NEWARK, N.J., Aug. 3, 2017 /PRNewswire/ -- Genie Energy
Ltd. (NYSE: GNE, GNEPRA) reported second quarter 2017 revenue of $52.2 million and a net loss
attributable to common stockholders of $11.8 million -- $0.50 per
basic and diluted share -- including a $9.0 million legal accrual.
2Q17 OPERATIONAL AND FINANCIAL HIGHLIGHTS
- Genie Retail Energy (GRE) accelerated its organic customer growth, adding twelve thousand meters and two thousand RCEs,
respectively, compared to March 31, 2017;
- GRE increased revenue to $52.2 million from $44.6 million
(+17.2%) in 2Q16. 2Q17 was GRE's fifth consecutive quarter of year-over-year revenue increases;
- GRE accrued $9.0 million related to an agreement to settle class action lawsuits stemming
from the polar vortex of 2013-2014. The agreement is subject to approval by the court;
- GRE reported a loss from operations of $8.2 million and negative Adjusted EBITDA* of
$7.6 million including the impact of the $9.0 million legal
accrual. In 2Q16, income from operations and Adjusted EBITDA* were $5.2 million and $5.3 million, respectively;
- Management believes GRE is well-positioned to deliver strong performance in the second half of 2017 and expects GRE to
generate between $20 million and $25 million in Adjusted EBITDA* for all of 2017, exclusive of
the $9 million legal accrual;
- In Israel, Genie Energy's Afek subsidiary expects to resume drilling its Ness 10
exploratory well in the Northern region of its license area shortly;
- Genie Energy's Board of Directors has declared a quarterly dividend of $0.075 per share on
Genie Energy's Class A and Class B common stock to be paid on or about August 25, 2017.
COMMENTS OF HOWARD JONAS, CHAIRMAN AND CEO OF GENIE ENERGY
"During the second quarter, we took significant steps to accelerate Genie Retail Energy's long-term growth
trajectory. We invested successfully in new meter acquisitions – adding 12,000 net meters while continuing to diversify our
meter base. Following the quarter close, we formed a joint venture to enter our first international market – Great Britain - with over 50 million addressable electricity and gas meters. We also reached a
preliminary agreement to settle the class-action lawsuits related to the 2013-2014 polar vortex. A final settlement would
remove a source of uncertainty as we pursue exciting growth opportunities ahead. In Israel, Afek is preparing to resume drilling the Ness 10 exploratory well in the Northern portion of our
license area after an unexpected delay."
CONSOLIDATED RESULTS
|
$ in millions, except EPS
|
2Q17
|
1Q17
|
2Q16
|
|
2Q17 -2Q16
Change
(%/$)
|
|
Revenue**
|
$52.2
|
$69.4
|
$44.6
|
|
+17.2%
|
|
Gross profit
|
$13.4
|
$23.6
|
$18.1
|
|
(26.3)%
|
|
Gross margin percentage
|
25.6%
|
34.0%
|
40.7%
|
|
(1510) BP
|
|
SG&A expense (including stock-based compensation)
|
$24.7
|
$18.8
|
$15.9
|
|
+55.3%
|
|
Stock-based compensation
|
$1.1
|
$1.2
|
$1.1
|
|
+1.3%
|
|
Research and development expense
|
-
|
-
|
$0.1
|
|
$(0.1)
|
|
Exploration expense***
|
$1.0
|
$0.9
|
$1.4
|
|
(33.3)%
|
|
(Loss) income from operations
|
$(12.3)
|
$4.0
|
$1.9
|
|
$(14.2)
|
|
Adjusted EBITDA*
|
$(10.6)
|
$5.7
|
$1.9
|
|
$(12.5)
|
|
Net (loss) income attributable to Genie Energy
common stockholders
|
$(11.8)
|
$3.1
|
$2.4
|
|
$(14.2)
|
|
Diluted (loss) earnings per share attributable to Genie
Energy common stockholders
|
$(0.50)
|
$0.13
|
$0.10
|
|
$(0.60)
|
|
Capitalized exploration costs
|
$2.2
|
$1.1
|
$4.7
|
|
$(2.5)
|
|
Net cash (used in) provided by operating activities
|
$(6.9)
|
$3.6
|
$4.2
|
|
$(11.1)
|
*Adjusted EBITDA for all periods 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 and reconciliation
to the most directly comparable GAAP measure.
** Revenue and cost of revenue were adjusted in the amount of $0.6 million in 2Q16
for a correction in treatment of gross receipt tax that was previously recorded as a reduction in electricity revenue. Also, cost
of revenue in 2Q16 was increased in the amount of $0.7 million that previously was recorded as
prepaid expense.
*** Genie Energy's Afek Oil & Gas subsidiary accounts for its oil and gas exploration activities under the
"successful efforts" method of accounting. Under this method, acquisition costs, costs of drilling exploratory wells, and
exploratory-type stratigraphic test wells are capitalized on the balance sheet as "Capitalized exploration costs – unproved oil
and gas property" pending determination of whether the well has found proved reserves. Exploration costs, other than
exploration drilling costs, are charged to expense in the statement of operations as "Exploration expense".
BALANCE SHEET AND CASH FLOW HIGHLIGHTS
At June 30, 2017, Genie Energy had $121.2 million in total assets,
including $35.2 million in cash, cash equivalents and restricted cash (short and long term).
