NEWARK, N.J., Nov. 2, 2017 /PRNewswire/ -- Genie Energy Ltd.
(NYSE: GNE, GNEPRA) reported third quarter 2017 revenue of $69.5 million and earnings of
$0.02 per basic and diluted share.
3Q17 OPERATIONAL AND FINANCIAL HIGHLIGHTS
(All results are for 3Q17 and are compared to 3Q16 unless otherwise noted)
- The Genie Energy Board of Directors has appointed Michael Stein, the Company's Chief
Operating Officer and CEO of Genie Retail Energy (GRE), as the CEO of Genie Energy Ltd., effective immediately.
Howard Jonas will continue to serve as Chairman of the Board of Genie Energy.
- Genie Retail Energy added a net thirty-six thousand RCEs and sixteen thousand meters during 3Q17 through both meter
acquisition programs and the previously announced acquisition of Mirabito Natural Gas, a Florida-based commercial gas supplier;
- GRE increased revenue to $69.5 million from $57.2 million
(+21.6%). 3Q17 was GRE's sixth consecutive quarter of year-over-year revenue increases;
- GRE contributed income from operations of $4.8 million and Adjusted EBITDA* of
$5.4 million, while investing significantly in new customer acquisition. In 3Q16, income
from operations and Adjusted EBITDA were $7.9 million and $8.0
million, respectively;
- Consolidated income from operations was $1.4 million compared to a loss from operations of
$37.1 million. Consolidated Adjusted EBITDA was $3.3 million
compared to $5.2 million in 3Q16;
- In Israel, Genie Energy's Afek subsidiary continues to work toward a revised target
depth at its first exploratory well in the Northern portion of its license area;
- 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 November 17,
2017.
COMMENTS OF MICHAEL STEIN, CEO OF GENIE ENERGY
"Genie Retail Energy achieved outsized increases in our customer base during the third quarter acquiring meters
organically and through a strategic acquisition. In the past year, we have increased our RCE base by 35% to 325,000 – the
highest level since before the Polar Vortex early in 2014. We also continue to diversify our geographic base and portfolio
of product offerings. In Israel, we expect to complete drilling the Ness 10 exploratory
well and report preliminary results with our fourth quarter and year end results.
"I want to thank Howard Jonas and Genie's Board of Directors for the honor and privilege of
leading the outstanding Genie organization. With our retail energy business poised to open new markets and Afek drilling
Ness 10, I'm looking forward to working with the Board and our management teams to fully exploit the abundant opportunities
before us. I appreciate the confidence shown in me, and I am excited to help achieve our goals."
|
CONSOLIDATED RESULTS
|
|
|
|
|
|
|
|
$ in millions, except EPS
|
3Q17
|
2Q17**
|
3Q16
|
|
3Q17 -3Q16
Change
(%/$)
|
|
Revenue
|
$69.5
|
$50.2
|
$57.2
|
|
+21.6%
|
|
Gross profit
|
$21.8
|
$12.1
|
$20.2
|
|
+7.8%
|
|
Gross margin percentage
|
31.3%
|
24.1%
|
35.4%
|
|
(410) BP
|
|
SG&A expense (including stock-based compensation)
|
$19.5
|
$24.7
|
$14.9
|
|
+30.3%
|
|
Stock-based compensation
|
$1.4
|
$1.1
|
$1.2
|
|
+21.6%
|
|
Exploration expense***
|
$0.8
|
$1.0
|
$1.3
|
|
(43.0)%
|
|
Write-off of capitalized exploration costs
|
-
|
-
|
$41.0
|
|
$(41.0)
|
|
Income (loss) from operations
|
$1.4
|
$(13.6)
|
$(37.1)
|
|
+$38.5
|
|
Adjusted EBITDA*
|
$3.3
|
$(11.9)
|
$5.2
|
|
(36.5)%
|
|
Net income (loss) attributable to Genie Energy
common stockholders
|
$0.4
|
$(12.9)
|
$(32.5)
|
|
$32.9
|
|
Diluted earnings (loss) per share attributable to Genie
Energy common stockholders
|
$0.02
|
$(0.55)
|
$(1.43)
|
|
+$1.45
|
|
Capitalized exploration costs
|
$2.3
|
$2.2
|
$0.1
|
|
+$2.2
|
|
Net cash provided by (used in) operating activities
|
$6.6
|
$(6.9)
|
$(1.7)
|
|
+$8.3
|
*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.
