HNRG - Earnings call transcript Q4 2017

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Operator

Good day. And welcome to Hallador Energy's Fourth Quarter 2017 Earnings Conference Call and Webcast. All participants will be in a listen-only mode [Operator instructions]. After today's presentation, there will be an opportunity to ask questions [Operator instructions]. Please note, today's event is also being recorded. to conference like to now would turn over the Ms. I Director of Palumbo, Investor Becky Relations. ahead. go Please

Becky Palumbo

Rocco. you, you call. on of you joining our Thank thank us And today for all

and today’s filed it copy, available webcast and transcript tab. on under week. SEC Our CFO. This down site site Web is Larry is with are Web SEC XX-K haven’t on pulled was this will Form live With morning the available if our our replay and a call available our you a being on the filings and Bilsland, this be later me CEO; President call Brent for and our Martin, is

statements remarks differ results to are to subject and cause Our forward-looking certain actual will materially. today that uncertainties include risks that could

sales our estimates We mining as statements relating required and example, regulations future Air as may update coal initiatives. a by other of or the information, environmental be law. For to forward-looking costs, to undertake and future Clean events Act new otherwise, whether except result not of do our

in Following calls Brent remarks Q&A. today, will take our prepared the

with will turn the call So that, to Larry. over I

Larry Martin

Thanks, Becky. Good everyone. afternoon

get quarter like define I’d definitions. the the year to started we with some and Before

as EBITDA compensation less income maintenance ARO cash plus flow ARO and stock First plus DD&A, accretion we define as differed we CapEx. define of all, adjusted stock plus net And compensation EBITDA accretion. free income taxes,

quarter of or or So let’s million $X.XX the year. for get into had $XX.X share the for the numbers. a income $XX.X per share We $X.XX and million net

quarter, million Adjusted $XX.X for $X.X full million for We $XX.X the for total $X.X the year. our $X.X cash $XX.X free of EBITDA the million dividends the year-to-date. or a $X.XX million the $XX.X for of debt year. reduced share year. a flow $X.XX for reduction for by have quarter, share the million or paid was debt We We million million million, quarter, $XX.X quarter for the

million. ’XX December our the of end and debt, Our net cash debt was of our net $XXX.X and $XXX bank at was million securities, marketable

upcoming to EBITDA. of Our ’XX And net EBITDA $XXX ratio summarizes for times expect only of the X.X end to our million leverage debt was debt the for we ’XX. target ‘XX about year owe at

So now, Brent to Hallador Chairman Bilsland, the to CEO turn over like I’d call of our Energy. and

Brent Bilsland

as announce Xth. you joining CEO our the will today. tell me a resided to the saddened Chairman, bad saying, are for With that Thank all has said, news, as on for us Vic former Stabio, served great our and over find we the good Vic the chairman had news Vic Board CEO and an of for additional March XX years four. passing me.

today. was is and Hallador, definitely now oil be XX missed. Vic’s it will he gas successful a company to mining a Vic good a from friend the the that, he call man, wonderful instrumental With company move was adequate years During a dear that financially exploration news. transforming our I with to company and challenged in will

news of XXXX, report. compare XXXX there is we to good lot As a to

was versus ’XX. $XX.X income million net Our million for $XX.X

without improved average but act of million million production effects prior cost year. our the liability, year-over-year tax a to XXXX tons is flow led or $XX.X lowering cash deferred declined in our due sold and in for million in million but result tax the help reduce versus reduction for $XX.X rate the an $XX.X our to to sale price f operating attributed income Revenues XXXX. increases to $XX.X a was million still $XX versus of granted did Now lower net

‘XX covenant as $XX This debt $XXX XXXX. well versus year-over-year, million to debt allowed healthy within million reduce times. bank to improved to free Our to adjusted bank year million cash $XX.X ’XX. versus EBITDA current adjusted flow million million healthy was $XX million EBITDA is And for another million flow $XX.X liquidity in and in million versus our free a bank cash in million of XXXX, $XX.X us for also in Yet help ’XX. well $XX.X X.XX $XX.X from improved our our to lower ’XX. times X.X of debt reduction In leverage our $XXX.X

our for the we proceeds here in and $X.X our Additionally, quarter. These E&P the further anticipate Energy, on gas closing million will ownership used sale in to based in Savoy of and first oil bank net reduce debt. Michigan be a

