NEWARK, N.J., March 7, 2019 /PRNewswire/ -- Genie Energy
Ltd. (NYSE: GNE, GNEPRA) reported fourth quarter 2018 earnings per
diluted share of $0.47 on revenue of
$62.8 million. Full year 2018
earnings per diluted share were $0.83
on revenue of $280.3 million.
OPERATIONAL AND FINANCIAL HIGHLIGHTS
(Throughout
this release, 4Q18 results are compared to 4Q17 and full year 2018
results are compared to full year 2017 unless otherwise
noted)
- During 4Q18, Genie acquired a majority stake in Prism Solar
Technologies, a solar solutions company and domestic manufacturer
of high-efficiency bi-facial solar panels;
- In January 2019, Genie
acquired a controlling interest in Helsinki-based Lumo Energia, a Finnish
provider of retail electricity;
- Consolidated revenue in 4Q18 decreased to $62.8 million from $73.1
million. Full year 2018 revenue increased to
$280.3 million from $264.2 million;
- Consolidated loss from operations in 4Q18 was $1.8 million compared to income from operations
of $430 thousand. Full year
2018 income from operations was $8.5
million compared to a loss from operations of $6.5 million;
- Consolidated Adjusted EBITDA* in 4Q18 was negative
$554 thousand compared to positive
$8.9 million. Full year 2018
Adjusted EBITDA increased to $17.9
million from $7.3 million;
- Earnings per diluted share were $0.47 in 4Q18 compared to a loss per share of
$0.01. Full year 2018 earnings
per diluted share were $0.83 compared
to a loss per share of $0.36. EPS in
4Q18 was positively impacted by the release of a valuation
allowance on a deferred tax asset;
- Genie Energy's Board of Directors has declared a fourth
quarter dividend of $0.075 per
share.
COMMENTS OF MICHAEL STEIN, CEO OF GENIE ENERGY
"Throughout 2018, we continued our strategic focus on building
and diversifying our retail energy and services business. We
invested the strong cash flows generated by our domestic energy
supply operations in promising growth opportunities, both domestic
and international, while significantly strengthening our balance
sheet.
"Our recent investment initiatives include expansion of our
retail supply operations into new international markets.
Following the end of the quarter, we acquired a majority stake in
Lumo Energia, a Finnish retail energy supplier. Lumo brings
us its existing customer base and a platform to address the 12-plus
million deregulated meters in the Scandinavian market. In
February, we began to enroll new customers in Japan's fully deregulating and extensive
retail market. With our joint venture in the UK ramping up
its meter acquisition program, we had over 50,000 international
meters as of the end of February and footholds in several of the
world's most promising deregulated retail energy markets.
"Domestically, we plan to return to meter growth in 2019.
As part of that effort, we are working to expand our service
footprint in certain states we already serve and to obtain licenses
to operate in additional deregulated states. Late last year,
we secured a license to operate in Texas, one of the nation's largest deregulated
retail electricity markets, and we expect to begin enrolling meters
there during the first half of 2019.
"In addition, we are intensifying our customer acquisition
efforts in our current territories while maintaining our discipline
and focus on higher consumption meters. This effort generated
strong positive net meter growth through the first two months of
2019.
"Within our energy services business, we are very excited by the
potential and progress of Prism Solar Technologies, the
manufacturer of high efficiency, bi-facial solar panels in which we
acquired a controlling stake during the fourth quarter.
"On a consolidated bases, Genie Energy delivered solid financial
results for the full year 2018 including significant gains in
revenue, income from operations, and EPS. Fourth quarter
results were in-line with our expectations although not at the
level of our performance in the year ago quarter."
