HOUSTON, March 08, 2018 (GLOBE NEWSWIRE) -- Spark Energy, Inc. ("Spark" or the "Company") (NASDAQ:SPKE), an
independent retail energy services company, today reported financial results for the year ended December 31, 2017.
Key Business Highlights
- Achieved record Net Income, Retail Gross Margin and Adjusted EBITDA for full year 2017
- Recorded $102.9 million in Adjusted EBITDA, $224.5 million in Retail Gross Margin, and $76.3 million in Net Income for the
year ended 2017, representing year-over-year increases of 26%, 23%, and 16%, respectively
- Recorded $28.9 million in Adjusted EBITDA, $66.2 million in Retail Gross Margin, and $47.5 million in Net Income for the
fourth quarter, representing year-over-year increases of 17%, 13%, and 97%, respectively
- Total RCE count increased 35% year-over-year to a record 1,042,000 as of December 31, 2017
- Overall attrition of 4.3% for the year ended December 31, 2017
- Closed three acquisitions in 2017
- Two new acquisitions announced thus far in 2018 with a total of approximately 80,000 RCEs
- Expanded the senior credit facility to $200.0 million in commitments
- Continue to simplify, streamline, and optimize the organization
- Engaged Morgan Stanley as financial advisor to evaluate strategic alternatives
“We are extremely proud to have delivered another year of record financial results despite unfavorable weather
throughout the year,” said Nathan Kroeker, Spark Energy’s President and Chief Executive Officer. “We saw a mild summer and several
severe weather events, including a devastating hurricane, but Spark was able to increase RCE count and improve both top and bottom
line financial performance.
“During 2017, we completed three acquisitions, highlighted by the acquisition of Verde in July. We put a new
credit facility in place and have added six new banks and a total of $185.0 million in commitments, which has since grown to $200.0
million in early 2018. In addition, we recently completed a $50.0 million follow-on offering of our Series A Preferred Stock. We
launched a company-wide initiative to further integrate acquisitions and realize significant cost-to-serve synergies, including the
early termination of the Verde earnout.
“As we move through 2018, we continue to strategically add customers and pursue additional opportunities to
further streamline our business model. In March 2018, we agreed to acquire a small competitor in the Northeast as well as a book of
customers from an affiliate of our sponsor. We expect both to be immediately accretive to Adjusted EBITDA. Our sponsor also agreed
to reintegrate Retailco Services back into Spark, which will simplify our structure and result in immediate and substantial cash
savings to the Company.”
“Finally, our Board of Directors has engaged Morgan Stanley as a financial advisor to explore strategic alternatives. We believe
that our stock price has not reflected the strong growth in financial performance we have shown over the past three and a half
years as a public company, and look forward to examining additional opportunities to unlock shareholder value.”
Summary Fourth Quarter 2017 Financial Results
For the quarter ended December 31, 2017, Spark reported Adjusted EBITDA of $28.9 million compared to
Adjusted EBITDA of $24.8 million for the quarter ended December 31, 2016. This increase of $4.1 million is primarily
attributable to additional volumes from the Verde and Perigee acquisitions.
For the quarter ended December 31, 2017, Spark reported Retail Gross Margin of $66.2 million compared to
Retail Gross Margin of $58.8 million for the quarter ended December 31, 2016. This increase of $7.4 million is primarily
attributable to the increased volumes of retail electricity following the Verde and Perigee acquisitions.
Net income for the quarter ended December 31, 2017, was $47.5 million compared to net income of $24.1
million for the quarter ended December 31, 2016, primarily due to higher retail gross margin and the revaluation of the Tax
Receivable Agreement as a result of the new tax legislation.
Summary Full Year 2017 Financial Results
For the year ended December 31, 2017, Spark reported Adjusted EBITDA of $102.9 million compared to Adjusted
EBITDA of $81.9 million for the year ended December 31, 2016. This increase of $21.0 million is primarily attributable to
additional volumes from the Verde and Perigee acquisitions and a full year of the Provider and Major acquisitions, partially offset
by milder-than-normal weather.
For the year ended December 31, 2017, Spark reported Retail Gross Margin of $224.5 million compared to
Retail Gross Margin of $182.4 million for the year ended December 31, 2016. This increase of $42.1 million is primarily
attributable to additional volumes from the Verde and Perigee acquisitions and a full year of the Provider and Major acquisitions,
partially offset by milder-than-normal weather.
Net income for the year ended December 31, 2017, was $76.3 million compared to net income of $65.7 million
for the year ended December 31, 2016, primarily due to higher volumes from the acquisitions and the revaluation of the Tax
Receivable Agreement as a result of the new tax legislation.
Strategic Update
On March 1, 2018, Spark acquired a retail electric provider with approximately 29,000 RCEs serving electricity
and natural gas customers in the Northeast and Midwest. The transaction is immediately accretive to 2018 earnings and requires
minimal integration.
On March 7, 2018, Spark entered into an agreement with National Gas & Electric, LLC, ("NG&E"), an affiliate
of Retailco, LLC, the Company's majority owner, for the acquisition of approximately 50,000 RCEs for approximately $12.5 million in
cash. The transaction, which was reviewed and approved by a special committee made up of independent members of the Company's board
of directors, is scheduled to close in April of this year.
On March 7, 2018, Spark agreed to reintegrate the employees and operations of Retailco Services, LLC
("Retailco"), which is wholly owned by W. Keith Maxwell III. Retailco was formed in 2015 to provide a variety of back office
functions, including customer operations and information technology services, at a lower cost than Spark was realizing at the time.
Retailco has been able to reduce the cost per customer over the past two years, and Spark expects to realize additional savings by
reintegrating the two companies. This reintegration, which was reviewed and approved by a special committee of independent
directors of the Company's board of directors, is scheduled to occur on April 1, 2018, and is expected to be accretive to 2018
earnings. Mr. Maxwell will receive no consideration for this transaction.
As previously announced, Spark terminated the Verde Energy earnout agreement on January 12, 2018. This
transaction allowed Spark to begin integration of Verde's operations sooner than originally anticipated, which the Company believes
should result in significant operational costs savings.
As mentioned above, the Board of Directors of Spark has retained Morgan Stanley as a financial advisor to
explore strategic alternatives.
Outlook
Spark expects full year 2018 Adjusted EBITDA to be similar to that of 2017. The Company will continue to pursue accretive
acquisitions, integrate recent acquisitions, drive operational performance improvements, and look to expand its geographic
footprint.
