NEWARK, N.J., May 3, 2018 /PRNewswire/ -- Genie Energy Ltd.
(NYSE: GNE, GNEPRA) reported first quarter 2018 net income of
$0.24 per share on revenue of
$89.3 million.
FINANCIAL AND OPERATIONAL HIGHLIGHTS
(Throughout
this release, 1Q18 results are compared to 1Q17 results unless
otherwise noted)
- Genie Retail Energy's (GRE) income from operations increased
to $10.3 million from $9.0 million and Adjusted EBITDA* increased to
$10.9 million from $9.5 million;
- Genie Retail Energy's joint venture operating in the UK as
Orbit Energy successfully completed its controlled market entry
period and has begun to scale its customer acquisition programs in
the second quarter;
- Evidence of hydrocarbons at levels sufficient to warrant
additional testing have been identified through an analysis of
results from Afek's Ness 10 well. Afek is pursuing an
extension of the Northern portion of its exploratory license to
perform additional testing within the well;
- Net income per share increased to $0.24 per basic and diluted share from
$0.18;
- Genie Energy's Board of Directors has declared a first
quarter dividend of $0.075 per
share.
COMMENTS OF MICHAEL STEIN, CEO OF GENIE ENERGY
"Genie
Retail Energy performed extremely well again this quarter,
generating over $10 million in
operating income and Adjusted EBITDA. Compared to the year
ago quarter, the impact of moderating gross margins was offset by
increased sales volumes and prices, while a decrease in customer
acquisition expense drove the increase in the business's operating
income and Adjusted EBITDA contribution.
"Genie Retail Energy's joint venture in the UK successfully
completed its regulatorily mandated controlled market entry period
and is now beginning to roll out its customer acquisition
program. We are exploring additional growth opportunities in
international markets even as we continue to expand our domestic
geographic footprint. This quarter, we entered our thirteenth
and fourteenth states.
"On a consolidated basis, EPS increased to $0.24 from $0.18,
reflecting Genie Retail Energy's solid quarter matched with the
decrease in oil and gas exploration expense following the
suspension of drilling activities at our Afek subsidiary."
CONSOLIDATED
RESULTS
|
|
|
|
$ in millions,
except EPS
|
1Q18
|
4Q17
|
1Q17
|
|
1Q18
-1Q17
Change
(%/$)
|
Revenue
|
$89.3
|
$73.1
|
$71.4
|
|
+25.0%
|
Gross
profit
|
$24.5
|
$26.8
|
$24.8
|
|
(1.6)%
|
Gross margin
percentage
|
27.4%
|
36.6%
|
34.8%
|
|
(740) BP
|
SG&A expense
(including stock-based compensation)
|
$17.1
|
$17.1
|
$18.8
|
|
(9.1)%
|
Stock-based
compensation included in SG&A
|
$1.3
|
$1.4
|
$1.2
|
|
+8.8%
|
Exploration
expense**
|
$0.2
|
$2.3
|
$0.9
|
|
(73.4)%
|
Write-off of
capitalized exploration costs
|
-
|
$6.5
|
-
|
|
-
|
Equity in the loss of
Genie UK***
|
$(0.5)
|
$(0.4)
|
-
|
|
$(0.5)
|
Income from
operations
|
$6.6
|
$0.4
|
$5.2
|
|
+27.5%
|
Adjusted
EBITDA*
|
$8.6
|
$8.9
|
$6.9
|
|
+24.1%
|
Net income (loss)
attributable to Genie Energy common stockholders
|
$5.8
|
$(0.2)
|
$4.2
|
|
+$1.6
|
Earnings (loss) per
share attributable to Genie Energy common stockholders
|
$0.24
|
$(0.01)
|
$0.18
|
|
+$0.06
|
Capitalized
exploration costs
|
-
|
-
|
$1.1
|
|
$(1.1)
|
Net cash provided by
operating activities
|
$8.6
|
$5.9
|
$3.6
|
|
+$5.0
|
|
|
|
|
|
|
*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 Measures 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 Genie UK, its joint venture
operating in the UK, under the equity method
of accounting. Under this method Genie Energy records its share in
the net income or loss of the joint venture. Therefore,
revenues generated, and expenses incurred by the joint venture are
not reflected in Genie Energy's consolidated revenues
and expenses.
|
BALANCE SHEET HIGHLIGHTS
At March 31, 2018, Genie Energy had
$125.2 million in total assets,
including $38.1 million in cash, cash
equivalents and restricted cash. Liabilities totaled
$53.5 million and working capital
(current assets less current liabilities) totaled $40.3 million.