CONSOLIDATED RESULTS
$ in millions,
except EPS
|
4Q18
|
3Q18
|
4Q17
|
|
4Q18
-4Q17
change (% /
$)
|
|
2018
|
2017
|
2018-2017
change
(% /
$)
|
Revenue
|
$62.8
|
$71.8
|
$73.1
|
|
(14.1)%
|
|
$280.3
|
$264.2
|
+6.1%
|
Gross
profit
|
$14.7
|
$21.3
|
$26.8
|
|
(44.9)%
|
|
$76.5
|
$85.5
|
(10.5)%
|
Gross margin
percentage
|
23.5%
|
29.6%
|
36.6%
|
|
(1310)BP
|
|
27.3%
|
32.4%
|
(510) BP
|
SG&A expense
(including stock-based
compensation)
|
$15.2
|
$13.9
|
$17.1
|
|
(11.2)%
|
|
$61.6
|
$80.1
|
(23.1)%
|
Stock-based
compensation included in
SG&A
|
$0.8
|
$1.1
|
$1.4
|
|
(41.2)%
|
|
$4.5
|
$5.2
|
(13.2)%
|
Exploration
expense**
|
-
|
-
|
$2.3
|
|
$(2.3)
|
|
$0.2
|
$4.9
|
$(4.6)
|
Equity in the net
loss of equity method
investees ***
|
$(1.3)
|
$(0.9)
|
$(0.4)
|
|
$(0.9)
|
|
$(3.4)
|
$(0.6)
|
$(2.9)
|
Write-off of
capitalized exploration cost
|
-
|
-
|
$6.5
|
|
$(6.5)
|
|
-
|
$6.5
|
$(6.5)
|
(Loss) income from
operations
|
$(1.8)
|
$6.0
|
$0.4
|
|
$(2.2)
|
|
$8.5
|
$(6.5)
|
+$15.1
|
Adjusted
EBITDA*
|
$(0.6)
|
$8.0
|
$8.9
|
|
$(9.5)
|
|
$17.9
|
$7.3
|
+$10.6
|
Benefit from
(provision for) income taxes
|
$14.1
|
$(0.7)
|
$(1.3)
|
|
+$15.4
|
|
$12.4
|
(1.7)
|
+$14.1
|
Net income (loss)
attributable to Genie
Energy common stockholders
|
$12.3
|
$5.5
|
$(0.2)
|
|
+$12.5
|
|
$21.3
|
$(8.5)
|
+$29.8
|
Earnings (loss) per
diluted share attributable
to Genie Energy common stockholders
|
$0.47
|
$0.21
|
$(0.01)
|
|
+$0.48
|
|
$0.83
|
$(0.36)
|
+$1.19
|
Capitalized
exploration costs
|
-
|
-
|
-
|
|
-
|
|
-
|
$5.6
|
$(5.6)
|
Net cash (used in)
provided by operating
activities
|
$(0.9)
|
$8.2
|
$5.9
|
|
$(6.0)
|
|
$19.4
|
$9.4
|
+$10.0
|
*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 Measure at the end of this release for an
explanation of Adjusted EBITDA and reconciliation to the most
directly comparable GAAP measure.
** 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".
*** Genie Energy accounts for its investment in Orbit
Energy, its joint venture operating in the UK, and in Atid, a
drilling services company in Israel, under the equity method of accounting.
Under this method Genie Energy records its share in the net income
or loss of the venture. Therefore, revenue generated, and expenses
incurred by the venture are not reflected in Genie Energy's
consolidated revenue and expenses.
SEGMENT RESULTS
Genie Energy's segment reporting has been revised to align with
recent changes in its business operations and structure.
Effective 4Q18 and for all prior periods reported:
- Genie Retail Energy (GRE) comprises domestic and international
retail energy supply businesses, including results from the
operations of Genie Energy's joint venture in the UK;
- Genie Energy Services (GES) comprises Genie Solar, Prism Solar Technologies, and
Diversegy, a retail brokerage and advisory business (formerly in
GRE);
- Genie Oil and Gas (GOGAS) comprises Afek's oil and gas
exploration venture in Israel
(formerly a separate segment) and legacy inactive exploration
ventures;
- Corporate is Genie Energy's corporate overhead.
Genie Retail Energy (GRE)
Genie Retail
Energy
($ in
millions)
|
4Q18
|
3Q18
|
4Q17
|
|
4Q18-
4Q17
change
(% / $)
|
|
2018
|
2017
|
2018-2017
change (% /
$)
|
Total
revenue
|
$58.8
|
$71.0
|
$72.6
|
|
(19.0)%
|
|
$274.4
|
$262.3
|
+4.6%
|
Electricity revenue
|
$46.7
|
$67.3
|
$58.5
|
|
(20.2)%
|
|
$227.9
|
$222.2
|
+2.6%
|
Natural
gas revenue
|
$12.1
|
$3.7
|
$14.1
|
|
(14.1)%
|
|
$46.6
|
$40.1
|
+16.1%
|
Gross
profit
|
$14.5
|
$20.8
|
$26.4
|
|
(45.3)%
|
|
$75.3
|
$84.4
|
(10.8)%
|
Gross margin
percentage
|
24.6%
|
29.4%
|
36.4%
|
|
(1180) BP
|
|
27.4%
|
32.2%
|
(480) BP
|
SG&A
expense
|
$11.5
|
$10.6
|
$13.4
|
|
(13.6)%
|
|
$46.6
|
$65.7
|
(29.1)%
|
Equity in the net
loss of equity
method investees
|
$(1.0)
|
$(0.8)
|
$(0.4)
|
|
$(0.6)
|
|
$(3.0)
|
$(0.6)
|
$(2.4)
|
Income from
operations
|
$1.6
|
$9.4
|
$12.3
|
|
$(10.7)
|
|
$24.8
|
$17.4
|
+$7.4
|
Adjusted
EBITDA
|
$2.1
|
$9.9
|
$12.9
|
|
$(10.8)
|
|
$26.9
|
$19.6
|
+$7.3
|
Genie Retail Energy's US customer base - as measured in
residential customer equivalents (RCEs) and meters served -
decreased year over year (see chart below) as the company focused
on higher value customers, reduced regulatory risk in certain
jurisdictions, and reduced customer acquisition expense in order to
increase liquidity and enhance strategic flexibility.