** Genie Energy identified an error in its reported financial statements for 1Q17 and 2Q17. The error impacted
revenue by $2.0 million, gross profit, income (loss) from operations and Adjusted EBITDA by
$1.2 million and net income by $1.1 million. The error caused an
understatement by those amounts in 1Q17, and an overstatement by the same amounts in 2Q17, resulting in no impact for the
six-month period ended June 30, 2017. The results in the table above are the corrected
amounts. Genie Energy will be filing amended Forms 10-Q for the first and second quarters of 2017 to reflect the correction
of the error.
*** 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 September 30, 2017, Genie Energy had $120.2 million in total
assets, including $31.1 million in cash, cash equivalents and restricted cash (short and long
term). Liabilities totaled $50.9 million, and working capital (current assets less current
liabilities) totaled $33.0 million.
Genie Energy's net cash provided by operating activities in 3Q17 was $6.6 million compared to
net cash used in operating activities of $1.7 million in the year ago quarter.
DIVIDEND ON GENIE ENERGY COMMON STOCK
Genie Energy's Board of Directors has declared a 3Q17 dividend of $0.075 per share of
Class A and Class B common stock with a record date of November 13, 2017. The dividend will
be paid on or about November 17, 2017. The distribution will be treated as a return of
capital for income tax purposes.
|
RESULTS BY SEGMENT
|
|
|
$ in millions
|
3Q17
|
2Q17**
|
3Q16
|
|
3Q17-3Q16
Change (%/$)
|
|
Genie Retail Energy
|
|
|
|
|
|
|
Total revenue
|
$69.5
|
$50.2
|
$57.2
|
|
+21.6%
|
|
Electricity revenue
|
$66.2
|
$44.5
|
$55.1
|
|
+20.2%
|
|
Natural gas revenue
|
$2.8
|
$5.3
|
$1.8
|
|
+57.8%
|
|
Other revenue
|
$0.5
|
$0.4
|
$0.3
|
|
+50.8%
|
|
Gross profit
|
$21.8
|
$12.1
|
$20.2
|
|
+7.8%
|
|
Gross margin percentage
|
31.3%
|
24.1%
|
35.4%
|
|
(410) BP
|
|
SG&A expense
|
$16.8
|
$21.5
|
$12.3
|
|
+36.8%
|
|
Income (loss) from operations
|
$4.8
|
$(9.4)
|
$7.9
|
|
$(3.1)
|
|
Adjusted EBITDA
|
$5.4
|
$(8.9)
|
$8.0
|
|
$(2.6)
|
|
|
|
|
|
|
|
Afek
|
|
|
|
|
|
|
G&A expense
|
$0.3
|
$0.4
|
$0.3
|
|
(14.4)%
|
|
Exploration expense
|
$0.8
|
$1.0
|
$1.3
|
|
(43.0)%
|
|
Write-off of capitalized exploration costs
|
-
|
-
|
$41.0
|
|
$(41.0)
|
|
(Loss) from operations
|
$(1.0)
|
$(1.3)
|
$(42.7)
|
|
+$41.7
|
|
Adjusted EBITDA
|
$(1.0)
|
$(1.2)
|
$(1.6)
|
|
+$0.6
|
|
Capitalized exploration costs
|
$2.3
|
$2.2
|
$0.1
|
|
+$2.2
|
|
|
|
|
|
|
|
GOGAS
|
|
|
|
|
|
|
G&A expense
|
$0.2
|
$0.1
|
$0.1
|
|
+7.3%
|
|
(Loss) income from operations
|
$(0.2)
|
$(0.1)
|
$(0.1)
|
|
$(0.1)
|
|
Adjusted EBITDA
|
$(0.1)
|
$(0.1)
|
$(0.1)
|
|
-
|
|
|
|
|
|
|
|
Corporate
|
|
|
|
|
|
|
G&A expense
|
$2.2
|
$2.8
|
$2.2
|
|
+0.9%
|
|
Non-cash compensation in G&A
|
$1.2
|
$1.0
|
$1.1
|
|
+11.5%
|
|
Loss from operations
|
$(2.2)
|
$(2.8)
|
$(2.2)
|
|
-
|
|
Adjusted EBITDA
|
$(1.0)
|
$(1.7)
|
$(1.1)
|
|
$0.1
|
Genie Retail Energy
Genie Retail Energy's customer base as measured in residential customer equivalents (RCEs) increased to 325,000 at
September 30, 2017 while meters served increased to 446,000. The sequential increases in RCEs
and meters served reflected organic growth as well as the 12,800 natural gas RCEs and 900 natural gas meters acquired in 3Q17
from Mirabito Natural Gas.