Liabilities totaled $52.3 million, and working capital (current assets less current liabilities)
totaled $39.6 million.
Genie Energy's net cash used in operating activities in 2Q17 was $6.9 million compared to net
cash provided by operating activities of $4.2 million in the year ago quarter. Cash expenditures
were driven in part by working capital requirements at Town Square.
DIVIDEND ON GENIE ENERGY COMMON STOCK
On August 2, 2017, Genie Energy's Board of Directors declared a 2Q17 dividend of
$0.075 per share of Class A and Class B common stock with a record date of August 15, 2017. The dividend will be paid on or about August 25,
2017. The ex-dividend date will be August 11, 2017. The distribution will be treated as a
return of capital for income tax purposes.
RESULTS BY SEGMENT
|
$ in millions
|
2Q17
|
1Q17
|
2Q16
|
|
2Q17-2Q16
Change
(%/$)
|
|
Genie Retail Energy
|
|
|
|
|
|
|
Total revenue**
|
$52.2
|
$69.4
|
$44.6
|
|
+17.2%
|
|
Electricity revenue**
|
$45.0
|
$52.5
|
$38.3
|
|
+17.4%
|
|
Natural gas revenue
|
$6.8
|
$16.5
|
$5.8
|
|
+17.5%
|
|
Other revenue
|
$0.4
|
$0.5
|
$0.5
|
|
(4.1)%
|
|
Gross profit
|
$13.4
|
$23.6
|
$18.1
|
|
(26.3)%
|
|
Gross margin percentage
|
25.6%
|
34.0%
|
40.7%
|
|
(1510) BP
|
|
SG&A expense
|
$21.5
|
$15.9
|
$12.9
|
|
+66.2%
|
|
(Loss) income from operations
|
$(8.2)
|
$7.7
|
$5.2
|
|
$(13.4)
|
|
Adjusted EBITDA*
|
$(7.6)
|
$8.3
|
$5.3
|
|
$(12.9)
|
|
|
|
|
|
|
|
Afek
|
|
|
|
|
|
|
G&A expense
|
$0.4
|
$0.4
|
$0.4
|
|
(0.3)%
|
|
Exploration expense***
|
$1.0
|
$0.9
|
$1.4
|
|
(33.3)%
|
|
(Loss) from operations
|
$(1.3)
|
$(1.3)
|
$(1.8)
|
|
+$0.5
|
|
Adjusted EBITDA*
|
$(1.2)
|
$(1.3)
|
$(1.8)
|
|
+$0.6
|
|
Capitalized exploration costs***
|
$2.2
|
$1.1
|
$4.7
|
|
$(2.5)
|
|
|
|
|
|
|
|
GOGAS
|
|
|
|
|
|
|
G&A expense
|
$0.1
|
$0.1
|
$0.3
|
|
(72.3)%
|
|
Research and development expense
|
-
|
-
|
$0.1
|
|
($0.1)
|
|
(Loss) income from operations
|
$(0.1)
|
$(0.1)
|
$0.8
|
|
$(0.9)
|
|
Adjusted EBITDA*
|
$(0.1)
|
$(0.1)
|
$(0.4)
|
|
+$0.3
|
|
|
|
|
|
|
|
Corporate
|
|
|
|
|
|
|
G&A expense
|
$2.8
|
$2.4
|
$2.3
|
|
+21.0%
|
|
Non-cash compensation in G&A
|
$1.0
|
$1.1
|
$1.0
|
|
(0.6)%
|
|
Loss from operations
|
$(2.8)
|
$(2.4)
|
$(2.3)
|
|
$(0.5)
|
|
Adjusted EBITDA*
|
$(1.7)
|
$(1.3)
|
$(1.3)
|
|
$(0.4)
|
|
|
|
|
|
|
Genie Retail Energy
Genie Retail Energy – 2Q17 Results of Operations
Genie Retail Energy's customer base as measured in residential customer equivalents (RCEs) increased to 289,000, while
meters served increased to 430,000, at June 30, 2017 compared to June 30,
2016. The increases in both RCEs and meters served primarily reflected strong new meter acquisition performance in the
territories GRE entered through the acquisition of Town Square Energy in November of 2016.
|
RCEs and Meters at End
of Quarter (in thousands)
|
June 30,
2017
|
March 31,
2017
|
December 31,
2016
|
September 30,
2016
|
June 30,
2016
|
|
Electricity RCEs
|
219
|
220
|
218
|
174
|
172
|
|
Natural gas RCEs
|
70
|
67
|
65
|
67
|
67
|
|
Total RCEs
|
289
|
287
|
283
|
241
|
239
|
|
|
|
|
|
|
|
Electricity meters
|
317
|
307
|
296
|
263
|
268
|
|
Natural gas meters
|
113
|
111
|
116
|
120
|
122
|
|
Total meters
|
430
|
418
|
412
|
383
|
390
|
Gross meter acquisitions in 2Q17 increased to 98,000 from 58,000 in the year ago quarter. Meters enrolled in offerings
with fixed rate characteristics constituted approximately 29% of GRE's electric load during June
2017 compared to 15% of GRE's electric load during June 2016.
GRE's average monthly customer churn increased to 6.3% in 2Q17 from 5.8% in the year ago quarter, and from 6.1% in 1Q17.