Genie Retail
Energy
RCEs and
Meters at End
of Quarter
(in
thousands)
|
December 31*,
2018
|
September 30,
2018
|
June 30,
2018
|
March 31,
2018
|
December 31,
2017
|
Electricity
RCEs
|
197
|
216
|
219
|
218
|
228
|
Natural gas
RCEs
|
59
|
59
|
64
|
67
|
73
|
Total
RCEs
|
256
|
275
|
283
|
285
|
301
|
|
|
|
|
|
|
Electricity
meters
|
249
|
269
|
282
|
284
|
307
|
Natural gas
meters
|
74
|
73
|
81
|
89
|
105
|
Total
meters
|
323
|
342
|
363
|
373
|
412
|
*Includes Orbit
Energy
|
|
|
|
|
|
GRE: 4Q18 and Full Year 2018 KPIs and
Take-Aways:
- Gross meter acquisitions during 4Q18 totaled 42,000 compared to
62,000 in 4Q17 and 45,000 in 3Q18.
- Average monthly customer churn in 4Q18 was 7.1% compared to
5.7% in the prior quarter and 6.9% in the year ago quarter. Churn
was negatively impacted by the expiration of a municipal
aggregation agreement in New
Jersey. Excluding the impact of the expiration, churn for
the quarter would have been approximately 6.1%.
- Meters enrolled in offerings with fixed rate characteristics
constituted approximately 32% of GRE's total load during
December 2018 compared to 30% in
December 2017.
- 4Q18 revenue decreased to $58.8
million from $72.6 million,
and full year 2018 revenue decreased to $274.4 million from $262.3
million. The revenue reductions were driven by
decreases in GRE's meter base slightly offset by higher revenue per
unit sold of electricity and natural gas.
- Gross margin percentage in 4Q18 was 24.6% compared to 36.4% in
4Q17. Full year 2018 gross margin percentage decreased to
27.4% from 32.2%. The decreases primarily reflect rising
electricity commodity costs compared to the prior periods.
- SG&A expense in 4Q18 decreased to $11.5 million from $13.4
million. Full year 2018 SG&A expense decreased to
$46.6 million from $65.7 million. The decreases primarily
resulted from reductions in customer acquisition costs related to
the lower levels of gross meter adds and lower legal expense.
- Income from operations in 4Q18 decreased to $1.6 million from $12.3
million driven principally by decreases in meters served and
a decrease in the gross margin from electricity sales. Full
year 2018 income from operations increased to $24.8 million from $17.4
million primarily due to the decrease in full year SG&A
expense.
Genie Energy Services
Genie Energy Services is
comprised of Diversegy, an energy advisory and brokerage services
company, and Genie's solar businesses including Prism Solar
Technologies in which Genie acquired a controlling interest during
4Q18. GES' revenue was $4.0
million in 4Q18 compared to $488
thousand in 4Q17. The increase primarily reflects the
addition of Prism Solar Technologies' revenue in 4Q18. GES'
loss from operations was $637
thousand compared to $84
thousand in 4Q17. GES' full year 2018 revenue was
$5.7 million compared to $1.9 million in 2017, and full year 2018 loss
from operations was $982 thousand
compared to $784 thousand.
Genie Oil and Gas (GOGAS)
Genie Energy's GOGAS segment
includes its Afek oil and gas exploration project, several dormant
exploration operations and a minority position in a drilling
services company in Israel. Afek is currently awaiting the
permits required for final testing on an existing well. In
3Q18, GOGAS divested a majority stake in a drilling services
company. For periods prior to the divestiture, results
include the full impact of that company's operations, and for
subsequent periods, results include only Genie Energy's portion of
results.
In 4Q18, GOGAS incurred $778
thousand in SG&A expense. In 4Q17, GOGAS incurred
$524 thousand in SG&A expense,
$2.3 million in exploration expense,
and a $6.5 million write-off of
capitalized exploration costs.