|
RCEs and Meters at End
of Quarter (in thousands)
|
September 30,
2017
|
June 30,
2017
|
March 31,
2017
|
December 31,
2016
|
September 30,
2016
|
|
Electricity RCEs
|
243
|
219
|
220
|
218
|
174
|
|
Natural gas RCEs
|
82
|
70
|
67
|
65
|
67
|
|
Total RCEs
|
325
|
289
|
287
|
283
|
241
|
|
|
|
|
|
|
|
Electricity meters
|
330
|
317
|
307
|
296
|
263
|
|
Natural gas meters
|
116
|
113
|
111
|
116
|
120
|
|
Total meters
|
446
|
430
|
418
|
412
|
383
|
Gross meter acquisitions in 3Q17 increased to 111,000 from 58,000 in the year ago quarter.
Meters enrolled in offerings with fixed rate characteristics constituted approximately 36% of GRE's load during September 2017 compared to 13% of GRE's load during September 2016.
GRE's average monthly customer churn increased to 6.9% in 3Q17 from 6.0% in the year ago quarter, and from 6.3% in 2Q17.
The increase reflects the higher rate of gross customer additions in recent quarters, as newly acquired customers tend to have
higher rates of churn than longer term customers.
As in prior quarters, GRE generated all of Genie Energy's revenue and gross profit.
GRE's revenue increased to $69.5 million in 3Q17 from $57.2
million in 3Q16. Revenue from electricity sales increased to $66.2 million from
$55.1 million primarily reflecting a 13.4% increase in electricity consumption resulting from the
increase in electricity meters served augmented by an increase in revenue per kilowatt hour sold as the price of the underling
commodity increased. Natural gas sales increased to $2.8 million from $1.8 million in 3Q16 reflecting an increase in revenue per therm sold and the sales generated by Mirabito
Natural Gas following its acquisition.
During the current quarter, the company accrued $1.5 million related to a pending regulatory
matter in New Jersey. The accrual reduced revenue by $1.3 million
with the remaining 200 thousand dollars being recorded to selling, general and administrative
expense.
GRE's gross profit in 3Q17 increased to $21.8 million from $20.2
million in 3Q16. The gross profit on electricity sales increased to $20.9 million from
$20.0 million primarily reflecting the increase in electricity consumption from the larger customer
base which more than offset the decrease in gross margin percentage on electricity sales. The gross profit on natural gas
sales was $525 thousand in 3Q17 compared to negative gross profit of $48
thousand in 3Q16 as the increase in natural gas revenue outpaced the increase in the underlying commodity cost.
GRE's gross margin percentage decreased to 31.3% in 3Q17 from 35.4% in 3Q16 as average revenue per kilowatt hour increased
more slowly than average unit cost of electricity, partially offset by improved margins on natural gas sales.
GRE's SG&A expense increased to $16.8 million from $12.3
million in 3Q16 primarily due to an increase in customer acquisition costs as a result of the 53 thousand additional gross
meter acquisitions in 3Q17 compared to 3Q16.
GRE's income from operations decreased to $4.8 million and Adjusted EBITDA decreased to
$5.4 million in 3Q17 from $7.9 million and $8.0 million, respectively, in the year ago quarter primarily as a result of the increase in customer
acquisition costs.
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).
Challenges to the order filed by certain REPs and industry groups in New York State courts
delayed implementation, but ultimately the State courts upheld the order and the NY PSC instructed the utilities and REPs to
begin implementation in September.
On October 20th, a federal appeals court issued a temporary stay of the order pursuant to a
federal class-action lawsuit filed in August on behalf of the class of low-income customers negatively impacted by the NY PSC's
order. The suit alleges that the NY PSC's order violates the plaintiff's privacy rights by requiring disclosure of
their financial status. The court stayed the order until a three-judge panel can convene to hear the matter. A ruling
is expected shortly. The New York customer base of the REPs operated by GRE contains a significant number of customers who
would be covered by the order. If legal challenges to the NY PSC's order are not successful and the order is implemented in its
current form, the combination of customers that Genie Energy would be required to return to their local utilities and the smaller
addressable market in New York would materially impact Genie Energy's future results.
Separately, the NY PSC has launched an evidentiary proceeding intended to provide a basis for additional restrictions on the
REP industry and competitive retail energy markets. The NY PSC is gathering written testimony and has scheduled a public
hearing for November 29, 2017. On October 26, the REPs that had been
actively participating in the proceeding jointly filed a motion asking the NY PSC to consider commencing confidential settlement
negotiations between the parties in an attempt to resolve the outstanding issues.
