Genie Energy Announces First Quarter 2024 Results
Genie Energy announced record first quarter revenue and gross profits, led by strong performance from Genie Retail Energy and Genie Renewables. Income from operations, adjusted EBITDA, and earnings per diluted share were reported. The company repurchased shares and paid quarterly dividends. Financial metrics and segment highlights were provided in the release. Cash flow, balance sheet, and trended financial information were also discussed.
Record first quarter revenue and gross profit levels reported by Genie Energy.
Strong performance from Genie Retail Energy and Genie Renewables drove overall business growth.
Repurchased 250,000 shares of Class B Common Stock and continued quarterly dividend payments.
Increased first-quarter revenue by 13.7% to $119.7 million from $105.3 million.
Genie Renewables saw an 86.9% year-over-year increase in revenue.
Decrease in gross margin to 28.2% from 31.6% compared to the previous year.
Income from operations decreased to $9.8 million from $11.3 million year-over-year.
Net income attributable to Genie common stockholders and EPS decreased from the previous year.
Adjusted EBITDA decreased by 5.6% to $11.7 million from $12.4 million.
Net income attributable to Genie common stockholders saw a significant decrease from the previous year.
Insights
Reviewing the financial results disclosed by Genie Energy, a noticeable revenue growth is observed, indicating an upward trajectory in sales. Notably, the gross profit also saw an increase, although the margin has seen a compression. The decline in gross margin from 31.6% to 28.2% illustrates a potential increase in the cost of goods sold or pricing pressures, which would merit further investigation for a comprehensive financial health assessment.
The net income notably decreased by 43.1%, a cause for concern as it signals a drop in profitability. The pullback in earnings per share (EPS) from $0.54 to $0.30, should give investors pause, questioning the sustainability of previous income levels. The repurchase of shares is generally viewed as a positive signal of management's confidence in the company's valuation and could provide some support to the stock price.
Considering the cash and cash equivalents, a strong position provides a cushion and strategic flexibility, but the operating cash flow increase is a positive indicator of operational efficiency and a potentially stronger liquidity position. The commitment to a continued quarterly dividend is reassuring for income-focused investors. However, the slight decrease in Adjusted EBITDA may indicate underlying challenges in the company's core earnings power.
The figures presented in Genie Energy's report hint at some dynamics within the energy sector. The increase in electricity revenue against the backdrop of a decrease in natural gas revenue mirrors shifting consumer preferences or pricing volatility in energy commodities, which might affect future profitability and risk assessments. The significant growth in the renewables division suggests a strategic diversification that could bode well in light of global energy transition trends.
It's also important to consider the market conditions, such as weather patterns and energy market stability, as mentioned by the CEO. These factors can have pronounced impacts on energy companies, influencing both operational costs and consumer demand. Investors should take note of Genie Energy's ongoing investments in solar projects, which could offer long-term growth prospects, although they also entail certain risks related to project execution and regulatory changes.
An investment research analysis would highlight Genie Energy's strategic moves, including its share repurchases and dividends, that often are appreciated by the market as they represent a shareholder-friendly capital allocation policy. However, the mixed financial results with increased revenue but decreased income and EPS, require a careful evaluation of the growth quality and potential margin pressures.
The reported decrease in RCEs (Retail Customer Equivalents), especially in electricity, could suggest a challenging competitive environment or customer acquisition issues. Also, the increase in churn rate needs to be monitored as it could indicate customer retention challenges. The investor community typically scrutinizes such metrics closely as they provide insight into a company's market position and future revenue potential.
In summary, while there are positive aspects such as strong operating cash flow and the aggressive expansion in the renewable sector, these must be weighed against the challenges seen in profitability metrics and customer loyalty indicators.
Revenue increased to
Income from Operations of
Repurchased 250,000 Shares of Class B Common Stock
Newark, NJ, May 08, 2024 (GLOBE NEWSWIRE) -- Genie Energy, Ltd. (NYSE: GNE), a leading retail energy and renewable energy solutions provider, today announced results for the first quarter of 2024.