Corporate
Corporate overhead totaled $1.7 million in 4Q18, including $646 thousand in non-cash compensation, compared
to $2.5 million and $1.1 million, respectively. Full year 2018
corporate overhead totaled $8.3
million, including $4.0
million in non-cash compensation, compared to $9.8 million in 2017, including $4.4 million in non-cash compensation.
BALANCE SHEET HIGHLIGHTS
At December 31, 2018, Genie Energy
had $146.9 million in total assets,
including $44.2 million in cash, cash
equivalents and restricted cash. Liabilities totaled
$54.2 million. Working capital
(current assets less current liabilities) totaled $47.1 million.
DIVIDEND ON GENIE ENERGY COMMON STOCK
Genie Energy's Board of Directors has declared a 4Q18 dividend
of $0.075 per share of Class A and
Class B common stock with a record date of March 25, 2019. The dividend will be paid
on or about March 29, 2019. The
distribution will be treated as an ordinary dividend for income tax
purposes.
GENIE ENERGY EARNINGS CONFERENCE CALL
This earnings press release is available for download in the
"Investors" section of the Genie Energy website
(www.genie.com/investor-relations) and has been filed on a current
report (Form 8-K) with the SEC.
At 8:30 AM Eastern time today,
March 7, 2019, Genie Energy's
management will host a conference call to present financial and
operational results, business outlook and strategy 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 March 14, 2019. The replay PIN is
10128971. 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 to have
earnings releases and other press releases e-mailed directly to
them.
ABOUT GENIE ENERGY LTD.
Genie Energy Ltd., (NYSE: GNE, GNEPRA) is a global energy
solutions company. We supply homes and small businesses in
the US, Europe and Asia with electricity - including electricity
generated from renewable resources - and natural gas. We
provide commercial and industrial clients with energy brokerage and
consultative services through our Diversegy brand. Through
Genie Solar Energy and Prism Solar, we design, construct and
deliver commercial solar energy solutions. For more
information, visit Genie.com.
In this press release, all statements that are not purely
about historical facts, including, but not limited to, those in
which we use the words "believe," "anticipate," "expect," "plan,"
"intend," "estimate, "target" and similar expressions, are
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. While these
forward-looking statements represent our current judgment of what
may happen in the future, actual results may differ materially from
the results expressed or implied by these statements due to
numerous important factors, including, but not limited to, those
described in our most recent report on SEC Form 10-K (under the
headings "Risk Factors" and "Management's Discussion and Analysis
of Financial Condition and Results of Operations"), which may be
revised or supplemented in subsequent reports on SEC Forms 10-Q and
8-K. We are under no obligation, and expressly disclaim any
obligation, to update the forward-looking statements in this press
release, whether as a result of new information, future events or
otherwise.
GENIE ENERGY
LTD.
|
|
CONSOLIDATED
BALANCE SHEETS
|
|
|
|
|
|
|
|
December
31
(in thousands, except per share amounts)
|
|
2018
|
|
|
2017
|
|
ASSETS
|
|
|
|
|
|
|
CURRENT
ASSETS:
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
41,601
|
|
|
$
|
29,913
|
|
Trade accounts
receivable, net of allowance for doubtful accounts of $2,003 and
$1,099 at December 31, 2018
and 2017, respectively
|
|
|
35,920
|
|
|
|
44,629
|
|
Inventory
|
|
|
9,893
|
|
|
|
3,986
|
|
Prepaid expenses
|
|
|
6,167
|
|
|
|
6,131
|
|
Other current assets
|
|
|
4,323
|
|
|
|
5,503
|
|
TOTAL CURRENT
ASSETS
|
|
|
97,904
|
|
|
|
90,162
|
|
Property and
equipment, net
|
|
|
4,301
|
|
|
|
4,020
|
|
Goodwill
|
|
|
11,082
|
|
|
|
9,998
|
|
Other intangibles,
net
|
|
|
6,321
|
|
|
|
4,859
|
|
Investment in equity
method investees
|
|
|
2,208
|
|
|
|
3,450
|
|
Restricted cash –
long-term
|
|
|
943
|
|
|
|
1,496
|
|
Deferred income tax
assets, net
|
|
|
15,625
|
|
|
|
2,141
|
|
Other assets
|
|
|
8,480
|
|
|
|
9,652
|
|
TOTAL ASSETS
|
|
$
|
146,864
|
|
|
$
|
125,778
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES:
|
|
|
|
|
|
|
|
|
Notes payable
|
|
$
|
923
|
|
|
$
|
—
|
|
Trade accounts
payable
|
|
|
18,508
|
|
|
|
21,068
|
|
Accrued expenses
|
|
|
25,242
|
|
|
|
28,069
|
|
Income taxes payable
|
|
|
1,463
|
|
|
|
2,204
|
|
Due to IDT
Corporation
|
|
|
234
|
|
|
|
228
|
|
Other current
liabilities
|
|
|
4,416
|
|
|
|
3,172
|
|
TOTAL CURRENT
LIABILITIES
|
|
|
50,786
|
|
|
|
54,741
|
|
Revolving line of
credit
|
|
|
2,516
|
|
|
|
2,513
|
|
Other liabilities
|
|
|
900
|
|
|
|
1,396
|
|
TOTAL LIABILITIES
|
|
|
54,202
|
|
|
|
58,650
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
EQUITY:
|
|
|
|
|
|
|
|
|
Genie Energy Ltd.