The increase reflects the higher rate of gross customer additions in recent quarters as well as the expiration of an aggregation
deal in Illinois.
As in prior quarters, GRE generated all of Genie Energy's revenue and gross profit.
GRE's revenue increased to $52.2 million in 2Q17 (including a revenue reduction of $3.6 million for estimated payments as a result of the expected legal settlement) from $44.6 million in 2Q16 on increased sales of both electricity and natural gas.
Electricity revenue increased to $45.0 million in 2Q17 from $38.3
million in 2Q16. Kilowatt hours sold increased substantially on the increase in electricity meters served and an
increase in consumption per meter. These factors more than offset a decrease in average revenue per kilowatt hour sold.
Natural gas sales increased to $6.8 million in 2Q17 from $5.8
million in 2Q16 as the underlying commodity cost increased, resulting in higher market rates and an increase in revenue
per therm sold. This increase more than offset a decrease in therms sold reflecting both a decline in gas meters served and
average consumption per meter.
GRE's gross margin percentage decreased to 25.6% in 2Q17 (including the revenue reduction for estimated payments to customers)
from 40.7% in 2Q16. The gross margin on electricity sales declined to 24.5% in 2Q17 from 38.0% in 2Q16. The average
revenue per kilowatt hour sold declined even as the underlying commodity cost increased – continuing a recent trend of
intensified competition in key markets and an increase in the proportion of customers on plans with fixed rate
characteristics.
The gross margin on natural gas sales decreased to 31.9% from 55.9% in 2Q16 reflecting a rapid escalation in the underlying
commodity cost, which more than doubled compared to the year ago quarter.
GRE's gross profit in 2Q17 was $13.4 million compared to $18.1
million in 2Q16 reflecting the narrowing of margins on sales of both electricity and natural gas and the decline in therms
sold and the revenue reduction of $3.6 million for estimated payments related to the expected legal
settlement partially offset by the increase in kWh sold.
GRE's SG&A expense increased to $21.5 million in 2Q17 from $12.9
million in 2Q16. The increase was primarily the result of $5.4 million in legal
expense recorded in 2Q17 after reaching a preliminary settlement agreement to resolve class action lawsuits stemming from the
polar vortex of the winter of 2013-2014. SG&A expense also increased due to higher meter acquisition expenses compared
to 2Q16.
The payments to customers and legal counsel pursuant to the preliminary agreement to settle the class action lawsuits are
expected to be disbursed in tranches during the first half of 2018. The actual amount to be paid out will depend on several
factors, including the number of customers who claim settlement payments.
GRE's loss from operations was $8.2 million in 2Q17 compared to income from operations of
$5.2 million in the year ago quarter reflecting the $9.0 million
legal accrual and the increased levels of customer acquisition activity, as well as the decrease in gross profit.
Adjusted EBITDA was negative $7.6 million in 2Q17 compared to Adjusted EBITDA of $5.3 million in 2Q16.
Genie Retail Energy – New York Regulatory Update
In December 2016, the New York State Public Service
Commission (NY PSC) issued an order prohibiting retail energy providers (REPs) in New York State
from serving customers enrolled in utility low-income assistance programs (low-income customers).
Certain REPs and industry groups challenged this order in the New York Supreme Court, Albany
County, on a variety of legal grounds. In late June, the Court rejected the challenges and upheld the order while
affirming the NY PSC's power to regulate the REP industry. In late July, a coalition of REPs filed a Notice of Appeal, seeking to
overturn the Court's decision. In the interim, the order took effect on July 26
th. Pending the outcome of the appeal, low-income customers in New York
are forbidden to select a REP for either their electricity or gas supply. Additionally, unless a stay of the order is
obtained, REPs will be required to return service of their current low-income customers to the relevant local incumbent utility
beginning in August.
The NY PSC has also undertaken additional initiatives which might further restrict the operations of REPs in New York State.
Afek
In April 2017, Afek spudded its sixth exploratory well, Ness 10, which is the first well
located in the portion of Afek's license area that is north of the Sheikh-Ali Fault. Reprocessed seismic and other data
indicate that the source rock containing immature organics which Afek identified in all five exploratory wells drilled in the
southern portion of the license area also extends north of the fault, but at significantly greater depths. The drilling at
Ness 10 seeks to confirm the presence of organics at the northern site and to determine whether the geological conditions
necessary to convert early-stage maturated organics to light crude are present.
In late May, drilling operations at Ness 10 were suspended following an accident at the drill site involving injuries to two
workers. Both workers are expected to make complete recoveries. Following investigations, equipment repairs and testing of
the equipment on the site, the Ministry of Energy has authorized Afek to resume operations and drilling, and Afek expects to
resume drilling within the next few days. Afek has revised its schedule of operations accordingly and plans to complete
drilling of Ness 10 as early as the third quarter.
G&A expense at Afek was $364 thousand in 2Q17, virtually unchanged from $363 thousand in 2Q16. Exploration expense was $952 thousand compared to
$1.4 million in the comparable period.
Afek's loss from operations and negative Adjusted EBITDA improved to $1.3 million and
$1.2 million, respectively, in 2Q17 from $1.8 million in 2Q16
reflecting measures taken to reduce expenses during the drilling hiatus.
During 2Q17, Afek's capitalized exploration costs were $2.2 million compared to $4.7 million in 2Q16.
