Revenue increased 54% year-over-year to a quarterly record $125 million
Increased 2023 Adjusted EBITDA1 guidance to $52 million to $57 million (versus prior guidance of $47 million to $55 million)
Year-over-year RCE and meter growth of 49% and 42% respectively
Newark, NJ, Nov. 06, 2023 (GLOBE NEWSWIRE) -- Genie Energy, Ltd. (NYSE: GNE), a leading retail energy and renewable energy solutions provider, today announced results for the third quarter ended September 30, 2023.
Michael Stein, chief executive officer of Genie Energy, commented:
"Our third quarter results were highlighted by record quarterly revenue and the strong bottom-line performance of our domestic energy supply business. In the year-ago quarter, in light of that period's unprecedented market volatility, we adjusted our commodity management strategy, curtailed customer acquisitions, and exited our European business to maximize profit and cash flow. This year's third-quarter results reflect the underlying strength of our domestic retail business under normalized market conditions and our successful efforts this year to add new retail customers with favorable economics.
"On a consolidated basis, our robust bottom-line results in the third quarter drove a 24% increase in cash flow from operations which further fortified our balance sheet. We closed the quarter with cash, restricted cash and marketable equity securities of $143.8 million.
"As a result of our strong performance year to date and overall 2023 outlook, we are increasing our previous consolidated 2023 Adjusted EBITDA guidance range of $47 to $55 million to $52 to $57 million. This range increase reflects our strong third quarter and continued optimism about the business as we head into winter.
"Genie Renewables continues to expand its solar project development pipeline as we execute on our growth strategy - evaluating additional candidates for our solar project pipeline while advancing the current portfolio through the development cycle. At September 30th, our pipeline comprised 17 projects aggregating 114MW, including two projects under construction totaling 10MW."
Third Quarter 2023 Highlights
(Versus 3Q22 unless otherwise noted. Excludes discontinued operations of Genie Retail Energy International (GREI) for all periods unless otherwise noted.)
| ● | Revenue increased 53.8% to $125.0 million from $81.3 million; | |
| ● | Gross profit decreased 4.8% to $41.1 million and gross margin decreased to 32.9% from 53.1%; | |
| ● | Income from operations decreased 24.0% to $17.9 million and | |
| ● | Adjusted EBITDA1 decreased 24.3% to $18.5 million; | |
| ● | Net income from continuing operations attributable to Genie common stockholders decreased to $14.8 million from $22.3 million and diluted income per share EPS from continuing operations decreased to $0.54 from $0.85; | |
| ● | Net income attributable to Genie common stockholders decreased to $14.5 million from $18.3 million and diluted EPS decreased to $0.53 from $0.70; | |
| ● | Net income and EPS attributable to Genie common stockholders included a loss from discontinued operations of $0.3 million, or $0.01, compared to a loss of $3.9 million or $0.15; | |
| ● | Cash, restricted cash and marketable equity securities increased to $143.8 million at September 30, 2023, from $115.1 million at June 30, 2023; | |
| ● | Genie Energy will pay a $0.075 per share quarterly dividend to Class A and Class B common stockholders on or about November 21, 2023, with a record date of November 13, 2023; | |
| 1 | Adjusted EBITDA for all periods presented 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, as well as reconciliations to its most directly comparable GAAP measure. | |
Select Financial Metrics*