Liquidity and Capital Resources
($ in thousands) |
December 31,
2017
|
|
Cash and cash equivalents |
$ |
29,419 |
|
Senior Credit Facility Availability (1) |
12,501 |
|
Subordinated Debt Availability (2) |
$ |
25,000 |
|
Total Liquidity |
$ |
66,920 |
|
(1) Subject to Senior Credit Facility borrowing base and covenant restrictions.
(2) The availability of the Subordinated Debt Facility provided by Spark’s founder is dependent on his financial position
and liquidity. The Company may use the Subordinated Facility from time to time to enhance short-term liquidity but does not view
the Subordinated Debt Facility as a material source of liquidity.
Since the beginning of 2018, Spark has increased the commitments on its credit facility by $15.0 million to
$200.0 million. As previously mentioned, Spark also raised an additional $48.9 million in net proceeds in an offering of Series A
Preferred Stock in January 2018.
Dividend
Spark’s Board of Directors declared quarterly dividends of $0.18125 per share of Class A common stock payable on
March 16, 2018, and $0.546875 per share of Series A Preferred Stock payable on April 16, 2018. Investors are reminded that on June
16, 2017, Spark completed a two-for-one stock split by means of a stock dividend.
Conference Call and Webcast
Spark will host a conference call to discuss year end and fourth quarter 2017 results on Friday, March 9, 2018,
at 10:00 AM Central Time (11:00 AM Eastern).
A live webcast of the conference call can be accessed from the Events & Presentations page of the Spark Energy
Investor Relations website at http://ir.sparkenergy.com/events-and-presentations. An archived replay of the webcast will be
available for twelve months following the live presentation.
About Spark Energy, Inc.
Spark Energy, Inc. is an established and growing independent retail energy services company founded in 1999 that
provides residential and commercial customers in competitive markets across the United States with an alternative choice for their
natural gas and electricity. Headquartered in Houston, Texas, Spark currently operates in 19 states and serves 94 utility
territories. Spark offers its customers a variety of product and service choices, including stable and predictable energy costs and
green product alternatives.
We use our website as a means of disclosing material non-public information and for complying with our
disclosure obligations under Regulation FD. Investors should note that new materials, including press releases, updated investor
presentations, and financial and other filings with the Securities and Exchange Commission are posted on the Spark Energy Investor
Relations website at ir.sparkenergy.com. Investors are urged to monitor our website regularly for information and updates about the
Company.
Cautionary Note Regarding Forward Looking Statements
This earnings release contains forward-looking statements that are subject to a number of risks and
uncertainties, many of which are beyond our control. These forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”) can be identified by the use of forward-looking terminology including “may,” “should,” “likely,” “will,” “believe,”
“expect,” “anticipate,” “estimate,” “continue,” “plan,” “intend,” “projects,” or other similar words. All statements, other than
statements of historical fact included in this earnings release, regarding strategy, future operations, financial position,
estimated revenues and losses, projected costs, prospects, plans, objectives and beliefs of management are forward-looking
statements. Forward-looking statements appear in a number of places in this earnings release and may include statements about
business strategy and prospects for growth, customer acquisition costs, ability to pay cash dividends, cash flow generation and
liquidity, availability of terms of capital, competition and government regulation and general economic conditions. Although we
believe that the expectations reflected in such forward-looking statements are reasonable, we cannot give any assurance that such
expectations will prove correct.
The forward-looking statements in this earnings release are subject to risks and uncertainties. Important
factors that could cause actual results to materially differ from those projected in the forward-looking statements include, but
are not limited to:
- changes in commodity prices and the sufficiency of risk management and hedging policies;
- extreme and unpredictable weather conditions, and the impact of hurricanes and other natural disasters;
- federal, state and local regulation, including the industry's ability to address or adapt to potentially restrictive new
regulations that may be enacted by the New York Public Service Commission;
- our ability to borrow funds and access credit markets and restrictions in our debt agreements and collateral
requirements;
- credit risk with respect to suppliers and customers;
- changes in costs to acquire customers and actual customer attrition rates;
- accuracy of billing systems;
- whether our majority stockholder or its affiliates offer us acquisition opportunities on terms that are commercially
acceptable to us;
- ability to successfully identify and complete, and efficiently integrate acquisitions into our operations;
- competition; and
- the “Risk Factors” in our latest Annual Report on Form 10-K, and in our quarterly reports, other public filings and press
releases.
You should review the Risk Factors and other factors noted throughout or incorporated by reference in this
earnings release that could cause our actual results to differ materially from those contained in any forward-looking statement.
All forward-looking statements speak only as of the date of this earnings release. Unless required by law, we disclaim any
obligation to publicly update or revise these statements whether as a result of new information, future events or otherwise. It is
not possible for us to predict all risks, nor can we assess the impact of all factors on the business or the extent to which any
factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking
statements.