stockholders' equity:
|
|
|
|
|
|
|
|
|
Preferred stock,
$0.01 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 December 31, 2018 and
2017
|
|
|
19,743
|
|
|
|
19,743
|
|
Class A common stock,
$0.01 par value; authorized shares – 35,000; 1,574 shares issued
and outstanding at December 31, 2018 and
2017
|
|
|
16
|
|
|
|
16
|
|
Class B common stock,
$0.01 par value; authorized shares – 200,000; 25,544 and 23,601
shares issued and 25,294 and 23,270 shares outstanding at December
31, 2018 and 2017, respectively
|
|
|
255
|
|
|
|
236
|
|
Additional paid-in
capital
|
|
|
136,629
|
|
|
|
130,870
|
|
Treasury stock, at
cost, consisting of 250 and 331 shares of Class B common at
December 31, 2018 and 2017,
respectively
|
|
|
(1,624)
|
|
|
|
(2,428)
|
|
Accumulated other
comprehensive income
|
|
|
2,591
|
|
|
|
3,045
|
|
Accumulated deficit
|
|
|
(53,939)
|
|
|
|
(67,469)
|
|
Total Genie Energy
Ltd. stockholders' equity
|
|
|
103,671
|
|
|
|
84,013
|
|
Noncontrolling
interests:
|
|
|
|
|
|
|
|
|
Noncontrolling
interests
|
|
|
(11,009)
|
|
|
|
(16,885)
|
|
Total noncontrolling
interests
|
|
|
(11,009)
|
|
|
|
(16,885)
|
|
TOTAL EQUITY
|
|
|
92,662
|
|
|
|
67,128
|
|
TOTAL LIABILITIES
AND EQUITY
|
|
$
|
146,864
|
|
|
$
|
125,778
|
|
GENIE ENERGY
LTD.
|
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
|
|
|
Year ended
December 31,
|
|
(in thousands,
except per share data)
|
|
2018
|
|
|
2017
|
|
REVENUES:
|
|
|
|
|
|
|
Electricity
|
|
$
|
227,883
|
|
|
$
|
222,171
|
|
Natural gas
|
|
|
46,560
|
|
|
|
40,098
|
|
Other
|
|
|
5,866
|
|
|
|
1,933
|
|
Total revenues
|
|
|
280,309
|
|
|
|
264,202
|
|
Cost of revenues
|
|
|
203,762
|
|
|
|
178,693
|
|
GROSS PROFIT
|
|
|
76,547
|
|
|
|
85,509
|
|
OPERATING EXPENSES
AND LOSSES:
|
|
|
|
|
|
|
|
|
Selling, general and
administrative
|
|
|
61,583
|
|
|
|
80,122
|
|
Exploration
|
|
|
244
|
|
|
|
4,879
|
|
Write-off of
capitalized exploration costs
|
|
|
—
|
|
|
|
6,483
|
|
Impairment of
assets
|
|
|
2,742
|
|
|
|
—
|
|
Equity in the net
loss in equity method investees
|
|
|
3,430
|
|
|
|
565
|
|
Income (Loss) from
operations
|
|
|
8,548
|
|
|
|
(6,540)
|
|
Interest income
|
|
|
557
|
|
|
|
295
|
|
Interest
expense
|
|
|
(401)
|
|
|
|
(310)
|
|
Gain
on extinguishment of liability
|
|
|
164
|
|
|
|
—
|
|
Other income
(expense), net
|
|
|
156
|
|
|
|
(367)
|
|
Income (Loss)
before income taxes
|
|
|
9,024
|
|
|
|
(6,922)
|
|
Benefit from
(provision) for income taxes
|
|
|
12,376
|
|
|
|
(1,726)
|
|
NET INCOME
(LOSS)
|
|
|
21,400
|
|
|
|
(8,648)
|
|
Net loss attributable
to noncontrolling interests
|
|
|
1,385
|
|
|
|
1,654
|
|
NET INCOME (LOSS)
ATTRIBUTABLE TO GENIE ENERGY LTD.