| Three Months Ended September 30, | ||||||||||||||||
| (in $M except for EPS)** | 3Q23 | 3Q22 | Change | |||||||||||||
| Total Revenue | $ | 125.0 | $ | 81.3 | 53.8 | % | ||||||||||
| Genie Retail Energy | $ | 120.3 | $ | 79.9 | 50.5 | % | ||||||||||
| Genie Renewables | $ | 4.7 | $ | 1.4 | 246.2 | % | ||||||||||
| Gross Margin | 32.9 | % | 53.1 | % | (2,020 | ) | bps | |||||||||
| Genie Retail Energy | 33.9 | % | 54.1 | % | (2,020 | ) | bps | |||||||||
| Genie Renewables | 5.3 | % | (6.3 | ) | % | 1,160 | bps | |||||||||
| Income from Operations | $ | 17.9 | $ | 23.5 | (24.0 | ) | % | |||||||||
| Operating Margin | 14.3 | % | 29.0 | % | (1,470 | ) | bps | |||||||||
| Net Income from Continuing Operations | $ | 14.5 | $ | 17.4 | (16.8 | ) | % | |||||||||
| Net Loss Attributable to Discontinued Operations | $ | (0.3 | ) | $ | (1.5 | ) | (79.1 | ) | % | |||||||
| Net Income Attributable to Genie Energy Ltd. Common Stockholders | $ | 14.5 | $ | 18.3 | (21.0 | ) | % | |||||||||
| Diluted Earnings Per Share | $ | 0.53 | $ | 0.70 | (24.3 | ) | % | |||||||||
| Adjusted EBITDA1 | $ | 18.5 | $ | 24.5 | (24.3 | ) | % | |||||||||
| Cash Flow from Continuing Operating Activities | $ | 28.0 | $ | 22.5 | 24.4 | % | ||||||||||
| * | GREI operations were classified as a discontinued operation in 2022 and its results are excluded from current and historical results | |
| ** | Numbers may not add due to rounding |
Segment Highlights
Genie Retail Energy (GRE)
GRE revenue increased 50.5% to $120.3 million from $79.9 million driven by strong customer acquisitions during the first half of 2023. Income from operations decreased 19.7% to $22.0 million, and Adjusted EBITDA decreased 19.5% to $22.3 million, reflecting GRE's elevated gross margins in the year-ago quarter.
Meters and RCEs served increased year-over-year by 114,000 and 124,000 to 385,000 and 375,000, respectively, as of September 30, 2023. Average monthly churn decreased to 4.4% in 3Q23 from 4.7% in 3Q22 and increased from 4.3% in 2Q23.
Genie Retail Energy (GRE) Select Performance Metrics
| RCEs and Meters in 1000s* | 3Q23 | 3Q22 | Change | ||||||||||||
| Total RCEs | 375 | 251 | 49 | % | |||||||||||
| Electricity | 298 | 174 | 71.3 | % | |||||||||||
| Natural Gas | 77 | 77 | (0.1 | ) | % | ||||||||||
| Total Meters | 385 | 271 | 42.2 | % | |||||||||||
| Electricity | 304 | 193 | 57.2 | % | |||||||||||
| Natural Gas | 81 | 77 | 4.9 | % | |||||||||||
| Gross Adds | 60 | 33 | 81.3 | % | |||||||||||
| Churn | 4.4 | % | 4.7 | % | (30 | ) | bps | ||||||||
| * | Numbers may not add due to rounding |
Genie Renewables (GREW)
GREW increased third quarter revenue year-over-year, driven by growth at Genie Solar, Diversegy, and CityCom Solar. A reduction in the value of solar panels held in inventory at Genie Solar due to delayed in-project timelines impacted GREW's results.
Genie Solar continued to advance its project development pipeline during the third quarter. At September 30, Genie Solar's pipeline comprised 17 potential projects totaling 114MW in development.
| Pipeline | Total | Site Control | Permitting | Construction | ||||
| MW | 114 | 97 | 6 | 10 | ||||
| Project Count | 17 | 14 | 1 | 2 |
Balance Sheet and Cash Flow Highlights
As of September 30, 2023, Genie Energy reported cash, restricted cash and marketable equity securities of $143.8 million, an increase from $115.1 million at June 30, 2023.
Total assets as of September 30, 2023 were $315.7 million. Liabilities totaled $108.3 million, and working capital (current assets less current liabilities) totaled $164.5 million. Non-current liabilities were $2.5 million.
Net cash provided by operating activities was $28.0 million compared to $22.5 million a year ago.