Michael Stein, chief executive officer of Genie Energy, commented:
“We reported record first quarter revenue and gross profits, led by Genie Retail Energy, or GRE, which continued to drive the overall business with higher meter counts and strong natural gas margins. Genie Renewables, or GREW, also had a strong quarter as several third-party solar projects hit construction milestones, leading to record segment gross profits and gross margins. We also repurchased 250,000 shares of GNE stock - about
First Quarter 2024 Highlights
(Compared to 1Q23 unless otherwise noted. Unless otherwise noted, results of Genie Retail Energy International (GREI) are included in discontinued operations for all periods.)
| ● | Revenue increased | |||
| ● | Gross profit increased | |||
| ● | Income from operations of | |||
| ● | Adjusted EBITDA1 of | |||
| ● | Net income attributable to Genie common stockholders and income per diluted share (EPS) attributable to Genie common stockholders of | |||
| | 1Q23 net income attributable to Genie common stockholders and EPS included the benefit of a | |||
| ● | Non-GAAP net income1 and non-GAAP EPS1 attributable to Genie common stockholders of | |||
| ● | Cash and cash equivalents, short and long-term restricted cash, and marketable equity securities totaled | |||
| ● | Genie will pay a | |||
| ● | Repurchased 250,000 shares of Class B Common stock for | |||
1Adjusted EBITDA, Non-GAAP net income (loss) attributable to Genie Energy Ltd. common stockholders, and Non-GAAP EPS for all periods presented are non-GAAP measures intended to provide useful information that supplements the core operating results in accordance with GAAP for 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 these non-GAAP metrics, as well as reconciliations to its most directly comparable GAAP measures.
Select Financial Metrics
| (in millions except for EPS)* | 1Q24 | 1Q23 | Change | |||||||||
| Total Revenue | $ | 119.7 | $ | 105.3 | 13.7 | % | ||||||
| Genie Retail Energy | $ | 112.5 | $ | 101.4 | 10.9 | % | ||||||
| Electricity | $ | 89.4 | $ | 74.5 | 20.0 | % | ||||||
| Natural Gas | $ | 22.4 | $ | 26.9 | (16.8 | )% | ||||||
| Genie Renewables | $ | 7.2 | $ | 3.9 | 86.9 | % | ||||||
| Gross Margin | 28.2 | % | 31.6 | % | (339 | )bps | ||||||
| Genie Retail Energy | 28.6 | % | 32.1 | % | (346 | )bps | ||||||
| Genie Renewables | 22.0 | % | 19.3 | % | 269 | bps | ||||||
| Income from Operations | $ | 9.8 | $ | 11.3 | (12.7 | )% | ||||||
| Operating Margin | 8.2 | % | 10.7 | % | (248 | )bps | ||||||
| Net Income from Continuing Operations | $ | 8.4 | $ | 11.3 | (25.6 | )% | ||||||
| Net Income Attributable to Genie Common Stockholders | $ | 8.1 | $ | 14.3 | (43.1 | )% | ||||||
| Diluted Earnings Per Share | $ | 0.30 | $ | 0.54 | (0.24 | )$ | ||||||
| Non-GAAP Net Income Attributable to Genie Common Stockholders | $ | 8.9 | $ | 14.3 | (37.7 | )% | ||||||
| Non-GAAP Diluted Earnings Per Share | $ | 0.33 | $ | 0.54 | (0.21 | )$ | ||||||
| Adjusted EBITDA | $ | 11.7 | $ | 12.4 | (5.6 | )% | ||||||
| Cash Flow from Continuing Operating Activities | $ | 8.7 | $ | 1.5 | 481.2 | % | ||||||
| * | Numbers may not add due to rounding |
Segment Highlights
Genie Retail Energy
GRE's first quarter revenue increased
Select Performance Metrics
| RCEs and Meters in 1000s* | 1Q24 | 1Q23 | Change | ||||||||||
| Total RCEs | 348 | 352 | (1.3 | ) | % | ||||||||
| Electricity | 267 | 276 | (3.3 | ) | % | ||||||||
| Natural Gas | 81 | 77 | 5.7 | % | |||||||||
| Total Meters | 365 | 349 | 4.5 | % | |||||||||
| Electricity | 281 | 271 | 3.7 | % | |||||||||
| Natural Gas | 83 | 78 | 7.5 | % | |||||||||
| Gross Adds | 70 | 129 | (45.8 | ) | % | ||||||||
| Churn** | 5.5 | % | 4.4 | % | 110 | bps | |||||||
| * | Numbers may not add due to rounding | |
| ** | Excludes the impacts of aggregation deal expirations |
Genie Renewables (GREW)
GREW increased first-quarter revenue by
