NEWARK, N.J., Aug. 6, 2018 /PRNewswire/ -- Genie Energy Ltd.
(NYSE: GNE, GNEPRA) reported a second quarter 2018 net loss of
$0.09 per share on revenue of
$56.4 million.
FINANCIAL AND OPERATIONAL HIGHLIGHTS
(Throughout this release, 2Q18 results are compared to 2Q17
results unless otherwise noted)
- Genie Retail Energy's (GRE) income from operations increased
to $3.3 million compared to a loss
from operations of $9.4 million.
Adjusted EBITDA* increased to $3.8
million compared to negative Adjusted EBITDA of $8.9 million. GRE's results in the year ago
quarter were impacted by a legal accrual of $9 million;
- Consolidated loss from operations was $2.3 million compared to $13.6 million. Consolidated Adjusted EBITDA
increased to $1.8 million compared to
negative Adjusted EBITDA of $11.9
million;
- Net loss per share decreased to $0.09 per basic and diluted share from
$0.55;
- GRE's churn rate decreased to 5.7% from 6.3%;
- Genie Energy reclassified its drilling assets as 'held for
sale' reflecting management's decision to explore strategic options
for its Atid drilling services start-up. The reclassification
resulted in an impairment charge of $2.3
million;
- Genie Energy's Board of Directors has declared a second
quarter dividend of $0.075 per
share.
COMMENTS OF MICHAEL STEIN, CEO OF GENIE ENERGY
"Genie Energy's results for the three months ended June 30 were solid and consistent with our
expectations. We continue to focus on Genie Retail Energy's
operations, and achieved encouraging improvements in revenue, gross
profit and income from operations even with our continued
investment in international expansion.
"Looking ahead, we are focused on continuing the expansion of
Genie Retail Energy both domestically and overseas. Orbit
Energy, our retail energy JV operating in Great Britain, is ramping up its customer
acquisition programs. We also expect to begin acquiring
customers in an additional international market later this
year."
CONSOLIDATED RESULTS
$ in millions,
except EPS
|
2Q18
|
1Q18
|
2Q17
|
|
2Q18
-2Q17
Change
(%/$)
|
Revenue
|
$56.4
|
$89.3
|
$50.2
|
|
+12.3%
|
Gross
profit
|
$16.1
|
$24.5
|
$12.1
|
|
+32.6%
|
Gross margin
percentage
|
28.5%
|
27.4%
|
24.1%
|
|
+430 BP
|
SG&A expense
(including stock-based compensation)
|
$15.4
|
$17.1
|
$24.7
|
|
(37.9)%
|
Stock-based
compensation included in SG&A
|
$1.3
|
$1.3
|
$1.1
|
|
+10.2%
|
Exploration
expense**
|
-
|
$0.2
|
$1.0
|
|
$(0.9)
|
Equity in the loss of
Genie UK***
|
$(0.7)
|
$(0.5)
|
-
|
|
$(0.7)
|
Write-down of assets
held for sale to fair value
|
$2.3
|
-
|
-
|
|
$2.3
|
(Loss) income from
operations
|
$(2.3)
|
$6.6
|
$(13.6)
|
|
+$11.2
|
Adjusted
EBITDA*
|
$1.8
|
$8.6
|
$(11.9)
|
|
+$13.7
|
Net (loss) income
attributable to Genie Energy common stockholders
|
$(2.3)
|
$5.8
|
$(12.9)
|
|
+$10.7
|
(Loss) earnings per
share attributable to Genie Energy common stockholders
|
$(0.09)
|
$0.24
|
$(0.55)
|
|
+$0.46
|
Capitalized
exploration costs
|
-
|
-
|
$2.2
|
|
$(2.2)
|
Net cash provided by
(used in) operating activities
|
$3.4
|
$8.6
|
$(7.1)
|
|
+$10.5
|
*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 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 June 30, 2018, Genie Energy had
$124.4 million in total assets,
including $44.4 million in cash, cash
equivalents and restricted cash. Liabilities totaled
$50.7 million and working capital
(current assets less current liabilities) totaled $45.0 million.