Trended Financial Information:*
| (in $M except for EPS, RCEs and Meters)** | 1Q22 | 2Q22 | 3Q22 | 4Q22 | 1Q23 | 2Q23 | 3Q23 | 2021 | 2022 | TTM | |||||||||||||||||||||||||||||||||
| Total Revenue | $ | 85.9 | $ | 66.9 | $ | 81.3 | $ | 81.4 | $ | 105.3 | $ | 93.5 | $ | 125.0 | $ | 323.3 | $ | 315.5 | $ | 405.2 | |||||||||||||||||||||||
| Genie Retail Energy | $ | 83.9 | $ | 63.2 | $ | 79.9 | $ | 77.0 | $ | 101.4 | $ | 89.7 | $ | 120.3 | $ | 311.8 | $ | 304.0 | $ | 388.5 | |||||||||||||||||||||||
| Electricity | $ | 59.4 | $ | 53.1 | $ | 73.8 | $ | 55.6 | $ | 74.5 | $ | 80.2 | $ | 114.0 | $ | 273.0 | $ | 241.8 | $ | 324.3 | |||||||||||||||||||||||
| Natural Gas | $ | 24.5 | $ | 10.1 | $ | 6.2 | $ | 21.4 | $ | 26.9 | $ | 9.0 | $ | 5.0 | $ | 38.8 | $ | 62.1 | $ | 62.3 | |||||||||||||||||||||||
| Others | $ | 0.0 | $ | 0.0 | $ | 0.0 | $ | 0.0 | $ | 0.0 | $ | 0.6 | $ | 1.3 | $ | 0.0 | $ | 0.0 | $ | 1.9 | |||||||||||||||||||||||
| Genie Renewables | $ | 2.0 | $ | 3.8 | $ | 1.4 | $ | 4.4 | $ | 3.9 | $ | 3.7 | $ | 4.7 | $ | 7.5 | $ | 11.6 | $ | 16.7 | |||||||||||||||||||||||
| Gross Margin | 54.8 | % | 44.5 | % | 53.1 | % | 42.7 | % | 31.6 | % | 40.9 | % | 32.9 | % | 28.3 | % | 49.1 | % | 36.4 | % | |||||||||||||||||||||||
| Genie Retail Energy | 55.5 | % | 45.9 | % | 54.1 | % | 44.4 | % | 32.1 | % | 41.8 | % | 33.9 | % | 29.1 | % | 50.3 | % | 37.3 | % | |||||||||||||||||||||||
| Genie Renewables | 25.7 | % | 21.6 | % | -6.3 | % | 12.4 | % | 19.3 | % | 19.6 | % | 5.3 | % | 37.1 | % | 15.6 | % | 95.6 | % | |||||||||||||||||||||||
| Income from Operations | $ | 27.0 | $ | 11.8 | $ | 23.5 | $ | 15.5 | $ | 11.3 | $ | 15.0 | $ | 17.9 | $ | 24.1 | $ | 77.7 | $ | 59.7 | |||||||||||||||||||||||
| Operating Margin | 31.4 | % | 17.6 | % | 29.0 | % | 19.0 | % | 10.7 | % | 16.1 | % | 14.3 | % | 7.5 | % | 24.6 | % | 14.7 | % | |||||||||||||||||||||||
| Net (Loss) Income Attributable to Discontinued Operations | $ | (1.9 | ) | $ | 29.3 | $ | (1.5 | ) | $ | 4.5 | $ | 3.1 | $ | 3.2 | $ | (0.3 | ) | $ | 11.7 | $ | 30.4 | $ | 10.4 | ||||||||||||||||||||
| Net Income Attributable to Genie Energy Ltd. Common Stockholders | $ | 17.5 | $ | 33.9 | $ | 18.3 | $ | 16.2 | $ | 14.3 | $ | 15.0 | $ | 14.5 | $ | 27.5 | $ | 27.5 | $ | 59.9 | |||||||||||||||||||||||
| Diluted Earnings Per Share | $ | 0.67 | $ | 1.30 | $ | 0.70 | $ | 0.59 | $ | 0.54 | $ | 0.57 | $ | 0.53 | $ | 1.05 | $ | 3.26 | $ | 2.2 | |||||||||||||||||||||||
| Adjusted EBITDA | $ | 28.0 | $ | 12.2 | $ | 24.5 | $ | 18.5 | $ | 12.4 | $ | 15.8 | $ | 18.5 | $ | 27.8 | $ | 83.2 | $ | 65.2 | |||||||||||||||||||||||