DIVIDEND ON GENIE ENERGY COMMON STOCK
Genie Energy's
Board of Directors has declared a 1Q18 dividend of $0.075 per share of Class A and Class B common
stock with a record date of May 15,
2018. The dividend will be paid on or about May 23, 2018. The distribution will be
treated as an ordinary dividend for income tax purposes.
RESULTS BY SEGMENT
$ in
millions
|
1Q18
|
4Q17
|
1Q17
|
|
1Q18-1Q17
Change
(%/$)
|
Genie Retail
Energy
|
|
|
|
|
|
Total
revenue
|
$89.3
|
$73.1
|
$71.4
|
|
+25.0%
|
Electricity revenue
|
$65.3
|
$58.5
|
$53.0
|
|
+23.4%
|
Natural
gas revenue
|
$23.4
|
$14.1
|
$17.9
|
|
+30.6%
|
Other
revenue
|
$0.5
|
$0.5
|
$0.5
|
|
+1.1%
|
Gross
profit
|
$24.5
|
$26.8
|
$24.8
|
|
(1.6)%
|
Gross margin
percentage
|
27.4%
|
36.6%
|
34.8%
|
|
(740) BP
|
SG&A
expense
|
$13.6
|
$14.1
|
$15.9
|
|
(14.3)%
|
Equity in the loss of
Genie UK
|
$(0.5)
|
$(0.4)
|
-
|
|
$(0.5)
|
Income from
operations
|
$10.3
|
$12.2
|
$9.0
|
|
+15.3%
|
Adjusted
EBITDA
|
$10.9
|
$12.8
|
$9.5
|
|
+14.5%
|
|
|
|
|
|
|
Afek
|
|
|
|
|
|
G&A
expense
|
-
|
$0.3
|
$0.4
|
|
(89.6)%
|
Exploration
expense
|
$0.2
|
$2.3
|
$0.9
|
|
(73.4)%
|
Write-off of
capitalized exploration costs
|
-
|
$6.5
|
-
|
|
-
|
Loss from
operations
|
$(0.3)
|
$(9.1)
|
$(1.3)
|
|
+$1.0
|
Adjusted
EBITDA
|
$(0.3)
|
$(2.5)
|
$(1.3)
|
|
+$1.0
|
Capitalized
exploration costs
|
-
|
-
|
$1.1
|
|
$(1.1)
|
|
|
|
|
|
|
Genie Oil &
Gas
|
|
|
|
|
|
G&A
expense
|
$1.1
|
$0.2
|
$0.1
|
|
+$1.0
|
Loss from
operations
|
$(1.1)
|
$(0.2)
|
$(0.1)
|
|
$(1.0)
|
Adjusted
EBITDA
|
$(0.9)
|
-
|
$(0.1)
|
|
$(0.8)
|
|
|
|
|
|
|
Corporate
|
|
|
|
|
|
G&A
expense
|
$2.4
|
$2.5
|
$2.4
|
|
(1.4)%
|
Stock-based
compensation in G&A
|
$1.2
|
$1.1
|
$1.1
|
|
10.2%
|
(Loss) from
operations
|
$(2.4)
|
$(2.5)
|
$(2.4)
|
|
1.4%
|
Adjusted
EBITDA
|
$(1.1)
|
$(1.4)
|
$(1.3)
|
|
11.6%
|
Genie Retail Energy (GRE)
Genie Retail Energy's
customer base as measured in residential customer equivalents
(RCEs) decreased to 285,000 at March 31,
2018 from 287,000 a year earlier and 301,000 at the end of
2017, while meters served decreased to 373,000 from 418,000 a year
ago and from 412,000 at December
31st. The decreases reflect the
regulatorily mandated return of low-income customers in
New York served by retail energy
providers (REPs) to the incumbent utilities as well as GRE's
strategic decision to pull back customer acquisition efforts in
certain territories.
Gross meter acquisitions decreased to 55,000 from 84,000 in the
year ago quarter and 62,000 in the prior quarter as customer
acquisition programs shifted to emphasize higher value customers
while avoiding certain riskier jurisdictions. This shift has led to
a steady increase in average customer size over the past year.
