Genie Energy Announces First Quarter Results

Record Gross Profit of $45.5 million and Gross Margin of 46.2%

Record Net Income Attributable to Common Stockholders of $17.5 million, diluted EPS of $0.67 and Adjusted EBITDA¹ of $25.7 million

NEWARK, N.J., May 9, 2022 /PRNewswire/ -- Genie Energy, Ltd. (NYSE: GNE, GNEPRA), a leading retail and renewable energy solutions provider, today announced results for its first quarter ended March 31, 2022.

Genie Energy is a leading provider of electricity and natural gas to homes and small businesses in the Eastern U.S. Genie also operates an E&P company with an active exploratory program in Northern Israel.

"Genie had an amazing start to the year with record quarterly results across numerous key profitability metrics," said Michael Stein, chief executive officer. "Genie Retail Energy, or GRE, our U.S. retail business, was the main driver behind this outstanding quarter, generating over $30 million in Adjusted EBITDA. Overall, the first quarter's results underscored the flexibility of our business model, and our ability to leverage our market expertise and execution capabilities to generate strong performance, including robust cash flows, and significant value for Genie Energy shareholders."

First Quarter 2022 Highlights (versus 1Q21 unless otherwise noted)

• Revenue decreased 8.3% to $98.5 million;

• Gross profit increased 259.9% to $45.5 million, and gross margin increased to 46.2% from 11.8%;

• Income (loss) from operations increased to $24.4 million from ($5.5) million; operating margin increased to 24.8% from (5.1%);

• Adjusted EBITDA¹ increased to $25.7 million from ($4.4) million;

• GRE generated income from operations and Adjusted EBITDA of $30.2 million and $30.5 million, compared to $1.2 million and $1.5 million, respectively;

• Net income attributable to GNE common stockholders increased to $17.5 million, and diluted income per share (EPS) increased to $0.67, compared to a net loss of ($2.4) million and diluted loss per share of ($0.09);

• Declared a $0.075 quarterly dividend for class A and B common stockholders.

Select Financial Metrics: 2022 versus 2021 as of 3/31/22*
(in $M except for EPS)	1Q22	1Q21	Change
Total Revenue	$98.5	$107.5	-8.3%
Genie Retail - US (GRE)	$83.9	$90.7	-7.5%
Electricity	$59.4	$73.4	-19.1%
Natural Gas	$24.5	$17.3	41.8%
Genie Retail - International (GREI)**	$12.6	$14.3	-12.1%
Electricity	$12.4	$14.2	-12.8%
Other	$0.2	$0.1	80.1%
Genie Renewables	$2.0	$2.5	-17.9%
Gross Margin	46.2%	11.8%	3445bps
Genie Retail - US (GRE)	55.5%	16.5%	3903bps
Genie Retail - International (GREI)	-12.4%	-23.9%	1150bps
Genie Renewables	25.7%	44.9%	-1924bps
Income (Loss) from Operations	$24.4	($5.5)	nm
Operating Margin	24.8%	-5.1%	2988bps
Net Income (Loss) Attributable to Discontinued Operations	$0.0	($1.1)	nm
Net Income (Loss) Attributable to GNE Common Stockholders	$17.5	($2.4)	nm
Diluted Earnings (Loss) Per Share	$0.67	($0.09)	nm
Adjusted EBITDA1	$25.7	($4.4)	nm
Cash Flow from Continuing Operating Activities	$18.3	($10.0)	nm
nm = not measurable/meaningful
*Numbers may not add due to rounding
** Orbit UK has been classified as a discontinued operation and its results excluded from current and historical results

Select Business Metrics: 2022 versus 2021 (quarters ended on March 31)**
Units in 1000s	1Q22	1Q21	Change
Retail Performance Metrics:
Retail Customer Equivalents (RCE)	298	400	-25.4%
Genie Retail - US (GRE)	260	347	-25.1%
Electricity	182	291	-37.3%
Natural Gas	78	56	38.7%
Genie Retail - International (GREI)	38	53	-27.6%
Electricity	38	53	-27.6%
Natural Gas	0	0	nm
Meters in 1000s units	347	447	-22.3%
Genie Retail - US (GRE)	286	373	-23.3%
Electricity	209	308	-32.0%
Natural Gas	78	65	20.0%
Genie Retail - International (GREI)	61	74	-17.4%
Electricity	61	74	-17.4%
Natural Gas	0	0	nm
GRE Average Monthly Churn - Meters
Gross Sales	44	62	-29.0%
Churn***	4.5%	4.9%	-400bps
** Orbit UK has been classified as a discontinued operation and its results excluded from current and historical results
*** Excludes expiration of low margin aggregation deals

¹ Adjusted EBITDA for all periods presented 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 Measures at the end of this release for an explanation of Adjusted EBITDA, as well as reconciliations to its most directly comparable GAAP measure.