| Genie Retail Energy Performance Metrics | |||||||||||||||||||||||||||||||||||||||||||
| RCEs | 260 | 263 | 251 | 262 | 352 | 380 | 375 | 260 | 262 | 375 | |||||||||||||||||||||||||||||||||
| Electricity | 182 | 185 | 174 | 181 | 276 | 304 | 298 | 189 | 181 | 298 | |||||||||||||||||||||||||||||||||
| Natural Gas | 78 | 77 | 77 | 81 | 77 | 76 | 77 | 71 | 81 | 77 | |||||||||||||||||||||||||||||||||
| Meters | 286 | 280 | 271 | 275 | 349 | 381 | 385 | 285 | 276 | 385 | |||||||||||||||||||||||||||||||||
| Electricity | 209 | 203 | 193 | 196 | 271 | 302 | 304 | 210 | 197 | 304 | |||||||||||||||||||||||||||||||||
| Natural Gas | 77 | 77 | 77 | 79 | 78 | 80 | 81 | 75 | 79 | 81 | |||||||||||||||||||||||||||||||||
| Gross Adds | 44 | 34 | 33 | 47 | 129 | 75 | 60 | 177 | 159 | 311 | |||||||||||||||||||||||||||||||||
| Churn*** | 4.5 | % | 4.4 | % | 4.7 | % | 5.5 | % | 4.4 | % | 4.3 | % | 4.4 | % | 4.5 | % | 4.8 | % | 4.6 | % | |||||||||||||||||||||||
| * | GREI operations have been classified as a discontinued operation and its results excluded from current and historical results | |
| ** | Numbers may not add due to rounding | |
| *** | Excludes expiration of low margin aggregation deals |
Earnings Announcement and Supplemental Information
At 8:30 AM Eastern this morning, 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 1-888-506-0062 (toll-free from the US) or 1-973-528-0011 (international) and provide the following participant access code: 383695.
Approximately three hours after the call, a call replay will be accessible by dialing 1-877-481-4010 (toll-free from the US) or 1-919-882-2331 (international) and providing the replay passcode: 49300. The replay will remain available through Monday, November 20, 2023. In addition, a recording of the call will be available for playback on the “Investors” section of the Genie Energy website.
About Genie Energy Ltd.
Genie Energy Ltd., (NYSE: GNE) is a retail energy and renewable energy solutions provider. The Genie Retail Energy division supplies electricity, including electricity from renewable resources, and natural gas to residential and small business customers in the United States. The Genie Renewables division is a vertically-integrated provider of commercial, community, and utility-scale 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.
Contact:
Brian Siegel IRC, MBA
Senior Managing Director
Hayden IR
(346) 396-8696
brian@haydenir.com
GENIE ENERGY LTD.