DIVIDEND ON GENIE ENERGY COMMON STOCK
Genie Energy's Board of Directors has declared a 2Q18 dividend
of $0.075 per share of Class A and
Class B common stock with a record date of August 15, 2018. The dividend will be paid
on or about August 24, 2018.
The distribution will be treated as an ordinary dividend for income
tax purposes.
RESULTS BY SEGMENT
$ in
millions
|
2Q18
|
1Q18
|
2Q17
|
|
2Q18-2Q17
Change
(%/$)
|
Genie Retail
Energy
|
|
|
|
|
|
Total
revenue
|
$56.4
|
$89.3
|
$50.2
|
|
+12.3%
|
Electricity revenue
|
$48.5
|
$65.3
|
$44.5
|
|
+9.1%
|
Natural
gas revenue
|
$7.4
|
$23.4
|
$5.3
|
|
+38.5%
|
Other
revenue
|
$0.6
|
$0.5
|
$0.4
|
|
+24.0%
|
Gross
profit
|
$16.1
|
$24.5
|
$12.1
|
|
+32.6%
|
Gross margin
percentage
|
28.5%
|
27.4%
|
24.1%
|
|
+430 BP
|
SG&A
expense
|
$12.1
|
$13.6
|
$21.5
|
|
(43.8)%
|
Equity in the loss of
Genie UK
|
$(0.7)
|
$(0.5)
|
-
|
|
$(0.7)
|
Income (loss) from
operations
|
$3.3
|
$10.3
|
$(9.4)
|
|
+$12.7
|
Adjusted
EBITDA
|
$3.8
|
$10.9
|
$(8.9)
|
|
+$12.7
|
|
|
|
|
|
|
Afek
|
|
|
|
|
|
G&A
expense
|
$0.2
|
-
|
$0.4
|
|
(45.4)%
|
Exploration
expense
|
-
|
$0.2
|
$1.0
|
|
$(0.9)
|
Loss from
operations
|
$(0.2)
|
$(0.3)
|
$(1.3)
|
|
+$1.1
|
Adjusted
EBITDA
|
$(0.2)
|
$(0.3)
|
$(1.2)
|
|
+$1.0
|
Capitalized
exploration costs
|
-
|
-
|
$2.2
|
|
$(2.2)
|
|
|
|
|
|
|
Genie Oil &
Gas
|
|
|
|
|
|
G&A
expense
|
$0.9
|
$1.1
|
$0.1
|
|
+$0.8
|
Write-down of assets
held for sale to fair value
|
$2.3
|
-
|
-
|
|
+$2.3
|
Loss from
operations
|
$(3.2)
|
$(1.1)
|
$(0.1)
|
|
$(3.1)
|
Adjusted
EBITDA
|
$(0.7)
|
$(0.9)
|
$(0.1)
|
|
$(0.6)
|
|
|
|
|
|
|
Corporate
|
|
|
|
|
|
G&A
expense
|
$2.2
|
$2.4
|
$2.8
|
|
(19.8)%
|
Stock-based
compensation in G&A
|
$1.1
|
$1.2
|
$1.0
|
|
11.0%
|
Loss from
operations
|
$(2.2)
|
$(2.4)
|
$(2.8)
|
|
+$0.5
|
Adjusted
EBITDA
|
$(1.1)
|
$(1.1)
|
$(1.7)
|
|
+$0.7
|
Genie Retail Energy (GRE)
Genie Retail Energy's customer base as measured in residential
customer equivalents (RCEs) decreased to 283,000 at June 30, 2018 from 289,000 a year earlier and
285,000 at March 31. Meters served decreased to 363,000 from
430,000 a year ago and from 373,000 at March 31. The year
over year decreases reflect the regulatorily mandated
relinquishment of certain 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 to reduce regulatory risk.
Gross meter acquisitions during the quarter totaled 57,000
compared to 98,000 in the year ago quarter and 55,000 in the prior
quarter. The year over year decrease resulted in part from a
refocusing of customer acquisition programs to emphasize higher
value customers while reducing regulatory risk in certain
jurisdictions. This shift has led to a steady increase in average
consumption per meter in recent quarters.