|
SPARK ENERGY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 2017 AND DECEMBER 31, 2016
(in thousands)
(unaudited) |
|
|
December 31,
2017 |
|
December 31,
2016 |
Assets |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
29,419 |
|
|
$ |
18,960 |
|
Accounts receivable, net of allowance for doubtful accounts of $4.0
million and $2.3 million as
of December 31, 2017 and 2016, respectively |
|
158,814 |
|
|
|
112,491 |
|
Accounts receivable—affiliates |
|
3,661 |
|
|
|
2,624 |
|
Inventory |
|
4,470 |
|
|
|
3,752 |
|
Fair value of derivative assets |
|
31,191 |
|
|
|
8,344 |
|
Customer acquisition costs, net |
|
22,123 |
|
|
|
18,834 |
|
Customer relationships, net |
|
18,653 |
|
|
|
12,113 |
|
Prepaid assets |
|
1,028 |
|
|
|
1,361 |
|
Deposits |
|
7,701 |
|
|
|
7,329 |
|
Other current assets |
|
19,678 |
|
|
|
12,175 |
|
Total current assets |
|
296,738 |
|
|
|
197,983 |
|
Property and equipment, net |
|
8,275 |
|
|
|
4,706 |
|
Fair value of derivative assets |
|
3,309 |
|
|
|
3,083 |
|
Customer acquisition costs, net |
|
6,949 |
|
|
|
6,134 |
|
Customer relationships, net |
|
34,839 |
|
|
|
21,410 |
|
Deferred tax assets |
|
24,185 |
|
|
|
54,109 |
|
Goodwill |
|
120,154 |
|
|
|
79,147 |
|
Other assets |
|
11,500 |
|
|
|
8,658 |
|
Total Assets |
|
505,949 |
|
|
|
375,230 |
|
|
|
|
|
Liabilities, Series A Preferred Stock and Stockholders'
Equity |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$ |
77,510 |
|
|
$ |
52,309 |
|
Accounts payable—affiliates |
|
4,622 |
|
|
|
3,775 |
|
Accrued liabilities |
|
33,679 |
|
|
|
36,619 |
|
Fair value of derivative liabilities |
|
1,637 |
|
|
|
680 |
|
Current portion of Senior Credit Facility |
|
7,500 |
|
|
|
51,287 |
|
Current payable pursuant to tax receivable agreement—affiliates |
|
5,937 |
|
|
|
— |
|
Current contingent consideration for acquisitions |
|
4,024 |
|
|
|
11,827 |
|
Current portion of note payable |
|
13,443 |
|
|
|
15,501 |
|
Convertible subordinated notes to affiliates |
|
— |
|
|
|
6,582 |
|
Other current liabilities |
|
2,675 |
|
|
|
5,476 |
|
Total current liabilities |
|
151,027 |
|
|
|
184,056 |
|
Long-term liabilities: |
|
|
|
Fair value of derivative liabilities |
|
492 |
|
|
|
68 |
|
Payable pursuant to tax receivable agreement—affiliates |
|
26,355 |
|
|
|
49,886 |
|
Long-term portion of Senior Credit Facility |
|
117,750 |
|
|
|
— |
|
Subordinated debt—affiliate |
|
— |
|
|
|
5,000 |
|
Contingent consideration for acquisitions |
|
626 |
|
|
|
10,826 |
|
Other long-term liabilities |
|
172 |
|
|
|
1,658 |
|
Long-term portion of note payable |
|
7,051 |
|
|
|
— |
|
Total liabilities |
$ |
303,473 |
|
|
$ |
251,494 |
|
Commitments and contingencies (Note 13) |
|
|
|
Series A Preferred Stock, par value $0.01 per share, 20,000,000 shares authorized,
1,704,339 shares issued and
outstanding at December 31, 2017 and zero shares issued and outstanding at December 31, 2016
|
|
41,173 |
|
|
|
— |
|
Stockholders' equity: |
|
|
|
Common Stock (1) : |
|
|
|
Class A common stock, par value $0.01 per share, 120,000,000 shares authorized,
13,235,082 issued and
13,135,636 outstanding at December 31, 2017 and 12,993,118 issued and outstanding at December 31, 2016 |
|
132 |
|
|
|
130 |
|
Class B common stock, par value $0.01 per share, 60,000,000 shares authorized,
21,485,126 issued and
outstanding at December 31, 2017 and 20,449,484 issued and outstanding at December 31, 2016 |
|
216 |
|
|
|
206 |
|
Additional paid-in capital (1) |
|
26,914 |
|
|
|
25,272 |
|
Accumulated other comprehensive (loss)/income |
|
(11 |
) |
|
|
11 |
|
Retained earnings |
|
11,008 |
|
|
|
4,711 |
|
Treasury stock, at cost, 99,446 shares at December 31, 2017 and zero shares at
December 31, 2016
|
|
(2,011 |
) |
|
|
— |
|
Total stockholders' equity |
|
36,248 |
|
|
|
30,330 |
|
Non-controlling interest in Spark HoldCo, LLC |
|
125,055 |
|
|
|
93,406 |
|
Total equity |
|
161,303 |
|
|
|
123,736 |
|
Total liabilities, Series A Preferred Stock and stockholders' equity |
$ |
505,949 |
|
|
$ |
375,230 |
|
(1) Outstanding shares of common stock, additional paid-in capital and non-controlling interest reflect the two-for-one stock
split, which took effect on June 16, 2017. See Note 4 "Equity" for further discussion.
(2) See Note 4 "Equity" for disclosure of our variable interest entity in Spark HoldCo, LLC.
|
SPARK ENERGY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME FOR THE YEARS ENDED
DECEMBER 31, 2017, 2016 and 2015
(in thousands)
(unaudited) |
|
|
Year Ended December
31, |
|
2017 (1) |
|
2016 (2) |
|
2015 (3) |
Revenues: |
|
|
|
|
|
Retail revenues |
|
798,772 |
|
|
|
547,283 |
|
|
356,659 |
|
Net asset optimization (expense)/revenues (4) |
|
(717 |
) |
|
|
(586 |
) |
|
1,494 |
|
Total Revenues |
|
798,055 |
|
|
|
546,697 |
|
|
358,153 |
|
Operating Expenses: |
|
|
|
|
|
Retail cost of revenues (5) |
|
552,167 |
|
|
|
344,944 |
|
|
241,188 |
|
General and administrative (6) |
|
101,127 |
|
|
|
84,964 |
|
|
61,682 |
|
Depreciation and amortization |
|
42,341 |
|
|
|
32,788 |
|
|
25,378 |
|
Total Operating Expenses |
|
695,635 |
|
|
|
462,696 |
|
|
328,248 |
|
Operating income |
|
102,420 |
|
|
|
84,001 |
|
|
29,905 |
|
Other (expense)/income: |
|
|
|
|
|
Interest expense |
|
(11,134 |
) |
|
|
(8,859 |
) |
|
(2,280 |
) |
Change in Tax Receivable Agreement liability |
|
22,267 |
|
|
|
— |
|
|
— |
|
Interest and other income |
|
256 |
|
|
|
957 |
|
|
324 |
|
Total other expenses |
|
11,389 |
|
|
|
(7,902 |
) |
|
(1,956 |
) |
Income before income tax expense |
|
113,809 |
|
|
|
76,099 |
|
|
27,949 |
|
Income tax expense |
|
37,528 |
|
|
|
10,426 |
|
|
1,974 |
|
Net income |
$ |
76,281
|
|
|
$ |
65,673
|
|
|
$ |
25,975 |
|
Less: Net income attributable to non-controlling interests |
|
57,427 |
|
|
|
51,229 |
|
|
22,110 |
|
Net income attributable to Spark Energy, Inc. stockholders |
$ |
18,854 |
|
|
$ |
14,444 |
|
|
$ |
3,865 |
|
Less: Dividend on Series A preferred stock |
|
3,038 |
|
|
|
— |
|
|
— |
|
Net income attributable to stockholders of Class A common stock |
$ |
15,816 |
|
|
$ |
14,444 |
|
|
$ |
3,865 |
|
Other comprehensive (loss) income, net of tax: |
|
|
|
|
|
Currency translation (loss) gain |
$ |
(59 |
) |
|
$ |
41 |
|
|
$ |
— |
|
Other comprehensive (loss) income |
|
(59 |
) |
|
|
41 |
|
|
— |
|
Comprehensive income |
$ |
76,222 |
|
|
$ |
65,714 |
|
|
$ |
25,975 |
|
Less: Comprehensive income attributable to non-controlling interests |
|
57,390 |
|
|
|
51,259 |
|
|
22,110 |
|
Comprehensive income attributable to Spark Energy, Inc. stockholders |
$ |
18,832 |
|
|
$ |
14,455 |
|
|
$ |
3,865 |
|
(1) Financial information includes results attributable to the acquisition of Perigee Energy, LLC by an affiliate on
February 3, 2017. See Notes 2 and 3 "Basis of Presentation and Summary of Significant Accounting Policies" and "Acquisitions,"
respectively, for further discussion.