The represents of towards our and sales volume of remainder this ahead $X.X ‘XX have for X% we our ’XX. target position helping truck addition the projected its on grow markets an This year, railway. allowing product look is and we new facility, to find rail X% reaffirmed to of sales to Norfolk over As increased sales a over new tons way XXXX. of loop, the million Southern Princeton our

loop be the trend expect Princeton fully operational quarter. to similarly XXXX. to We second expect XXXX to Thus, in the we

expected is drop $X.XX roughly price a coal average Our to ton.

continue us our reduce maintain cost reduce creating plenty fund should flow free expenditures, capital volume help dividends sales and/or debt. pay increased However, and to of maintenance our to cash structure, our

expect the year. strong markets this export We be to continue to

new Colorado company directly a this permitted While month, Hallador strong million of as customers $X in in state LLC, a market, the not participate opportunities exports Sands in Colorado. domestic Sands help Springs. evidenced by near mining shipping we sand new currently us with to invested Hourglass XXXX. frac sand reserve in us may indirectly Hourglass two Last controls

hope versus frac a knowledge of locally be switching feel in believe to to thousand only produced our frac to years. our sand produced future state core And that well frac the exceeds to investment in is miles expected not we to meaningfully profitable sand within ’XX, outside Basin Hallador's the the DJ criteria. can earnings expect To mining to of basin. sands truck shipments a we the Hourglass We summer. sand be trend Colorado. mine competency, contribute part industry in do our in though We this permitted this the is customers of We

to will call the I So questions. up with that said, open

Operator

[Operator Instructions] ahead. Pipes first comes from question Lucas Riley FBR. of Please B. Today’s go

Lucas Pipes

manager just a him and First met my seeing respect I a all, unfortunate Vic, of to as and wanted leader. to as add very that’s

this So sorry news. on I earnings tail very about have domestic Basin reported some we the of very few And the competitive have shaking the them up your get Illinois at peers I my I’m dynamics. commented you out end bad that dynamics, to market of of On and perspective domestic wanted wanted the on on a first follow see Brent, at to time? market hear question, the your

Brent Bilsland

it competitive. Well, is

for to years in go than tons which some us. has more seeing past created export new We’re opportunities

competitors, to be look you ‘XX us XXXX in look than and in even even our volumes I in and at XXXX. as higher think perhaps

have demand look So in think as a more some but the running as result seen that come at higher with in coming the factors. Indiana happened and also are as production at has trend as states which we we offline, And capacity other mines of in the to both the offline to Illinois I landscape, supply basin. export of

in market my has the less past. been opinion, years So is in oversupplied it the than

Lucas Pipes

as announcement side, wondered us May Hourglass. asset? are of little be more you have this the strategy give to you Thank capacity? mesh this but to color that if what idea ramp-up the you And good if contracting And you very for specs regarding made a of come could a also you. I’ll new I bit envision interesting the back also side, from sand the and coal

Brent Bilsland

on as than is have party vision third what very we for got we’re next this what we accomplish have Well, here days less will conversations we're look a with we still just nailed customers that sand still think like look intensify what we a month. have We those they this we to feel process working on made our We’ve want now that’s and ago. had right still discussions new. down. investment permitted roughly to But behalf. on exactly and a that reserve to for going XX probably working And would that’s preliminary once

and ship longer we were would the see shale And using our sands us, what the think qualities. XXXX we trend of purchasing of look versus in are to seems that. that are transition a produced plays miles like look industry people lower then To sand what that accept test to locally led and of is the seeing has sands most are to away. tentatively in produced thousand the willing we're So is that than like is to volumes shipments that what relationships greater schedule a

a thousand miles at So all thousand your play. if not go market mile. the the questions. and costs is something closer the this end we’re to That’s that of to answered that then really day, advantage it a sure of is I’m transportation

Lucas Pipes

and Maybe --. one side the follow-up that’s on sand

maybe more it's tons? but first good thinking this a think asset, of X In about million terms than or of perspective? should to preliminary to the tons What's a less that know be impression. I we size million X the fiscal from your size up

