | ||||||||
Net income per share: | ||||||||||||||||||||
Basic | $ | .81 | ||||||||||||||||||
Diluted | $ | .80 | $ | 1.63 | ||||||||||||||||
$ | 1.61 | |||||||||||||||||||
Weighted average shares outstanding: | ||||||||||||||||||||
Basic
|
28,595 | 28,595 | ||||||||||||||||||
Diluted
|
28,906 | 28,906 | ||||||||||||||||||
a
|
On August 29, 2014, we consummated the acquisition of Vectren Fuels, Inc. (VFI) for $320 million. The acquisition was financed through a new debt facility, and the purchase price allocation and use of proceeds from the new debt facility were as follows (assets not received or liabilities not assumed were retained by the parent company of VFI):
|
Assets received:
|
|||||
Accounts receivable
|
$ | 13,112 | |||
Coal inventory
|
40,395 | ||||
Inventory - parts
|
13,228 | ||||
Advance royalties
|
2,319 | ||||
Prepaid expenses
|
1,522 | ||||
Land and mineral rights
|
99,188 | ||||
Buildings and equipment
|
172,431 | ||||
Total assets received
|
342,195 | ||||
Liabilities assumed:
|
|||||
Accounts payable and accrued liabilities
|
15,645 | ||||
Asset retirement obligations
|
6,550 | ||||
Total liabilities assumed
|
22,195 | ||||
Total consideration paid for VFI
|
$ | 320,000 | |||
Proceeds from new debt facility:
|
|||||
Cash
|
$ | 2,000 | |||
Consideration paid for Vectren Fuels, Inc. acquisition
|
320,000 | ||||
Deferred financing costs
|
6,000 | ||||
Payoff existing debt facility
|
16,000 | ||||
Closing expenses
|
6,000 | ||||
Total
|
$ | 350,000 |
b
|
In connection with securing a new debt facility, deferred financing costs of $1,166 were written off net of tax of $466 ($700).
|
||||
c
|
In connection with the acquisition of VFI, we estimated additional transaction costs of $500.
|
d
|
At the date of acquisition, we idled the Prosperity mine, but retained the sales contracts that will be fulilled by its Oaktown #1 and #2 mines. The unaudited pro forma condensed combined statements of operations for the six months ended June 30, 2014 and the year December 31, 2013 reflect reduction for the Prosperity mine operating costs and expenses of $44,878 and $108,244, the Cypress Creek Mine operating costs and expenses of $231 and $0, which was retained by VFI, and the elimination of the Oaktown #1 and #2 contract miners fees of $4,207 and $6,055, respectively. For those same periods, operating costs and expenses reflect the costs to fulfill the contracts from the Oaktown #1 and #2 mines of $33,957 and $71,746, respectively.
|
e
|
The unaudited pro forma condensed combined statements of operations for the six months ended June 30, 2014 and the year ended December 31, 2013 reflect a reduction to depletion, depreciation and amortization (DD&A) of $10,451 and $19,470, respectively, to give effect to the idling of the Prosperity mine.
|
f
|
The unaudited pro forma condensed combined statement of operations for the six months ended June 30, 2014 and the year ended December 31, 2013 reflects a decrease to DD&A of $8,500 and $9,596, respectively, to reflect the impact of the change in the basis of land and mineral rights, and buildings and improvements, and the incremental DD&A associated with additional production by the Oaktown #1 and #2 mines necessary to fulfill the sales volumes at the Prosperity mine. For the six months ended June 30, 2014, VFI recorded DD&A of $19,492; the pro forma DD&A was $10,992, $2,370 for land and mineral rights, and $8,622 for buildings and improvements. For the year ended December 31, 2013, VFI recorded DD&A of $31,396; the pro forma DD&A was $21,800, $4,557 for land and mineral rights, and $17,243 for buildings and improvements.
|
g
|
For the six months ended June 30, 2014, VFI recorded a charge of $32,466 to writedown the properties sold, and for mine termination, legal, change in control and other related expenses. The unaudited pro forma condensed combined statement of operations reflect an adjustment to eliminate this writedown.
|
h
|
The unaudited pro forma condensed combined statement of operations for the six month ended June 30, 2014 reflect a reduction to selling, general and administrative expenses of $325 for transaction costs that we incurred.
|
i
|
The unaudited pro forma condensed combined statements of operations for the six months ended June 30, 2014 and the year ended December 31, 2013 reflect an increase to interest expense of $3,316 and $8,411, respectively. For the six months ended June 30, 2014, VFI recorded interest expense of $6,034; the pro forma interest expense was $9,350, consisting of $8,750 of interest at 5% per annum on principal of $350 million, and amortization of deferred financing costs of $600 on costs of $6,000 over a five year period. For the year ended December 31, 2013, VFI recorded interest expense of $10,289; the pro forma interest expense was $18,700, consisting of $17,500 of interest at 5% per annum on principal of $350 million, and amortization of deferred financing costs of $1,200 on costs of $6,000 over a five year period.
|
j
|
The unaudited pro forma condensed combined statements of operations for the six months ended June 30, 2014 and the year ended December 31, 2013 reflect an adjustment of $24,878 and $26,455 for an increase to income tax expense. The adjustment reflects the impact of taxing VFI's results of operations and the pre-tax pro forma adjustments at an effective tax rate of 30%.
|