NEWARK, N.J., May 6, 2019 /PRNewswire/ -- Genie Energy Ltd.
(NYSE: GNE, GNEPRA) reported first quarter 2019 net income of
$0.21 per share on revenue of
$86.6 million.
FINANCIAL AND OPERATIONAL HIGHLIGHTS
(Throughout
this release, 1Q19 results are compared to 1Q18 results unless
otherwise noted)
- Genie Energy's global customer base increased by 77 thousand
RCEs during 1Q19 to 333 thousand at March
31st. Global meters served climbed by 76
thousand to 399 thousand;
- Genie Energy continued to expand its global footprint, closing
on the acquisition of Finnish retail energy provider Lumo
Energia and launching operations in Japan;
- Consolidated revenue decreased to $86.6
million from $89.3
million;
- Consolidated income from operations increased to $9.8 million from $7.1
million. Consolidated Adjusted EBITDA* increased to
$10.4 million from $8.6 million;
- Earnings per share decreased to $0.21 per basic and diluted share from
$0.24;
- Genie Energy's Board of Directors has declared a first quarter
2019 dividend of $0.075 per
share.
COMMENTS OF MICHAEL STEIN, CEO OF GENIE ENERGY
"Genie
Energy had an excellent first quarter. Income from operations
and Adjusted EBITDA both increased significantly even as we
continued to invest in expansion of our customer base and building
out our solar solutions business. These investments also
further mitigate our commodity and geography-linked risks.
"Looking ahead, we are working to further expand our domestic
meter base and expect to launch service in Texas in the second quarter.
Internationally, our customer acquisition programs are progressing
in the U.K, and Japan while our
Finnish retail supplier business provides a platform to address
additional markets in Scandinavia."
CONSOLIDATED RESULTS
$ in millions,
except EPS
|
1Q19
|
4Q18
|
1Q18
|
|
1Q19
-1Q18
Change
(%/$)
|
Revenue
|
$86.6
|
$62.8
|
$89.3
|
|
(3.0%)
|
Gross
profit
|
$25.6
|
$14.7
|
$24.5
|
|
+4.6%
|
Gross margin
percentage
|
29.5%
|
23.5%
|
27.4%
|
|
+210 BP
|
SG&A expense
(including stock-based compensation)
|
$15.8
|
$15.2
|
$17.1
|
|
(7.8)%
|
Stock-based
compensation included in SG&A
|
$0.4
|
$0.8
|
$1.3
|
|
(66.7)%
|
Exploration
expense
|
-
|
-
|
$0.2
|
|
$(0.2)
|
Depreciation and
amortization
|
$0.9
|
$0.4
|
$0.6
|
|
+53.3%
|
Equity in the net
loss of joint ventures *
|
$(0.8)
|
$(1.3)
|
$(0.5)
|
|
$(0.3)
|
Income (loss) from
operations
|
$9.8
|
$(0.5)
|
$7.1
|
|
+37.9%
|
Adjusted
EBITDA**
|
$10.4
|
$(0.6)
|
$8.6
|
|
+$21.3%
|
Benefit from
(provision for) income taxes
|
$(2.9)
|
$14.1
|
$(0.8)
|
|
$(2.1)
|
Net income
attributable to Genie Energy common
stockholders
|
$5.7
|
$12.3
|
$5.8
|
|
$(0.1)
|
Earnings per share
attributable to Genie Energy
common stockholders
|
$0.21
|
$0.47
|
$0.24
|
|
$(0.03)
|
Net cash provided by
(used in) operating activities
|
$7.0
|
$(0.9)
|
$8.6
|
|
$(1.6)
|
* Genie Energy accounts for its investments in Orbit
Energy, its joint venture operating in the UK and Atid, a drilling
services business based in Israel,
in which it holds a minority stake, under the equity method of
accounting. Under this method Genie Energy records its share in the
net income or loss of the venture. Therefore, revenue generated,
and expenses incurred are not reflected in Genie Energy's
consolidated revenue and expenses.
