Excelerate Energy, Inc. (NYSE: EE) (the “Company” or
“Excelerate”) today reported its financial results for the first
quarter ended March 31, 2023.
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Excelerate Energy's FSRU Sequoia. (Photo:
Business Wire)
RECENT HIGHLIGHTS
- Reported Net Income of $30.7 million for the first quarter
- Reported Adjusted Net Income of $32.7 million for the first
quarter
- Reported Adjusted EBITDA of $79.9 million for the first
quarter
- Commenced time charter with the Federal Republic of Germany for
the FSRU Excelsior in February 2023
- Closed on an amended and restated $600 million senior secured
credit facility in March 2023
- Completed purchase of the FSRU Sequoia for $265 million in
April 2023
- Commenced seasonal regasification services at the Bahia Blanca
GasPort in Argentina in May 2023
- Declared a quarterly dividend of $0.025 per share, payable on
June 8, 2023
CEO COMMENT
“Excelerate Energy’s first quarter financial results continue to
demonstrate the strength of our diversified business model and our
proven track record of leveraging our integrated FSRU fleet to
provide critical LNG services to customers across our global
footprint,” said President and Chief Executive Officer Steven
Kobos. “The ongoing contribution from our stable regasification
business was complemented by another quarter of earnings
overperformance from our gas sales contracts in Brazil. This strong
start to the year represents an important step toward meeting the
financial guidance we outlined in March.
Also during the quarter, we closed on a $600 million amended and
restated senior secured credit facility. This facility enhances our
financial flexibility and will support our future growth and
development initiatives. More recently, we completed the purchase
of the FSRU Sequoia for $265 million. This transaction cemented the
Sequoia as an integral part of both our FSRU fleet and our growth
strategy over the long term. Together, these transactions improved
our financial strength and have positioned us well to pursue new
commercial opportunities.”
FIRST QUARTER 2023 FINANCIAL RESULTS
For the three months
ended
March 31,
December 31,
March 31,
(in millions, except per share
amounts)
2023
2022
2022
Revenues
$
211.1
$
455.1
$
591.7
Operating Income
$
49.6
$
58.4
$
39.1
Net Income
$
30.7
$
33.9
$
12.8
Adjusted Net Income (1)
$
32.7
$
34.1
$
15.6
Adjusted EBITDA (1)
$
79.9
$
89.4
$
62.7
Earnings Per Share (diluted)
$
0.26
$
0.25
$
—
(1)
See the reconciliation of non-GAAP
financial measures to the most comparable GAAP financial measure in
the section titled "Non-GAAP Reconciliation" below.
Net Income and Adjusted EBITDA for the first quarter of 2023
increased over the prior year first quarter primarily due to higher
margins earned on gas sales contracts in Brazil along with gas
sales into Finland and higher FSRU and terminal services revenue
from the Finland and Germany charters.
Net Income and Adjusted EBITDA decreased sequentially from last
quarter primarily due to a scheduled dry dock for the FSRU
Excelsior along with higher planned maintenance expense at our
Bangladesh terminal. The sequential decrease was partially offset
by earnings overperformance from our Brazil gas sales contracts.
The sequential decrease in Net Income was also partially offset by
a lower provision for income taxes.
KEY COMMERCIAL UPDATES
Germany
In February 2023, the FSRU Excelsior commenced its charter hire
with the Federal Republic of Germany, pursuant to a five-year
charter agreement signed in October 2022. The Germany charter has
been placed on a temporary suspension agreement while the FSRU
Excelsior is deployed to provide seasonal regasification service at
the Bahia Blanca GasPort terminal in Argentina. The FSRU Excelsior
will return to the Germany charter in the third quarter of
2023.
Amended and Restated Credit
Facility
In March 2023, Excelerate closed on an amended and restated $600
million senior secured credit facility, consisting of a $350
million revolving credit facility and a $250 million term loan. The
facility extended our existing revolver and added a term loan.
Proceeds from the term loan were used to purchase the FSRU Sequoia.
The revolving credit facility has a four-year maturity that expires
in March 2027.
FSRU Sequoia Purchase
In April 2023, Excelerate completed the purchase of the FSRU
Sequoia from Anemoesa Marine Inc. (“Anemoesa”) for $265 million.