RCEs and Meters at
End
of Quarter (in thousands)
|
March 31,
2018
|
December 31,
2017
|
September 30,
2017
|
June 30,
2017
|
March 31,
2017
|
Electricity
RCEs
|
218
|
228
|
243
|
219
|
220
|
Natural gas
RCEs
|
67
|
73
|
82
|
70
|
67
|
Total
RCEs
|
285
|
301
|
325
|
289
|
287
|
|
|
|
|
|
|
Electricity
meters
|
284
|
307
|
330
|
317
|
307
|
Natural gas
meters
|
89
|
105
|
116
|
113
|
111
|
Total
meters
|
373
|
412
|
446
|
430
|
418
|
The mandated return of low-income customers in New York drove an increase in GRE's average
monthly customer churn to 7.6% from 6.1% in the year ago quarter
and 6.9% in the prior quarter. Exclusive of the impact of these
low-income customers, churn in the first quarter would have been
comparable to churn in recent quarters.
Meters enrolled in offerings with fixed rate characteristics
constituted approximately 34% of GRE's total load during
March 2018 reflecting the growing
popularity of fixed rate programs.
GRE generated all of Genie Energy's revenue and gross
profit.
GRE's revenue increased to $89.3
million from $71.4 million on
higher prices and volumes sold for both electricity and natural
gas.
Revenue from electricity sales increased to $65.3 million from $53.0
million reflecting both a 12.2% increase in kilowatt hours
sold (primarily attributable to higher per-meter consumption) and a
9.9% increase in average revenue per kilowatt hour sold.
Natural gas sales increased to $23.4
million from $17.9 million
reflecting a 22.9% increase in therms sold and a 6.2% increase in
average revenue per therm sold reflecting higher natural gas
commodity prices. The increase in therms sold reflects an
increase in average consumption per gas meter, including the impact
of the acquisition of Mirabito Natural Gas in August, 2017 and
subsequent sales of gas to its commercial customer base.
GRE's gross margin percentage decreased to 27.4% from 34.8% as
cost per commodity unit increased more rapidly than revenue per
unit sold of both electricity and natural gas.
GRE's SG&A expense decreased to $13.6
million from $15.9 million
reflecting the reduction in customer acquisition costs due to the
significant reduction in gross meter acquisitions.
GRE's income from operations increased to $10.3 million and Adjusted EBITDA increased to
$10.9 million from $9.0 million and $9.5
million, respectively, primarily reflecting the decrease in
customer acquisition costs.
Genie Retail Energy – New York Regulatory
Update
Pursuant to the December
2016 order of the New York
State Public Service Commission prohibiting REPs in
New York State from serving
customers enrolled in utility low-income assistance programs
(low-income customers), GRE returned 18,700 meters (representing
approximately 10,600 RCEs) to their incumbent utilities in
1Q18.
Separately, the NY PSC is conducting an evidentiary proceeding
to study the REP industry and competitive retail energy
markets. Hearings were held in November and December of 2017,
and final briefs from interested parties were filed on April 30th.
The New York Court of Appeals
has agreed to hear a REP industry appeal of a lower court's finding
that the NY PSC has the legal authority to regulate rates charged
by REPs. A decision is not expected before late summer.
Afek
In November
2017, Genie Energy's Afek Oil and Gas subsidiary suspended
drilling operations in Northern
Israel based on preliminary analysis of results from its
Ness 10 exploratory well. Subsequent analysis by an outside
consultant indicates that a zone within the Ness 10 well contains
evidence of hydrocarbons at levels sufficient to warrant additional
testing. Accordingly, Afek is pursuing a renewal of its
exploratory license from the Ministry of Energy for the Northern
portion of its former license area. Subject to regulatory
approvals, Afek expects to obtain definitive test results as early
as the third quarter.
GENIE ENERGY EARNINGS CONFERENCE CALL
This 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,
May 3rd, 2018, Genie
Energy's management will host a conference call to discuss
financial and operational results, business outlook and
strategy. The call will begin with management's remarks
followed by Q&A with investors.
To participate in the conference call, dial toll-free
1-888-348-6472 (from the US) or 1-412-902-4240 (international) and
request the Genie Energy conference call.
The call replay will be available for seven days at
1-844-512-2921 (US toll free) or 1-412-317-6671
(international). The replay PIN is: 10119964. A
recording of the call - in MP3 format - will also be available for
playback on the "Investors" section of the Genie Energy
website.
Investors can sign up through the Genie Energy website
http://genie.com/investors/email-alerts/ to have earnings releases
and other press releases emailed directly to them.
ABOUT GENIE ENERGY LTD.