Genie Solar continued to advance its company-owned project development pipeline during the first quarter. In addition to moving projects through its development pipeline, the Company began booking its first revenue and gross profit from the portfolio of operating solar projects it acquired during 4Q23. At March 31, 2024, Genie Solar's operating portfolio and development pipeline comprised:
| Pipeline | Total | Operational | Site Control | Permitting | Construction | |||||
| MW | 100 | 10 | 78 | 2 | 10 | |||||
| Project Count | 14 | 1 | 10 | 1 | 2 |
Balance Sheet and Cash Flow Highlights
As of March 31, 2024, Genie reported cash and cash equivalents, short and long-term restricted cash, and marketable equity securities of
Total assets as of March 31, 2024 were
Cash provided by operating activities increased to
Trended Financial Information:*
| (in millions except for EPS, RCEs and Meters in thousands)** | 1Q23 | 2Q23 | 3Q23 | 4Q23 | 1Q24 | 2022 | 2023 | |||||||||||||||||||||
| Total Revenue | $ | 105.3 | $ | 93.5 | $ | 125.0 | $ | 104.9 | $ | 119.7 | $ | 316.2 | $ | 428.7 | ||||||||||||||
| Genie Retail Energy | $ | 101.4 | $ | 89.7 | $ | 120.3 | $ | 98.4 | $ | 112.5 | $ | 304.6 | $ | 409.9 | ||||||||||||||
| Electricity | $ | 74.5 | $ | 80.2 | $ | 114.0 | $ | 82.1 | $ | 89.4 | $ | 241.8 | $ | 350.8 | ||||||||||||||
| Natural Gas | $ | 26.9 | $ | 9.0 | $ | 5.0 | $ | 15.1 | $ | 22.4 | $ | 62.1 | $ | 56.0 | ||||||||||||||
| Others | $ | 0.0 | $ | 0.6 | $ | 1.3 | $ | 1.2 | $ | 0.7 | $ | 0.7 | $ | 3.1 | ||||||||||||||
| Genie Renewables | $ | 3.9 | $ | 3.7 | $ | 4.7 | $ | 6.5 | $ | 7.2 | $ | 11.6 | $ | 18.8 | ||||||||||||||
| Gross Margin | 31.6 | % | 40.9 | % | 32.9 | % | 32.1 | % | 28.2 | % | 49.2 | % | 34.1 | % | ||||||||||||||
| Genie Retail Energy | 32.1 | % | 41.8 | % | 33.9 | % | 33.0 | % | 28.6 | % | 50.4 | % | 35.0 | % | ||||||||||||||
| Genie Renewables | 19.3 | % | 19.6 | % | 5.3 | % | 17.2 | % | 22.0 | % | 15.6 | % | 15.1 | % | ||||||||||||||
| Income (Loss) from Operations | $ | 11.3 | $ | 15.0 | $ | 17.9 | $ | (34.2 | ) | $ | 9.8 | $ | 78.4 | $ | 10.0 | |||||||||||||
| Operating Margin | 10.7 | % | 16.1 | % | 14.3 | % | (32.6 | )% | 8.2 | % | 24.8 | % | 2.3 | % | ||||||||||||||
| Net Income (Loss) Attributable to Genie Common Stockholders | $ | 14.3 | $ | 15.0 | $ | 14.5 | $ | (24.5 | ) | $ | 8.1 | $ | 85.9 | $ | 19.2 | |||||||||||||
| Diluted Earnings (Loss) Per Share | $ | 0.54 | $ | 0.57 | $ | 0.53 | $ | (0.90 | ) | $ | 0.30 | $ | 3.26 | $ | 0.74 | |||||||||||||
| Adjusted EBITDA | $ | 12.4 | $ | 15.8 | $ | 18.5 | $ | 11.4 | $ | 11.7 | $ | 83.2 | $ | 58.2 | ||||||||||||||
| Genie Retail Energy Performance Metrics | ||||||||||||||||||||||||||||
| RCEs | 352 | 380 | 375 | 350 | 348 | 262 | 350 | |||||||||||||||||||||
| Electricity | 276 | 304 | 298 | 272 | 267 | 181 | 272 | |||||||||||||||||||||
| Natural Gas | 77 | 76 | 77 | 78 | 81 | 81 | 78 | |||||||||||||||||||||
| Meters | 349 | 381 | 385 | 361 | 365 | 276 | 361 | |||||||||||||||||||||
| Electricity | 271 | 302 | 304 | 279 | 281 | 197 | 279 | |||||||||||||||||||||
| Natural Gas | 78 | 80 | 81 | 82 | 83 | 79 | 82 | |||||||||||||||||||||
| Gross Adds | 129 | 75 | 60 | 52 | 70 | 70 | 52 | |||||||||||||||||||||
| Churn*** | 4.4 | % | 4.3 | % | 4.4 | % | 5.4 | % | 5.5 | % | 4.8 | % | 5.4 | % | ||||||||||||||
| * | Some Genie Retail Energy International (GREI) operations have been classified as a discontinued operation and their results excluded from current and historical results | |
| ** | Numbers may not add due to rounding | |
| *** | Excludes the impacts of expirations of aggregation deals |
2024 Commentary
Stein continued: "Despite some irregular weather patterns, energy markets have remained relatively stable, and we are well positioned with a strong retail customer base to generate attractive returns. We also continue to move Company-owned solar projects forward in our pipeline, with two projects in New York State entering the construction phase, while evaluating additional opportunities to grow our pipeline more efficiently following the upgrades we’ve made to our teams and processes. Finally, we expect to continue to return cash to shareholders through dividends and stock repurchases.”