Proceeds from our $250 million term loan and $15 million of cash on
hand were used to purchase the Sequoia. Prior to the purchase,
Excelerate leased the FSRU Sequoia on a five-year bareboat charter
from Anemoesa, which began in June 2020.
Argentina
In May 2023, the FSRU Excelsior commenced seasonal
regasification services at the Bahia Blanca GasPort terminal in
Argentina. The Excelsior is expected to provide regasification
services for the duration of the Argentine winter season.
LIQUIDITY AND CAPITAL RESOURCES
As of March 31, 2023, Excelerate had $530.4 million in cash and
cash equivalents, $42.0 million of letters of credit issued and no
outstanding borrowings under its $350 million revolving credit
facility.
On May 9, 2023, Excelerate’s Board of Directors approved a
quarterly dividend equal to $0.025 per share of Class A common
stock, which will be paid on June 8, 2023, to shareholders of
record as of the close of business on May 24, 2023.
2023 FINANCIAL OUTLOOK
Excelerate is reaffirming its full year 2023 guidance range. The
Company expects Adjusted EBITDA to range between $320 million and
$340 million for the full year 2023. Maintenance capex for 2023 is
expected to range between $15 million and $35 million.
Actual results may differ materially from the Company’s outlook
as a result of, among other things, the factors described under
“Forward-Looking Statements” below.
INVESTOR CONFERENCE CALL AND WEBCAST
The Excelerate management team will host a conference call for
investors and analysts at 8:30 a.m. Eastern Time (7:30 a.m. Central
Time) on Thursday, May 11, 2023. Investors are invited to access a
live webcast of the conference call via the Investor Relations page
on the Company’s website at www.excelerateenergy.com. An archived
replay of the call and a copy of the presentation will be on the
website following the call.
ABOUT EXCELERATE ENERGY
Excelerate Energy, Inc. is a U.S.-based LNG company located in
The Woodlands, Texas. Excelerate is changing the way the world
accesses cleaner forms of energy by providing integrated services
along the LNG value chain with an objective of delivering
rapid-to-market and reliable LNG solutions to customers. The
Company offers a full range of flexible regasification services
from FSRUs to infrastructure development to LNG supply. Excelerate
has offices in Abu Dhabi, Antwerp, Boston, Buenos Aires,
Chattogram, Dhaka, Doha, Dubai, Helsinki, Manila, Rio de Janeiro,
Singapore, and Washington, DC. For more information, please visit
www.excelerateenergy.com.
USE OF NON-GAAP FINANCIAL MEASURES
The Company reports financial results in accordance with
accounting principles generally accepted in the United States
(“GAAP”). Included in this press release are certain financial
measures that are not calculated in accordance with GAAP. They are
designed to supplement, and not substitute, Excelerate’s financial
information presented in accordance with U.S. GAAP. The non-GAAP
measures as defined by Excelerate may not be comparable to similar
non-GAAP measures presented by other companies. The presentation of
such measures, which may include adjustments to exclude
non-recurring items, should not be construed as an inference that
Excelerate’s future results, cash flows or leverage will be
unaffected by other nonrecurring items. Management believes that
the following non-GAAP financial measures provide investors with
additional useful information in evaluating the Company's
performance and valuation. See the reconciliation of non-GAAP
financial measures to the most comparable GAAP financial measure,
including those measures presented as part of the Company’s 2023
Financial Outlook, in the section titled “Non-GAAP Reconciliation”
below.
Adjusted Gross Margin
We use Adjusted Gross Margin, a non-GAAP financial measure,
which we define as revenues less direct cost of sales and operating
expenses, excluding depreciation and amortization, to measure our
operational financial performance. Management believes Adjusted
Gross Margin is useful because it provides insight on profitability
and true operating performance excluding the implications of the
historical cost basis of our assets. Our computation of Adjusted
Gross Margin may not be comparable to other similarly titled
measures of other companies, and you are cautioned not to place
undue reliance on this information.