Genie Energy Ltd. (NYSE: GNE,
GNEPRA), through its Genie Retail Energy (GRE) division, provides
electricity and natural gas primarily to residential and small
business customers in the United
States and, through a joint venture, in Great Britain.
GRE also operates Diversegy, a commercial brokerage and marketing
services company. Genie's GOGAS division operates oil and gas
exploration and drilling services ventures. For more information,
visit www.genie.com.
In this press release, all statements that are not purely
about historical facts, including, but not limited to, those in
which we use the words "believe," "anticipate," "expect," "plan,"
"intend," "estimate, "target" and similar expressions, are
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. While these
forward-looking statements represent our current judgment of what
may happen in the future, actual results may differ materially from
the results expressed or implied by these statements due to
numerous important factors, including, but not limited to, those
described in our most recent report on SEC Form 10-K (under the
headings "Risk Factors" and "Management's Discussion and Analysis
of Financial Condition and Results of Operations"), which may be
revised or supplemented in subsequent reports on SEC Forms 10-Q and
8-K. We are under no obligation, and expressly disclaim any
obligation, to update the forward-looking statements in this press
release, whether as a result of new information, future events or
otherwise.
GENIE ENERGY
LTD
|
|
|
|
|
|
CONSOLIDATED
BALANCE SHEETS
|
|
|
|
|
|
|
March 31,
2018
|
December
31,
2017
|
|
(Unaudited)
|
|
|
(in
thousands)
|
Assets
|
|
|
Current
assets:
|
|
|
Cash and cash
equivalents
|
$
36,705
|
$
29,913
|
Trade accounts
receivable, net of allowance for doubtful accounts
of $1,394 and $1,099 at
March 31, 2018 and December 31, 2017,
respectively
|
40,448
|
44,629
|
Inventory
|
5,677
|
3,986
|
Prepaid
expenses
|
5,619
|
6,131
|
Other current
assets
|
1,418
|
5,503
|
Total current
assets
|
89,867
|
90,162
|
Property and
equipment, net
|
4,053
|
4,020
|
Goodwill
|
9,998
|
9,998
|
Other intangibles,
net
|
4,516
|
4,859
|
Investment in joint
venture
|
3,074
|
3,450
|
Restricted
cash—long-term
|
1,090
|
1,496
|
Deferred income tax
assets, net
|
2,028
|
2,141
|
Other
assets
|
10,552
|
9,652
|
Total
assets
|
$
125,178
|
$
125,778
|
|
|
|
Liabilities and
equity
|
|
|
Current
liabilities:
|
|
|
Trade accounts
payable
|
$
17,752
|
$
21,068
|
Accrued
expenses
|
26,115
|
28,069
|
Income taxes
payable
|
2,958
|
2,204
|
Due to IDT
Corporation
|
135
|
228
|
Other current
liabilities
|
2,626
|
3,172
|
Total current
liabilities
|
49,586
|
54,741
|
Revolving line of
credit
|
2,514
|
2,513
|
Other
liabilities
|
1,378
|
1,396
|
Total
liabilities
|
53,478
|
58,650
|
Commitments and
contingencies
|
|
|
Equity:
|
|
|
Genie Energy Ltd.
stockholders' equity:
|
|
|
Preferred stock, $.01
par value; authorized shares—10,000:
|
|
|
Series 2012-A, designated
shares—8,750; at liquidation preference,
consisting of 2,322 shares issued and
outstanding at March
31, 2018 and December 31,
2017
|
19,743
|
19,743
|
Class A common
stock, $.01 par value; authorized shares—35,000;
1,574 shares issued and outstanding at
March 31, 2018 and
December 31, 2017
|
16
|
16
|
Class B common stock,
$.01 par value; authorized shares—200,000;
23,626 and 23,601 shares issued and 23,295
and 23,270 shares
outstanding at March 31, 2018 and December 31,
2017, respectively
|
236
|
236
|
Additional paid-in
capital
|
131,759
|
130,870
|
Treasury stock, at
cost, consisting of 331 shares of Class B common
stock at March 31, 2018 and December 31,
2017
|
(2,428)
|
(2,428)
|
Accumulated other
comprehensive income
|
3,060
|
3,045
|
Accumulated
deficit
|
(63,550)
|
(67,469)
|
Total Genie Energy
Ltd. stockholders' equity
|
88,836
|
84,013
|
Noncontrolling
interests
|
(17,136)
|
(16,885)
|
Total
equity
|
71,700
|
67,128
|
Total liabilities and
equity
|
$
125,178
|
$
125,778
|
|
|
|
GENIE ENERGY
LTD.
