Genie Energy Ltd. Reports Second Quarter 2020 Results

8/6/20

Genie Energy Ltd. (NYSE: GNE, GNEPRA) reported second quarter 2020 earnings of $0.06 per basic and diluted share on revenue of $76.1 million.

HIGHLIGHTS

(Throughout this release, 2Q20 results are compared to 2Q19 results unless otherwise noted)

  • Global RCEs served increased by 64,000 (18%) year over year and 20,000 (5%) sequentially to 421,000. Global meters served increased by 88,000 (20%) year over year and 4,000 (1%) sequentially to 536,000.
  • At Genie Retail Energy (GRE), Genie's US retail energy provider business, per-meter electricity consumption increased 26%.
  • Consolidated revenue increased 24.7% to $76.1 million from $61.0 million driven by increased electricity consumption.
  • Consolidated income from operations improved to $2.7 million compared to a loss from operations of $9.3 million. Consolidated Adjusted EBITDA1 increased to $3.5 million from negative Adjusted EBITDA1 of $9.1 million.
  • GRE's income from operations improved to $6.0 million compared to a loss from operations of $5.4 million, and Adjusted EBITDA1 increased to $6.2 million from negative Adjusted EBITDA1 of $5.1 million.
  • Basic and diluted EPS improved to $0.06 from a loss per basic and diluted share of $0.29.
  • During the second quarter, Genie repurchased 200,873 shares of its Class B common stock for $1.5 million.

COMMENTS OF MICHAEL STEIN, CEO

"Genie Energy delivered strong financial and operational results, much improved from the difficult year ago quarter. We again expanded our global customer base led by growth in our overseas markets, and reported the highest level of Adjusted EBITDA1 for any second quarter in our history.

"Given our continued favorable outlook and strong cash generation in recent quarters and after increasing our quarterly dividend last quarter, we resumed repurchasing shares in the second quarter.

"The Genie team again did an outstanding job growing our business and significantly enhancing our bottom-line results despite the challenges of the COVID-19-impacted environment while working from home. A big 'Thank you!' to them."

GLOBAL METERS AND RCEs

Genie Energy's global customer base increased year-over-year and sequentially driven by investment in customer acquisition in overseas and domestic markets. The pace of growth in the second quarter was slowed by COVID-19 related sales restrictions in key markets. Genie Energy's global RCE and meter totals are provided in the chart below.

GRE - KPIs and Take-Aways:

  • RCEs served at June 30, 2020 increased to 343,000 from 318,000 a year earlier and from 330,000 at March 31, 2020. The year over year and sequential increases reflect a sustained focus on the acquisition of higher consumption meters, increased residential electricity consumption due to warmer weather in 2Q20 compared to 2Q19 and COVID-19 "stay-at-home" orders.
  • Meters served at June 30, 2020 decreased to 374,000 from 379,000 a year earlier and from 384,000 at March 31, 2020. The decreases reflect a slower pace of gross meter additions, partially offset by a reduction in monthly customer churn.
  • Gross meters added during 2Q20 totaled 40,000 compared to 91,000 in 2Q19 and 69,000 in 1Q20. COVID-19-related public health restrictions reduced sales activity through certain channels in 2Q20.
  • Average monthly customer churn decreased to 3.9% from 4.4% in 2Q19 and 4.7% in 1Q20, reflecting decreased sales activity by competitors as a result of COVID-19-related restrictions.
  • The year over year increase in electricity revenue was driven by a 26% increase in consumption per meter and, to a lesser extent, the growth of GRE's electricity customer base, which more than offset a decrease in revenue per kilowatt-hour sold.
  • The year over year increases in income from operations and Adjusted EBITDA1 were driven by increased electricity consumption and improved gross margin, augmented by a decrease in customer acquisition expense.

GRE International – KPIs and Take-Aways:

  • RCE's served3 at June 30, 2020 increased to 79,000 from 39,000 a year earlier and from 72,000 at March 31, 2020 led by growth of Orbit Energy's customer base in the U.K.
  • Meters served3 at June 30, 2020 increased to 161,000 from 69,000 a year earlier and from 148,000 at March 31, 2020.
  • On a pro forma basis5, inclusive of Orbit Energy's revenue, GRE International's revenue increased to $19.9 million in 2Q20 from $7.7 million in 2Q19.
  • Loss from operations decreased year over year reflecting increases in revenue and gross margin, specifically within our Lumo Energia operations in Finland.
  • On a pro forma basis5, inclusive of Orbit Energy's loss from operations, GRE International's loss from operations decreased to $2.4 million in 2Q20 from $3.9 million in 2Q19.

Genie Energy Services (GES)

GES comprises Diversegy, a commercial energy consulting business, Genie's interest in Prism Solar, a supplier of solar panels and solutions, and Genie Solar Energy.

  • GES' revenue increased to $4.6 million from $3.7 million reflecting increased revenue at Genie Solar Energy.
  • GES' loss from operations was $1.1 million compared to a loss from operations of $0.7 million in 2Q19. The increase was attributable to a write-down of Prism Solar assets.

Genie Oil and Gas (GOGAS)

  • Operations at GOGAS' Afek oil and gas exploration subsidiary remain suspended pending final testing on an existing well.
  • GOGAS' loss from operations6 decreased to $0.2 million from $0.4 million in 2Q19.

Corporate

  • Corporate loss from operations was $1.2 million in both 2Q20 and 2Q19. The losses include the impact of corporate stock-based compensation which increased to $0.2 million from $0.1 million in 2Q19.

BALANCE SHEET AND CASH FLOW HIGHLIGHTS

At June 30, 2020, Genie Energy had $142.4 million in total assets, including $41.8 million in cash, cash equivalents and restricted cash. Liabilities totaled $59.8 million and working capital (current assets less current liabilities) totaled $49.1 million.

Cash provided by operating activities in 2Q20 was $16.4 million compared to cash used in operating activities of $3.1 million in 2Q19.

DIVIDEND ON GENIE ENERGY COMMON STOCK

Genie's Board of Directors has declared a second quarter dividend of $0.085 with a record date of August 18, 2020. The dividend will be paid on or about August 26, 2020. The distribution will be treated as an ordinary dividend for income tax purposes.

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 Energy Services division includes Diversegy, a commercial and industrial brokerage and consultative services company, and Genie Solar Energy and Prism Solar, which design, supply and install commercial solar solutions. For more information, visit Genie.com.