Adjusted EBITDA
Adjusted EBITDA is a non-GAAP financial measure included as a
supplemental disclosure because we believe it is a useful indicator
of our operating performance. We define Adjusted EBITDA as net
income before interest expense, income taxes, depreciation and
amortization, accretion, non-cash long-term incentive compensation
expense and items such as charges and non-recurring expenses that
management does not consider as part of assessing ongoing operating
performance. In the first quarter of 2023, we revised the
definition of Adjusted EBITDA to adjust for the impact of non-cash
accretion expense, which results in a metric that is consistent
with how management will review performance going forward.
Management believes accretion expense does not directly reflect our
ongoing operating performance.
Adjusted Net Income
The Company uses Adjusted Net Income, a non-GAAP financial
measure, which it defines as net income plus the early
extinguishment of lease liability related to the acquisition of the
Excellence vessel, the non-cash write-off of deferred financing
costs related to our prior credit agreement, and restructuring,
transition and transaction expenses. Management believes Adjusted
Net Income is useful because it provides insight on profitability
excluding the impact of non-recurring charges related to our
IPO.
The Company adjusts net income for the items listed above to
arrive at Adjusted EBITDA and Adjusted Net Income because these
amounts can vary substantially from company to company within its
industry depending upon accounting methods and book values of
assets, capital structures and the method by which the assets were
acquired. Adjusted EBITDA and Adjusted Net Income should not be
considered as an alternative to, or more meaningful than, net
income as determined in accordance with GAAP or as an indicator of
the Company's operating performance or liquidity. These measures
have limitations as certain excluded items are significant
components in understanding and assessing a company’s financial
performance, such as a company’s cost of capital and tax structure,
as well as the historic costs of depreciable assets, none of which
are components of Adjusted EBITDA. The Company's presentation of
Adjusted EBITDA and Adjusted Net Income should not be construed as
an inference that its results will be unaffected by unusual or
non-recurring items. The Company's computations of Adjusted EBITDA
and Adjusted Net Income may not be comparable to other similarly
titled measures of other companies. For the foregoing reasons, each
of Adjusted EBITDA and Adjusted Net Income has significant
limitations which affect its use as an indicator of its
profitability and valuation, and you are cautioned not to place
undue reliance on this information.
FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements, within
the meaning of the Private Securities Litigation Reform Act of 1995
as contained in Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended, about Excelerate Energy, Inc. (“Excelerate,” and together
with its subsidiaries “we,” “us,” “our” or the “Company”) and our
industry that involve substantial risks and uncertainties. All
statements other than statements of historical fact contained in
this press release, including, without limitation, statements
regarding our future results of operations or financial condition,
business strategy and plans, expansion plans and strategy, economic
conditions, both generally and in particular in the regions in
which we operate or plan to operate, and objectives of management
for future operations, are forward-looking statements. In some
cases, you can identify forward-looking statements by terminology
such as “anticipate,” “believe,” “consider,” “contemplate,”
“continue,” “could,” “estimate,” “expect,” “intend,” “may,”
“opportunity,” “plan,” “potential,” “predict,” “project,” “shall,”
“should,” “target,” “will,” or “would,” or the negative of these
words or other similar terms or expressions.
