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Genie Energy Announces Third Quarter Results

Reports record third-quarter gross profit, net income and Adjusted EBITDA1

Acquired site rights to build up to 64MW (megawatts) of solar projects

NEWARK, N.J., Nov. 7, 2022 /PRNewswire/ -- Genie Energy, Ltd. (NYSE: GNE, GNEPRA), a leading retail energy and renewable energy solutions provider, today announced results for its third quarter ended September 30, 2022.

Genie Energy, Ltd. is a leading retail energy and renewable energy solutions provider.
Genie Energy, Ltd. is a leading retail energy and renewable energy solutions provider.

"We reported record third quarter profit metrics driven by strength in Genie Retail Energy (GRE), our domestic retail energy business," said Michael Stein, chief executive officer. "GRE continued to outperform in a volatile energy price environment. We were well-positioned with our customer book and hedges heading into the quarter and were able to drive a 54% gross margin and generate nearly $28 million in Adjusted EBITDA. Genie Renewables (GREW) also made excellent progress in our solar business, acquiring site rights to 64MW of solar projects and advancing them through their permitting processes.

"Given the challenging environment in the European energy market, we determined that the risk was beyond our acceptable tolerances. As a result, we exited our remaining international retail operations and no longer serve customers in Scandanavia.* Finally, building on our strong domestic operational performance, we returned $3.2 million in capital to shareholders via redemption of preferred stock and payments of our regular quarterly common and preferred stock dividends."

* Genie Retail Energy International (GREI) results are classified as discontinued operations in the third quarter of 2022 and for all prior periods presented.

Third Quarter 2022 Highlights (versus 3Q21 unless otherwise noted; excludes GREI for all periods)

  • Revenue decreased 7.3% to $81.3 million from $87.7 million;

  • Gross profit increased 24.7% to $43.1 million from $34.6 million, and gross margin increased to 53.1% from 39.5%, driven by strength at GRE;

  • Income from operations increased 34.8% to $23.5 million from $17.5 million;

  • Adjusted EBITDA1 increased 35.2% to $24.5 million from $18.1 million;

  • GRE generated income from continuing operations and Adjusted EBITDA of $27.4 million and $27.7 million, compared to $19.7 million and $20.0 million, respectively;

  • Net income from continuing operations attributable to GNE common stockholders increased to $18.3 million, and diluted income per share (EPS) increased to $0.70, compared to a loss of $2.7 million and net loss per share of $0.10, respectively;

  • Cash, restricted cash and marketable equity securities increased to $87.7 million at September 30, 2022, from $67.2 million at June 30, 2022;

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

  • Redeemed $1 million of preferred stock.

 

Select Financial Metrics: 2022 versus 2021 as of 9/30/22*

 (in $M except for EPS)

3Q22

3Q21

Change

YTD 2022

YTD 2021

Change

Total Revenue

$81.3

$87.7

(7.3 %)

$234.2

$254.1

(7.8 %)

Genie Retail - US (GRE)

$79.9

$86.3

(7.4 %)

$227.0

$244.0

(7.0 %)

Electricity

$73.8

$82.8

(10.9 %)

$186.2

$218.1

(14.6 %)

Natural Gas

$6.2

$3.5

75.0 %

$40.8

$25.9

57.5 %

Genie Renewables

$1.4

$0.9

2.2 %

$7.2

$6.2

16.5 %

Gross Margin

53.1 %

39.5 %

1360bps

51.3 %

26.7 %

2455bps

Genie Retail - US (GRE)

54.1 %

39.6 %

1453bps

27.6 %

24.7 %

394bps

Genie Renewables

(6.3 %)

34.0 %

(4029)bps

17.5 %

40.4 %

(2298)bps

Income (Loss) from Operations

$23.5

$17.5

34.8 %

$62.3

$18.3

240.7 %

Operating Margin

29.0 %

19.9 %

903bps

26.6 %

(5.1 %)

3168bps

Net Income (Loss) Attributable to Discontinued Operations

($1.5)

($10.9)

(86.6 %)

$25.9

($17.0)

nm

Net Income (Loss) Attributable to GNE Common Stockholders

$18.3

($2.7)

nm

$69.7

($0.0)

nm

Diluted Earnings (Loss) Per Share

$0.70

($0.10)

nm

$2.65

($0.00)

nm

Adjusted EBITDA1

$24.5

$18.1

35.2 %

$64.7

$20.4

nm

Cash Flow from Continuing Operating Activities

$22.5

$0.3

nm

$44.9

($0.9)

nm

nm = not measurable/meaningful







*Numbers may not add due to rounding







** GREI operations have been classified as a discontinued operation and its results excluded from current and historical results








              Select Business Metrics: 2022 versus 2021 (as of quarters ended on September 30)**

Units in 1000s

3Q22

3Q21

Change


Retail Performance Metrics:





Genie Retail - US (GRE)

251

336

(25.3 %)


Electricity

174

276

(37.0 %)


Natural Gas

77

60

28.1 %


Meters in 1000s units





Genie Retail - US (GRE)

271

361

(25.0 %)


Electricity

193

289

(33.0 %)


Natural Gas

77

72

7.3 %


Gross Adds

34

47

(27.7 %)


Churn***

4.7 %

4.0 %

70bps


** GREI operations have 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 Measure 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

Genie Retail Energy (GRE)

GRE delivered record third quarter gross profit, income from operations, and Adjusted EBITDA, highlighted by strong margins in its retail book. Electric per meter consumption declined moderately versus the year-ago quarter but remained solidly above pre-COVID levels. As in prior quarters, GRE moderated customer acquisition to maximize the value of its portfolio, given the ongoing market volatility.