Genie Oil and Gas (GOGAS)
The GOGAS segment is comprised of inactive oil shale projects. The GOGAS segment's loss from operations in 2Q17
was $94 thousand compared to income from operations of $838 thousand
in 2Q16. In 2Q16, GOGAS recognized a gain of $1.3 million from the acquisition of the joint venture
interests in AMSO, LLC that it did not own and the resulting consolidation of AMSO, LLC.
Corporate
Genie Energy's consolidated results include corporate overhead. In 2Q17, corporate G&A expense was
$2.8 million including $1.0 million in non-cash compensation compared
to G&A expense of $2.3 million including $1.0 million in non-cash
compensation in 2Q16. The G&A expense increase was primarily driven by a severance accrual.
GENIE ENERGY EARNINGS CONFERENCE CALL
This release is available for download in the "Investors" section of the Genie Energy website (www.genie.com/investors/investor-relations) and has been
filed on a current report (Form 8-K) with the SEC.
At 8:30 AM Eastern time today, August 3, 2017, 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 analysts and investors.
To participate in the call, dial toll-free 1-888-348-6472 (from the US) or 1-412-902-4240 (international) and request the
Genie Energy conference call.
A replay of the call will be available at 1-844-512-2921 (US toll free) or 1-412-317-6671 (international) through August 10, 2017. The replay identification number is: 10109946. An audio file recording of the call
- in MP3 format - will also be posted on the "Investors" section of the Genie Energy website.
Investors can sign up through the Genie Energy website http://genie.com/investors/email-alerts/ to have earnings releases and other press releases emailed directly to
them.
ABOUT GENIE ENERGY LTD.
Genie Energy Ltd. (NYSE: GNE, GNEPRA) is comprised of two operating divisions, Genie Retail Energy (GRE) and Genie Oil
and Gas (GOGAS). GRE operates retail energy providers and brokerage and marketing services. GRE's retail energy
providers market electricity and natural gas to residential and small business customers in deregulated markets in the United
States. GOGAS is a global oil and gas exploration company operating an exploratory program in Northern Israel. For
more information, visit www.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
|
|
|
|
|
|
June 30,
2017
|
December 31,
2016
|
|
(Unaudited)
|
|
|
(in thousands)
|
|
Assets
|
|
|
|
Current assets:
|
|
|
|
Cash and cash
equivalents.............................................................................................................................................
|
$ 33,430
|
$ 35,192
|
|
Restricted
cash—short-term...........................................................................................................................................
|
277
|
10,813
|
|
Trade accounts receivable, net of allowance for doubtful accounts of $456
and $171 at June 30, 2017 and December 31, 2016,
respectively...........................................................................................................................................................
|
37,507
|
36,858
|
|
Inventory...................................................................................................................................................................
|
4,719
|
5,989
|
|
Prepaid
expenses.........................................................................................................................................................
|
6,443
|
4,026
|
|
Other current
assets......................................................................................................................................................
|
5,812
|
4,932
|
|
Total current
assets............................................................................................................................................
|
88,188
|
97,810
|
|
Property and equipment,
net.....................................................................................................................................................
|
4,132
|
1,617
|
|
Capitalized exploration costs—unproved oil and gas
property.........................................................................................................
|
3,436
|
—
|
|
Goodwill..............................................................................................................................................................................
|
8,728
|
8,728
|
|
Other intangibles,
net..............................................................................................................................................................
|
3,653
|
4,277
|
|
Restricted
cash—long-term......................................................................................................................................................
|
1,489
|
1,047
|
|
Deferred income tax assets,
net.................................................................................................................................................
|
2,324
|
1,781
|
|
Other
assets...........................................................................................................................................................................
|
9,235
|
6,553
|
|
Total
assets......................................................................................................................................................
|
$ 121,185
|
$ 121,813
|
|
|
|
|
Liabilities and equity
|
|
|
|
Current liabilities:
|
|
|
|
Revolving line of
credit................................................................................................................................................
|
$
—
|
$ 711
|
|
Trade accounts
payable.................................................................................................................................................
|
15,175
|
17,274
|
|
Accrued
expenses.........................................................................................................................................................
|
26,555
|
16,301
|
|
Income taxes
payable....................................................................................................................................................
|
685
|
2,426
|
|
Due to IDT
Corporation................................................................................................................................................
|
201
|
141
|
|
Other current
liabilities.................................................................................................................................................
|
5,969
|
4,292
|
|
Total current
liabilities.......................................................................................................................................
|
48,585
|
41,145
|
|
Revolving line of
credit...........................................................................................................................................................
|
2,506
|
—
|
|
Other
liabilities......................................................................................................................................................................
|
1,237
|
803
|
|
Total
liabilities.................................................................................................................................................
|
52,328
|
41,948
|
|
Commitments and contingencies
|
|
|
|
Equity:
|
|
|
|
Genie Energy Ltd. stockholders' equity:
|
|
|
|
Preferred stock, $.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 June 30,
2017 and December 31,
2016..............................................................................................................................
|
19,743
|
19,743
|
|
Class A common stock, $.01 par value; authorized shares—35,000; 1,574
shares issued and outstanding at June 30, 2017 and
December 31,
2016.................................................................................................................................................