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share amounts)
| September 30, 2023 | December 31, 2022 | |||||||
| (Unaudited) | ||||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 139,829 | $ | 98,571 | ||||
| Restricted cash—short-term | 3,574 | 6,007 | ||||||
| Marketable equity securities | 411 | 490 | ||||||
| Trade accounts receivable, net of allowance for doubtful accounts of $6,365 and $4,826 at September 30, 2023 and December 31, 2022, respectively | 60,682 | 55,134 | ||||||
| Inventory | 15,306 | 15,714 | ||||||
| Prepaid expenses | 11,891 | 6,822 | ||||||
| Other current assets | 4,625 | 6,207 | ||||||
| Current assets of discontinued operations | 33,923 | 38,688 | ||||||
| Total current assets | 270,241 | 227,633 | ||||||
| Property and equipment, net | 6,112 | 891 | ||||||
| Goodwill | 9,998 | 9,998 | ||||||
| Other intangibles, net | 2,834 | 3,133 | ||||||
| Deferred income tax assets, net | 5,799 | 5,799 | ||||||
| Other assets | 13,150 | 13,856 | ||||||
| Noncurrent assets of discontinued operations | 7,553 | 16,305 | ||||||
| Total assets | $ | 315,687 | $ | 277,615 | ||||
| Liabilities and equity | ||||||||
| Current liabilities: | ||||||||
| Trade accounts payable | 24,857 | 25,313 | ||||||
| Accrued expenses | 45,444 | 35,659 | ||||||
| Income taxes payable | 16,010 | 22,576 | ||||||
| Due to IDT Corporation, net | 120 | 165 | ||||||
| Other current liabilities | 8,624 | 4,549 | ||||||
| Current liabilities of discontinued operations | 10,736 | 10,936 | ||||||
| Total current liabilities | 105,791 | 99,198 | ||||||
| Other liabilities | 1,859 | 4,087 | ||||||
| Noncurrent liabilities of discontinued operations | 668 | 686 | ||||||
| Total liabilities | 108,318 | 103,971 | ||||||
| Commitments and contingencies | — | — | ||||||
| Equity: | ||||||||
| Genie Energy Ltd. stockholders’ equity: | ||||||||
| Preferred stock, $0.01 par value; authorized shares - 10,000: | ||||||||
| Series 2012-A, Preferred Stock (liquidation preference, $8.50 per share), designated shares - 8,750; 0 and 983 shares issued and outstanding at September 30, 2023 and December 31, 2022 | — | 8,359 | ||||||
| Class A common stock, $0.01 par value; authorized shares - 35,000; 1,574 shares issued and outstanding at September 30, 2023 and December 31, 2022 | 16 | 16 | ||||||
| Class B common stock, $0.01 par value; authorized shares - 200,000; 28,764 and 27,126 shares issued and 25,820 and 24,421 shares outstanding at September 30, 2023 and December 31, 2022, respectively | 288 | 271 | ||||||
| Additional paid-in capital | 154,948 | 146,546 | ||||||
| Treasury stock, at cost, consisting of 2,944 and 2,705 shares of Class B common stock at September 30, 2023 and December 31, 2022 | (22,469 | ) | (19,010 | ) | ||||
| Accumulated other comprehensive income | 1,413 | 1,926 | ||||||
| Retained earnings | 86,759 | 49,010 | ||||||
| Total Genie Energy Ltd. stockholders’ equity | 220,955 | 187,118 | ||||||
| Noncontrolling interests | (13,586 | ) | (13,474 | ) | ||||
| Total equity | 207,369 | 173,644 | ||||||
| Total liabilities and equity | $ | 315,687 | $ | 277,615 | ||||
GENIE ENERGY LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| (in thousands, except per share data) | ||||||||||||||||
| Revenues: | ||||||||||||||||
| Electricity | $ | 114,002 | $ | 73,764 | $ | 268,688 | $ | 186,207 | ||||||||
| Natural gas | 4,990 | 6,153 | 40,890 | 40,754 | ||||||||||||
| Other | 6,057 | 1,368 | 14,209 | 7,189 | ||||||||||||
| Total revenues | 125,049 | 81,285 | 323,787 | 234,150 | ||||||||||||
| Cost of revenues | 83,967 | 38,142 | 211,211 | 114,082 | ||||||||||||
