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GENIE ENERGY LTD.

(GNE)
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Genie Energy : Reports First Quarter 2021 Results

05/06/2021 | 07:35am EDT

Genie Energy Ltd. Reports First Quarter 2021 Results

NEWARK, NJ - May 6, 2021: Genie Energy Ltd. (NYSE: GNE, GNEPRA) reported record revenue of $135.3 million and a loss per diluted share of $0.09 for the first quarter 2021.

CONSOLIDATED HIGHLIGHTS

(Throughout this release, 1Q21 results are compared to 1Q20 results unless otherwise noted)

  • Global RCEs served increased by 49,000 or 12.1% year over to year to 450,000. Global meters served increased by 40,000 or 7.6% year over to year to 572,000.
  • Consolidated revenue increased 30.1% to $135.3 million from $104.1 million driven by increased per meter consumption in domestic markets and by the consolidation of Orbit Energy during 4Q20.
  • Genie Retail Energy (GRE), Genie's domestic retail energy supply business, generated income from operations of $1.2 million compared to $13.0 million in 1Q20. The 1Q21 results reflect a negative impact of approximately $13.0 million attributable to the impact of a severe winter storm and resultant spike in wholesale electricity rates in Texas.
  • Genie Renewables, formerly Genie Energy Services, generated income from operations of $0.6 million compared to $0.3 million in 1Q20 reflecting Genie's ongoing diversification to higher margin solar solutions.
  • Consolidated loss from operations was $6.6 million compared to income from operations of $9.2 million in 1Q20. Consolidated Adjusted EBITDA* was negative $4.5 million compared to positive Adjusted EBITDA* of $10.3 million.
  • The net loss attributable to Genie Energy common stockholders was $2.4 million compared to net income of $5.5 million in 1Q20.
  • Genie purchased 146,720 shares of its Class B common stock at $5.76 per share in a private transaction following the quarter close.

COMMENTS OF MICHAEL STEIN, CEO

"As we discussed when we reported last quarter's earnings, the first quarter was impacted by unusually severe weather events that led to massive spikes in wholesale electricity prices in Texas and Japan. The winter storms in Texas and Japan had an aggregate negative impact on income from operations of approximately $15.5 million. In Texas, where the negative impact of the storm this quarter was approximately $13.0 million, our industry has borne a disproportionate share of the financial burden. We remain hopeful that prospective legislation, regulatory changes and/or litigation will provide material relief.

"Genie Energy achieved record first quarter revenue. Our meter and RCE counts continued to climb, and absent the Texas storm's impact, our domestic business would likely have achieved record income from operations and Adjusted EBITDA*. Additionally, Genie Renewables, formerly Genie Energy Services, continued to expand into higher margin solar solutions offerings and delivered its highest level of income from operations to date.

"After overcoming the challenges of the first quarter, we are well positioned for strong cash generation and continued growth as we look ahead to the balance of the year and beyond. Across our business, the best is yet to come."

CONSOLIDATED RESULTS

1Q21-1Q20

Genie Energy Consolidated Results

Change

$ in millions, except EPS

1Q21

4Q20

1Q20

(%/$)

Revenue

$135.3

$102.9

$104.1

+30.1%

Gross profit

$17.5

$22.0

$28.9

(39.4)%

Gross margin percentage

13.0%

21.4%

27.8%

(1,480) BP

SG&A expense

$24.1

$22.7

$19.5

+23.6%

Stock-based compensation included in SG&A

$0.6

$(0.2)

$0.5

+$0.1

Depreciation and amortization

$1.3

$1.3

$0.8

+$0.5

Bad debt expense

$1.1

$1.5

$0.6

+$0.5

Impairment of assets

-

$0.4

$0.2

$(0.2)

(Loss) income from operations

$(6.6)

$(1.1)

$9.2

$(15.8)

Adjusted EBITDA*

$(4.5)

$0.7

$10.3

$(14.9)

Equity in the net loss in equity method investees**

$0.1

$0.3

$(0.4)

+$0.5

Provision for income taxes

$(0.5)

$(2.8)

$(2.6)

+$2.1

Net (loss) income attributable to Genie Energy

$(2.4)

$(1.7)

$5.5

$(7.9)

common stockholders

(Loss) earnings per diluted share attributable to

$(0.09)

$(0.06)

$0.20

$(0.29)

Genie Energy common stockholders

Net cash used in operating activities

$(10.0)

$(0.9)

$(2.7)

$(7.2)

  • 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 for reconciliations to its most directly comparable GAAP measures.
  • To reflect Genie's purchase of the outstanding interest in its Orbit Energy joint venture operating in the United Kingdom from its former joint venture partner, Genie began to consolidate Orbit's results in its financial reporting under the GRE International segment effective October 8, 2020. Prior to that date, Genie accounted for its investments in Orbit under the equity method of accounting. Revenue generated, and expenses incurred, were not reflected in segment revenue and operating expenses.