* *Adjusted EBITDA for all periods is a non-GAAP measure
intended to provide useful information that supplements the core
operating results in accordance with GAAP of Genie Energy or the
relevant segment. Please refer to the Reconciliation of
Non-GAAP Financial Measure at the end of this release for an
explanation of Adjusted EBITDA and reconciliation to the most
directly comparable GAAP measure.
METERS AND RCEs
Genie Energy's global customer base increased sequentially and
year-over-year driven by the acquisition of Finish electricity
provider Lumo Energia during the quarter, the expansion of
Orbit Energy, a joint venture supplying electricity and
natural gas in the UK, and robust domestic customer base growth
driven, in part, by a municipal aggregation agreement in New
Jersey. Genie Energy's global RCE and meter totals are
provided in the chart below.
Global RCEs and
Meters
at End of Quarter (in
thousands)*
|
March 31,
2019
|
December 31,
2018
|
September 30,
2018
|
June 30,
2018
|
March 31,
2018
|
Electricity
RCEs
|
271
|
197
|
216
|
219
|
218
|
Natural gas
RCEs
|
62
|
59
|
59
|
64
|
67
|
Total
RCEs
|
333
|
256
|
275
|
283
|
285
|
|
|
|
|
|
|
Electricity
meters
|
322
|
249
|
269
|
282
|
284
|
Natural gas
meters
|
77
|
74
|
73
|
81
|
89
|
Total
meters
|
399
|
323
|
342
|
363
|
373
|
*Includes RCEs and meters acquired and served by Genie
Energy's domestic and international retail energy provider
businesses including its JV operating in the UK, Orbit
Energy.
Consolidated Take-Aways
- Consolidated revenue decreased to $86.6
million from $89.3 million in
1Q18. The change reflected the year over year decrease in
domestic retail energy revenues substantially offset by revenue
contributions from Prism Solar and Lumo Energia,
acquired in 4Q18 and 1Q19 respectively.
- Genie Energy's gross profit increased to $25.6 million from $24.5
million in 1Q18 primarily from increased margins on domestic
gas sales and the impact of the Prism Solar
acquisition.
- SG&A expense declined to $15.8
million from $17.1 million in
1Q18 reflecting decreases in domestic customer acquisition expense
and corporate-level stock-based compensation.
- Consolidated income from operations increased to $9.8 million from $7.1
million in 1Q18 and Adjusted EBITDA increased to
$10.4 million from $8.6 million.
SEGMENT RESULTS
Genie Energy's segment reporting in
1Q19 and prior periods has been revised to reflect recent changes
in its business operations and structure:
- Genie Retail Energy (GRE) comprises domestic retail energy
supply businesses;
- Genie Energy Services (GES) comprises Genie Solar, Prism Solar Technologies, and
Diversegy, a retail brokerage and advisory business;
- Genie Retail Energy International (GRE International) comprises
overseas retail energy supply businesses including interests in
Lumo Energia (Finland),
Genie Energy Japan and results from Orbit Energy, a
joint venture operating in the UK;
- Genie Oil and Gas (GOGAS) comprises Afek's currently suspended
oil and gas exploration venture in Israel (formerly a separate segment), a
minority stake in a drilling services company based in Israel and inactive legacy exploration
ventures;
- Corporate is Genie Energy's corporate overhead.
Genie Retail Energy (GRE)
- Gross meter adds during the quarter totaled 85 thousand
including a municipal aggregation deal in New Jersey which added approximately 34
thousand meters;
- Average monthly average churn decreased to 5.3% from 7.1% in
4Q18. Churn was favorably impacted by the municipal aggregation
agreement as these meters are typically characterized by relatively
low rates of churn, and by relatively low rates of new customer
acquisition in recent quarters. The churn rate in the prior
quarter was negatively impacted by the expiration of a municipal
aggregation agreement. Excluding the impact of that expiration,
average monthly churn for the prior quarter would have been
approximately 6.1%. Average monthly churn in the year ago quarter
was 7.6% including the impact of a regulatorily mandated
relinquishment of low-income customers in New York.