|
|
CONSOLIDATED
STATEMENTS OF INCOME
|
(Unaudited)
|
|
|
Three Months
Ended
March 31,
|
|
2018
|
2017
|
|
(in thousands,
except per share
data)
|
Revenues:
|
|
|
Electricity
|
$
65,335
|
$
52,966
|
Natural gas
|
23,428
|
17,940
|
Other
|
505
|
499
|
Total
revenues
|
89,268
|
71,405
|
Cost of
revenues
|
64,810
|
46,556
|
Gross
profit
|
24,458
|
24,849
|
Operating expenses
and losses:
|
|
|
Selling, general and
administrative (i)
|
17,098
|
18,802
|
Exploration
|
227
|
851
|
Equity in the net loss
of joint venture
|
506
|
—
|
Income from
operations
|
6,627
|
5,196
|
Interest
income
|
81
|
86
|
Interest
expense
|
(92)
|
(39)
|
Other income
(expense), net
|
42
|
(248)
|
Income before income
taxes
|
6,658
|
4,995
|
Provision for income
taxes
|
(799)
|
(856)
|
Net income
|
5,859
|
4,139
|
Net loss attributable
to noncontrolling interests
|
295
|
443
|
Net income
attributable to Genie Energy Ltd
|
6,154
|
4,582
|
Dividends on preferred
stock
|
(370)
|
(370)
|
Net income
attributable to Genie Energy Ltd. common stockholders
|
$
5,784
|
$
4,212
|
|
|
|
Earnings per share
attributable to Genie Energy Ltd. common
stockholders:
|
|
|
Basic
|
$
0.24
|
$
0.18
|
Diluted
|
$
0.24
|
$
0.18
|
|
|
|
Weighted-average
number of shares used in calculation of earnings per
share:
|
|
|
Basic
|
24,239
|
23,450
|
Diluted
|
24,295
|
23,761
|
|
|
|
Dividends declared
per common share
|
$
0.075
|
$
0.075
|
(i) Stock-based
compensation included in selling, general and
administrative expense
|
$
1,347
|
$
1,238
|
GENIE ENERGY
LTD.
|
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
(Unaudited)
|
|
|
Three Months
Ended
March 31,
|
|
2018
|
2017
|
|
(in
thousands)
|
Operating
activities
|
|
|
Net income
|
$
5,859
|
$
4,139
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
Depreciation and
amortization
|
594
|
470
|
Deferred income
taxes
|
113
|
—
|
Provision for doubtful
accounts receivable
|
295
|
25
|
Gain on sale of
property and equipment
|
(18)
|
—
|
Stock-based
compensation
|
1,347
|
1,238
|
Equity in the net loss
of a joint venture
|
506
|
—
|
Change in assets and
liabilities:
|
|
|
Trade accounts
receivable
|
3,886
|
1,631
|
Inventory
|
(1,690)
|
(933)
|
Prepaid
expenses
|
511
|
47
|
Other current assets
and other assets
|
2,903
|
(1,855)
|
Trade accounts
payable, accrued expenses and other current liabilities
|
(6,328)
|
(1,981)
|
Due to IDT
Corporation
|
(94 )
|
(62 )
|
Income taxes
payable
|
754
|
874
|
Net cash provided by
operating activities
|
8,638
|
3,593
|
Investing
activities
|
|
|
Capital
expenditures
|
(344 )
|
(222)
|
Proceeds from sale of
property and equipment
|
62
|
—
|
Investments in
capitalized exploration costs—unproved oil and gas
property
|
—
|
(1,127)
|
Deposit for
investment
|
—
|
(94)
|
Repayment of notes
receivable
|
54
|
446
|
Net cash used in
investing activities
|
(228)
|
(997)
|
Financing
activities
|
|
|
Dividends
paid
|
(2,235)
|
(2,220)
|
Purchase of equity of
subsidiary
|
—
|
(278)
|
Proceeds from
revolving line of credit
|
—
|
10,450
|
Repayment of revolving
line of credit
|
—
|
(10,001)
|
Repurchases of Class B
common stock from employees
|
—
|
(23)
|
Net cash used in
financing activities
|
(2,235 )
|
(2,072 )
|
Effect of exchange
rate changes on cash and cash equivalents
|
(19)
|
319
|
Net increase in cash,
cash equivalents, and restricted cash
|
6,156
|
843
|
Cash, cash
equivalents, and restricted cash at beginning of period
|
31,927
|
47,052
|
Cash, cash
equivalents, and restricted cash at end of period
|
$
38,083
|
$
47,895
|
|
|
|
Reconciliation of Non-GAAP Financial Measures
for the First Quarter 2018 and 2017
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 first quarter of 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 the write-off of capitalized
exploration costs.