Brent Bilsland

Yes, think much of part will gauge will -- trying our what we to how is of are market market what the the accept. I product

zip next that here million somewhere for think So in to for XXX,XXX starters, X probably is think to code I tons the year. about

smaller I think getting what in ‘XX see. comfortable look volumes like the would going with test shipper customers and a to to like we’re with really just

Lucas Pipes

question… turn coal last back the to maybe one And side

Brent Bilsland

the take will to and earnings. or that's tons we product time the be To build trying that looking we’re volume this determine up say that can follow-up our to handle market our But that expand of we that there, is if can one the to if think something more goes decide why to if and X meaningful to could more we million on we X market facilities thing handle then be very road it. still down

the the be. transportation advantage what could looking at volumes and Just

Lucas Pipes

necessary? water or that side That’s is access of the not to

Brent Bilsland

to now right third already an that Well, plan. be will we through party existing looking has a go

have -- to just would secure were water to are new, have secure already properties rights is we which build hurdle water. that we cross, to have that and we’d we ongoing. So have to for something would processes If those we

Lucas Pipes

your coal side, of to the both beyond? turn out To and cost back on then -- XXXX at also as what production course thoughts the you cost look production latest are over the mine

Brent Bilsland

typically I structure. One is look our more very XXXX. cost hand cost our is run to similar to which Well, to beneficial to think tons, going structure we’re going

a think steel. additional had better a then other due chance wager, place inflationary have the being just pressures if such cost to But I we and than say do the I to And has for… would our dling lower structure we volumes as that -- of I running. costs ‘XX On anticipate hand, labor some holding

Larry Martin

X million, down over brought Lucas. we’re the we’re things there’s than quarter Prosperity, estimating quite But up were come two which The last last that and we significantly. pace. and Carlisle, lower that million, estimating they X years

Lucas Pipes

or million $X to I say so. time when want it still I a remember was

Larry Martin

missed I there, $X -- And we it's both not estimating million million $X for folks the its for year. are

Operator

And Instructions] from [Operator comes Advisors. Meraki ahead. Sepulveda our Michael go next of question Please

Michael Sepulveda

one. have just I

of and Given competitors about Illinois the investments your around in service Basin? field hourglass within thinking oil companies. investors comments in consolidation and be energy What one of should the terms announcement

Brent Bilsland

down eight and seven smaller at basically large it have four And ago, to lot a I Well, think today, of you years players consolidation. ones. producers. look consolidated I of And two is more or producers one we three the if seen that at consolidation. to West And or State we’ll of see the think Kentucky four continue some there look were and principal markets, think you there I Indiana, was or if two

continue. I will think that's trend the that

of the knowledge is we all I base. well It is -- -- are that's base. knowledge for our us lot think our for think our mining can’t but company I a us of I others, speak

have XX% gaps. so think some like nuances learning that for versus are doing today, opportunities Hourglass And average particular sand we those in that on hiring come of definitely we the is look, an to think what has the we’re fill and we when fits and coal. return But skill-set above along expertise our of investment that capable we're nuances potential to

we much I we some excited interest, if I 'XX, that mean other what excited of are just our position, purchased about and on found the purchased don't wouldn’t think the investment competitor mean be right assets that it’s about sands we’re takes that could we've today, price. still But be we at away in 'XX Fuels to interested found. what very ’XX, we find we average. in doesn't Vectren doing that. we in our coal we assets think very So In Hourglass return right above have in we're think we know from

So that’s decided we make. a decision to

Operator

management the over [Operator the remarks. I’d Instructions] to any No further closing to questions. turn team conference like for back

Brent Bilsland

everyone Lucas, he get special I about he as truly for was Victor, And kind you back thank and man says, taking the your call. And Well, time work. I our friend. a to to words listen to appreciate we’ll

you. thank So

Operator

and today's all thank And sir. concluded now presentation. The thank you you, conference we has for attending

You day. your and disconnect have a may now lines wonderful

Hallador Energy (HNRG) 13 Mar 182017 Q4 Earnings call transcript