- GRE increased income from operations to $13.5 million from $11.0
million in 1Q18. Adjusted EBITDA increased to
$13.8 million from $11.6 million in 1Q18. The increases
reflect margin improvement on natural gas sales and decreased
customer acquisition expense.
GRE's financial results are summarized in the chart below:
Genie Retail
Energy
$ in
millions
|
1Q19
|
4Q18
|
1Q18
|
|
1Q19-1Q18
Change
(%/$)
|
Total
revenue
|
$76.5
|
$58.8
|
$88.8
|
|
(13.8)%
|
Electricity revenue
|
$57.8
|
$46.7
|
$65.3
|
|
(11.5)%
|
Natural
gas revenue
|
$18.7
|
$12.1
|
$23.4
|
|
(20.2)%
|
Gross
profit
|
$24.7
|
$14.5
|
$24.2
|
|
+2.1%
|
Gross margin
percentage
|
32.3%
|
24.7%
|
27.2%
|
|
+510 BP
|
SG&A
expense
|
$11.2
|
$11.2
|
$13.1
|
|
(14.9)%
|
Income from
operations
|
$13.5
|
$3.4
|
$11.0
|
|
+22.3%
|
Adjusted
EBITDA
|
$13.8
|
$3.8
|
$11.6
|
|
+18.9%
|
Genie Energy Services (GES)
- GES revenue increased to $5.3
million from $502 thousand in
1Q18 reflecting the impact of the Prism Solar acquisition in
4Q18;
- GES' loss from operations was $232
thousand in 1Q19 compared to a loss from operations
$92 thousand in 1Q18.
- GES generated positive Adjusted EBITDA of $45 thousand compared to negative Adjusted EBITDA
of $85 thousand in 1Q18.
Genie Retail Energy International (GRE
International)
- GRE International served 33 thousand RCEs and 55 thousand
meters at March 31st,
compared to 4 thousand RCEs and 8 thousand meters at December 31st. The increases
resulted from the acquisition of Lumo Energy and organic
growth at Orbit Energy;
- GRE International's revenue increased to $4.8 million compared to nil in 1Q18 on the
Lumo Energia acquisition;
- Equity in the loss of Orbit Energy was $1.1 million compared to $506 thousand in 1Q18;
- GRE International's loss from operations increased to
$1.7 million from a loss from
operations of $91 thousand in
1Q18. Negative Adjusted EBITDA was $2.3 million compared to $597 thousand in 1Q18. The increased losses
reflect increased meter acquisition expense at Orbit Energy
and Lumo Energia and buildout operations at Genie
Japan.
Genie Oil and Gas (GOGAS)
- Operations at Genie Energy's Afek oil and gas
exploration subsidiary remain suspending pending the permitting
required for final testing on an existing well;
- Exploration expense was nil in the 1Q19 compared to
$227 thousand in 1Q18;
- Loss from operations was $163
thousand compared to a loss from operations of $1.4 million in 1Q18. Adjusted EBITDA was
$124 thousand compared to negative
Adjusted EBITDA of $1.2 million in
1Q18. The improvements reflect the suspension of oil and gas
exploration activities at Afek and a positive equity
contribution from Genie's minority stake in drilling services
company Atid.
Corporate
- Corporate loss from operations was $1.5
million compared to a loss of $2.4
million in 1Q18. The loss narrowed on a decline in
corporate stock-based compensation, which decreased to $238 thousand dollars from $1.2 million in the year ago quarter.
Negative Adjusted EBITDA was $1.3
million compared to $1.1
million in 1Q18.
BALANCE SHEET HIGHLIGHTS
At March 31, 2019, Genie Energy had $154.2 million in total assets, including
$44.5 million in cash, cash
equivalents and restricted cash. Liabilities totaled
$55.9 million and working capital
(current assets less current liabilities) totaled $51.7 million.
DIVIDEND ON GENIE ENERGY COMMON STOCK
Genie Energy's
Board of Directors has declared a 1Q19 dividend of $0.075 per share of Class A and Class B common
stock with a record date of May 20,
2019. The dividend will be paid on or about May 31, 2019. The distribution will be
treated as an ordinary dividend for income tax purposes.