| Gross profit | 41,082 | 43,143 | 112,576 | 120,068 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Selling, general and administrative | 23,196 | 19,605 | 68,380 | 57,796 | ||||||||||||
| Income from operations | 17,886 | 23,538 | 44,196 | 62,272 | ||||||||||||
| Interest income | 1,331 | 194 | 3,313 | 259 | ||||||||||||
| Interest expense | (27 | ) | (33 | ) | (75 | ) | (135 | ) | ||||||||
| Gain (loss) on marketable equity securities and investments | 334 | 57 | 385 | (742 | ) | |||||||||||
| Other (loss) income, net | (4 | ) | 156 | 3,137 | (712 | ) | ||||||||||
| Income before income taxes | 19,520 | 23,912 | 50,956 | 60,942 | ||||||||||||
| Provision for income taxes | (5,018 | ) | (6,482 | ) | (12,951 | ) | (16,791 | ) | ||||||||
| Net income from continuing operations | 14,502 | 17,430 | 38,005 | 44,151 | ||||||||||||
| (Loss) income from discontinued operations, net of taxes | (304 | ) | (1,459 | ) | 5,923 | 25,929 | ||||||||||
| Net income | 14,198 | 15,971 | 43,928 | 70,080 | ||||||||||||
| Net income attributable to noncontrolling interests, net | (261 | ) | (2,797 | ) | (118 | ) | (1,056 | ) | ||||||||
| Net income attributable to Genie Energy Ltd. | 14,459 | 18,768 | 44,046 | 71,136 | ||||||||||||
| Dividends on preferred stock | — | (454 | ) | (333 | ) | (1,448 | ) | |||||||||
| Net income attributable to Genie Energy Ltd. common stockholders | $ | 14,459 | $ | 18,314 | $ | 43,713 | $ | 69,688 | ||||||||
| Amounts attributable to Genie Energy Ltd. common stockholders | ||||||||||||||||
| Continuing operations | $ | 14,763 | $ | 22,259 | $ | 37,789 | $ | 48,368 | ||||||||
| Discontinued operations | (304 | ) | (3,945 | ) | 5,924 | 21,320 | ||||||||||
| Net income attributable to Genie Energy Ltd. common stockholders | $ | 14,459 | $ | 18,314 | $ | 43,713 | $ | 69,688 | ||||||||
| Earnings (loss) per share attributable to Genie Energy Ltd. common stockholders: | ||||||||||||||||
| Basic: | ||||||||||||||||
| Continuing operations | $ | 0.55 | $ | 0.88 | $ | 1.48 | $ | 1.89 | ||||||||
| Discontinued operations | (0.01 | ) | (0.15 | ) | 0.23 | 0.83 | ||||||||||
| Earnings per share attributable to Genie Energy Ltd. common stockholders | $ | 0.54 | $ | 0.73 | $ | 1.71 | $ | 2.72 | ||||||||
| Diluted | ||||||||||||||||
| Continuing operations | $ | 0.54 | $ | 0.85 | $ | 1.45 | $ | 1.84 | ||||||||
| Discontinued operations | (0.01 | ) | (0.15 | ) | 0.23 | 0.81 | ||||||||||
| Earnings per share attributable to Genie Energy Ltd. common stockholders | $ | 0.53 | $ | 0.70 | $ | 1.68 | $ | 2.65 | ||||||||
| Weighted-average number of shares used in calculation of earnings per share: | ||||||||||||||||
| Basic | 26,615 | 25,233 | 25,541 | 25,623 | ||||||||||||
| Diluted | 27,362 | 26,205 | 26,056 | 26,261 | ||||||||||||
| Dividends declared per common share | $ | 0.075 | $ | 0.075 | $ | 0.225 | $ | 0.225 | ||||||||
| Stock-based compensation included in selling, general and administrative expenses | $ | 649 | $ | 713 | $ | 2,254 | $ | 2,232 | ||||||||
GENIE ENERGY LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| Nine Months Ended September 30, | ||||||||
| 2023 | 2022 | |||||||
| (in thousands) | ||||||||
| Operating activities | ||||||||
| Net income | $ | 43,928 | $ | 70,080 | ||||
| Net income from discontinued operations, net of tax | 5,923 | 25,929 | ||||||
| Net income from continuing operations | 38,005 | 44,151 | ||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 286 | 288 | ||||||
| Provision for doubtful accounts receivable | 1,722 | 2,116 | ||||||
| Inventory valuation allowance | 829 | — | ||||||
| Unrealized (gain) loss on marketable equity securities and investment and others | (386 | ) | 833 | |||||