Afek
In April 2017, Afek spudded its sixth exploratory well. Ness 10 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 in which Afek discovered immature organics 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. Ness 10 seeks to confirm
the presence of organics at the northern site and to determine whether the additional depth and other geological conditions
necessary to convert early-stage maturated organics to light crude are present.
Afek planned to drill Ness 10 to a target depth of 1900 meters based on its initial geologic models. Drilling has now reached
this target depth. However, the data gathered during drilling operations suggest that the potential source rock may lie
deeper, extending from approximately 1900 to 2400 meters. Afek has begun drilling toward a new target depth of 2400
meters.
G&A expense at Afek decreased to $257 thousand in 3Q17 from $301
thousand in 3Q16. Exploration expense was $754 thousand compared to $1.3 million in the comparable period.
Afek generated a loss from operations of $1.0 million, and Adjusted EBITDA of negative
$963 thousand in 3Q17, compared to a loss from operations of $42.7
million (including the impact of a write-off of capitalized exploration costs of $41.0
million) and Adjusted EBITDA of negative $1.6 million, in 3Q16. During 3Q17, Afek's
capitalized exploration costs were $2.3 million compared to $126
thousand in 3Q16.
Genie Oil and Gas (GOGAS)
The GOGAS segment is comprised of inactive oil shale projects. The GOGAS segment's loss from operations
increased in 3Q17 to $158 thousand from $148 thousand in 3Q16.
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, November 2, 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 investors.
To participate in the conference call, dial toll-free 1-888-348-6472 (from the US) or 1-412-902-4240 (international) and
request the Genie Energy conference call.
The call replay will be available at 1-844-512-2921 (US toll free) or 1-412-317-6671 (international) through November
9th. The replay PIN is: 10113166. A recording of the call - in MP3 format - will also be available for playback 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
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
2017
|
|
December 31,
2016
|
|
(Unaudited)
|
|
(in thousands)
|
|
Assets
|
|
|
|
|
Current assets:
|
|
|
|
|
Cash and cash
equivalents.............................................................................................................................................
|
$ 29,390
|
|
$ 35,192
|
|
Restricted
cash—short-term...........................................................................................................................................
|
206
|
|
10,813
|
|
Trade accounts receivable, net of allowance for doubtful accounts of $730
and $171 at September 30, 2017 and
December 31, 2016,
respectively.................................................................................................................................
|
34,699
|
|
36,858
|
|
Inventory.........................................................................................................................................................................
|
4,861
|
|
5,989
|
|
Prepaid
expenses...........................................................................................................................................................
|
7,249
|
|
4,026
|
|
Other current
assets.......................................................................................................................................................
|
3,790
|
|
4,932
|
|
|
|
|
|
Total current
assets.............................................................................................................................................
|
80,195
|
|
97,810
|
|
Property and equipment,
net...................................................................................................................................................
|
4,194
|
|
1,617
|
|
Capitalized exploration costs—unproved oil and gas
property................................................................................................
|
5,741
|
|
—
|
|
Goodwill...................................................................................................................................................................................
|
9,998
|
|
8,728
|
|
Other intangibles,
net..............................................................................................................................................................
|
5,202
|
|
4,277
|
|
Investment in joint
venture.......................................................................................................................................................
|
1,117
|
|
—
|
|
Restricted
cash—long-term.....................................................................................................................................................
|
1,491
|
|
1,047
|
|
Deferred income tax assets,
net..............................................................................................................................................
|
2,324
|
|
1,781
|
|
Other
assets............................................................................................................................................................................
|
9,948
|
|
6,553
|
|
|
|
|
|
Total
assets.........................................................................................................................................................
|
$ 120,210
|
|
$ 121,813
|
|
|
|
|
|
Liabilities and equity
|
|
|
|
|
Current liabilities:
|
|
|
|
|
Revolving line of
credit..................................................................................................................................................
|
$
—
|
|
$ 711
|
|
Trade accounts
payable................................................................................................................................................
|
15,341
|
|
17,274
|
|
Accrued
expenses.........................................................................................................................................................
|
27,322
|
|
16,301
|
|
Income taxes
payable....................................................................................................................................................
|
1,105
|
|
2,426
|
|
Due to IDT
Corporation.................................................................................................................................................
|
193
|
|
141
|
|
Other current
liabilities..................................................................................................................................................
|
3,256
|
|
4,292
|
|
|
|
|
|
Total current
liabilities.........................................................................................................................................
|
47,217
|
|
41,145
|
|
Revolving line of
credit...........................................................................................................................................................
|
2,512
|
|
—
|
|
Other
liabilities........................................................................................................................................................................
|
1,218
|
|
803
|
|
|
|
|
|
Total
liabilities.....................................................................................................................................................