Segment Highlights

GRE

GRE delivered record levels of gross profit, income from operations and Adjusted EBITDA for the quarter highlighted by strong margins in its retail book. The strong performance was driven, in part, by the decision to allow certain less profitable meters to attrite in advance of the winter volatility and optimize the forward book accordingly. Electric per meter consumption declined moderately versus the year ago quarter but remained solidly above pre-COVID levels.

Sequentially, meters increased by 1k to 286k and RCEs were flat at 260k as of March 31, 2022. Average monthly churn decreased to 4.5% from 4.9% in the year ago quarter and 6.2% in the fourth quarter of 2021 (excluding the impact of expired aggregation deals).

GREI

Volatility in energy prices resulted in mark-to-market losses for GREI, in contrast to the gains recognized during the fourth quarter of 2021. During the first quarter, GREI moderated customer acquisition activity to focus on gross profit and margin expansion. Exclusive of the impact of mark-to-market valuations, GREI generated an operating profit.

Genie Renewables

Genie Renewables' revenue was impacted by seasonality and projects that were in process but not completed. In addition to working through its existing signed contracts, the solar business signed three new deals during the quarter that will positively impact results going forward.

Balance Sheet and Cash Flow Highlights

On March 31, 2022, Genie Energy reported $220.2 million in total assets, including $95.3 million in cash, restricted cash and marketable equity securities. Liabilities totaled $93.9 million, and working capital (current assets less current liabilities) totaled $96.0 million. Non-current liabilities were $2.9 million.

During the quarter ended March 31, 2022, net cash provided by operating activities was $18.3 million compared to net cash used in operating activities of $10.0 million a year ago.

Commentary on Balance of 2022

"The second quarter is typically a period of seasonally lower consumption in the U.S.," said Stein. "However, we expect to again deliver relatively strong results across our retail businesses as we continue to focus on customer portfolio management and margin preservation until we return to a less volatile commodity price environment. Once market conditions normalize, our strong cash flows, cash position and debt-free balance sheet leaves us well-positioned to invest in growth opportunities. For Genie Renewables, we expect our solar business to continue to close pipeline deals and make installations under current contracts. Overall, we remain confident that Genie Renewables will continue to expand, and we expect it to report $15-20 million in revenue for 2022.

"Finally, in addition to continuing to pay our quarterly dividend, we recently initiated the process to redeem $2 million of our preferred stock during the second quarter," concluded Stein.

Trended Financial Information:*
(in $M except for EPS, RCE and Meters)	Q121	Q221	Q321	Q421	1Q22
Total Revenue	$107.5	$76.4	$95.1	$84.7	$98.5
Genie Retail - US (GRE)	$90.7	$67.0	$86.3	$67.9	$83.9
Electricity	$73.4	$61.9	$82.8	$54.9	$59.4
Natural Gas	$17.3	$5.1	$3.5	$12.9	$24.5
Genie Retail - International (GREI)**	$14.3	$7.1	$7.5	$15.5	$12.6
Electricity	$14.2	$6.8	$7.1	$15.2	$12.4
Other	$0.1	$0.3	$0.4	$0.3	$0.2
Genie Renewables	$2.5	$2.3	$1.3	$1.3	$2.0
Gross Margin	11.8%	27.8%	43.5%	34.9%	46.2%
Genie Retail - US (GRE)	16.5%	27.4%	39.6%	34.5%	55.5%
Genie Retail - International (GREI)	-23.9%	27.9%	91.0%	37.8%	-12.4%
Genie Renewables	44.9%	39.4%	34.0%	21.5%	25.7%
Income (loss) from Operations	($5.5)	$4.5	$23.3	$10.7	$24.4
Operating Margin	-5.1%	5.9%	24.5%	12.7%	24.8%
Net Income (Loss) Attributable to Discontinued Operations	($1.1)	($3.2)	($16.4)	$26.3	---
Net Income (Loss) Attributable to GNE Common Stockholders	($2.4)	$5.0	($2.7)	$29.2	$17.5
Diluted Earnings (Loss) Per Share	($0.09)	$0.19	($0.11)	$1.12	$0.67
Adjusted EBITDA	($4.4)	$5.5	$24.2	$12.5	$25.7
Retail Performance Metrics:
Retail Customer Equivalents (RCE) in 1000s	400	384	383	301	298
Genie Retail - US (GRE)	347	330	336	260	260
Electricity	291	272	276	189	182
Natural Gas	56	58	60	71	78
Genie Retail - International (GREI)	53	55	46	40	38
Electricity	53	55	46	40	38
Natural Gas	0	0	0	0	0
Meters in 1000s units	447	434	428	352	347
Genie Retail - US (GRE)	373	361	361	285	286
Electricity	308	292	289	210	209
Natural Gas	65	69	72	75	78
Genie Retail - International (GREI)	74	74	67	67	61
Electricity	74	74	67	67	61
Natural Gas	0	0	0	0	0
GRE Average Monthly Churn - Meters
Gross Sales	62	35	46	33	44
Churn***	4.9%	3.8%	4.0%	6.2%	4.5%
nm = not measurable/meaningful
*Numbers may not add due to rounding
** Orbit UK has been classified as a discontinued operation and its results excluded from current and historical results
*** Excludes expiration of low margin aggregation deals