CUSTOMER BASE

Genie Energy's global RCE and meter base increased year-over-year and sequentially driven by GRE International's investment in customer acquisition, by customer acquisition programs focused on higher consumption per meter markets in the U.S. and by higher average per meter residential consumption driven by the COVID-induced shift to work from home. Genie Energy's global RCE and meter totals, including operations in the U.S., Finland, Sweden, the U.K. and Japan for all periods presented, are provided in the chart below.

Global RCEs and

March 31,

December 31,

September 30,

June 30,

March 31,

Meters (in thousands)

2021

2020

2020

2020

2020

Electricity RCEs

373

366

364

346

325

Natural gas RCEs

77

75

78

75

76

Total RCEs

450

440

442

421

401

Electricity meters

460

454

445

429

421

Natural gas meters

112

111

113

107

111

Total meters

572

565

558

536

532

SEGMENT RESULTS

Genie Retail Energy (GRE)

GRE's financial results are summarized in the chart below:

GRE

1Q21

4Q20

1Q20

1Q21-1Q20

$ in millions

Change (%/$)

Total revenue

$90.7

$69.9

$79.1

+14.6%

Electricity revenue

$73.4

$60.5

$63.1

+16.4%

Natural gas revenue

$17.3

$9.4

$16.1

+7.5%

Gross profit

$15.0

$17.9

$27.6

(45.8)%

Gross margin percentage

16.5%

25.5%

34.9%

(1,840) BP

SG&A expense

$13.8

$12.6

$14.6

(5.6)%

Depreciation and amortization

$0.1

$0.1

$0.1

NC

Bad debt expense

$0.4

$0.5

$0.5

$(0.2)

Income from operations

$1.2

$5.3

$13.0

$(11.8)

Adjusted EBITDA*

$1.5

$5.4

$13.3

$(11.8)

GRE - KPIs and take-aways:

  • Results in the quarter were materially impacted by Winter Storm Uri which led to spikes in the Texas grid's wholesale electricity prices in February 2021. The Company estimates that the storm and associated regulatory surcharges had a net negative impact on income from operations of approximately $13.0 million compared to normalized operating conditions. Genie Energy had estimated that the impact would be $12.8 million when it reported fourth quarter 2020 results.
  • GRE's customer base at March 31, 2021 increased to 347,000 RCEs from 330,000 RCEs a year earlier. Meters served decreased to 373,000 from 384,000. The changes resulted from Genie's focus on meter acquisition opportunities in geographies with higher average consumption per meter and from higher per meter consumption in the past year due to COVID-related factors.
  • Gross meters added during 1Q21 totaled 62,000 compared to 69,000 in 1Q20 and 58,000 in 4Q20. The year over year decrease largely reflected the impact of COVID-related public health restrictions compared to the year ago quarter. The sequential increase was enabled by the relaxation of those restrictions in some jurisdictions and by the closing of an aggregation deal in 1Q21.
  • Average monthly churn increased to 4.9% from 4.7% in 1Q20 but decreased from 5.3% in 4Q20. Churn in the 4th quarter of 2020 was impacted by the expiration of an aggregation deal.
  • Electricity revenue increased to $73.4 million from $63.1 million in 1Q20 driven by higher average per meter consumption partly offset by lower revenue per kilowatt hour sold.
  • Income from operations decreased to $1.2 million from $13.0 million and Adjusted EBITDA* decreased to $1.5 million from $13.3 million in 1Q20.
  • Excluding the direct impact of the Texas weather event, but without adjustments for other market conditions, GRE's Adjusted EBITDA* would have been approximately $14.5 million, a record quarter for the business.

Genie Retail Energy International (GRE International)

Genie began to consolidate Orbit's results in its financial reporting under the GRE International segment effective October 8, 2020 following our purchase of the outstanding interest in the venture. Prior to that date, Genie accounted for its investments in Orbit under the equity method of accounting. Revenue generated, and expenses incurred, were not reflected in segment revenue and operating expenses. However, Orbit Energy's customers are included in counts of Genie Energy's and GRE International's customer bases for all periods presented.