|
|
|
22,785
|
|
|
|
(6,994)
|
|
Dividends on
preferred stock
|
|
|
(1,481)
|
|
|
|
(1,481)
|
|
NET INCOME (LOSS)
ATTRIBUTABLE TO GENIE ENERGY LTD. COMMON STOCKHOLDERS
|
|
$
|
21,304
|
|
|
$
|
(8,475)
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per
share attributed to Genie Energy Ltd. common stockholder
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.85
|
|
|
$
|
(0.36)
|
|
Diluted
|
|
$
|
0.83
|
|
|
$
|
(0.36)
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
number of shares used in calculation of earnings (loss) per
share
|
|
|
|
|
|
|
|
|
Basic
|
|
|
25,154
|
|
|
|
23,531
|
|
Diluted
|
|
|
25,695
|
|
|
|
23,531
|
|
|
|
|
|
|
|
|
|
|
Dividends declared
per common share
|
|
$
|
0.30
|
|
|
$
|
0.30
|
|
(i) Stock-based
compensation included in selling, general and administrative
expenses
|
|
$
|
4,523
|
|
|
$
|
5,213
|
|
GENIE ENERGY
LTD.
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
|
|
Year ended
December 31,
|
|
(in
thousands)
|
|
2018
|
|
|
2017
|
|
OPERATING
ACTIVITIES
|
|
|
|
|
|
|
Net
income (loss)
|
|
$
|
21,400
|
|
|
$
|
(8,648)
|
|
Adjustments to
reconcile net income (loss) to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
2,062
|
|
|
|
2,140
|
|
Deferred income taxes
|
|
|
(13,483)
|
|
|
|
(360)
|
|
Provision for
doubtful accounts receivable
|
|
|
904
|
|
|
|
762
|
|
Stock-based
compensation
|
|
|
4,523
|
|
|
|
5,213
|
|
Gain on sale disposal
of property and equipment
|
|
|
(18)
|
|
|
|
—
|
|
Gain on
extinguishment of liability
|
|
|
(164)
|
|
|
|
—
|
|
Write-off of
capitalized exploration costs
|
|
|
—
|
|
|
|
6,483
|
|
Impairment of
assets
|
|
|
2,742
|
|
|
|
—
|
|
Equity in the net
loss of equity method investees
|
|
|
3,430
|
|
|
|
565
|
|
Change in assets and
liabilities, net of effect of acquisition:
|
|
|
|
|
|
|
|
|
Trade accounts
receivable
|
|
|
7,817
|
|
|
|
(8,024)
|
|
Inventory
|
|
|
(4,764)
|
|
|
|
2,003
|
|
Prepaid expenses
|
|
|
219
|
|
|
|
(2,027)
|
|
Other current assets
and other assets
|
|
|
2,726
|
|
|
|
(3,703)
|
|
Trade accounts
payable, accrued expenses and other current liabilities
|
|
|
(7,319)
|
|
|
|
15,110
|
|
Due to IDT
Corporation
|
|
|
20
|
|
|
|
88
|
|
Income taxes payable
|
|
|
(741)
|
|
|
|
(222)
|
|
Net cash provided by
operating activities
|
|
|
19,354
|
|
|
|
9,380
|
|
INVESTING
ACTIVITIES
|
|
|
|
|
|
|
|
|
Capital
expenditures
|
|
|
(584)
|
|
|
|
(3,292)
|
|
Investments in capitalized exploration costs – unproved oil and gas
property
|
|
|
—
|
|
|
|
(5,531)
|
|
Proceeds from disposal of property
|
|
|
62
|
|
|
|
—
|
|
Payment
for acquisition of license in Japan
|
|
|
(745)
|
|
|
|
—
|
|
Cash
transferred to Atid
|
|
|
(209)
|
|
|
|
—
|
|
Payment
for acquisition, net of cash acquired
|
|
|
(250)
|
|
|
|
(4,180)
|
|
Repayment of notes receivable
|
|
|
94
|
|
|
|
445
|
|
Investments in equity method investees
|
|
|
(1,306)
|
|
|
|
(3,970)
|
|
Net cash used in
investing activities
|
|
|
(2,938)
|
|
|
|
(16,528)
|
|
FINANCING
ACTIVITIES
|
|
|
|
|
|
|
|
|
Dividends paid
|
|
|
(9,256)
|
|
|
|
(8,908)
|
|
Purchases of equity of subsidiary
|
|
|
—
|
|
|
|
(312)
|
|
Proceeds from revolving line of credit and loan payable
|
|
|
—
|
|
|
|
14,450
|