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.
The write-off of capitalized exploration costs, which is a
component of income (loss) from operations, is also excluded from
the calculation of Adjusted EBITDA. The write-off of capitalized
exploration costs is primarily dictated by events and circumstances
outside the control of management that trigger an impairment
analysis. While there may be similar charges in other periods, the
nature and magnitude of these charges can fluctuate markedly and do
not reflect the performance of Genie Energy's continuing
operations.
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
(unaudited)
$ in
thousands
|
|
|
Total
|
|
Genie
Retail
Energy
|
GOGAS
|
Afek
|
Corporate
|
Three Months Ended
March 31, 2018
(1Q18)
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
8,568
|
|
$ 10,906
|
$
(934)
|
$
(272)
|
$ (1,132)
|
Subtract:
|
|
|
|
|
|
|
Stock-based
compensation
|
1,347
|
|
118
|
-
|
-
|
1,229
|
Depreciation and
amortization
|
594
|
|
439
|
155
|
-
|
-
|
Income (loss) from
operations
|
6,627
|
|
$
10,349
|
$ (1,089)
|
$
(272)
|
$ (2,361)
|
Interest
income
|
81
|
|
|
|
|
|
Interest
expense
|
(92)
|
|
|
|
|
|
Other income,
net
|
42
|
|
|
|
|
|
Provision for income
taxes
|
(799)
|
|
|
|
|
|
Net income
|
5,859
|
|
|
|
|
|
Net loss attributable
to noncontrolling interests
|
295
|
|
|
|
|
|
Net income
attributable to Genie Energy Ltd.
|
$
6,154
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
Genie
Retail
Energy
|
GOGAS
|
Afek
|
Corporate
|
Three Months Ended
December 31, 2017
(4Q17)
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
8,946
|
|
$ 12,794
|
$
14
|
$ (2,501)
|
$ (1,361)
|
Subtract:
|
|
|
|
|
|
|
Stock-based
compensation
|
1,422
|
|
108
|
200
|
-
|
1,114
|
Depreciation and
amortization
|
612
|
|
453
|
57
|
102
|
-
|
Write-off of
capitalized exploration costs
|
6,483
|
|
-
|
-
|
6,483
|
-
|
Income (loss) from
operations
|
429
|
|
$
12,233
|
$
(243)
|
$
(9,086)
|
$ (2,475)
|
Interest
income
|
88
|
|
|
|
|
|
Interest
expense
|
(88)
|
|
|
|
|
|
Other income,
net
|
29
|
|
|
|
|
|
Provision for income
taxes
|
(1,271)
|
|
|
|
|
|
Net loss
|
(813)
|
|
|
|
|
|
Net loss attributable
to noncontrolling interests
|
1,027
|
|
|
|
|
|
Net income
attributable to Genie Energy Ltd.
|
$
214
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
Genie
Retail
Energy
|
GOGAS
|
Afek
|
Corporate
|
Three Months Ended
March 31, 2017
(1Q17)
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
6,905
|
|
$
9,524
|
$
(86)
|
$ (1,253)
|
$ (1,280)
|
Subtract:
|
|
|
|
|
|
|
Stock-based
compensation
|
1,238
|
|
118
|
6
|
-
|
1,114
|
Depreciation and
amortization
|
471
|
|
432
|
6
|
33
|
-
|
Income (loss) from
operations
|
5,196
|
|
$ 8,974
|
$
(98)
|
$
(1,286)
|
$ (2,394)
|
Interest
income
|
86
|
|
|
|
|
|
Interest
expense
|
(39)
|
|
|
|
|
|
Other expense,
net
|
(248)
|
|
|
|
|
|
Provision for income
taxes
|
(856)
|
|
|
|
|
|
Net income
|
4,139
|
|
|
|
|
|
Net loss attributable
to noncontrolling interests
|
443
|
|
|
|
|
|
Net income
attributable to Genie Energy Ltd.
|
$
4,582
|
|
|
|
|
|
View original content with
multimedia:http://www.prnewswire.com/news-releases/genie-energy-ltd-reports-first-quarter-2018-results-300641763.html
SOURCE Genie Energy Ltd.