|
16
|
16
|
|
Class B common stock, $.01 par value; authorized shares—200,000; 23,307 and
23,274 shares issued and 23,102 and 23,073 shares
outstanding at June 30, 2017 and December 31, 2016,
respectively........................................................................
|
233
|
233
|
|
Additional paid-in
capital..............................................................................................................................................
|
129,249
|
128,243
|
|
Treasury stock, at cost, consisting of 205 shares and 201 shares of Class B
common stock at June 30, 2017 and December 31, 2016,
respectively..................................................................................................................................................
|
(1,622)
|
(1,599)
|
|
Accumulated other comprehensive
income........................................................................................................................
|
2,784
|
1,465
|
|
Accumulated deficit
....................................................................................................................................................
|
(63,993)
|
(51,567)
|
|
Total Genie Energy Ltd. stockholders'
equity.........................................................................................................
|
86,410
|
96,534
|
|
Noncontrolling interests:
|
|
|
|
Noncontrolling
interests............................................................................................................................................
|
(15,886)
|
(15,002)
|
|
Receivable for issuance of
equity.................................................................................................................................
|
(1,667)
|
(1,667)
|
|
Total noncontrolling
interests..........................................................................................................................
|
(17,553)
|
(16,669)
|
|
Total
equity.....................................................................................................................................................
|
68,857
|
79,865
|
|
Total liabilities and
equity..................................................................................................................................
|
$ 121,185
|
$ 121,813
|
|
|
|
|
|
GENIE ENERGY LTD.
|
|
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
(Unaudited)
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
|
(Revised see Note)
|
|
(Revised see
Note)
|
|
|
(in thousands, except per share data)
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Electricity............................................................................................................
|
|
$
|
44,972
|
|
$
|
38,312
|
|
$
|
97,446
|
|
$
|
83,438
|
|
|
Natural
gas........................................................................................................................
|
|
|
6,791
|
|
|
5,781
|
|
|
23,258
|
|
|
19,147
|
|
|
Other....................................................................................................................
|
|
|
449
|
|
|
468
|
|
|
949
|
|
|
856
|
|
|
Total
revenues..............................................................................................................
|
|
|
52,212
|
|
|
44,561
|
|
|
121,653
|
|
|
103,441
|
|
|
Cost of
revenues..............................................................................................................
|
|
|
38,859
|
|
|
26,446
|
|
|
84,678
|
|
|
61,278
|
|
|
Gross
profit....................................................................................................................
|
|
|
13,353
|
|
|
18,115
|
|
|
36,975
|
|
|
42,163
|
|
|
Operating expenses, (gains) and losses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative
(i)....................................................................................
|
|
|
24,742
|
|
|
15,934
|
|
|
43,544
|
|
|
31,943
|
|
|
Research and
development...................................................................................................
|
|
|
—
|
|
|
83
|
|
|
—
|
|
|
210
|
|
|
Exploration.........................................................................................................
|
|
|
952
|
|
|
1,426
|
|
|
1,803
|
|
|
3,117
|
|
|
Gain on consolidation of AMSO,
LLC......................................................................................
|
|
|
—
|
|
|
(1,262)
|
|
|
—
|
|
|
(1,262)
|
|
|
Equity in the net loss of AMSO,
LLC.......................................................................................
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
222
|
|
|
(Loss) income from
operations...........................................................................................................
|
|
|
(12,341)
|
|
|
1,934
|
|
|
(8,372)
|
|
|
7,933
|
|
|
Interest
income.............................................................................................................
|
|
|
70
|
|
|
104
|
|
|
156
|
|
|
186
|
|
|
Other expense,
net.....................................................................................................................
|
|
|
(274)
|
|
|
(27)
|
|
|
(561)
|
|
|
(162)
|
|
|
(Loss) income before income
taxes.....................................................................................................................
|
|
|
(12,545)
|
|
|
2,011
|
|
|
(8,777)
|
|
|
7,957
|
|
|
Benefit from (provision for) income
taxes................................................................................
|
|
|
700
|
|
|
(594)
|
|
|
(33)
|
|
|
(1,690)
|
|
|
Net (loss)
income.................................................................................................................
|
|
|
(11,845)
|
|
|
1,417
|
|
|
(8,810)
|
|
|
6,267
|
|
|
Net loss attributable to noncontrolling
interests.......................................................................
|
|
|
381
|
|
|
1,344
|
|
|
824
|
|
|
2,163
|
|
|
Net (loss) income attributable to Genie Energy
Ltd...................................................................................
|
|
|
(11,464)
|
|
|
2,761
|
|
|
(7,986)
|
|
|
8,430
|
|
|
Dividends on preferred
stock.................................................................................................................
|
|
|
(370)
|
|
|
(370)
|
|
|
(740)
|
|
|
(740)
|
|
|
Net (loss) income attributable to Genie Energy Ltd. common
stockholders........................................................................................................
|
|
$
|
(11,834)
|
|
$
|
2,391
|
|
$
|
(8,726)
|
|
$
|
7,690
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) earnings per share attributable to Genie Energy Ltd. common
stockholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic....................................................................................................................
|
|
$
|
(0.50)
|
|
$
|
0.10
|
|
$
|
(0.37)
|
|
$
|
0.34
|
|
|
Diluted.................................................................................................................