|
Repayment of revolving line of credit and loan payable
|
|
|
—
|
|
|
|
(12,655)
|
|
Repayment of notes payable
|
|
|
10
|
|
|
|
—
|
|
Proceeds from exercise of stock options
|
|
|
—
|
|
|
|
108
|
|
Proceeds from sales of Class B common stock and
warrants
|
|
|
6,000
|
|
|
|
—
|
|
Repurchases of Class B common stock from employees
|
|
|
(889)
|
|
|
|
(829)
|
|
Net cash used in
financing activities
|
|
|
(4,135)
|
|
|
|
(8,146)
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
|
|
(11)
|
|
|
|
169
|
|
Net increase
(decrease) in cash and cash equivalents
|
|
|
12,270
|
|
|
|
(15,125)
|
|
Cash and cash
equivalents at beginning of
year
|
|
|
31,927
|
|
|
|
47,052
|
|
Cash and cash
equivalents at end of year
|
|
$
|
44,197
|
|
|
$
|
31,927
|
|
SUPPLEMENTAL
DISCLOSURE OF CASH FLOW INFORMATION
|
|
|
|
|
|
|
|
|
Cash payments made
for interest
|
|
$
|
400
|
|
|
$
|
310
|
|
Cash payments made
for income taxes
|
|
$
|
1,771
|
|
|
$
|
2
|
|
SUPPLEMENTAL
SCHEDULE OF NON-CASH FINANCING AND INVESTING
ACTIVITIES
|
|
|
|
|
|
|
|
|
Class B common stock
issued for GRE deferred stock units
|
|
$
|
1,886
|
|
|
$
|
1,845
|
|
Receivable for
issuance of equity
written-off
|
|
$
|
—
|
|
|
$
|
1,667
|
|
Purchase of equity of
subsidiary
|
|
$
|
(4,140)
|
|
|
$
|
—
|
|
Carrying value of
assets contributed to New Atid
|
|
$
|
1,000
|
|
|
$
|
—
|
|
Reconciliation of Non-GAAP Financial Measure for the Fourth
Quarter and Full Year 2018
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 four quarter and full
year 2018, 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,
exploration expense and equity in the net loss of joint venture,
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 write-down of assets held for sale to
fair value.
Management believes that Genie Energy's Adjusted EBITDA provides
useful information to both management and investors by excluding
certain expenses 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.
Write-down of assets held for sale to fair value is a component
of (loss) income from operations that is excluded from the
calculation of Adjusted EBITDA. From time-to-time, Genie Energy may
determine that a line of business is outside of its core business
and therefore decide to dispose of the related assets and
liabilities. However, such disposals do not occur each quarter.
Genie Energy does not believe the losses or gains from asset
disposals or sales are components of its 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
|
GES
|
GOGAS
|
Corporate
|
Three Months Ended
December 31, 2018
(4Q18)
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
(554)
|
|
$
2,061
|
$
(480)
|
$ (1,110)
|
$ (1,024)
|
Subtract:
|
|
|
|
|
|
|
Stock-based
compensation
|
836
|
|
190
|
-
|
-
|
646
|
Depreciation and
amortization
|
416
|
|
245
|
157
|
14
|
-
|
Income (loss) from
operations
|
$
(1,806)
|
|
$
1,626
|
$
(637)
|
$
(1,124)
|
$ (1,671)
|
Interest
income
|
174
|
|
|
|
|
|
Interest
expense
|
(140)
|
|
|
|
|
|
Other income,
net
|
32
|
|
|
|
|
|
Income
taxes
|
14,109
|
|
|
|
|
|
Net income
|
12,368
|
|
|
|
|
|
Net loss attributable
to noncontrolling interests
|
264
|
|
|
|
|
|
Net income
attributable to Genie Energy Ltd.