(2) Financial information includes results attributable to the acquisition of Major Energy Companies from an affiliate
on April 15, 2016. See Notes 2 and 3 "Basis of Presentation and Summary of Significant Accounting Policies" and "Acquisitions,"
respectively, for further discussion.
(3) Financial information includes results attributable to the acquisition of Oasis Power Holdings LLC from an
affiliate on May 12, 2015. See Notes 2 and 3 "Basis of Presentation and Summary of Significant Accounting Policies" and
"Acquisitions," respectively, for further discussion.
(4) Net asset optimization revenues includes asset optimization (expense)/revenues—affiliates of $1,334, $154 and
$1,101 for the years ended December 31, 2017, 2016 and 2015, respectively, and asset optimization revenues—affiliates cost of
revenues of $53, $1,633 and $11,285 for the years ended December 31, 2017, 2016 and 2015, respectively.
(5) Retail cost of revenues includes retail cost of revenues—affiliates of $0, $9 and $17 for the years
December 31, 2017, 2016 and 2015, respectively.
(6) General and administrative includes general and administrative expense—affiliates of $24,700, $15,700 and $0 for
the years ended December 31, 2017, 2016 and 2015, respectively.
|
SPARK ENERGY, INC.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2017, 2016 and 2015
(in thousands)
(unaudited) |
|
|
Issued Shares of Class
A Common Stock (1) |
Issued Shares of Class
B Common Stock (1) |
Treasury
Stock |
Class A Common Stock
(1) |
Class B Common Stock
(1) |
Treasury
Stock |
Accumulated Other
Comprehensive Income (Loss) |
Additional Paid-In
Capital (1) |
Retained Earnings
(Deficit) |
Total Stockholders'
Equity |
Non-controlling
Interest (1) |
Total
Equity |
Balance at 12/31/2014: |
6,000 |
|
21,500 |
|
— |
|
$ |
60 |
|
$ |
216 |
|
$ |
— |
|
$ |
— |
|
$ |
9,158 |
|
$ |
(775 |
) |
$ |
8,659 |
|
$ |
15,458 |
|
$ |
24,117 |
|
Stock based compensation |
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
2,165 |
|
— |
|
2,165 |
|
— |
|
2,165 |
|
Restricted stock unit vesting |
238 |
|
— |
|
— |
|
2 |
|
— |
|
— |
|
— |
|
185 |
|
— |
|
187 |
|
— |
|
187 |
|
Contribution from NuDevco |
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
129 |
|
— |
|
129 |
|
— |
|
129 |
|
Consolidated net income (2) |
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
3,865 |
|
3,865 |
|
22,110 |
|
25,975 |
|
Beneficial conversion feature |
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
789 |
|
— |
|
789 |
|
— |
|
789 |
|
Distributions paid to Class B non-controlling unit holders |
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
(15,587 |
) |
(15,587 |
) |
Dividends paid to Class A common shareholders |
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
(4,456 |
) |
(4,456 |
) |
— |
|
(4,456 |
) |
Balance at 12/31/2015: |
6,238 |
|
21,500 |
|
— |
|
$ |
62 |
|
$ |
216 |
|
$ |
— |
|
$ |
— |
|
$ |
12,426 |
|
$ |
(1,366 |
) |
$ |
11,338 |
|
$ |
21,981 |
|
$ |
33,319 |
|
Stock based compensation |
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
|
2,270 |
|
— |
|
2,270 |
|
— |
|
2,270 |
|
Restricted stock unit vesting |
305 |
|
— |
|
— |
|
4 |
|
— |
|
— |
|
— |
|
1,058 |
|
— |
|
1,062 |
|
— |
|
1,062 |
|
Excess tax benefit related to restricted stock vesting |
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
186 |
|
— |
|
186 |
|
— |
|
186 |
|
Consolidated net income (3) |
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
14,444 |
|
14,444 |
|
51,229 |
|
65,673 |
|
Foreign currency translation adjustment for equity method investee |
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
11 |
|
— |
|
— |
|
11 |
|
30 |
|
41 |
|
Beneficial conversion feature |
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
243 |
|
— |
|
243 |
|
— |
|
243 |
|
Distributions paid to non-controlling unit holders |
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
(34,931 |
) |
(34,931 |
) |
Net contribution of the Major Energy Companies |
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
3,873 |
|
3,873 |
|
Dividends paid to Class A common stockholders |
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
(8,367 |
) |
(8,367 |
) |
— |
|
(8,367 |
) |
Proceeds from disgorgement of stockholder short-swing profits |
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
1,605 |
|
— |
|
1,605 |
|
— |
|
1,605 |
|
Tax impact from tax receivable agreement upon exchange of units of Spark HoldCo,
LLC to shares of Class A Common Stock |
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
4,768 |
|
— |
|
4,768 |
|
— |
|
4,768 |
|
Exchange of shares of Class B common stock to shares of Class A common stock |
6,450 |
|
(6,450 |
) |
— |
|
64 |
|
(64 |
) |
— |
|
— |
|
2,716 |
|
— |
|
2,716 |
|
(2,716 |
) |
— |
|
Issuance of Class B Common Stock |
— |
|
5,400 |
|
— |
|
— |
|
54 |
|
— |
|
— |
|
— |
|
— |
|
54 |
|
53,940 |
|
53,994 |
|
Balance at 12/31/2016: |
12,993 |
|
20,450 |
|
— |
|
$ |
130 |
|
$ |
206 |
|
$ |
— |
|
$ |
11 |
|
$ |
25,272 |
|
$ |
4,711 |
|
$ |
30,330 |
|
$ |
93,406 |
|
$ |
123,736 |
|
Stock based compensation |
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