RCEs and Meters at
End
of Quarter
(in thousands)
|
June
30,
2018
|
March
31,
2018
|
December
31,
2017
|
September
30,
2017
|
June
30,
2017
|
Electricity
RCEs
|
219
|
218
|
228
|
243
|
219
|
Natural gas
RCEs
|
64
|
67
|
73
|
82
|
70
|
Total
RCEs
|
283
|
285
|
301
|
325
|
289
|
|
|
|
|
|
|
Electricity
meters
|
282
|
284
|
307
|
330
|
317
|
Natural gas
meters
|
81
|
89
|
105
|
116
|
113
|
Total
meters
|
363
|
373
|
412
|
446
|
430
|
GRE's average monthly customer churn decreased to 5.7% from 7.6%
in the first quarter and from 6.3% in the year ago quarter. The
decreases primarily reflect lower rates of new customer
acquisitions in recent periods – new customers exhibit higher churn
rates than longer tenured customers - and the impact of customer
retention programs, and, sequentially, the relinquishment of
certain customers in New York
State during the first quarter of 2018.
Meters enrolled in offerings with fixed rate characteristics
constituted approximately 36% of GRE's total load during
June 2018 – an increase from 29% in
June 2017 - reflecting the growing
popularity of fixed rate programs.
GRE generated all of Genie Energy's revenue and gross
profit.
GRE's revenue increased to $56.4
million from $50.2 million
reflecting higher commodity prices and the impact of the settlement
of class-action lawsuits related to the 'polar vortex' of the
winter of 2013-2014. In connection with those settlements,
GRE reduced 2Q17 revenue by $3.6
million for estimated payments to customers.
Revenue from electricity sales increased to $48.5 million from $44.5
million reflecting the $3.1
million reduction in revenue in 2Q17 for the legal
settlements, and a 9.0% increase in revenue per kilowatt hour
sold.
Natural gas sales increased to $7.4
million from $5.3 million
primarily reflecting a 42.0% increase in revenue per therm sold and
a 2Q17 revenue reduction of $0.5
million for the legal settlements.
GRE's gross margin percentage increased to 28.5% from 24.1% as
revenue per unit of both electricity and gas sold increased more
rapidly than their respective costs.
GRE's SG&A expense decreased to $12.1
million from $21.5 million as
a result of the $5.4 million in
expense incurred for the settlement of the class-action lawsuits in
2Q17 and the reduced level of customer acquisitions in the current
quarter.
GRE's income from operations increased to $3.3 million compared to a loss from operations
of $9.4 million. Adjusted
EBITDA increased to $3.8 million from
negative Adjusted EBITDA of $8.9
million. The improved results were driven by the legal
settlements in the year ago quarter, the strengthened gross margins
and the reduction in customer acquisition expense.
Afek and Atid
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 requested and received a renewal
of its exploratory license from the Ministry of Energy for the
Northern portion of its former license area. Afek is in the
process of securing the permits and other regulatory approvals
needed to perform the testing.
During the second quarter, the management of Genie Energy
determined to explore strategic options for its Atid drilling
services start-up. Reflective of that decision, the company's
drilling assets were reclassified as 'held for sale' resulting in
an impairment charge of $2.3
million.
Following the quarter close, Genie reached a tentative agreement
in principle to restructure Atid, its drilling services start-up.
Under the terms of the tentative agreement, Genie Energy would
retain a minority stake in Atid with the remainder owned by
Chairman Howard Jonas and Atid's
CEO. The arrangement would reduce Genie Energy's exposure to
the costs of the venture while retaining access to Atid's expertise
and services.
