HNRG

Hallador is a small Illinois Basin coal miner repositioning around its Merom power plant, and FY2025 shows the turnaround working: revenue rebounded 16.2% to $469M, operating income more than doubled to $61.1M (13.0% margin), and net income flipped from a -$226M loss in FY2024 to +$41.9M, driving diluted EPS to $0.96 and a 26.2% ROE. Operating cash flow of $81.1M comfortably covered $69.2M of capex, long-term debt was trimmed 20.6% to $29.7M, and equity grew 53.3% to $160M. At $17.98 the stock trades at 18.7x trailing EPS and 1.8x sales — not screamingly cheap given the cyclicality, but reasonable if 2025 earnings power is repeatable.

The filing language is what tempers the call. The 10-K discloses that Oaktown Fuels No. 2, Prosperity and Freelandville were 'temporarily idled in February of 2024 as part of the Organizational Restructuring,' and that Ace in the Hole and Carlisle are 'fully depleted' — leaving Oaktown Fuels No. 1 as the only individually material mine. That concentration plus a finite reserve base is the structural overhang behind the -$226M FY2024 loss and the swing-y five-year revenue line ($248M → $635M → $404M → $469M). MD&A also flags $30.0M of SOFR-indexed variable-rate debt at an 8.17% weighted rate, with only $10.1M of cash and $28.8M of undrawn facilities — adequate, not abundant, and a 50bp rate move costs another $0.2M annually.