2,754 |
|
— |
|
2,754 |
|
— |
|
2,754 |
|
Restricted stock unit vesting |
242 |
|
— |
|
— |
|
2 |
|
— |
|
— |
|
— |
|
1,052 |
|
— |
|
1,054 |
|
— |
|
1,054 |
|
Consolidated net income (4) |
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
18,854 |
|
18,854 |
|
57,427 |
|
76,281 |
|
Foreign currency translation adjustment for equity method investee |
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
(22 |
) |
— |
|
— |
|
(22 |
) |
(37 |
) |
(59 |
) |
Distributions paid to non-controlling unit holders |
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
(33,800 |
) |
(33,800 |
) |
Net contribution by NG&E |
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
274 |
|
274 |
|
Dividends paid to Class A common stockholders |
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
(9,519 |
) |
(9,519 |
) |
— |
|
(9,519 |
) |
Dividends to Preferred Stock |
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
(3,038 |
) |
(3,038 |
) |
— |
|
(3,038 |
) |
Proceeds from disgorgement of stockholder short-swing profits |
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
708 |
|
— |
|
708 |
|
— |
|
708 |
|
Tax receivable agreement liability true-up |
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
(2,872 |
) |
— |
|
(2,872 |
) |
— |
|
(2,872 |
) |
Conversion of Convertible Subordinated Notes to Class B Common Stock |
— |
|
1,035 |
|
— |
|
— |
|
10 |
|
— |
|
— |
|
— |
|
— |
|
10 |
|
7,785 |
|
7,795 |
|
Treasury Stock |
— |
|
— |
|
(99 |
) |
— |
|
— |
|
(2,011 |
) |
— |
|
— |
|
— |
|
(2,011 |
) |
— |
|
(2,011 |
) |
Balance at 12/31/2017: |
13,235 |
|
21,485 |
|
(99 |
) |
$ |
132 |
|
$ |
216 |
|
$ |
(2,011 |
) |
$ |
(11 |
) |
$ |
26,914 |
|
$ |
11,008 |
|
$ |
36,248 |
|
$ |
125,055 |
|
$ |
161,303 |
|
(1) Outstanding shares of common stock, additional paid-in capital and non-controlling interest have been retrospectively
adjusted to reflect the two-for-one stock split, which took effect on June 16, 2017. See Note 4 "Equity" for further
discussion.
(2) Financial information includes results attributable to the acquisition of Oasis Power Holdings LLC from an affiliate on May
12, 2015. See Notes 2 and 3 "Basis of Presentation and Summary of Significant Accounting Policies" and "Acquisitions,"
respectively, for further discussion.
(3) Financial information includes results attributable to the acquisition of Major Energy Companies from an affiliate on April
15, 2016. See Notes 2 and 3 "Basis of Presentation and Summary of Significant Accounting Policies" and "Acquisitions,"
respectively, for further discussion.
(4) Financial information has been recast to include results attributable to the acquisition of Perigee Energy, LLC by an
affiliate on February 3, 2017. See Notes 2 and 3 "Basis of Presentation and Summary of Significant Accounting Policies" and
"Acquisitions," respectively, for further discussion.
|
|
SPARK ENERGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2017, 2016 AND 2015
(in thousands)
(unaudited) |
|
|
|
Year Ended December 31, |
|
2017 (1) |
|
2016 (2) |
|
2015 (3) |
Cash flows from operating activities: |
|
|
|
|
|
Net income |
$ |
76,281 |
|
|
$ |
65,673 |
|
|
$ |
25,975 |
|
Adjustments to reconcile net income to net cash flows
provided by operating
activities: |
|
|
|
|
|
Depreciation and amortization expense |
|
42,666 |
|
|
|
48,526 |
|
|
|
25,378 |
|
Deferred income taxes |
|
28,584 |
|
|
|
3,382 |
|
|
|
1,340 |
|
Change in Tax Receivable Agreement liability |
|
(22,267 |
) |
|
|
— |
|
|
|
— |
|
Stock based compensation |
|
5,058 |
|
|
|
5,242 |
|
|
|
3,181 |
|
Amortization of deferred financing costs |
|
1,035 |
|
|
|
668 |
|
|
|
412 |
|
Change in fair value of Earnout liabilities |
|
(7,898 |
) |
|
|
(297 |
) |
|
|
— |
|
Accretion on fair value of Earnout liabilities |
|
4,108 |
|
|
|
5,060 |
|
|
|
— |
|
Excess tax benefit related to restricted stock vesting |
|
179 |
|
|
|
— |
|
|
|
— |
|
Bad debt expense |
|
6,550 |
|
|
|
1,261 |
|
|
|
7,908 |
|
(Gain) loss on derivatives, net |
|
(5,008 |
) |
|
|
(22,407 |
) |
|
|
18,497 |
|
Current period cash settlements on derivatives, net |
|
(19,598 |
) |
|
|
(24,427 |
) |
|
|
(23,948 |
) |
Accretion of discount to convertible subordinated notes to
affiliate |
|
1,004 |
|
|
|
— |
|
|
|
— |
|
Other |
|
(5 |
) |
|
|
(407 |
) |
|
|
(1,320 |
) |
Changes in assets and liabilities: |
|
|
|
|
|
Decrease in restricted cash |
|
— |
|
|
|
— |
|
|
|
707 |
|
(Increase) decrease in accounts receivable |
|
(32,361 |
) |
|
|
(12,088 |
) |
|
|
7,876 |
|
Increase in accounts receivable—affiliates |
|
(1,459 |
) |
|
|
(118 |
) |
|
|
(608 |
) |
(Increase) decrease in inventory |
|
(718 |
) |
|
|
542 |
|
|
|
4,544 |
|
Increase in customer acquisition costs |
|
(25,874 |
) |
|
|
(21,907 |
) |
|
|
(19,869 |
) |
Decrease in prepaid and other current assets |
|
1,915 |
|
|
|
71 |
|
|
|
10,845 |
|
(Increase) decrease in other assets |
|
(465 |
) |
|
|
1,321 |
|
|
|
(1,101 |
) |
Increase in customer relationships and trademarks |
|
— |
|
|
|
— |
|
|
|
(2,776 |
) |
Increase (decrease) in accounts payable and accrued liabilities |
|
14,831 |
|
|
|
14,831 |
|
|
|