GRE International

1Q21

4Q20

1Q20

1Q21-1Q20

$ in millions

Change (%/$)

Total revenue

$42.2

$31.8

$7.0

+506.7%

Electricity revenue

$30.3

$23.4

$6.9

+339.1%

Natural gas revenue

$11.8

$8.3

-

+$11.8

Gross profit (loss)

$1.4

$4.4

$(0.3)

+$1.7

Gross margin percentage

3.4%

14.0%

(4.1)%

+760 BP

SG&A expense

$8.1

$7.4

$2.2

+$5.9

Depreciation & amortization

$1.2

$1.1

$0.5

+$0.7

Bad debt

$0.7

$1.0

$0.1

+$0.6

Loss from operations

$(6.7)

$(2.9)

$(2.5)

$(4.1)

Adjusted EBITDA*

$(5.4)

$(1.8)

$(2.0)

$(3.4)

GRE International - KPIs and take-aways:

  • GRE International's customer base at March 31, 2021 increased to 103,000 RCEs from 72,000 RCEs and to 199,000 meters from 148,000 meters a year earlier led by growth in Scandinavia and the U.K.
  • Revenue increased to $42.2 million compared to $7.0 million in 1Q20 primarily reflecting the consolidation of Orbit Energy during 4Q20 as well as the significant growth of GRE International's customer base. On a pro forma basis***, inclusive of Orbit Energy's revenue, GRE International's revenue was $26.6 million in 1Q20.
  • Loss from operations increased to $6.7 million from $2.5 million in 1Q20 primarily impacted by a severe weather induced spike in wholesale electricity rates which increased Genie Japan's supply cost by approximately $2.5 million. On a pro forma basis***, inclusive of Orbit Energy's loss from operations, GRE International's loss from operations was $5.5 million in 1Q20.
  • Pro forma results for 1Q20 are non-GAAP measures intended to provide useful information that supplement the core operating results in accordance with GAAP of the relevant segment. Please refer to the 'Reconciliation of Non- GAAP Financial Measures' at the end of this release for an explanation of the pro forma results as well as for reconciliations to their most directly comparable GAAP measures.

Genie Renewables

Genie Renewables (formerly Genie Energy Services) comprises Genie Solar, 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.

  • Revenue decreased to $2.5 million from $18.0 million in 1Q20. 1Q20 results were dominated by high revenue, low margin Prism Solar panel deliveries.
  • Gross margin increased to 44.9% compared to 8.9% in 1Q20. The increase reflects ongoing diversification to higher margin solar solutions.
  • Income from operations increased to $0.6 million compared to $0.3 million in 1Q20.

Corporate

  • Corporate loss from operations was $1.7 million compared to a loss of $1.6 million in 1Q20.

BALANCE SHEET AND CASH FLOW HIGHLIGHTS

At March 31, 2021, Genie Energy had $191.3 million in total assets, including $41.7 million in cash, restricted cash and marketable equity securities. Liabilities totaled $107.8 million and working capital (current assets less current liabilities) totaled $35.4 million. Non-current liabilities were $3.5 million.

Cash used in operating activities in 1Q21 was $10.0 million compared to $2.7 million in 1Q20. The increase was driven by the weather events in Texas and Japan.

GENIE ENERGY EARNINGS CONFERENCE CALL

This earnings press release is available for download in the "Investors" section of the Genie Energy website

(https://genie.com/investors/investor-relations/) and has been filed on a current report (Form 8-K) with the SEC.

At 8:30 AM Eastern today, May 6, 2021, 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 1-800-945-8198(toll-free from the US) or 1-212-231-2934 (international) and request the Genie Energy conference call.

Approximately three hours after the call, a call replay will be accessible by dialing 1-844-512-2921(toll-free from the US) or 1-412-317-6671 (international) and providing the replay PIN: 21993711. The replay will remain available through May 13, 2021. A recording of the call - in MP3 format - also will be available for playback on the "Investors" section of the Genie Energy website.

Investors can sign up through the Genie Energy websiteto 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, 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 Europe and Asia. The Genie Renewables division 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.

Contact

Genie Energy Investor Relations

Bill Ulrey

P: (973) 438-3848

E-mail: invest@genie.com

This is an excerpt of the original content. To continue reading it, access the original document here.

Disclaimer

Genie Energy Ltd. published this content on 06 May 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 06 May 2021 11:34:02 UTC.


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