| Stock-based compensation | 2,254 | 2,232 | ||||||
| Change in assets and liabilities: | ||||||||
| Trade accounts receivable | (7,271 | ) | (4,331 | ) | ||||
| Inventory | (6,114 | ) | (797 | ) | ||||
| Prepaid expenses | (3,753 | ) | (3,641 | ) | ||||
| Other current assets and other assets | 2,637 | (6,084 | ) | |||||
| Trade accounts payable, accrued expenses and other liabilities | 10,963 | 2,570 | ||||||
| Due to IDT Corporation, net | (45 | ) | (398 | ) | ||||
| Income taxes payable | (6,566 | ) | 8,009 | |||||
| Net cash provided by operating activities of continuing operations | 32,561 | 44,948 | ||||||
| Net cash provided by operating activities of discontinued operations | 19,461 | 8,150 | ||||||
| Net cash provided by operating activities | 52,022 | 53,098 | ||||||
| Investing activities | ||||||||
| Capital expenditures | (878 | ) | (1,058 | ) | ||||
| Proceeds from the sale of marketable equity securities and other investments | 10,023 | — | ||||||
| Purchase of marketable equity securities and other investments | (9,913 | ) | (1,300 | ) | ||||
| Investment in notes receivables with related party | — | (1,505 | ) | |||||
| Repayment of notes receivable | 19 | 19 | ||||||
| Net cash used in investing activities of continuing operations | (749 | ) | (3,844 | ) | ||||
| Net cash provided by (used in) investing activities of discontinued operations | 2,578 | (43,941 | ) | |||||
| Net cash provided by (used in) investing activities | 1,829 | (47,785 | ) | |||||
| Financing activities | ||||||||
| Dividends paid | (6,818 | ) | (6,894 | ) | ||||
| Repurchases of Class B common stock from employees | (2,338 | ) | (409 | ) | ||||
| Proceeds from the exercise of warrants | 5,000 | — | ||||||
| Repurchase of Class B common stock | — | (4,414 | ) | |||||
| Redemption of preferred stock | (8,359 | ) | (3,000 | ) | ||||
| Net cash used in financing activities | (12,515 | ) | (14,717 | ) | ||||
| Effect of exchange rate changes on cash, cash equivalents, and restricted cash | 61 | (15 | ) | |||||
| Net increase (decrease) in cash, cash equivalents, and restricted cash | 41,397 | (9,419 | ) | |||||
| Cash, cash equivalents, and restricted cash (including cash held at discontinued operations) at beginning of period | 106,080 | 102,149 | ||||||
| Cash, cash equivalents and restricted cash (including cash held at discontinued operations) at end of the period | 147,477 | 92,730 | ||||||
| Less: Cash held at of discontinued operations at end of period | 4,074 | 5,470 | ||||||
| Cash, cash equivalents, and restricted cash (excluding cash held at discontinued operations) at end of period | $ | 143,403 | $ | 87,260 | ||||
Reconciliation of Non-GAAP Financial Measure for the Third Quarter 2023
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 disclosed Adjusted EBITDA on a consolidated basis and for GRE. Adjusted EBITDA 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’s measure of consolidated Adjusted EBITDA starts with income from operations and adds back depreciation, amortization, and stock-based compensation and subtracts out impairment of assets and equity in the net loss of equity method investees, net.
Adjusted EBITDA should be considered in addition to, not as a substitute for, or superior to, revenue, gross profit, income from operations, cash flow from operating activities, net income, basic and diluted earnings per share or other measures of liquidity and financial performance prepared in accordance with GAAP. In addition, Genie’s measurement of Adjusted EBITDA may not be comparable to similarly titled measures reported by other companies.