|
50,947
|
|
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
September 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 September 30, 2017 and
December 31,
2016.................................................................................................................................................
|
16
|
|
16
|
|
Class B common stock, $.01 par value; authorized shares—200,000; 23,601 and
23,274 shares issued and 23,270 and 23,073 shares
outstanding at September 30, 2017 and December 31, 2016,
respectively..................................................................
|
236
|
|
233
|
|
Additional paid-in
capital..............................................................................................................................................
|
131,778
|
|
128,243
|
|
Treasury stock, at cost, consisting of 331 shares and 201 shares of Class B
common stock at September 30, 2017 and December 31,
2016,
respectively.........................................................................................................................................................
|
(2,428)
|
|
(1,599)
|
|
Accumulated other comprehensive
income........................................................................................................................
|
2,813
|
|
1,465
|
|
Accumulated deficit
...........................................................................................................................................................
|
(65,449)
|
|
(51,567)
|
|
|
|
|
|
Total Genie Energy Ltd. stockholders'
equity..........................................................................................................
|
86,709
|
|
96,534
|
|
Noncontrolling interests:
|
|
|
|
|
Noncontrolling
interests....................................................................................................................................................
|
(15,779)
|
|
(15,002)
|
|
Receivable for issuance of
equity....................................................................................................................................
|
(1,667)
|
|
(1,667)
|
|
|
|
|
|
Total noncontrolling
interests................................................................................................................................
|
(17,446)
|
|
(16,669)
|
|
|
|
|
|
Total
equity..............................................................................................................................................................
|
69,263
|
|
79,865
|
|
|
|
|
|
Total liabilities and
equity......................................................................................................................................
|
$ 120,210
|
|
$ 121,813
|
|
|
|
|
|
|
|
|
|
|
GENIE ENERGY LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
(in thousands, except per share data)
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Electricity..................................................................................................................
|
|
$
|
66,189
|
|
$
|
55,057
|
|
$
|
163,636
|
|
$
|
138,494
|
|
Natural
gas...............................................................................................................
|
|
|
2,787
|
|
|
1,766
|
|
|
26,045
|
|
|
20,913
|
|
Other........................................................................................................................
|
|
|
497
|
|
|
330
|
|
|
1,445
|
|
|
1,186
|
|
Total
revenues..............................................................................................................
|
|
|
69,473
|
|
|
57,153
|
|
|
191,126
|
|
|
160,593
|
|
Cost of
revenues...........................................................................................................
|
|
|
(47,694)
|
|
|
(36,946)
|
|
|
(132,371)
|
|
|
(98,223)
|
|
Gross
profit...................................................................................................................
|
|
|
21,779
|
|
|
20,207
|
|
|
58,755
|
|
|
62,370
|
|
Operating expenses, (gains) and losses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative
(i).......................................................................
|
|
|
19,464
|
|
|
14,945
|
|
|
63,008
|
|
|
46,888
|
|
Research and
development......................................................................................
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
210
|
|
Exploration................................................................................................................
|
|
|
753
|
|
|
1,323
|
|
|
2,556
|
|
|
4,439
|
|
Gain on consolidation of AMSO,
LLC........................................................................
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,262)
|
|
Equity in the net loss of joint
ventures......................................................................
|
|
|
159
|
|
|
—
|
|
|
159
|
|
|
222
|
|
Write-off of capitalized exploration
costs...................................................................
|
|
|
—
|
|
|
41,041
|
|
|
—
|
|
|
41,041
|
|
Income (loss) from
operations......................................................................................
|
|
|
1,403
|
|
|
(37,102)
|
|
|
(6,968)
|
|
|
(29,168)
|
|
Interest
income.........................................................................................................
|
|
|
51
|
|
|
70
|
|
|
207
|
|
|
257
|
|
Other (expense) income,
net....................................................................................
|
|
|
(58)
|
|
|
333
|
|
|
(620)
|
|
|
171
|
|
Income (loss) before income
taxes...............................................................................
|
|
|
1,396
|
|
|
(36,699)
|
|
|
(7,381)
|
|
|
(28,740)
|
|
Provision for income
taxes........................................................................................
|
|
|
(421)
|
|
|
(475)
|
|
|
(453)
|
|
|
(2,165)
|
|
Net income
(loss).........................................................................................................
|
|
|
975
|
|
|
(37,174)
|
|
|
(7,834)
|
|
|
(30,905)
|
|
Net (income) loss attributable to noncontrolling
interests.........................................
|
|
|
(197)
|
|
|
5,035
|
|
|
626
|
|
|
7,198
|
|
Net income (loss) attributable to Genie Energy
Ltd.....................................................