|
|
$
|
(0.50)
|
|
$
|
0.10
|
|
$
|
(0.37)
|
|
$
|
0.33
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average number of shares used in calculation of (loss)
earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic....................................................................................................................
|
|
|
23,467
|
|
|
22,795
|
|
|
23,458
|
|
|
22,793
|
|
|
Diluted.................................................................................................................
|
|
|
23,467
|
|
|
23,603
|
|
|
23,458
|
|
|
23,644
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends declared per common
share.............................................................................................
|
|
$
|
0.075
|
|
$
|
0.06
|
|
$
|
0.15
|
|
$
|
0.12
|
|
|
(i) Stock-based compensation included in selling, general and
administrative
expenses..............................................................................................................
|
|
$
|
1,141
|
|
$
|
1,127
|
|
$
|
2,379
|
|
$
|
2,337
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GENIE ENERGY LTD.
|
|
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
(Unaudited)
|
|
|
Six Months Ended
June 30,
|
|
2017
|
2016
|
|
|
(Revised see Note)
|
|
(in thousands)
|
|
Operating activities
|
|
|
|
Net (loss)
income.........................................................................................................................................................
|
$ (8,810)
|
$ 6,267
|
|
Adjustments to reconcile net (loss) income to net cash (used in) provided
by operating activities:
|
|
|
|
Depreciation and
amortization..........................................................................................................................................
|
1,041
|
196
|
|
Provision for doubtful accounts
receivable...............................................................................................................................................
|
186
|
—
|
|
Deferred income
taxes........................................................................................................................................................
|
(543)
|
—
|
|
Stock-based
compensation........................................................................................................................................
|
1,969
|
2,337
|
|
Loss on disposal of
property..................................................................................................................................................
|
—
|
25
|
|
Gain on consolidation of AMSO,
LLC.........................................................................................................................................................
|
—
|
(1,262)
|
|
Equity in the net loss of AMSO,
LLC.........................................................................................................................................................
|
—
|
222
|
|
Change in assets and liabilities:
|
|
|
|
Restricted
cash.........................................................................................................................................................
|
205
|
540
|
|
Trade accounts
receivable...............................................................................................................................................
|
(834)
|
(2,622)
|
|
Inventory........................................................................................................................................................
|
1,271
|
4,135
|
|
Prepaid
expenses.................................................................................................................................................
|
(2,401)
|
3,730
|
|
Other current assets and other
assets.......................................................................................................................................................
|
(3,796)
|
507
|
|
Trade accounts payable, accrued expenses and other current
liabilities..................................................................................
|
10,124
|
(1,448)
|
|
Due to IDT
Corporation............................................................................................................................................
|
60
|
(327 )
|
|
Income taxes
payable...................................................................................................................................................
|
(1,740)
|
991
|
|
Net cash (used in) provided by operating
activities...........................................................................................................................
|
(3,268)
|
13,291
|
|
Investing activities
|
|
|
|
Capital
expenditures........................................................................................................................................
|
(2,876)
|
(135)
|
|
Investments in capitalized exploration costs—unproved oil and gas
property.....................................................................
|
(3,311)
|
(12,758)
|
|
Deposit for
investment...........................................................................................................................................
|
(94)
|
—
|
|
Repayment of notes
receivable.............................................................................................................................................
|
446
|
—
|
|
Proceeds from disposal of
property................................................................................................................................................
|
—
|
27
|
|
Cash acquired from consolidation of AMSO,
LLC.........................................................................................................................................
|
—
|
702
|
|
Capital contribution to AMSO, LLC received from
Total.....................................................................................................................
|
—
|
3,000
|
|
Capital contributions to AMSO,
LLC.......................................................................................................................................................
|
—
|
(63 )
|
|
Net cash used in investing
activities..........................................................................................................................................................
|
(5,835)
|
(9,227)
|
|
Financing activities
|
|
|
|
Dividends
paid.......................................................................................................................................................
|
(4,440)
|
(3,697)
|
|
Purchase of equity of
subsidiary.............................................................................................................................................
|
(278)
|
—
|
|
Proceeds from revolving line of
credit.....................................................................................................................................................
|
14,450
|
—
|
|
Repayment of revolving line of
credit.....................................................................................................................................................
|
(12,655)
|
—
|
|
Decrease in restricted
cash.......................................................................................................................................................
|
10,000
|
—
|
|
Exercise of stock
options..................................................................................................................................................
|
109
|
—
|
|
Repurchases of Class B common stock from
employees............................................................................................................................................
|
(23)
|
(29)
|
|
Payment for
acquisitions..........................................................................................................................................
|
—
|
(183)
|
|
Net cash provided by (used in) financing
activities..........................................................................................................................................................
|
7,163
|
(3,909 )
|
|
Effect of exchange rate changes on cash and cash
equivalents.....................................................................................................................
|
178
|
(69)
|
|
Net (decrease) increase in cash and cash
equivalents.....................................................................................................................................................
|
(1,762)
|
86
|
|
Cash and cash equivalents at beginning of
period..............................................................................................................................................................
|
35,192
|
38,786
|
|
Cash and cash equivalents at end of
period..............................................................................................................................................................
|
$ 33,430
|
$ 38,872
|
|
|
|
Reconciliation of Non-GAAP Financial Measures for the Second Quarter 2017 and 2016
In addition to disclosing financial results that are determined in accordance with generally accepted accounting principles in
the United States of America (GAAP), Genie Energy also disclosed for the second quarter of 2017,
as well as for comparable periods, Adjusted EBITDA, which is a non-GAAP measure. Generally, a non-GAAP financial measure is a
numerical measure of a company's performance, financial position, or cash flows that either excludes or includes amounts that are
not normally excluded or included in the most directly comparable measure calculated and presented in accordance with GAAP.