GENIE ENERGY EARNINGS CONFERENCE CALL
This earnings press release is available for download in the
"Investors" section of the Genie Energy website
(www.genie.com/investor-relations) and has been filed on a current
report (Form 8-K) with the SEC.
At 8:30 AM Eastern time today,
May 6, 2019, Genie Energy's
management will host a conference call to discuss financial and
operational results, business outlook and strategy. The call
will begin with management's remarks followed by Q&A with
investors.
To participate in the conference call, dial toll-free
1-888-348-6472 (from the US) or 1-412-902-4240 (international) and
request the Genie Energy conference call.
The call replay will be available at 1-844-512-2921 (US
toll-free) or 1-412-317-6671 (international) through May 13, 2019. The replay PIN is
10130656. A recording of the call - in MP3 format - will also
be available for playback on the "Investors" section of the Genie
Energy website.
Investors can sign up through the Genie Energy website to have
earnings releases and other press releases e-mailed directly to
them.
ABOUT GENIE ENERGY LTD.
Genie Energy Ltd. (NYSE: GNE,
GNEPRA), is a global provider of energy services. The Genie
Retail Energy division supplies electricity and natural gas
primarily to residential and small business customers in
the United States. The Genie
Retail Energy International division supplies customers in
Europe and Asia. The Genie
Energy Services division includes Diversegy, a commercial brokerage
and marketing services company, and Genie Solar Energy, a provider
of solar generation systems. For more information, visit
Genie.com.
In this press release, all statements that are not purely
about historical facts, including, but not limited to, those in
which we use the words "believe," "anticipate," "expect," "plan,"
"intend," "estimate, "target" and similar expressions, are
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. While these
forward-looking statements represent our current judgment of what
may happen in the future, actual results may differ materially from
the results expressed or implied by these statements due to
numerous important factors, including, but not limited to, those
described in our most recent report on SEC Form 10-K (under the
headings "Risk Factors" and "Management's Discussion and Analysis
of Financial Condition and Results of Operations"), which may be
revised or supplemented in subsequent reports on SEC Forms 10-Q and
8-K. We are under no obligation, and expressly disclaim any
obligation, to update the forward-looking statements in this press
release, whether as a result of new information, future events or
otherwise.
GENIE ENERGY LTD.
CONSOLIDATED BALANCE SHEETS
(in thousands, except per
share amounts)
|
|
March 31,
2019
|
|
December 31,
2018
|
|
|
(Unaudited)
|
|
|
Assets
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
37,540
|
|
$
|
41,601
|
Restricted
cash—short-term
|
|
|
6,058
|
|
|
1,653
|
Trade accounts
receivable, net of allowance for doubtful accounts of $2,139 and
$2,003 at
March 31, 2019 and December 31, 2018, respectively
|
|
|
41,921
|
|
|
35,920
|
Inventory
|
|
|
9,685
|
|
|
9,893
|
Prepaid
expenses
|
|
|
4,874
|
|
|
6,167
|
Other current
assets
|
|
|
2,126
|
|
|
2,670
|
Total current
assets
|
|
|
102,204
|
|
|
97,904
|
Property and
equipment, net
|
|
|
4,371
|
|
|
4,301
|
Goodwill
|
|
|
13,023
|
|
|
11,082
|
Other intangibles,
net
|
|
|
8,509
|
|
|
6,321
|
Investment in equity
method investees
|
|
|
1,470
|
|
|
2,208
|
Restricted
cash—long-term
|
|
|
865
|
|
|
943
|
Deferred income tax
assets, net
|
|
|
13,184
|
|
|
15,625
|
Other
assets
|
|
|
10,610
|
|
|
8,480
|
Total
assets
|
|
$
|
154,236
|
|
$
|
146,864
|
Liabilities and
equity
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
Notes
payable
|
|
$
|
918
|
|
$
|
923
|
Trade accounts
payable
|
|
|
20,044
|
|
|
18,508
|
Accrued
expenses
|
|
|
24,402
|
|
|
25,242
|
Income taxes
payable
|
|
|
1,923
|
|
|
1,463
|
Due to IDT
Corporation
|
|
|
138
|
|
|
234
|
Other current
liabilities
|
|
|
3,082
|
|
|
4,416
|
Total current
liabilities
|
|
|
50,507
|
|
|
50,786
|
Revolving line of
credit
|
|
|
2,516
|
|
|
2,516
|
Other
liabilities
|
|
|
2,842
|
|
|
900
|
Total
liabilities
|
|
|
55,865
|
|
|
54,202
|
Commitments and
contingencies
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
|
Genie Energy Ltd.