|
$
12,632
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
Genie
Retail
Energy
|
|
|
|
Three Months Ended
September 30, 2018
(3Q18)
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
8,042
|
|
$
9,939
|
|
|
|
Subtract:
|
|
|
|
|
|
|
Write-down of assets
held for sale to fair value
|
451
|
|
-
|
|
|
|
Stock-based
compensation
|
1,082
|
|
5
|
|
|
|
Depreciation and
amortization
|
463
|
|
430
|
|
|
|
Income from
operations
|
6,046
|
|
$
9,373
|
|
|
|
Interest
income
|
195
|
|
|
|
|
|
Interest
expense
|
(89)
|
|
|
|
|
|
Gain on
extinguishment of liability
|
164
|
|
|
|
|
|
Other income,
net
|
25
|
|
|
|
|
|
Provision for income
taxes
|
(675)
|
|
|
|
|
|
Net income
|
5,666
|
|
|
|
|
|
Net loss attributable
to noncontrolling interests
|
251
|
|
|
|
|
|
Net income
attributable to Genie Energy Ltd.
|
$
5,917
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
Genie
Retail
Energy
|
GES
|
GOGAS
|
Corporate
|
Three Months Ended
December 31, 2017
(4Q17)
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
8,946
|
|
$ 12,871
|
$
(77)
|
$ (2,487)
|
$ (1,361)
|
Subtract:
|
|
|
|
|
|
|
Stock-based
compensation
|
1,422
|
|
108
|
-
|
200
|
1,114
|
Depreciation and
amortization
|
612
|
|
446
|
7
|
159
|
-
|
Write-off of
capitalized exploration costs
|
6,483
|
|
-
|
-
|
6,483
|
-
|
Income (loss) from
operations
|
429
|
|
$
12,317
|
$
(84)
|
$
(9,329)
|
$ (2,475)
|
Interest
income
|
88
|
|
|
|
|
|
Interest
expense
|
(111)
|
|
|
|
|
|
Other income,
net
|
54
|
|
|
|
|
|
Provision for income
taxes
|
(1,273)
|
|
|
|
|
|
Net loss
|
(813)
|
|
|
|
|
|
Net loss attributable
to noncontrolling interests
|
1,027
|
|
|
|
|
|
Net income
attributable to Genie Energy Ltd.
|
$
214
|
|
|
|
|
|
Genie Energy
Ltd.
Reconciliation of
Adjusted EBITDA to Net Loss
(unaudited)
$ in
thousands
|
|
Total
|
|
Genie
Retail
Energy
|
GES
|
GOGAS
|
Corporate
|
Year Ended
December 31, 2018
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
17,874
|
|
$ 26,897
|
$
(804)
|
$ (3,885)
|
$ (4,333)
|
Subtract:
|
|
|
|
|
|
|
Stock-based
compensation
|
4,523
|
|
563
|
-
|
-
|
3,960
|
Depreciation and
amortization
|
2,062
|
|
1,537
|
178
|
345
|
1
|
Impairment
|
|
|
2,742
|
|
2,742
|
|
Income (loss) from
operations
|
8,548
|
|
$ 24,797
|
$
(982)
|
$( 6,972)
|
$ (8,295)
|
Interest
income
|
557
|
|
|
|
|
|
Interest
expense
|
(401)
|
|
|
|
|
|
Gain on
extinguishment of liability
|
164
|
|
|
|
|
|
Other expense,
net
|
156
|
|
|
|
|
|
Provision for income
taxes
|
12,376
|
|
|
|
|
|
Net income
|
21,400
|
|
|
|
|
|
Net loss attributable
to noncontrolling interests
|
1,385
|
|
|
|
|
|
Net income
attributable to Genie Energy Ltd.
|
$
22,785
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
Genie
Retail
Energy
|
GES
|
GOGAS
|
Corporate
|
Year Ended
December 31, 2017
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
7,296
|
|
$ 19,604
|
$
(763)
|
$ (6,153)
|
$ (5,392)
|
Subtract:
|
|
|
|
|
|
|
Stock-based
compensation
|
5,213
|
|
516
|
-
|
255
|
4,442
|
Depreciation and
amortization
|
2,140
|
|
1,718
|
22
|
400
|
1
|
Write-off of
capitalized exploration costs
|
6,483
|
|
-
|
-
|
6,483
|
-
|
(Loss) income from
operations
|
(6,540)
|
|
$ 17,370
|
$
(784)
|
$( 13,290)
|
$ (9,835)
|
Interest
income
|
295
|
|
|
|
|
|
Interest
expense
|
(310)
|
|
|
|
|
|
Other expense,
net
|
(367)
|
|
|
|
|
|
Provision for income
taxes
|
(1,726)
|
|
|
|
|
|
Net loss
|
(8,648)
|
|
|
|
|
|
Net loss attributable
to noncontrolling interests
|
1,654
|
|
|
|
|
|
Net loss attributable
to Genie Energy Ltd.
|
$
(6,994)
|
|
|
|
|
|
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SOURCE Genie Energy Ltd.