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Genie Energy Announces First Quarter Results

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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 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

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