Dividend on Genie Energy Common Stock

Genie Energy's Board of Directors has declared a dividend of $0.075 per share of Class A and Class B common stock with a record date of May 20, 2022. The dividend will be paid on or about May 31, 2022. The distribution will be treated as an ordinary dividend for income tax purposes.

Earnings Announcement and Supplemental Information

Genie Energy will issue an earnings release over a wire service and post it in the "Investors" section of the Genie Energy website (https://genie.com/investors/investor-relations/) at 7:30 AM Eastern. The release also will be filed in a current report (Form 8-K) with the SEC.

At 8:30 AM Eastern, 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 1-877-545-0523 (toll-free from the US) or 1-973-528-0016 (international) and provide the following participant access code: 423761.

Approximately three hours after the call, a call replay will be accessible by dialing 1-877-481-4010 (toll-free from the US) or 1-919-882-2331 (international) and providing the replay passcode: 45250. The replay will remain available through May 19, 2022. A recording of the call also will be available for playback on the "Investors" section of the Genie Energy website.

About Genie Energy Ltd.

Genie Energy Ltd. (NYSE: GNE, GNEPRA), is a provider of energy services. The Genie Retail Energy division supplies electricity, including electricity from renewable resources, and natural gas to residential and small business customers in the United States. The Genie Retail Energy International division supplies customers in selected markets in Europe. Genie Renewables comprises Genie Solar Energy, a provider of end-to-end customized solar solutions primarily for commercial customers, Diversegy, a commercial energy consulting business, CityCom Solar, a provider of community solar energy solutions and Genie's interest in Prism Solar, a supplier of solar panels and solutions. 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, 2022				December 31, 2021
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	88,185			$	95,492
Restricted cash—short-term		6,496				6,657
Marketable equity securities		657				1,336
Trade accounts receivable, net of allowance for doubtful accounts of $6,781 and $6,365 at March 31, 2022 and December 31, 2021, respectively		48,790				52,357
Inventory		18,865				17,720
Prepaid expenses		6,638				4,994
Other current assets		17,393				21,789
Total current assets		187,024				200,345
Property and equipment, net		350				297
Goodwill		11,709				11,755
Other intangibles, net		3,529				3,648
Deferred income tax assets, net		5,204				4,259
Other assets		12,369				9,161
Total assets	$	220,185			$	229,465
Liabilities and equity
Current liabilities:
Trade accounts payable		21,460				33,554
Accrued expenses		42,272				39,523
Income taxes payable		16,352				9,792
Due to IDT Corporation, net		141				532
Other current liabilities		1,848				2,125
Current liabilities of discontinued operations		8,934				30,766
Total current liabilities		91,007				116,292
Other liabilities		2,886				2,384
Total liabilities		93,893				118,676
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, 2022 and December 31, 2021		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, 2022 and December 31, 2021		16				16
Class B common stock, $0.01 par value; authorized shares—200,000; 26,642 and 26,620 shares issued and 24,625 and 24,615 shares outstanding at March 31, 2022 and December 31, 2021, respectively		266				266
Additional paid-in capital		144,089				143,249
Treasury stock, at cost, consisting of 2,017 and 2,005 shares of Class B common stock at March 31, 2022 and December 31, 2021		(14,105)				(14,034)
Accumulated other comprehensive income		3,499				3,160