You should not rely on forward-looking statements as predictions
of future events. We have based the forward-looking statements
contained in this press release primarily on our current
expectations and projections about future events and trends that we
believe may affect our business, financial condition and operating
results. The outcome of the events described in these
forward-looking statements is subject to risks, uncertainties and
other factors described under “Risk Factors” in Excelerate’s Annual
Report on Form 10‐K for the year ended December 31, 2022, our other
filings with the Securities and Exchange Commission (the “SEC”),
and those identified in this press release, including, but not
limited to, the following: customers’ contract termination rights
or failure to perform their contractual obligations; risks and
technical complexities inherent in operating the Company’s floating
storage and regasification units (“FSRUs”) and other infrastructure
assets; unforeseen delays, cancellations, expenses or other
complications in developing the Company’s projects; regasification
terminal or other facility failures; the Company’s need for
substantial capital expenditures to maintain or replace FSRUs,
terminals or other associated assets; reliance on third parties,
including engineering, procurement and construction contractors;
officer and crew shortages; the Company’s ability to maintain
customer and supplier relationships and to source new suppliers;
the Company’s ability to connect with third-party infrastructure;
the Company’s ability to purchase or receive delivery of sufficient
quantities of liquified natural gas (“LNG”) to satisfy contractual
obligations and exposure to commodity price risk; changes in the
demand for and price of LNG; the competitive market for LNG
regasification services and fluctuations in hire rates for FSRUs;
community and political group resistance to existing and new LNG
and natural gas infrastructure due to concerns about the
environment, safety and terrorism; access to financing sources on
favorable terms; the Company’s debt level and finance lease
liabilities that could limit its flexibility to obtain additional
financing or refinance existing debt; catastrophic events,
political tensions, conflicts and wars (such as the ongoing
Russia-Ukraine war), health crises and pandemics; volatility of the
global financial markets and uncertain economic conditions,
including the impact of increased inflation and related
governmental monetary policies; our ability to pay dividends on our
Class A common stock; and the other risks, uncertainties and other
factors identified in the Company’s filings with the SEC. All
forward-looking statements are based on assumptions or judgments
about future events that may or may not be correct or necessarily
take place and that are by their nature subject to significant
uncertainties and contingencies, many of which are outside the
control of Excelerate. The occurrence of any such factors, events
or circumstances would significantly alter the results set forth in
these statements.
Moreover, we operate in a very competitive and rapidly changing
environment. New risks and uncertainties emerge from time to time,
such as the Russia-Ukraine war, and it is not possible for us to
predict all risks and uncertainties that could have an impact on
the forward-looking statements contained in this press release. The
volatility of the global financial markets and uncertain economic
conditions, such as energy costs, geopolitical issues and supply
chain disruptions, may give rise to risks that are currently
unknown or amplify the risks associated with many of the foregoing
events or factors. The results, events and circumstances reflected
in the forward-looking statements may not be achieved or occur, and
actual results, events or circumstances could differ materially
from those described in the forward-looking statements.
In addition, statements that “we believe” and similar statements
reflect our beliefs and opinions on the relevant subject. These
statements are based on information available to us as of the date
of this press release. While we believe that information provides a
reasonable basis for these statements, that information may be
limited or incomplete. Our statements should not be read to
indicate that we have conducted an exhaustive inquiry into, or
review of, all relevant information. These statements are
inherently uncertain, and investors are cautioned not to unduly
rely on these statements.
The forward-looking statements made in this press release relate
only to events as of the date on which the statements are made. We
undertake no obligation to update any forward-looking statements
made in this press release to reflect events or circumstances after
the date of this press release or to reflect new information or the
occurrence of unanticipated events, except as required by law. We
may not actually achieve the plans, intentions or expectations
disclosed in our forward-looking statements, and you should not
place undue reliance on our forward-looking statements. Our
forward-looking statements do not reflect the potential impact of
any future acquisitions, mergers, dispositions, joint ventures or
investments.
Excelerate Energy,
Inc.
Consolidated Statements of
Income
For the three months
ended
March 31,
December 31,
March 31,
2023
2022
2022
(In thousands, except share and
per share amounts)
Revenues
FSRU and terminal services
$
118,577
$
122,147
$
97,592
Gas sales
92,479
332,963
494,081
Total revenues
211,056
455,110
591,673
Operating expenses
Cost of revenue and vessel operating
expenses
58,792
50,201
50,063
Direct cost of gas sales
55,185
300,086
463,352
Depreciation and amortization
25,193
24,626
23,743
Selling, general and administrative
expenses
22,317
21,623
12,634
Restructuring, transition and transaction
expenses
—
220
2,753
Total operating expenses
161,487
396,756
552,545
Operating income
49,569
58,354
39,128
Other income (expense)
Interest expense
(11,955
)
(9,619
)
(7,054
)
Interest expense – related party
(3,592
)
(3,711
)
(12,173
)
Earnings from equity method investment
416
563
778
Other income (expense), net
3,904
4,857
(4,116
)
Income before income taxes
38,342
50,444
16,563
Provision for income taxes
(7,603
)
(16,574
)
(3,719
)
Net income
30,739
33,870
12,844
Less net income (loss) attributable to
non-controlling interest
23,895
28,195
(816
)
Less net loss attributable to
non-controlling interest – ENE Onshore
—
(851
)
(237
)
Less pre-IPO net income attributable to
EELP
—
—
13,897
Net income attributable to
shareholders
$
6,844
$
6,526
$
—
Net income per common share – basic
$
0.26
$
0.25
$
—
Net income per common share – diluted
$
0.26
$
0.25
$
—
Weighted average shares outstanding –
basic
26,254,167
26,254,167
—
Weighted average shares outstanding –
diluted
26,269,862
26,267,768
—
Excelerate Energy,
Inc.