Genie Energy's measure of Adjusted EBITDA consists of gross profit less selling, general and administrative expense, research
and development expense, exploration expense and equity in the net loss of AMSO, LLC, plus depreciation, amortization and
stock-based compensation (which are included in selling, general and administrative expense). Another way of calculating Adjusted
EBITDA is to start with income (loss) from operations and add depreciation, amortization, and stock-based compensation, and
deduct the gain on consolidation of AMSO, LLC.
Management believes that Genie Energy's Adjusted EBITDA provides useful information to both management and investors by
excluding certain expenses and gains that may not be indicative of Genie Energy's or the relevant segment's core operating
results. Management uses Adjusted EBITDA, among other measures, as a relevant indicator of core operational strengths in its
financial and operational decision making. In addition, management uses Adjusted EBITDA to evaluate operating performance in
relation to Genie Energy's competitors. Disclosure of this financial measure may be useful to investors in evaluating performance
and allows for greater transparency to the underlying supplemental information used by management in its financial and
operational decision-making. In addition, Genie Energy has historically reported Adjusted EBITDA and believes it is commonly used
by readers of financial information in assessing performance, therefore the inclusion of comparative numbers provides consistency
in financial reporting at this time.
Management refers to Adjusted EBITDA, as well as the GAAP measures gross profit, income (loss) from operations and net income
(loss), on a segment and/or consolidated level to facilitate internal and external comparisons to the segments' and Genie
Energy's historical operating results, in making operating decisions, for budget and planning purposes, and to form the basis
upon which management is compensated.
Although depreciation and amortization are considered operating costs under GAAP, they primarily represent the non-cash
current period allocation of costs associated with long-lived assets acquired or constructed in prior periods. While Genie Energy's oil and gas exploration business may be capital intensive, Genie Energy does not expect to
incur significant depreciation or depletion expense for the foreseeable future. Genie Energy's operating results exclusive of
depreciation and amortization is therefore a useful indicator of its current performance.
Stock-based compensation recognized by Genie Energy and other companies may not be comparable because of the various valuation
methodologies, subjective assumptions and the variety of types of awards that are permitted under GAAP. Stock-based compensation
is excluded from Genie Energy's calculation of Adjusted EBITDA because management believes this allows investors to make more
meaningful comparisons of the operating results of Genie Energy's core business with the results of other companies. However,
stock-based compensation will continue to be a significant expense for Genie Energy for the foreseeable future and an important
part of employees' compensation that impacts their performance.
The gain on consolidation of AMSO, LLC, which is a component of income from operations, is excluded from the calculation of
Adjusted EBITDA. Genie Energy's equity in the net loss of AMSO, LLC was included in Adjusted EBITDA because it was the result of
ongoing operations of AMSO, LLC. The gain on consolidation of AMSO, LLC was a non-routine result of Total's withdrawal from AMSO,
LLC. The gain is not part of Genie Energy's or the relevant segment's core operating results.
Adjusted EBITDA should be considered in addition to, not as a substitute for, or superior to, gross profit, income (loss) from
operations, cash flow from operating activities, net income (loss), basic and diluted earnings (loss) per share or other measures
of liquidity and financial performance prepared in accordance with GAAP. In addition, Genie Energy's measurements of Adjusted
EBITDA may not be comparable to similarly titled measures reported by other companies.
Following is the reconciliation of Adjusted EBITDA to the most directly comparable GAAP measure, which is income (loss) from
operations for Genie Energy's reportable segments and net income (loss) for Genie Energy on a consolidated basis.
|
Genie Energy Ltd.
|
|
Reconciliation of Adjusted EBITDA to Net (Loss) Income
|
|
(unaudited)
|
|
$ in thousands
|
|
|
Total
|
|
Genie
Retail
Energy
|
GOGAS
|
Afek
|
Corporate
|
|
Three Months Ended June 30, 2017
(2Q17)
|
|
|
|
|
|
|
|
Adjusted EBITDA
|
$ (10,628)
|
|
$ (7,631)
|
$ (89)
|
$ (1,170)
|
$ (1,738)
|
|
Subtract:
|
|
|
|
|
|
|
|
Stock-based compensation
|
1,141
|
|
114
|
-
|
-
|
1,027
|
|
Depreciation and amortization
|
572
|
|
422
|
5
|
145
|
-
|
|
Loss from operations
|
(12,341)
|
|
$ (8,167)
|
$ (94)
|
$ (1,315)
|
$ (2,765)
|
|
Interest income
|
70
|
|
|
|
|
|
|
Other expense, net
|
(274)
|
|
|
|
|
|
|
Benefit from income taxes
|
700
|
|
|
|
|
|
|
Net loss
|
(11,845)
|
|
|
|
|
|
|
Net loss attributable to noncontrolling interests
|
381
|
|
|
|
|
|
|
Net loss attributable to Genie Energy Ltd.