stockholders' equity:
|
|
|
|
|
|
|
Preferred stock,
$0.01 par value; authorized shares—10,000:
|
|
|
|
|
|
|
Series 2012-A,
designated shares—8,750; at liquidation preference, consisting of
2,322 shares issued and outstanding at March 31, 2019 and December
31, 2018
|
|
|
19,743
|
|
|
19,743
|
Class A common
stock, $0.01 par value; authorized shares—35,000; 1,574 shares
issued and outstanding at March 31, 2019 and December 31,
2018
|
|
|
16
|
|
|
16
|
Class B common stock,
$0.01 par value; authorized shares—200,000; 25,767 and 25,544
shares issued and 25,517 and 25,294 shares outstanding at March 31,
2019 and December
31, 2018, respectively
|
|
|
258
|
|
|
255
|
Additional paid-in
capital
|
|
|
137,789
|
|
|
136,629
|
Treasury stock, at
cost, consisting of 250 shares of Class B common stock at March
31,
2019 and December 31, 2018
|
|
|
(1,624)
|
|
|
(1,624)
|
Accumulated other
comprehensive income
|
|
|
2,881
|
|
|
2,591
|
Accumulated
deficit
|
|
|
(50,464)
|
|
|
(53,939)
|
Total Genie Energy
Ltd. stockholders' equity
|
|
|
108,599
|
|
|
103,671
|
Noncontrolling interests
|
|
|
(10,228)
|
|
|
(11,009)
|
Total
equity
|
|
|
98,371
|
|
|
92,662
|
Total liabilities and
equity
|
|
$
|
154,236
|
|
$
|
146,864
|
GENIE ENERGY LTD.
CONSOLIDATED
STATEMENTS OF OPERATIONS
(Unaudited)
|
Three Months
Ended
March 31,
|
|
2019
|
2018
|
|
(in thousands,
except per
share data)
|
Revenues:
|
|
|
Electricity
|
$
|
62,614
|
$
|
65,335
|
Natural
gas
|
|
18,706
|
|
23,428
|
Other
|
|
5,297
|
|
505
|
Total
revenues
|
|
86,617
|
|
89,268
|
Cost of
revenues
|
|
61,026
|
|
64,810
|
Gross
profit
|
|
25,591
|
|
24,458
|
Operating expenses
and losses:
|
|
|
|
|
Selling, general and
administrative (i)
|
|
15,708
|
|
17,098
|
Research and
development
|
|
49
|
|
—
|
Exploration
|
|
—
|
|
227
|
Income from
operations
|
|
9,834
|
|
7,133
|
Interest
income
|
|
93
|
|
81
|
Interest
expense
|
|
(140)
|
|
(92)
|
Gain Equity in the
net loss of equity method investees, net
|
|
(797)
|
|
(506)
|
Other income,
net
|
|
73
|
|
42
|
Income before income
taxes
|
|
9,063
|
|
6,658
|
Provision for income
taxes
|
|
(2,903)
|
|
(799)
|
Net income
|
|
6,160
|
|
5,859
|
Net income
attributable to noncontrolling interests
|
|
(91)
|
|
295
|
Net income
attributable to Genie Energy Ltd.