Consolidated Balance
Sheets
March 31, 2023
December 31, 2022
(Unaudited)
ASSETS
(In thousands)
Current assets
Cash and cash equivalents
$
530,425
$
516,659
Current portion of restricted cash
3,557
2,614
Accounts receivable, net
57,761
82,289
Inventories
132,179
173,603
Current portion of net investments in
sales-type leases
13,544
13,344
Other current assets
24,397
35,026
Total current assets
761,863
823,535
Restricted cash
19,076
18,698
Property and equipment, net
1,706,245
1,455,683
Operating lease right-of-use assets
12,498
78,611
Net investments in sales-type leases
395,998
399,564
Investment in equity method investee
24,201
24,522
Deferred tax assets, net
39,185
39,867
Other assets
41,567
26,342
Total assets
$
3,000,633
$
2,866,822
LIABILITIES AND EQUITY
Current liabilities
Accounts payable
$
10,674
$
96,824
Accrued liabilities and other
liabilities
54,658
66,888
Current portion of deferred revenue
162,164
144,807
Current portion of long-term debt
21,057
20,913
Current portion of long-term debt –
related party
7,864
7,661
Current portion of operating lease
liabilities
7,838
33,612
Current portion of finance lease
liabilities
46,183
20,804
Total current liabilities
310,438
391,509
Long-term debt, net
188,671
193,396
Long-term debt, net – related party
178,579
180,772
Operating lease liabilities
5,723
48,373
Finance lease liabilities
445,956
210,354
TRA liability
72,951
72,951
Asset retirement obligations
40,259
39,823
Long-term deferred revenue
33,905
32,947
Total liabilities
$
1,276,482
$
1,170,125
Commitments and contingencies
Class A Common Stock ($0.001 par value,
300,000,000 shares authorized and 26,254,167 shares issued and
outstanding as of March 31, 2023 and December 31, 2022)
$
26
$
26
Class B Common Stock ($0.001 par value,
150,000,000 shares authorized and 82,021,389 shares issued and
outstanding as of March 31, 2023 and December 31, 2022)
82
82
Additional paid-in capital
464,807
464,721
Retained earnings
18,190
12,009
Accumulated other comprehensive income
208
515
Non-controlling interest
1,240,838
1,219,344
Total equity
$
1,724,151
$
1,696,697
Total liabilities and equity
$
3,000,633
$
2,866,822
Excelerate Energy,
Inc.