(13,307 |
) |
Increase in accounts payable—affiliates |
|
51 |
|
|
|
458 |
|
|
|
944 |
|
(Decrease) increase in other current liabilities |
|
(1,210 |
) |
|
|
2,364 |
|
|
|
(645 |
) |
(Decrease) increase in other non-current liabilities |
|
(1,487 |
) |
|
|
45 |
|
|
|
1,898 |
|
Net cash provided by operating
activities |
|
63,912 |
|
|
|
67,793 |
|
|
|
45,931 |
|
Cash flows from investing activities: |
|
|
|
|
|
Purchases of property and equipment |
|
(1,704 |
) |
|
|
(2,258 |
) |
|
|
(1,766 |
) |
Acquisitions of CenStar and Oasis |
|
— |
|
|
|
— |
|
|
|
(39,847 |
) |
Acquisition of Major Energy Companies and Provider Companies |
|
(1,853 |
) |
|
|
(31,641 |
) |
|
|
— |
|
Acquisitions of Perigee and other customers |
|
(11,759 |
) |
|
|
— |
|
|
|
— |
|
Acquisition of the Verde Companies |
|
(69,538 |
) |
|
|
— |
|
|
|
— |
|
Payment of CenStar Earnout |
|
— |
|
|
|
(1,343 |
) |
|
|
— |
|
Payment of the Major Energy Companies Earnout |
|
(7,403 |
) |
|
|
— |
|
|
|
— |
|
Payment of the Provider Companies Earnout |
|
(5,500 |
) |
|
|
— |
|
|
|
— |
|
Contribution to equity method investment |
|
— |
|
|
|
(1,102 |
) |
|
|
(330 |
) |
Net cash used in investing activities |
|
(97,757 |
) |
|
|
(36,344 |
) |
|
|
(41,943 |
) |
Cash flows from financing activities: |
|
|
|
|
|
Proceeds from issuance of Series A Preferred Stock, net of issuance
costs paid |
|
40,241 |
|
|
|
— |
|
|
|
— |
|
Borrowings on notes payable |
|
206,400 |
|
|
|
79,048 |
|
|
|
59,224 |
|
Payments on notes payable |
|
(152,939 |
) |
|
|
(66,652 |
) |
|
|
(49,826 |
) |
Issuance of convertible subordinated notes to affiliate |
|
— |
|
|
|
— |
|
|
|
7,075 |
|
Restricted stock vesting |
|
(3,091 |
) |
|
|
(1,183 |
) |
|
|
(432 |
) |
Contributions from NuDevco |
|
— |
|
|
|
— |
|
|
|
129 |
|
Proceeds from issuance of Class B common stock |
|
— |
|
|
|
13,995 |
|
|
|
— |
|
Proceeds from disgorgement of stockholders short-swing profits |
|
1,129 |
|
|
|
941 |
|
|
|
— |
|
Excess tax benefit related to restricted stock vesting |
|
— |
|
|
|
185 |
|
|
|
— |
|
Payment of dividends to Class A common shareholders |
|
(9,519 |
) |
|
|
(8,367 |
) |
|
|
(4,456 |
) |
Payment of distributions to non-controlling unitholders |
|
(33,800 |
) |
|
|
(34,930 |
) |
|
|
(15,587 |
) |
Payment of dividends to Preferred Stock |
|
(2,106 |
) |
|
|
— |
|
|
|
— |
|
Purchase of Treasury Stock |
|
(2,011 |
) |
|
|
— |
|
|
|
— |
|
Net cash provided by (used in) financing
activities |
|
44,304 |
|
|
|
(16,963 |
) |
|
|
(3,873 |
) |
Increase in Cash and cash equivalents and Restricted
Cash |
|
10,459 |
|
|
|
14,486 |
|
|
|
115 |
|
Cash and cash equivalents and Restricted cash—beginning of
period |
|
18,960 |
|
|
|
4,474 |
|
|
|
4,359 |
|
Cash and cash equivalents and Restricted cash—end of period |
|
29,419 |
|
|
|
18,960 |
|
|
|
4,474 |
|
Supplemental Disclosure of Cash Flow Information: |
|
|
|
|
|
Non-cash items: |
|
|
|
|
|
Issuance of Class B common stock to affiliates for Major Energy
Companies
acquisition |
|
— |
|
|
|
40,000 |
|
|
|
— |
|
Contingent consideration—earnout obligations incurred in connection with the
Provider
Companies and Major Energy Companies acquisitions |
|
— |
|
|
|
18,936 |
|
|
|
— |
|
Assumption of legal liability in connection with the Major Energy Companies
acquisition |
|
— |
|
|
|
5,000 |
|
|
|
— |
|
Net contribution of the Major Energy Companies |
|
— |
|
|
|
3,873 |
|
|
|
— |
|
Net contribution by NG&E in excess of cash |
|
274 |
|
|
|
— |
|
|
|
— |
|
Installment consideration incurred in connection with the Provider Companies
acquisition |
|
— |
|
|
|
1,890 |
|
|
|
— |
|
Installment consideration incurred in connection with the Verde Companies
acquisition
and Verde Earnout Termination Note |
|
19,994 |
|
|
|
— |
|
|
|
— |
|
Tax benefit from tax receivable agreement |
|
(1,802 |
) |
|
|
31,490 |
|
|
|
(64 |
) |
Liability due to tax receivable agreement |
|
4,674 |
|
|
|
(26,722 |
) |
|
|
(55 |
) |
Property and equipment purchase accrual |
|
91 |
|
|
|
(32 |
) |
|
|
45 |
|
CenStar Earnout accrual |
|
— |
|
|
|
— |
|
|
|
500
|
|
Cash paid during the period for: |
|
|
|
|
|
Interest |
$ |
5,715
|
|
|
$ |
2,280
|
|
|
$ |
1,661
|
|
Taxes |
$ |
11,205
|
|
|
$ |
7,326
|
|
|
$ |
216
|
|
(1) Financial information has been recast to include results attributable to the acquisition of Perigee Energy, LLC by an
affiliate on February 3, 2017. See Notes 2 and 3 "Basis of Presentation and Summary of Significant Accounting Policies" and
"Acquisitions," respectively, for further discussion.
(2) Financial information has been recast to include results attributable to the acquisition of the Major Energy Companies
from an affiliate on April 15, 2016. See Notes 2 and 3 "Basis of Presentation and Summary of Significant Accounting Policies"
and "Acquisitions," respectively, for further discussion.
(3) Financial information has been recast to include results attributable to the acquisition of Oasis Power Holdings LLC by
an affiliate on May 12, 2015. See Note 2 "Basis of Presentation and Summary of Significant Accounting Policies" for further
discussion.
|
SPARK ENERGY, INC.