|
|
|
778
|
|
|
(32,139)
|
|
|
(7,208)
|
|
|
(23,707)
|
|
Dividends on preferred
stock...................................................................................
|
|
|
(370)
|
|
|
(370)
|
|
|
(1,111)
|
|
|
(1,111)
|
|
Net income (loss) attributable to Genie Energy Ltd. common
stockholders.................
|
|
$
|
408
|
|
$
|
(32,509)
|
|
$
|
(8,319)
|
|
$
|
(24,818)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per share attributable to Genie Energy Ltd. common
stockholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic.......................................................................................................................
|
|
$
|
0.02
|
|
$
|
(1.43)
|
|
$
|
(0.35)
|
|
$
|
(1.09)
|
|
Diluted....................................................................................................................
|
|
$
|
0.02
|
|
$
|
(1.43)
|
|
$
|
(0.35)
|
|
$
|
(1.09)
|
|
Weighted-average number of shares used in calculation of earnings (loss)
per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic.....................................................................................................................
|
|
|
23,567
|
|
|
22,813
|
|
|
23,495
|
|
|
22,800
|
|
Diluted..................................................................................................................
|
|
|
24,158
|
|
|
22,813
|
|
|
23,495
|
|
|
22,800
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends declared per common
share....................................................................
|
|
$
|
0.075
|
|
$
|
0.06
|
|
$
|
0.225
|
|
$
|
0.18
|
|
(i) Stock-based compensation included in selling, general and
administrative
expenses
|
|
$
|
1,411
|
|
$
|
1,161
|
|
$
|
3,790
|
|
$
|
3,497
|
|
GENIE ENERGY LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
|
|
|
|
|
Nine Months Ended
September 30,
|
|
2017
|
|
2016
|
|
(in thousands)
|
|
Operating activities
|
|
|
|
|
Net
loss................................................................................................................................................................
|
$ (7,834)
|
|
$ (30,905)
|
|
Adjustments to reconcile net loss to net cash provided by operating
activities:
|
|
|
|
|
Depreciation and
amortization.........................................................................................................................
|
1,528
|
|
294
|
|
Provision for doubtful accounts
receivable......................................................................................................
|
392
|
|
5
|
|
Deferred income
taxes....................................................................................................................................
|
(543)
|
|
—
|
|
Stock-based
compensation.............................................................................................................................
|
3,796
|
|
3,497
|
|
Write-off of capitalized exploration
costs.........................................................................................................
|
—
|
|
41,041
|
|
Gain from repayment of revolving credit loan
payable....................................................................................
|
—
|
|
(200)
|
|
Loss on disposal of
property...........................................................................................................................
|
—
|
|
25
|
|
Gain on consolidation of AMSO,
LLC..............................................................................................................
|
—
|
|
(1,262)
|
|
Equity in the net loss of joint
ventures.............................................................................................................
|
159
|
|
222
|
|
Change in assets and liabilities:
|
|
|
|
|
Restricted
cash...............................................................................................................................................
|
181
|
|
1,295
|
|
Trade accounts
receivable.............................................................................................................................
|
2,275
|
|
(5,904)
|
|
Inventory.........................................................................................................................................................
|
1,128
|
|
4,599
|
|
Prepaid
expenses...........................................................................................................................................
|
(3,150)
|
|
3,996
|
|
Other current assets and other
assets...........................................................................................................
|
(2,127)
|
|
2,941
|
|
Trade accounts payable, accrued expenses and other current
liabilities.......................................................
|
8,840
|
|
(9,105)
|
|
Due to IDT
Corporation..................................................................................................................................
|
52
|
|
(378)
|
|
Income taxes
payable.....................................................................................................................................
|
(1,320)
|
|
1,445
|
|
|
|
|
|
Net cash provided by operating
activities...........................................................................................................
|
3,377
|
|
11,606
|
|
Investing activities
|
|
|
|
|
Capital
expenditures......................................................................................................................................
|
(3,248)
|
|
(449)
|
|
Investments in capitalized exploration costs—unproved oil and gas
property................................................
|
(5,531)
|
|
(12,884)
|
|
Acquisition, net of cash
acquired...................................................................................................................
|
(3,717)
|
|
—
|
|
Investment in joint
venture.............................................................................................................................
|
(1,275)
|
|
—
|
|
Repayment of notes
receivable.....................................................................................................................
|
446
|
|
50
|
|
Proceeds from disposal of
property...............................................................................................................
|
—
|
|
27
|
|
Purchase of certificates of
deposit.................................................................................................................