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,
August 6, 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: 10122371. 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. 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
|
|
|
|
|
|
June 30,
2018
|
|
December
31,
2017
|
|
(Unaudited)
|
|
|
|
(in
thousands)
|
Assets
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
43,175
|
|
$
29,913
|
Trade accounts
receivable, net of allowance for doubtful accounts of $1,601 and
$1,099 at June 30, 2018 and December 31, 2017,
respectively
|
31,019
|
|
44,629
|
Inventory
|
7,765
|
|
3,986
|
Prepaid
expenses
|
6,110
|
|
6,131
|
Other current
assets
|
3,769
|
|
5,503
|
|
|
|
|
Total current
assets
|
91,838
|
|
90,162
|
Property and
equipment, net
|
702
|
|
4,020
|
Goodwill
|
9,998
|
|
9,998
|
Other intangibles,
net
|
4,918
|
|
4,859
|
Investment in joint
venture
|
2,203
|
|
3,450
|
Restricted
cash—long-term
|
984
|
|
1,496
|
Deferred income tax
assets, net
|
2,028
|
|
2,141
|
Other
assets
|
11,714
|
|
9,652
|
|
|
|
|
Total
assets
|
$
124,385
|
|
$
125,778
|
|
|
|
|
Liabilities and
equity
|
|
|
|
Current
liabilities:
|
|
|
|
Trade accounts
payable
|
$
16,424
|
|
$
21,068
|
Accrued
expenses
|
25,254
|
|
28,069
|
Income taxes
payable
|
1,300
|
|
2,204
|
Due to IDT
Corporation
|
154
|
|
228
|
Other current
liabilities
|
3,696
|
|
3,172
|
|
|
|
|
Total current
liabilities
|
46,828
|
|
54,741
|
Revolving line of
credit
|
2,514
|
|
2,513
|
Other
liabilities
|
1,356
|
|
1,396
|
|
|
|
|
Total
liabilities
|
50,698
|
|
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 June 30, 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 June 30, 2018 and December 31,
2017
|
16
|
|
16
|
Class B common stock,
$.01 par value; authorized shares—200,000; 24,977 and 23,601 shares
issued and 24,876 and 23,270 shares outstanding at June 30, 2018
and December 31, 2017, respectively
|
250
|
|
236
|
Additional paid-in
capital
|
133,037
|
|
130,870
|
Treasury stock, at
cost, consisting of 101 and 331 shares of Class B common stock at
June 30, 2018 and December 31, 2017, respectively
|
(735)
|
|
(2,428)
|
Accumulated other
comprehensive income
|
2,401
|
|
3,045
|
Accumulated
deficit
|
(67,715)
|
|
(67,469)
|
|
|
|
|
Total Genie Energy
Ltd. stockholders' equity
|
86,997
|
|
84,013
|
Noncontrolling
interests
|
(13,310)
|
|
(16,885)
|
|
|
|
|
Total
equity
|
73,687
|
|
67,128
|
|
|
|
|
Total liabilities and
equity
|
$
124,385
|
|
$
125,778
|
|
|
|
|
|
|
|
|
|
GENIE ENERGY
LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
June 30,
|
|
Six Months
Ended
June 30,
|
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
|
(in thousands,
except per share data)
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Electricity
|
|
$
|
48,514
|
|
$
|
44,480
|
|
$
|
113,849
|
|
$
|
97,446
|
|
Natural gas
|
|
|
7,362
|
|
|
5,318
|
|
|
30,791
|
|
|
23,258
|
|
Other
|
|
|
557
|
|
|
449
|
|
|
1,062
|
|
|
949
|
|
Total
revenues
|
|
|
56,433
|
|
|
50,247
|
|
|
145,702
|
|
|
121,653
|
|
Cost of
revenues
|
|
|
40,361
|
|
|
38,122
|
|
|
105,171
|
|
|
84,678
|
|
Gross
profit
|
|
|
16,072
|
|
|
12,125
|
|
|
40,531
|
|
|
36,975
|
|
Operating expenses
and losses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative (i)
|
|
|
15,369
|
|
|
24,742
|
|
|
32,467
|
|
|
43,544
|