|
|
6,069
|
|
6,154
|
Dividends on
preferred stock
|
|
(370)
|
|
(370)
|
Net income (loss)
attributable to Genie Energy Ltd. common stockholders
|
$
|
5,699
|
$
|
5,784
|
|
|
|
|
|
Earnings per share
attributable to Genie Energy Ltd. common stockholders:
|
|
|
|
|
Basic
|
$
|
0.21
|
$
|
0.24
|
Diluted
|
$
|
0.21
|
$
|
0.24
|
Weighted-average
number of shares used in calculation of earnings per
share:
|
|
|
|
|
Basic
|
|
26,532
|
|
24,239
|
Diluted
|
|
27,240
|
|
24,295
|
|
|
|
|
|
Dividends declared
per common share
|
$
|
0.075
|
$
|
0.075
|
(i) Stock-based
compensation included in selling, general and administrative
expenses
|
$
|
448
|
$
|
1,347
|
GENIE ENERGY
LTD.
CONSOLIDATED STATEMENTS OF CASH
FLOWS
(Unaudited)
|
|
Three Months
Ended
March 31,
|
|
|
2019
|
2018
|
|
|
(in
thousands)
|
Operating
activities
|
|
|
|
Net income
|
|
$
|
6,160
|
$
|
5,859
|
Adjustments to
reconcile net income to net cash provided by (used in) operating
activities:
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
921
|
|
594
|
Deferred income
taxes
|
|
|
2,442
|
|
113
|
Provision for
doubtful accounts receivable
|
|
|
72
|
|
295
|
Gain on sale of
property and equipment
|
|
|
—
|
|
(18)
|
Stock-based
compensation
|
|
|
448
|
|
1,347
|
Equity in the net
loss of equity method investees
|
|
|
797
|
|
506
|
Change in assets and
liabilities:
|
|
|
|
|
|
Trade accounts
receivable
|
|
|
(3,554)
|
|
3,886
|
Inventory
|
|
|
208
|
|
(1,690)
|
Prepaid
expenses
|
|
|
1,320
|
|
511
|
Other current assets
and other assets
|
|
|
(1,041)
|
|
2,903
|
Trade accounts
payable, accrued expenses and other current liabilities
|
|
|
(1,115)
|
|
(6,328)
|
Due to IDT
Corporation
|
|
|
(100)
|
|
(94
|
Income taxes
payable
|
|
|
460
|
|
754
|
Net cash provided by
operating activities
|
|
|
7,018
|
|
8,638
|
Investing
activities
|
|
|
|
|
|
Capital
expenditures
|
|
|
(325)
|
|
(344)
|
Proceeds from sale of
property and equipment
|
|
|
—
|
|
62
|
Payments for business
acquisition, net of cash acquired
|
|
|
(1,852)
|
|
—
|
Investments in notes
receivables
|
|
|
(177)
|
|
—
|
Repayment of notes
receivable
|
|
|
122
|
|
54
|
Net cash (used in)
investing activities
|
|
|
(2,232)
|
|
(228)
|
Financing
activities
|
|
|
|
|
|
Dividends
paid
|
|
|
(2,377)
|
|
(2,235)
|
Repayment of
short-term debt - Lumo
|
|
|
(2,260)
|
|
—
|
Exercise of stock
options
|
|
|
172
|
|
—
|
Repayment of notes
payable
|
|
|
(20)
|
|
—
|
Net cash used in
financing activities
|
|
|
(4,485)
|
|
(2,235)
|
Effect of exchange
rate changes on cash, cash equivalents, and restricted
cash
|
|
|
(35)
|
|
(19)
|
Net increase in cash,
cash equivalents, and restricted cash
|
|
|
266
|
|
6,156
|
Cash, cash
equivalents, and restricted cash at beginning of period
|
|
|
44,197
|
|
31,927
|
Cash, cash
equivalents, and restricted cash at end of period
|
|
$
|
44,463
|
$
|
38,083
|
Supplemental
Schedule of Non-Cash Financing Activities
|
|
|
|
|
|
Liability incurred
for acquisitions
|
|
$
|
2,260
|
$
|
—
|
Reconciliation of Non-GAAP Financial Measure
for the First Quarter 2019
In addition to disclosing financial results that are determined
in accordance with generally accepted accounting principles in
the United States of America
(GAAP), Genie Energy also disclosed for the first quarter 2019, as
well as for comparable periods, Adjusted EBITDA, which is a
non-GAAP measure. Generally, a non-GAAP financial measure is a
numerical measure of a company's performance, financial position,
or cash flows that either excludes or includes amounts that are not
normally excluded or included in the most directly comparable
measure calculated and presented in accordance with GAAP.