|
—
|
|
(2,974)
|
|
Proceeds from maturities of certificates of
deposit........................................................................................
|
—
|
|
11,900
|
|
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..................................................................................................................
|
(13,325)
|
|
(691)
|
|
Financing activities
|
|
|
|
|
Dividends
paid..............................................................................................................................................
|
(6,674)
|
|
(5,547)
|
|
Purchase of equity of
subsidiary...................................................................................................................
|
(312)
|
|
—
|
|
Proceeds from revolving line of
credit...........................................................................................................
|
14,450
|
|
—
|
|
Repayment of revolving line of
credit............................................................................................................
|
(12,655)
|
|
(1,800)
|
|
Decrease in restricted
cash..........................................................................................................................
|
10,000
|
|
—
|
|
Exercise of stock
options..............................................................................................................................
|
109
|
|
—
|
|
Repurchases of Class B common stock
from employees..............................................................................
|
(829)
|
|
(29)
|
|
Payment for
acquisitions...............................................................................................................................
|
—
|
|
(227)
|
|
|
|
|
|
Net cash provided by (used in) financing
activities............................................................................................
|
4,089
|
|
(7,603 )
|
|
Effect of exchange rate changes on cash and cash
equivalents.......................................................................
|
57
|
|
203
|
|
|
|
|
|
Net (decrease) increase in cash and cash
equivalents.....................................................................................
|
(5,802)
|
|
3,515
|
|
Cash and cash equivalents at beginning of
period............................................................................................
|
35,192
|
|
38,786
|
|
|
|
|
|
Cash and cash equivalents at end of
period.....................................................................................................
|
$ 29,390
|
|
$ 42,301
|
|
|
|
|
Reconciliation of Non-GAAP Financial Measures for the Third 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 third 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 joint ventures, 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, stock-based compensation and the
write-off of capitalized exploration costs, 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 write-off of capitalized exploration costs, which is a component of income (loss) from operations, is also excluded from
the calculation of Adjusted EBITDA. The write-off of capitalized exploration costs is primarily dictated by events and
circumstances outside the control of management that trigger an impairment analysis. While there may be similar charges in other
periods, the nature and magnitude of these charges can fluctuate markedly and do not reflect the performance of Genie Energy's
continuing operations.
The gain on consolidation of AMSO, LLC, which is a component of income (loss) from operations, is excluded from the
calculation of Adjusted EBITDA. Genie Energy's equity in the net loss of AMSO, LLC (a joint venture with Total until April 30, 2016) 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 Income (Loss)
(unaudited)
$ in thousands
|
|
|
Total
|
|
Genie
Retail
Energy
|
GOGAS
|
Afek
|
Corporate
|
|
Three Months Ended September 30, 2017
(3Q17)
|
|
|
|
|
|
|
|
Adjusted EBITDA
|
$ 3,301
|
|
$ 5,382
|
$ (104)
|
$ (963)
|
$ (1,014)
|
|
Subtract:
|
|
|
|
|
|
|
|
Stock-based compensation
|
1,411
|
|
176
|
49
|
-
|
1,186
|
|
Depreciation and amortization
|
487
|
|
434
|
5
|
48
|
-
|
|
Income (loss) from operations
|
1,403
|
|
$ 4,772
|
$ (158)
|
$ (1,011)
|
$ (2,200)
|
|
Interest income
|
51
|
|
|
|
|
|
|
Other expense, net
|
(58)
|
|
|
|
|
|
|
Provision for income taxes
|
(421)
|
|
|
|
|
|
|
Net income
|
975
|
|
|
|
|
|
|
Net income attributable to noncontrolling
interests
|
(197)
|
|
|
|
|
|
|
Net income attributable to Genie Energy Ltd.
|
$ 778
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
Genie
Retail
Energy
|
GOGAS
|
Afek
|
Corporate
|
|
Three Months Ended June 30, 2017
(2Q17)
|
|
|
|
|
|
|
|
Adjusted EBITDA
|
$ (11,856)
|
|
$ (8,859)
|
$ (89)
|
$ (1,170)
|
$ (1,738)
|
|
Subtract:
|
|
|
|
|
|
|
|
Stock-based compensation
|
1,141
|
|
114
|
-
|
-
|
1,027
|
|
Depreciation and amortization
|
571
|
|
421
|
5
|
145
|
-
|
|
Loss from operations
|
(13,568)
|
|
$ (9,394)
|
$ (94)
|
$ (1,315)
|
$ (2,765)
|
|
Interest income
|
70
|
|
|
|
|
|
|
Other expense, net
|
(274)
|
|
|
|
|
|
|
Benefit from income taxes
|
700
|
|
|
|
|
|
|
Net loss
|
(13,072)
|
|
|
|
|
|
|
Net loss attributable to noncontrolling interests
|
381
|
|
|
|
|
|
|
Net loss attributable to Genie Energy Ltd.
