Learn German: Der Junge war traurig, denn er hatte Pech. - The boy was sad, because he had bad luck.

war is the simple past tense of sein (to be) and means "was". We use it here because the subject is Der Junge (The boy, which is a "he"). If this were happening right now, we would use the present tense: Der Junge ist traurig (The boy is sad).

Is hatte the past tense of haben?

Yes! hatte means "had". For the pronouns er (he), sie (she), and es (it), the simple past form of haben is hatte. If the sentence were in the present tense, it would be er hat Pech (he has bad luck).

I thought words for "because" push the verb to the end of the sentence. Why is hatte in the normal second position?

You are probably thinking of the word weil (because), which does push the verb to the very end. However, this sentence uses denn. denn is a coordinating conjunction, which means it sits outside the sentence structure and doesn't change the word order at all. After denn, you just start a normal sentence: Subject (er), Verb (hatte), Object (Pech).

What exactly is Pech?