Consolidated Statements of
Cash Flows
For the three months
ended
March 31, 2023
March 31, 2022
Cash flows from operating activities
(In thousands)
Net income
$
30,739
$
12,844
Adjustments to reconcile net income to net
cash from operating activities
Depreciation and amortization
25,193
23,743
Amortization of operating lease
right-of-use assets
7,428
7,663
ARO accretion expense
436
367
Amortization of debt issuance costs
3,345
277
Deferred income taxes
682
176
Share of net earnings in equity method
investee
(416
)
(778
)
Distributions from equity method
investee
—
2,700
Long-term incentive compensation
expense
357
—
(Gain)/loss on non-cash items
1,326
—
Changes in operating assets and
liabilities:
Accounts receivable
24,528
144,056
Inventories
40,422
52,813
Other current assets and other assets
(3,666
)
(11,924
)
Accounts payable and accrued
liabilities
(97,969
)
(264,001
)
Derivative liabilities
—
554
Current portion of deferred revenue
17,357
(1,106
)
Net investments in sales-type leases
3,366
2,815
Operating lease assets and liabilities
(7,289
)
(5,041
)
Other long-term liabilities
958
3,489
Net cash provided by (used in) operating
activities
$
46,797
$
(31,353
)
Cash flows from investing activities
Purchases of property and equipment
(14,929
)
(11,029
)
Net cash used in investing activities
$
(14,929
)
$
(11,029
)
Cash flows from financing activities
Proceeds from long-term debt – related
party
—
566,300
Repayments of long-term debt – related
party
(1,990
)
(506,844
)
Repayments of long-term debt
(4,829
)
(4,025
)
Payment of debt issuance costs
(4,582
)
—
Collections of related party note
receivables
—
6,600
Principal payments under finance lease
liabilities
(5,297
)
(5,345
)
Principal payments under finance lease
liabilities – related party
—
(2,912
)
Contributions
337
—
Net cash provided by (used in) financing
activities
$
(16,361
)
$
53,774
Effect of exchange rate on cash, cash
equivalents, and restricted cash
(420
)
—
Net increase in cash, cash equivalents and
restricted cash
15,087
11,392
Cash, cash equivalents and restricted
cash
Beginning of period
$
537,971
$
90,964
End of period
$
553,058
$
102,356
Excelerate Energy, Inc. Non-GAAP
Reconciliation
The following table presents a reconciliation of adjusted gross
margin to the GAAP financial measures of gross margin for each of
the period indicated.
For the three months
ended
March 31, 2023
December 31, 2022
March 31, 2022
(In thousands)
FSRU and terminal services revenues
$
118,577
$
122,147
$
97,592
Gas sales revenues
92,479
332,963
494,081
Cost of revenue and vessel operating
expenses
(58,792
)
(50,201
)
(50,063
)
Direct cost of gas sales
(55,185
)
(300,086
)
(463,352
)
Depreciation and amortization expense
(25,193
)
(24,626
)
(23,743
)
Gross Margin
$
71,886
$
80,197
$
54,515
Depreciation and amortization expense
25,193
24,626
23,743
Adjusted Gross Margin
$
97,079
$
104,823
$
78,258
The following table presents a reconciliation of Adjusted EBITDA
to the GAAP financial measures of net income for each of the period
indicated.
For the three months
ended
March 31, 2023
December 31, 2022
March 31, 2022
(In thousands)
Net income
$
30,739
$
33,870
$
12,844
Interest expense
15,547
13,330
19,227
Provision for income taxes
7,603
16,574
3,719
Depreciation and amortization expense
25,193
24,626
23,743
Accretion expense
436
380
367
Long-term incentive compensation
expense
357
358
—
Restructuring, transition and transaction
expenses
—
220
2,753
Adjusted EBITDA
$
79,875
$
89,358
$
62,653
The following table presents a reconciliation of Adjusted Net
Income to the GAAP financial measures of net income for each of the
period indicated.
For the three months
ended
March 31, 2023
December 31, 2022
March 31, 2022
(In thousands)
Net income
$
30,739
$
33,870
$
12,844
Add back (deduct):
Restructuring, transition and transaction
expenses
—
220
2,753
Non-cash debt issuance costs
1,990
—
—
Adjusted net income
$
32,729
$
34,090
$
15,597
2023E
2023E
(In millions)
Low Case
High Case
Income before income taxes
$
136
$
167
Interest expense
69
64
Depreciation and amortization expense
109
104
Restructuring, transition and transaction
expenses
1
—
Long-term incentive compensation
expense
3
4
Accretion expense
2
1
Adjusted EBITDA
320
340
Note: We have not reconciled the Adjusted
EBITDA outlook to net income, the most comparable measure, because
it is not possible to estimate, without unreasonable effort, our
income taxes with the level of required precision. Accordingly, we
have reconciled these non-GAAP measures to our estimated income
before taxes.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230510006035/en/
Investors Craig Hicks Excelerate
Energy Craig.Hicks@excelerateenergy.com
Media Stephen Pettibone / Frances
Jeter FGS Global Excelerate@fgsglobal.com or
media@excelerateenergy.com
Excelerate Energy (NYSE:EE)
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From Apr 2024 to May 2024
Excelerate Energy (NYSE:EE)
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From May 2023 to May 2024