Genie Energy's measure of Adjusted EBITDA consists of gross
profit less selling, general and administrative expense,
exploration expense and equity in the net loss of in equity method
investees, net, plus depreciation, amortization and stock-based
compensation (which are included in selling, general and
administrative expense). Another way of calculating Adjusted EBITDA
is to start with income from operations and add depreciation,
amortization and stock-based compensation and subtract equity in
net loss in equity method investees, net.
Management believes that Genie Energy's Adjusted EBITDA provides
useful information to both management and investors by excluding
certain expenses that may not be indicative of Genie Energy's or
the relevant segment's core operating results. Management uses
Adjusted EBITDA, among other measures, as a relevant indicator of
core operational strengths in its financial and operational
decision making. In addition, management uses Adjusted EBITDA to
evaluate operating performance in relation to Genie Energy's
competitors. Disclosure of this financial measure may be useful to
investors in evaluating performance and allows for greater
transparency to the underlying supplemental information used by
management in its financial and operational decision-making. In
addition, Genie Energy has historically reported Adjusted EBITDA
and believes it is commonly used by readers of financial
information in assessing performance, therefore the inclusion of
comparative numbers provides consistency in financial reporting at
this time.
Management refers to Adjusted EBITDA, as well as the GAAP
measures gross profit, income (loss) from operations and net income
(loss), on a segment and/or consolidated level to facilitate
internal and external comparisons to the segments' and Genie
Energy's historical operating results, in making operating
decisions, for budget and planning purposes, and to form the basis
upon which management is compensated.
Although depreciation and amortization are considered operating
costs under GAAP, they primarily represent the non-cash current
period allocation of costs associated with long-lived assets
acquired or constructed in prior periods. While Genie Energy's oil and gas exploration business
may be capital intensive, Genie Energy does not expect to incur
significant depreciation or depletion expense for the foreseeable
future. Genie Energy's operating results exclusive of depreciation
and amortization is therefore a useful indicator of its current
performance.
Stock-based compensation recognized by Genie Energy and other
companies may not be comparable because of the various valuation
methodologies, subjective assumptions and the variety of types of
awards that are permitted under GAAP. Stock-based compensation is
excluded from Genie Energy's calculation of Adjusted EBITDA because
management believes this allows investors to make more meaningful
comparisons of the operating results of Genie Energy's core
business with the results of other companies. However, stock-based
compensation will continue to be a significant expense for Genie
Energy for the foreseeable future and an important part of
employees' compensation that impacts their performance.
Adjusted EBITDA should be considered in addition to, not as a
substitute for, or superior to, gross profit, income from
operations, cash flow from operating activities, net income, basic
and diluted earnings per share or other measures of liquidity and
financial performance prepared in accordance with GAAP. In
addition, Genie Energy's measurements of Adjusted EBITDA may not be
comparable to similarly titled measures reported by other
companies.
Following is the reconciliation of Adjusted EBITDA to the most
directly comparable GAAP measure, which is income from operations,
for Genie Energy's reportable segments and net income for Genie
Energy on a consolidated basis.
Genie Energy
Ltd.