|
$ (12,691)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
Genie
Retail
Energy
|
GOGAS
|
Afek
|
Corporate
|
|
Three Months Ended September 30, 2016
(3Q16)
|
|
|
|
|
|
|
|
Adjusted EBITDA
|
$ 5,197
|
|
$ 8,039
|
$ (131)
|
$ (1,594)
|
$ (1,117)
|
|
Subtract:
|
|
|
|
|
|
|
|
Stock-based compensation
|
1,161
|
|
88
|
9
|
-
|
1,064
|
|
Depreciation
|
97
|
|
58
|
8
|
31
|
-
|
|
Write-off of capitalized exploration costs
|
41,041
|
|
-
|
-
|
41,041
|
-
|
|
(Loss) income from operations
|
(37,102)
|
|
$ 7,893
|
$ (148)
|
$ (42,666)
|
$ (2,181)
|
|
Interest income
|
70
|
|
|
|
|
|
|
Other income, net
|
333
|
|
|
|
|
|
|
Provision for income taxes
|
(475)
|
|
|
|
|
|
|
Net loss
|
(37,174)
|
|
|
|
|
|
|
Net loss attributable to noncontrolling interests
|
5,035
|
|
|
|
|
|
|
Net loss attributable to Genie Energy Ltd.
|
$ (32,139)
|
|
|
|
|
|
|
Genie Energy Ltd.
Reconciliation of Adjusted EBITDA to Net Loss
(unaudited)
$ in thousands
|
|
|
Total
|
|
Genie
Retail
Energy
|
GOGAS
|
Afek
|
Corporate
|
|
Nine Months Ended September 30, 2017
|
|
|
|
|
|
|
|
Adjusted EBITDA
|
$ (1,650)
|
|
$ 6,047
|
$ (279)
|
$ (3,386)
|
$ (4,032)
|
|
Subtract:
|
|
|
|
|
|
|
|
Stock-based compensation
|
3,790
|
|
408
|
55
|
-
|
3,327
|
|
Depreciation and amortization
|
1,528
|
|
1,286
|
16
|
226
|
-
|
|
(Loss) income from operations
|
(6,968)
|
|
$ 4,353
|
$ (350)
|
$ (3,612)
|
$ (7,359)
|
|
Interest income
|
207
|
|
|
|
|
|
|
Other expense, net
|
(620)
|
|
|
|
|
|
|
Provision for income taxes
|
(453)
|
|
|
|
|
|
|
Net loss
|
(7,834)
|
|
|
|
|
|
|
Net loss attributable to noncontrolling interests
|
626
|
|
|
|
|
|
|
Net loss attributable to Genie Energy Ltd.
|
$ (7,208)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
Genie
Retail
Energy
|
GOGAS
|
Afek
|
Corporate
|
|
Nine Months Ended September 30, 2016
|
|
|
|
|
|
|
|
Adjusted EBITDA
|
$ 14,402
|
|
$ 24,220
|
$ (984)
|
$ (5,146)
|
$ (3,688)
|
|
Subtract (Add):
|
|
|
|
|
|
|
|
Stock-based compensation
|
3,497
|
|
284
|
33
|
-
|
3,180
|
|
Depreciation
|
294
|
|
176
|
24
|
94
|
-
|
|
Write-off of capitalized exploration costs
|
41,041
|
|
-
|
-
|
41,041
|
-
|
|
Gain on consolidation of AMSO, LLC
|
(1,262)
|
|
-
|
(1,262)
|
-
|
-
|
|
(Loss) income from operations
|
(29,168)
|
|
$ 23,760
|
$ 221
|
$ (46,281)
|
$ (6,868)
|
|
Interest income
|
257
|
|
|
|
|
|
|
Other income, net
|
171
|
|
|
|
|
|
|
Provision for income taxes
|
(2,165)
|
|
|
|
|
|
|
Net loss
|
(30,905)
|
|
|
|
|
|
|
Net loss attributable to noncontrolling interests
|
7,198
|
|
|
|
|
|
|
Net loss attributable to Genie Energy Ltd.
|
$ (23,707)
|
|
|
|
|
|
View original content with multimedia:http://www.prnewswire.com/news-releases/genie-energy-ltd-reports-third-quarter-2017-results-300548288.html
SOURCE Genie Energy Ltd.