|
Write-down of assets
held for sale to fair value
|
|
|
2,291
|
|
|
—
|
|
|
2,291
|
|
|
—
|
|
Exploration
|
|
|
17
|
|
|
952
|
|
|
244
|
|
|
1,803
|
|
Equity in the net loss
of joint venture
|
|
|
716
|
|
|
—
|
|
|
1,221
|
|
|
—
|
|
(Loss) income from
operations
|
|
|
(2,321)
|
|
|
(13,569)
|
|
|
4,308
|
|
|
(8,372)
|
|
Interest
income
|
|
|
108
|
|
|
70
|
|
|
189
|
|
|
156
|
|
Interest
expense
|
|
|
(81)
|
|
|
(116)
|
|
|
(173)
|
|
|
(155)
|
|
Other income
(expense), net
|
|
|
58
|
|
|
(158)
|
|
|
100
|
|
|
(406)
|
|
(Loss) income before
income taxes
|
|
|
(2,236)
|
|
|
(13,773)
|
|
|
4,424
|
|
|
(8,777)
|
|
(Provision for)
benefit from income taxes
|
|
|
(258)
|
|
|
823
|
|
|
(1,057)
|
|
|
(33)
|
|
Net (loss)
income
|
|
|
(2,494)
|
|
|
(12,950)
|
|
|
3,367
|
|
|
(8,810)
|
|
Net loss attributable
to noncontrolling interests
|
|
|
575
|
|
|
381
|
|
|
870
|
|
|
824
|
|
Net (loss) income
attributable to Genie Energy Ltd
|
|
|
(1,919)
|
|
|
(12,569)
|
|
|
4,237
|
|
|
(7,986)
|
|
Dividends on preferred
stock
|
|
|
(370)
|
|
|
(370)
|
|
|
(740)
|
|
|
(740)
|
|
Net (loss) income
attributable to Genie Energy Ltd. common stockholders
|
|
$
|
(2,289)
|
|
$
|
(12,939)
|
|
$
|
3,497
|
|
$
|
(8,726)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) earnings per
share attributable to Genie Energy Ltd. common
stockholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(0.09)
|
|
$
|
(0.55)
|
|
$
|
0.14
|
|
$
|
(0.37)
|
|
Diluted
|
|
$
|
(0.09)
|
|
$
|
(0.55)
|
|
$
|
0.14
|
|
$
|
(0.37)
|
|
Weighted-average
number of shares used in calculation of (loss) earnings per
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
24,584
|
|
|
23,467
|
|
|
24,440
|
|
|
23,458
|
|
Diluted
|
|
|
24,584
|
|
|
23,467
|
|
|
24,598
|
|
|
23,458
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends declared
per common share
|
|
$
|
0.075
|
|
$
|
0.075
|
|
$
|
0.15
|
|
$
|
0.15
|
|
(i) Stock-based
compensation included in selling, general and administrative
expenses
|
|
$
|
1,257
|
|
$
|
1,141
|
|
$
|
2,605
|
|
$
|
2,379
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GENIE ENERGY
LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
|
|
|
|
|
Six Months
Ended
June 30,
|
|
2018
|
|
2017
|
|
(in
thousands)
|
Operating
activities
|
|
|
|
Net income
(loss)
|
$
3,367
|
|
$
(8,810)
|
Adjustments to
reconcile net income (loss) to net cash provided by (used in)
operating activities:
|
|
|
|
Depreciation and
amortization
|
1,183
|
|
1,041
|
Write-down of assets
held for sale to fair value
|
2,291
|
|
—
|
Deferred income
taxes
|
113
|
|
(543)
|
Provision for doubtful
accounts receivable
|
502
|
|
186
|
Gain on sale of
property and equipment
|
(18)
|
|
—
|
Stock-based
compensation
|
2,605
|
|
1,969
|
Equity in the net loss
of a joint venture
|
1,221
|
|
—
|
Change in assets and
liabilities:
|
|
|
|
Trade accounts
receivable
|
13,088
|
|
(834)
|
Inventory
|
(3,779)
|
|
1,271
|
Prepaid
expenses
|
(7)
|
|
(2,401)
|
Other current assets
and other assets
|
120
|
|
(3,796)
|
Trade accounts
payable, accrued expenses and other current liabilities
|
(7,639)
|
|
10,124
|
Due to IDT
Corporation
|
(74 )
|
|
60
|
Income taxes
payable
|
(904)
|
|
(1,740)
|
|
|
|
|
Net cash provided by
(used in) operating activities
|
12,069
|
|
(3,473)
|
Investing
activities
|
|
|
|
Capital