OPERATING SEGMENT RESULTS
FOR THE YEARS ENDED December 31, 2017, 2016 and 2014
(in thousands, except per unit operating data)
(unaudited) |
|
|
Year Ended December
31, |
|
2017 |
|
2016 |
|
|
2015 |
|
(in thousands, except volume and
per unit operating data) |
Retail Electricity Segment |
|
|
|
|
|
Total Revenues |
$ |
657,561 |
|
|
$ |
417,229 |
|
|
$ |
229,490
|
|
Retail Cost of Revenues |
477,012 |
|
|
286,795 |
|
|
|
170,684 |
|
Less: Net Asset Optimization Revenues |
(5 |
) |
|
— |
|
|
|
— |
|
Less: Net Gains (Losses) on non-trading
derivatives, net of cash settlements |
22,086 |
|
|
12,298 |
|
|
|
(1,449 |
) |
Retail Gross Margin —Electricity |
$ |
158,468 |
|
|
$ |
118,136 |
|
|
$ |
60,255
|
|
Volumes—Electricity (MWhs) |
6,755,663 |
|
|
4,170,593 |
|
|
|
2,075,479 |
|
Retail Gross Margin —Electricity per MWh |
$ |
23.46 |
|
|
$ |
28.33 |
|
|
$ |
29.03
|
|
Retail Natural Gas Segment |
|
|
|
|
|
Total Revenues |
$ |
140,494 |
|
|
$ |
129,468 |
|
|
|
128,663 |
|
Retail Cost of Revenues |
75,155 |
|
|
58,149 |
|
|
|
70,504 |
|
Less: Net Asset Optimization Revenues |
(712 |
) |
|
(586 |
) |
|
|
1,494 |
|
Less: Net Gains (Losses) on non-trading
derivatives, net of cash settlements |
10 |
|
|
7,672 |
|
|
|
3,305 |
|
Retail Gross Margin —Gas |
$ |
66,041 |
|
|
$ |
64,233 |
|
|
$ |
53,360 |
|
Volumes—Gas (MMBtus) |
18,203,684 |
|
|
16,819,713 |
|
|
|
14,786,681 |
|
Retail Gross Margin —Gas per MMBtu |
3.63 |
|
|
3.82 |
|
|
|
3.61 |
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of GAAP to Non-GAAP Measures
Adjusted EBITDA
We define “Adjusted EBITDA” as EBITDA less (i) customer acquisition costs incurred in the current period,
(ii) net gain (loss) on derivative instruments, and (iii) net current period cash settlements on derivative instruments,
plus (iv) non-cash compensation expense, and (v) other non-cash and non-recurring operating items. EBITDA is defined as
net income (loss) before provision for income taxes, interest expense and depreciation and amortization. We deduct all current
period customer acquisition costs (representing spending for organic customer acquisitions) in the Adjusted EBITDA calculation
because such costs reflect a cash outlay in the period in which they are incurred, even though we capitalize such costs and
amortize them over two years in accordance with our accounting policies. The deduction of current period customer acquisition costs
is consistent with how we manage our business, but the comparability of Adjusted EBITDA between periods may be affected by varying
levels of customer acquisition costs. For example, our Adjusted EBITDA is lower in years of customer growth reflecting larger
customer acquisition spending. We do not deduct the cost of customer acquisitions through acquisitions of business or portfolios of
customers in calculated Adjusted EBITDA. We deduct our net gains (losses) on derivative instruments, excluding current period cash
settlements, from the Adjusted EBITDA calculation in order to remove the non-cash impact of net gains and losses on derivative
instruments. We also deduct non-cash compensation expense as a result of restricted stock units that are issued under our long-term
incentive plan.
We believe that the presentation of Adjusted EBITDA provides information useful to investors in assessing our
liquidity and financial condition and results of operations and that Adjusted EBITDA is also useful to investors as a financial
indicator of our ability to incur and service debt, pay dividends and fund capital expenditures. Adjusted EBITDA is a supplemental
financial measure that management and external users of our condensed consolidated financial statements, such as industry analysts,
investors, commercial banks and rating agencies, use to assess the following:
- our operating performance as compared to other publicly traded companies in the retail energy industry, without regard to
financing methods, capital structure or historical cost basis;
- the ability of our assets to generate earnings sufficient to support our proposed cash dividends; and
- our ability to fund capital expenditures (including customer acquisition costs) and incur and service debt.
Retail Gross Margin
We define retail gross margin as operating income (loss) plus (i) depreciation and amortization expenses
and (ii) general and administrative expenses, less (i) net asset optimization revenues, (ii) net gains (losses) on
non-trading derivative instruments, and (iii) net current period cash settlements on non-trading derivative instruments.
Retail gross margin is included as a supplemental disclosure because it is a primary performance measure used by our management to
determine the performance of our retail natural gas and electricity business by removing the impacts of our asset optimization
activities and net non-cash income (loss) impact of our economic hedging activities. As an indicator of our retail energy business’
operating performance, retail gross margin should not be considered an alternative to, or more meaningful than, operating income
(loss), its most directly comparable financial measure calculated and presented in accordance with GAAP.
We believe retail gross margin provides information useful to investors as an indicator of our retail energy
business's operating performance.
The GAAP measures most directly comparable to Adjusted EBITDA are net income (loss) and net cash provided by
operating activities. The GAAP measure most directly comparable to Retail Gross Margin is operating income (loss). Our non-GAAP
financial measures of Adjusted EBITDA and Retail Gross Margin should not be considered as alternatives to net income (loss), net
cash provided by operating activities, or operating income (loss). Adjusted EBITDA and Retail Gross Margin are not presentations
made in accordance with GAAP and have important limitations as analytical tools. You should not consider Adjusted EBITDA or Retail
Gross Margin in isolation or as a substitute for analysis of our results as reported under GAAP. Because Adjusted EBITDA and Retail
Gross Margin exclude some, but not all, items that affect net income (loss) and net cash provided by operating activities, and are
defined differently by different companies in our industry, our definition of Adjusted EBITDA and Retail Gross Margin may not be
comparable to similarly titled measures of other companies.
Management compensates for the limitations of Adjusted EBITDA and Retail Gross Margin as analytical tools by
reviewing the comparable GAAP measures, understanding the differences between the measures and incorporating these data points into
management’s decision-making process.