|
$ (11,464)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
Genie Retail Energy
|
GOGAS
|
Afek
|
Corporate
|
|
Three Months Ended March 31, 2017
(1Q17)
|
|
|
|
|
|
|
|
Adjusted EBITDA
|
$ 5,677
|
|
$ 8,296
|
$ (86)
|
$ (1,253)
|
$ (1,280)
|
|
Subtract:
|
|
|
|
|
|
|
|
Stock-based compensation
|
1,238
|
|
118
|
6
|
-
|
1,114
|
|
Depreciation and amortization
|
471
|
|
432
|
6
|
33
|
-
|
|
Income (loss) from operations
|
3,968
|
|
$ 7,746
|
$ (98)
|
$ (1,286)
|
$ (2,394)
|
|
Interest income
|
86
|
|
|
|
|
|
|
Other expense, net
|
(287)
|
|
|
|
|
|
|
Provision for income taxes
|
(733)
|
|
|
|
|
|
|
Net income
|
3,034
|
|
|
|
|
|
|
Net loss attributable to noncontrolling interests
|
443
|
|
|
|
|
|
|
Net income attributable to Genie Energy Ltd.
|
$ 3,477
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
Genie Retail Energy
|
GOGAS
|
Afek
|
Corporate
|
|
Three Months Ended June 30, 2016
(2Q16)
|
|
|
|
|
|
|
|
Adjusted EBITDA
|
$ 1,898
|
|
$ 5,305
|
$ (400)
|
$ (1,756)
|
$ (1,251)
|
|
Subtract (Add):
|
|
|
|
|
|
|
|
Stock-based compensation
|
1,127
|
|
78
|
16
|
-
|
1,033
|
|
Depreciation
|
99
|
|
59
|
8
|
32
|
-
|
|
Gain on consolidation of AMSO, LLC
|
(1,262)
|
|
-
|
(1,262)
|
-
|
-
|
|
Income (loss) from operations
|
1,934
|
|
$ 5,168
|
$ 838
|
$ (1,788)
|
$ (2,284)
|
|
Interest income
|
104
|
|
|
|
|
|
|
Other expense, net
|
(27)
|
|
|
|
|
|
|
Provision for income taxes
|
(594)
|
|
|
|
|
|
|
Net income
|
1,417
|
|
|
|
|
|
|
Net loss attributable to noncontrolling interests
|
1,344
|
|
|
|
|
|
|
Net income attributable to Genie Energy Ltd.
|
$ 2,761
|
|
|
|
|
|
|
Genie Energy Ltd.
|
|
Reconciliation of Adjusted EBITDA to Net (Loss) Income
|
|
(unaudited)
|
|
$ in thousands
|
|
|
Total
|
|
Genie
Retail
Energy
|
GOGAS
|
Afek
|
Corporate
|
|
Six Months Ended June 30, 2017
|
|
|
|
|
|
|
|
Adjusted EBITDA
|
$ (4,952)
|
|
$ 665
|
$ (175)
|
$ (2,423)
|
$ (3,019)
|
|
Subtract:
|
|
|
|
|
|
|
|
Stock-based compensation
|
2,379
|
|
232
|
6
|
-
|
2,141
|
|
Depreciation and amortization
|
1,041
|
|
853
|
10
|
178
|
-
|
|
Loss from operations
|
(8,372)
|
|
$ (420)
|
$ (191)
|
$ (2,601)
|
$ (5,160)
|
|
Interest income
|
156
|
|
|
|
|
|
|
Other expense, net
|
(561)
|
|
|
|
|
|
|
Provision for income taxes
|
(33)
|
|
|
|
|
|
|
Net loss
|
(8,810)
|
|
|
|
|
|
|
Net loss attributable to noncontrolling interests
|
824
|
|
|
|
|
|
|
Net loss attributable to Genie Energy Ltd.
|
$ (7,986)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
Genie Retail Energy
|
GOGAS
|
Afek
|
Corporate
|
|
Six Months Ended June 30, 2016
|
|
|
|
|
|
|
|
Adjusted EBITDA
|
$ 9,204
|
|
$ 16,180
|
$ (853)
|
$ (3,552)
|
$ (2,571)
|
|
Subtract (Add):
|
|
|
|
|
|
|
|
Stock-based compensation
|
2,337
|
|
196
|
25
|
-
|
2,116
|
|
Depreciation
|
196
|
|
118
|
15
|
63
|
-
|
|
Gain on consolidation of AMSO, LLC
|
(1,262)
|
|
-
|
(1,262)
|
-
|
-
|
|
Income (loss) from operations
|
7,933
|
|
$ 15,866
|
$ 369
|
$ (3,615)
|
$ (4,687)
|
|
Interest income
|
186
|
|
|
|
|
|
|
Other expense, net
|
(162)
|
|
|
|
|
|
|
Provision for income taxes
|
(1,690)
|
|
|
|
|
|
|
Net income
|
6,267
|
|
|
|
|
|
|
Net loss attributable to noncontrolling interests
|
2,163
|
|
|
|
|
|
|
Net income attributable to Genie Energy Ltd.
|
$ 8,430
|
|
|
|
|
|
View original content with multimedia:http://www.prnewswire.com/news-releases/genie-energy-ltd-reports-second-quarter-2017-results-300498934.html
SOURCE Genie Energy Ltd.