Management believes that Genie’s measure of Adjusted EBITDA provides useful information to both management and investors by excluding certain expenses that may not be indicative of Genie’s or GRE’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.
Management also uses Adjusted EBITDA to evaluate operating performance in relation to Genie’s competitors. Disclosure of this non-GAAP 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 revenue, gross profit, and income from operations, as well as net income, on a consolidated level to facilitate internal and external comparisons to Genie'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. Genie’s operating results exclusive of depreciation and amortization are therefore useful indicators 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’s calculation of Adjusted EBITDA because management believes this allows investors to make more meaningful comparisons of the operating results of Genie’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.
Impairment of goodwill is a component of (loss) income from operations that is excluded from the calculation of Adjusted EBITDA. The impairment of goodwill 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's continuing operations.
Following are the reconciliations of Adjusted EBITDA on a consolidated basis to its most directly comparable GAAP measure. Adjusted EBITDA is reconciled to income from operations for Genie Energy on a consolidated basis as well as for GRE.
Non-GAAP Reconciliation - Consolidated Adjusted EBITDA
| 1Q22 | 2Q22 | 3Q22 | 4Q22 | 1Q23 | 2Q23 | 3Q23 | 2021 | 2022 | TTM | |||||||||||||||||||||||||||||||
| Income (loss) from Operations | $ | 27.0 | $ | 11.8 | $ | 23.5 | $ | 15.5 | $ | 11.3 | $ | 15.0 | $ | 17.9 | $ | 24.1 | $ | 77.7 | $ | 59.7 | ||||||||||||||||||||
| Add back | ||||||||||||||||||||||||||||||||||||||||
| Depreciation and Amortization | $ | 0.1 | $ | 0.1 | $ | 0.1 | $ | 0.1 | $ | 0.1 | $ | 0.1 | $ | 0.1 | $ | 0.4 | $ | 0.4 | $ | 0.4 | ||||||||||||||||||||
| Non-Cash Compensation | $ | 0.8 | $ | 0.7 | $ | 0.7 | $ | 0.7 | $ | 0.8 | $ | 0.8 | $ | 0.6 | $ | 2.8 | $ | 2.9 | $ | 2.9 | ||||||||||||||||||||
| Impairment | $ | 0.0 | $ | 0.0 | $ | 0.0 | $ | 2.1 | $ | 0.0 | $ | 0.0 | $ | 0.0 | $ | 0.0 | $ | 2.1 | $ | 2.1 | ||||||||||||||||||||
| Equity in the Loss of AMSO/GEUK | $ | 0.1 | $ | (0.4 | ) | $ | 0.2 | $ | 0.1 | $ | 0.2 | $ | (0.1 | ) | $ | 0.0 | $ | 0.4 | $ | (0.0 | ) | $ | 0.2 | |||||||||||||||||
| Adjusted EBITDA | $ | 28.0 | $ | 12.2 | $ | 24.5 | $ | 18.5 | $ | 12.4 | $ | 15.8 | $ | 18.6 | $ | 27.8 | $ | 83.1 | $ | 65.3 | ||||||||||||||||||||
Non-GAAP Reconciliation - GRE Adjusted EBITDA
| (in millions) | 3Q23 | 3Q22 | TTM | 2022 | 2021 | |||||||||||||||
| Income (loss) from Operations | $ | 22.0 | $ | 27.4 | $ | 77.4 | $ | 92.6 | $ | 34.7 | ||||||||||
| Add back | ||||||||||||||||||||
| Depreciation and Amortization | $ | 0.1 | $ | 0.1 | $ | 0.4 | $ | 0.3 | $ | 0.4 | ||||||||||
| Stock-based Compensation | $ | 0.2 | $ | 0.2 | $ | 1.0 | $ | 1.0 | $ | 0.9 | ||||||||||
| Adjusted EBITDA | $ | 22.3 | $ | 27.7 | $ | 78.8 | $ | 93.9 | $ | 36.0 | ||||||||||
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