The following tables present a reconciliation of Adjusted EBITDA to net income (loss) and net cash provided by
operating activities for each of the periods indicated.
|
|
|
|
APPENDIX TABLES A-1 AND A-2
ADJUSTED EBITDA RECONCILIATIONS
(in thousands)
(unaudited) |
|
|
|
|
|
Year Ended December 31, |
|
Quarter Ended December 31, |
(in thousands) |
2017 |
|
2016 |
|
2017 |
|
2016 |
Reconciliation of Adjusted EBITDA to
Net Income: |
|
|
|
|
|
|
|
Net income |
76,281 |
|
|
65,673 |
|
|
$ |
47,536 |
|
|
$ |
24,137 |
|
Depreciation and amortization |
42,341 |
|
|
32,788 |
|
|
11,906 |
|
|
9,451 |
|
Interest expense |
11,134 |
|
|
8,859 |
|
|
2,374 |
|
|
6,004 |
|
Income tax expense |
37,528 |
|
|
10,426 |
|
|
32,263 |
|
|
3,574 |
|
EBITDA (1) |
167,284 |
|
|
117,746 |
|
|
94,079 |
|
|
43,166 |
|
Less: |
|
|
|
|
|
|
|
Net, Gains (losses) on derivative instruments |
5,008 |
|
|
22,407 |
|
|
39,233 |
|
|
19,520 |
|
Net, Cash settlements on derivative instruments |
16,309 |
|
|
(2,146 |
) |
|
(2,499 |
) |
|
(5,573 |
) |
Customer acquisition costs |
25,874 |
|
|
24,934 |
|
|
7,232 |
|
|
9,717 |
|
Plus: |
|
|
|
|
— |
|
|
|
Non-cash compensation expense |
5,058 |
|
|
5,242 |
|
|
1,035 |
|
|
1,215 |
|
Contract termination charge related to
Major Energy Companies change of
control |
— |
|
|
4,099 |
|
|
— |
|
|
4,099 |
|
Change in Tax Receivable Agreement liability (1) |
(22,267 |
) |
|
— |
|
|
$ |
(22,267 |
) |
|
$ |
— |
|
Adjusted EBITDA (2) |
102,884 |
|
|
81,892 |
|
|
$ |
28,881 |
|
|
$ |
24,816 |
|
(1) Represents the change in the value of the Tax Receivable Agreement liability due to U.S. Tax Reform.
(2) Includes $9.6 million and $1.1 million related to the change in fair value as the result of the revaluation of the Major
Earnout liability at December 31, 2017 and 2016.
|
|
|
|
|
Year Ended December 31, |
|
Quarter Ended December 31, |
(in thousands) |
2017 |
|
2016 |
|
2017 |
|
2016 |
Reconciliation of Adjusted EBITDA to net
cash provided by operating activities: |
|
|
|
|
|
|
|
Net cash provided by operating activities |
$ |
63,912 |
|
|
$ |
67,793 |
|
|
$ |
88 |
|
|
$ |
6,150 |
|
Amortization of deferred financing costs |
(1,035 |
) |
|
(668 |
) |
|
(285 |
) |
|
(203 |
) |
Allowance for doubtful accounts and bad
debt expense |
(6,550 |
) |
|
(1,261 |
) |
|
(3,114 |
) |
|
(419 |
) |
Interest expense |
11,134 |
|
|
8,859 |
|
|
2,374 |
|
|
6,004 |
|
Income tax expense |
37,528 |
|
|
10,426 |
|
|
32,263 |
|
|
3,574 |
|
Change in Tax Receivable Agreement liability (1) |
(22,267 |
) |
|
— |
|
|
(22,267 |
) |
|
— |
|
Changes in operating working capital |
|
|
|
|
|
|
|
Accounts receivable, prepaids, current assets |
31,905 |
|
|
12,135 |
|
|
48,989 |
|
|
31,362 |
|
Inventory |
718 |
|
|
542 |
|
|
(1,218 |
) |
|
1,110 |
|
Accounts payable and accrued liabilities |
(13,672 |
) |
|
(17,653 |
) |
|
(21,808 |
) |
|
(23,507 |
) |
Other |
1,211 |
|
|
1,719 |
|
|
(6,141 |
) |
|
745 |
|
Adjusted EBITDA |
$ |
102,884 |
|
|
$ |
81,892 |
|
|
$ |
28,881 |
|
|
$ |
24,816 |
|
Cash Flow Data: |
|
|
|
|
|
|
|
Cash flows provided by operating activity |
$ |
63,912 |
|
|
$ |
67,793 |
|
|
$ |
88 |
|
|
$ |
6,150 |
|
Cash flows used in investing activity |
(97,757 |
) |
|
(36,344 |
) |
|
(1,780 |
) |
|
(2,169 |
) |
Cash flows provided by (used in) financing
activity |
44,304 |
|
|
(16,963 |
) |
|
19,862 |
|
|
(1,928 |
) |
(1) Represents the change in the value of the Tax Receivable Agreement liability due to U.S. Tax Reform.
The following table presents a reconciliation of Retail Gross Margin to operating income (loss) for each of the
periods indicated.
|
|
|
|
APPENDIX TABLE A-3
RETAIL GROSS MARGIN RECONCILIATION
(in thousands)
(unaudited) |
|
|
|
|
|
Year Ended December 31, |
|
Quarter Ended 31, |
(in thousands) |
2017 |
|
2016 |
|
2017 |
|
2016 |
Reconciliation of Retail Gross Margin to
Operating Income: |
|
|
|
|
|
|
|
Operating income |
$ |
102,420 |
|
|
$ |
84,001 |
|
|
$ |
59,752 |
|
|
$ |
33,098 |
|
Depreciation and amortization |
42,341 |
|
|
32,788 |
|
|
11,906 |
|
|
9,451 |
|
General and administrative |
101,127 |
|
|
84,964 |
|
|
31,722 |
|
|
29,776 |
|
Less: |
|
|
|
|
|
|
|
Net asset optimization (expenses) revenues |
(717 |
) |
|
(586 |
) |
|
(36 |
) |
|
(544 |
) |
Net, Losses (gains) on non-trading
derivative instruments |
5,588 |
|
|
22,254 |
|
|
39,734 |
|
|
19,735 |
|
Net, Cash settlements on non-trading
derivative instruments |
16,508 |
|
|
(2,284 |
) |
|
(2,508 |
) |
|
(5,625 |
) |
Retail Gross Margin |
$ |
224,509 |
|
|
$ |
182,369 |
|
|
$ |
66,190 |
|
|
$ |
58,759 |
|
Retail Gross Margin - Retail Electricity
Segment |
$ |
158,468 |
|
|
$ |
118,136 |
|
|
$ |
42,339 |
|
|
$ |
35,910 |
|
Retail Gross Margin - Retail Natural Gas
Segment |
$ |
66,041 |
|
|
$ |
64,233 |
|
|
$ |
23,851 |
|
|
$ |
22,849 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contact: Spark Energy, Inc.
Investors:
Christian Hettick, 832-200-3727
ir@sparkenergy.com
Media:
Eric Melchor, 281-833-4151