Reconciliation of
Adjusted EBITDA to Net Income (Loss)
(unaudited)
$ in
thousands
|
|
Total
|
|
Genie
Retail
Energy
|
GES
|
GRE
Inter-
national
|
GOGAS
|
Corporate
|
Three Months Ended
March 31, 2019
(1Q19)
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
10,395
|
|
$
13,775
|
$
45
|
$
(2,257)
|
$
124
|
$ (1,293)
|
Subtract:
|
|
|
|
|
|
|
|
Stock-based
compensation
|
448
|
|
116
|
-
|
94
|
-
|
238
|
Depreciation and
amortization
|
910
|
|
156
|
277
|
463
|
14
|
-
|
Add:
|
|
|
|
|
|
|
|
Gain equity in the net
loss of equity method Investees
|
797
|
|
|
|
1,070
|
(274)
|
|
Income (loss) from
operations
|
$
9,834
|
|
$
13,503
|
$
(232)
|
$
1,744
|
$
(163)
|
$ (1,530)
|
Gain equity in the
net loss of equity method
Investees
|
797
|
|
|
|
|
|
|
Interest
income
|
93
|
|
|
|
|
|
|
Interest
expense
|
(140)
|
|
|
|
|
|
|
Other income,
net
|
73
|
|
|
|
|
|
|
Income
taxes
|
(2,903)
|
|
|
|
|
|
|
Net income
|
6,160
|
|
|
|
|
|
|
Net loss attributable
to noncontrolling interests
|
(91)
|
|
|
|
|
|
|
Net income
attributable to Genie Energy Ltd.
|
$
6,069
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
Genie Retail
Energy
|
GES
|
GRE
Inter-
national
|
GOGAS
|
Corporate
|
Three Months Ended
December 31, 2018
(4Q18)
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
(554)
|
|
$
3,791
|
$
(480)
|
$
(1,731)
|
$ (1,110)
|
$ (1,024)
|
Subtract:
|
|
|
|
|
|
|
|
Stock-based
compensation
|
448
|
|
190
|
-
|
-
|
-
|
646
|
Depreciation and
amortization
|
910
|
|
244
|
157
|
-
|
14
|
-
|
Add:
|
|
|
|
|
|
|
|
Gain equity in the net
loss of equity method Investees
|
1,348
|
|
|
|
1,002
|
346
|
|
Income (loss) from
operations
|
$
(458)
|
|
$
3,357
|
$
(637)
|
$
(729)
|
$
(778)
|
$ (1,671)
|
Gain equity in the
net loss of equity method
Investees
|
1,348
|
|
|
|
|
|
|
Interest
income
|
557
|
|
|
|
|
|
|
Interest
expense
|
(401)
|
|
|
|
|
|
|
Gain on
extinguishment of liability
|
164
|
|
|
|
|
|
|
Other income,
net
|
156
|
|
|
|
|
|
|
Benefit from income
taxes
|
12,376
|
|
|
|
|
|
|
Net income
|
21,400
|
|
|
|
|
|
|
Net loss attributable
to noncontrolling interests
|
(1,385)
|
|
|
|
|
|
|
Net income
attributable to Genie Energy Ltd.
|
$
22,785
|
|
|
|
|
|
|
|
Total
|
|
Genie Retail
Energy
|
GES
|
GRE
Inter-
national
|
GOGAS
|
Corporate
|
Three Months Ended
March 31, 2018
(1Q18)
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
8,568
|
|
$
11,588
|
$
(85)
|
$
(597)
|
$ (1,206)
|
$ (1,132)
|
Subtract:
|
|
|
|
|
|
|
|
Stock-based
compensation
|
1,347
|
|
119
|
-
|
|
-
|
1,229
|
Depreciation and
amortization
|
594
|
|
431
|
7
|
|
155
|
-
|
Add:
|
|
|
|
|
|
|
|
Gain equity in the net
loss of equity method investees
|
506
|
|
|
|
506
|
|
|
Income (loss) from
operations
|
$
7,133
|
|
$
11,038
|
$
(92)
|
$
(91)
|
$
(1,361)
|
$ (2,361)
|
Gain equity in the
net loss of equity method
investees
|
506
|
|
|
|
|
|
|
Interest
income
|
81
|
|
|
|
|
|
|
Interest
expense
|
(92)
|
|
|
|
|
|
|
Other income,
net
|
42
|
|
|
|
|
|
|
Income
taxes
|
(799)
|
|
|
|
|
|
|
Net income
|
5,859
|
|
|
|
|
|
|
Net loss attributable
to noncontrolling interests
|
295
|
|
|
|
|
|
|
Net income
attributable to Genie Energy Ltd.
|
$
6,154
|
|
|
|
|
|
|
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SOURCE Genie Energy Ltd.