expenditures
|
(370 )
|
|
(2,876)
|
Proceeds from sale of
property and equipment
|
62
|
|
—
|
Payments for
acquisitions
|
(745)
|
|
—
|
Investments in
capitalized exploration costs—unproved oil and gas
property
|
—
|
|
(3,311)
|
Deposit for
investment
|
—
|
|
(94)
|
Repayment of notes
receivable
|
54
|
|
446
|
|
|
|
|
Net cash used in
investing activities
|
(999)
|
|
(5,835)
|
Financing
activities
|
|
|
|
Dividends
paid
|
(4,483)
|
|
(4,440)
|
Purchase of equity of
subsidiary
|
—
|
|
(278)
|
Proceeds from sales of
Class B common stock and warrants
|
6,000
|
|
—
|
Proceeds from
revolving line of credit
|
—
|
|
14,450
|
Repayment of revolving
line of credit
|
—
|
|
(12,655)
|
Exercise of stock
options
|
—
|
|
109
|
Repurchases of Class B
common stock from employees
|
—
|
|
(23)
|
|
|
|
|
Net cash provided by
(used in) financing activities
|
1,517
|
|
(2,837 )
|
Effect of exchange
rate changes on cash, cash equivalents, and restricted
cash
|
(77)
|
|
289
|
|
|
|
|
Net increase
(decrease) in cash, cash equivalents, and restricted
cash
|
12,510
|
|
(11,856)
|
Cash, cash
equivalents, and restricted cash at beginning of period
|
31,927
|
|
47,052
|
|
|
|
|
Cash, cash
equivalents, and restricted cash at end of period
|
$
44,437
|
|
$
35,196
|
|
|
|
|
Supplemental
Schedule of Non-Cash Financing Activities
|
|
|
|
Purchase of equity of
subsidiary
|
$
(4,139)
|
|
$
—
|
Reconciliation of Non-GAAP Financial Measure for the Second
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 second 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 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 (Loss) Income
(unaudited)
$ in
thousands
|
|
Total
|
|
Genie
Retail
Energy
|
GOGAS
|
Afek
|
Corporate
|
Three Months Ended
June 30, 2018
(2Q18)
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
1,817
|
|
$
3,825
|
$
(714)
|
$
(216)
|
$ (1,078)
|
Subtract:
|
|
|
|
|
|
|
Write-down of assets
held for sale to fair value
|
2,291
|
|
-
|
2,291
|
-
|
-
|
Stock-based
compensation
|
1,257
|
|
118
|
-
|
-
|
1,139
|
Depreciation and
amortization
|
590
|
|
438
|
152
|
-
|
-
|
(Loss) income from
operations
|
(2,321)
|
|
$
3,269
|
$ (3,157)
|
$
(216)
|
$ (2,217)
|
Interest
income
|
108
|
|
|
|
|
|
Interest
expense
|
(81)
|
|
|
|
|
|
Other income,
net
|
58
|
|
|
|
|
|
Provision for income
taxes
|
(258)
|
|
|
|
|
|
Net loss
|
(2,494)
|
|
|
|
|
|
Net loss attributable
to noncontrolling interests
|
575
|
|
|
|
|
|
Net loss attributable
to Genie Energy Ltd.
|
$
(1,919)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
June 30, 2017
(2Q17)
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$ (11,856)
|
|
$ (8,859)
|
$
(89)
|
$ (1,170)
|
$ (1,738)
|
Subtract:
|
|
|
|
|
|
|
Stock-based
compensation
|
1,141
|
|
115
|
-
|
-
|
1,026
|
Depreciation and
amortization
|
572
|
|
422
|
5
|
145
|
-
|
Loss from
operations
|
(13,569)
|
|
$ (9,396)
|
$
(94)
|
$
(1,315)
|
$ (2,764)
|
Interest
income
|
70
|
|
|
|
|
|
Interest
expense
|
(116)
|
|
|
|
|
|
Other expense,
net
|
(158)
|
|
|
|
|
|
Benefit from income
taxes
|
823
|
|
|
|
|
|
Net loss
|
(12,950)
|
|
|
|
|
|
Net loss attributable
to noncontrolling interests
|
381
|
|
|
|
|
|
Net loss attributable
to Genie Energy Ltd.
|
$ (12,569)
|
|
|
|
|
|
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SOURCE Genie Energy Ltd.