Sequentially, RCEs and meters served decreased by 11,000 and 9,000 to 251,000 and 271,000, respectively, as of September 30, 2022. Average monthly churn increased to 4.7% from 4.0% in the year-ago quarter and from 4.4% in the second quarter of 2022.

Genie Renewables (GREW)

Genie Solar Energy continued building solar projects for large commercial customers and is on track to continue recognizing additional revenue from its growing backlog of projects.

As previously disclosed, GREW is also building a portfolio of company-owned and/or controlled solar generation fields. In that regard, the Company achieved site control on multiple projects totaling 64MW of generation capacity.

Balance Sheet and Cash Flow Highlights

On September 30, 2022, Genie Energy reported $259.9 million in total assets. Liabilities totaled $97.7 million, and working capital (current assets less current liabilities) totaled $128.5 million. Non-current liabilities were $11.7 million.

For the quarter ended September 30, 2022, net cash provided by operating activities was $25.6 million compared to $6.0 million a year ago.

Strategic Update and Commentary on the Balance of 2022

GRE will continue monitoring the U.S. retail energy markets for customer acquisition opportunities. As volatility either moderates or becomes more palatable to customers, GRE expects to recalibrate its customer acquisition and retention programs to generate growth in its customer book.

On October 12, 2022, Genie announced that, on November 15, 2022, it would redeem 986,400 shares of its Preferred Stock for an aggregate cost of approximately $8.3 million. After this redemption, Genie Energy will have 983,358 shares of Preferred Stock outstanding with an aggregate stated value of $8.4 million.

Stein commented, "We expect energy prices to remain volatile as we head into the Winter months, but we continue to be well-positioned from a risk management position and will return to customer acquisition mode on a market-by-market basis when the risk/reward balance is favorable. Additionally, we expect to receive all approvals necessary to begin construction on our first wholly-owned and operated solar generation project this quarter. Finally, we continue to redeem our preferred stock to enhance our flexibility to invest future cash-flows in value creation initiatives, including pursuing additional growth opportunities in our renewables business."

Trended Financial Information:*

 (in $M except for EPS, RCE and Meters)**

1Q21

2Q21

3Q21

4Q21

1Q22

2Q22

3Q22


2019

2020

2021

YTD 2022

Total Revenue

$96.3

$70.1

$87.7

$69.2

$85.9

$66.9

$81.3


$315.3

$338.4

$323.3

$234.2

Genie Retail - US (GRE)

$90.7

$67.0

$86.3

$67.9

$83.9

$63.2

$79.9


$286.6

$304.4

$311.8

$244.0

Electricity

$73.4

$61.9

$82.8

$54.9

$59.4

$53.1

$73.8


$246.7

$270.9

$273.0

$186.2

Natural Gas

$17.3

$5.1

$3.5

$12.9

$24.5

$10.1

$6.2


$39.9

$33.6

$38.8

$40.8

Genie Renewables

$2.5

$2.3

$1.3

$1.3

$2.0

$3.8

$1.4


$12.1

$25.2

$7.5

$7.2

Gross Margin

14.4 %

27.8 %

39.5 %

34.3 %

54.8 %

44.5 %

53.1 %


26.3 %

27.0 %

28.3 %

51.3 %

Genie Retail - US (GRE)

16.5 %

16.5 %

16.5 %

16.5 %

16.5 %

16.5 %

16.5 %


28.1 %

29.0 %

29.1 %

52.3 %

Genie Renewables

44.9 %

39.4 %

34.0 %

21.5 %

25.7 %

21.6 %

-6.3 %


15.7 %

8.8 %

37.1 %

17.5 %

Income (loss) from Operations

($3.2)

$4.0

$17.5

$5.8

$27.0

$11.8

$23.5


$9.8

$23.1

$24.1

$62.3

Operating Margin

-3.3 %

5.7 %

19.9 %

8.4 %

31.4 %

17.6 %

29.0 %


3.1 %

6.8 %

7.5 %

26.6 %

Net Income (Loss) Attributable to Discontinued Operations

($3.4)

($2.7)

($10.9)

$28.7

($1.9)

$29.3

($1.5)


$9.8

($0.5)

$11.7

$25.9

Net Income (Loss) Attributable to GNE Common Stockholders 

($2.4)

$5.0

($2.7)

$27.6

$17.5

$33.9

$18.3


$9.8

$11.7

$27.5

$69.7

Diluted Earnings (Loss) Per Share

($0.09)

$0.19

($0.10)

$1.06

$0.67

$1.30

$0.70


$0.10

$0.44

$1.06

$2.65

Adjusted EBITDA

($2.4)

$4.7

$18.1

$7.3

$28.0

$12.2

$24.5


$10.1

$26.6

$27.8

$64.7

GRE Retail Performance Metrics













RCEs

347

330

336

260

260

263

251


307

337

260

nm

Electricity

291

272

276

189

182

185

174


246

284

189

nm

Natural Gas

56

58

60

71

78

77

77


61

53

71

nm

Meters

373

361

361

285

286

280

271


...