Earnings Announcement and Supplemental Information
At 8:30 AM Eastern this morning, Genie Energy’s management will host a conference call to discuss the Company's 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: 763638.
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: 50470. The replay will remain available through Wednesday, May 22, 2024. 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 leading retail energy and renewable energy solutions provider. The Genie Retail Energy division (GRE) supplies electricity, including electricity from renewable resources, and natural gas to residential and small business customers in the United States. The Genie Renewables division (GREW) 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)
| March 31, 2024 | December 31, 2023 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 106,560 | $ | 107,609 | ||||
| Restricted cash—short-term | 9,918 | 10,442 | ||||||
| Marketable equity securities | 372 | 396 | ||||||
| Trade accounts receivable, net of allowance for doubtful accounts of | 60,087 | 61,909 | ||||||
| Inventory | 18,460 | 14,598 | ||||||
| Prepaid expenses | 15,049 | 16,222 | ||||||
| Other current assets | 6,085 | 5,475 | ||||||
| Current assets of discontinued operations | 11,292 | 13,182 | ||||||
| Total current assets | 227,823 | 229,833 | ||||||
| Restricted cash—long-term | 45,541 | 44,945 | ||||||
| Property and equipment, net | 16,139 | 15,192 | ||||||
| Goodwill | 9,998 | 9,998 | ||||||
| Other intangibles, net | 2,643 | 2,735 | ||||||
| Deferred income tax assets, net | 5,200 | 5,200 | ||||||
| Other assets | 16,427 | 15,247 | ||||||
| Noncurrent assets of discontinued operations | 4,533 | 7,405 | ||||||
| Total assets | $ | 328,304 | $ | 330,555 | ||||
| Liabilities and equity | ||||||||
| Current liabilities: | ||||||||
| Trade accounts payable | 22,407 | 27,881 | ||||||
| Accrued expenses | 53,821 | 49,389 | ||||||
| Income taxes payable | 9,614 | 6,699 | ||||||
| Due to IDT Corporation, net | 120 | 145 | ||||||
| Other current liabilities | 6,107 | 9,280 | ||||||
| Current liabilities of discontinued operations | 8,516 | 4,858 | ||||||
| Total current liabilities | 100,585 | 98,252 | ||||||
| Noncurrent captive insurance liability | 45,541 | 44,945 | ||||||
| Other liabilities | 2,082 | 2,212 | ||||||
| Noncurrent liabilities of discontinued operations | 681 | 638 | ||||||
| Total liabilities | 148,889 | 146,047 | ||||||
| Commitments and contingencies | — | — | ||||||
| Equity: | ||||||||
| Genie Energy Ltd. stockholders’ equity: | ||||||||
| Preferred stock, | ||||||||
| Series 2012-A, designated shares - 8,750; at liquidation preference, consisting of 0 shares issued and outstanding at March 31, 2024 and December 31, 2023 | — | — | ||||||
| Class A common stock, | 16 | 16 | ||||||
| Class B common stock, | 289 | 288 | ||||||
| Additional paid-in capital | 157,549 | 156,101 | ||||||
| Treasury stock, at cost, consisting of 3,300 and 2,944 shares of Class B common stock at March 31, 2024 and December 31, 2023 | (29,285 | ) | (22,661 | ) | ||||
| Accumulated other comprehensive income | (1,911 | ) | 3,299 | |||||
| Retained earnings | 66,198 | 60,196 | ||||||
| Total Genie Energy Ltd. stockholders’ equity | 192,856 | 197,239 | ||||||
| Noncontrolling interests | (13,441 | ) | (12,731 | ) | ||||
| Total equity | 179,415 | 184,508 | ||||||
| Total liabilities and equity | $ | 328,304 | $ | 330,555 | ||||
GENIE ENERGY LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
| Three Months Ended March 31, | ||||||||
| 2024 | 2023 | |||||||
| (in thousands, except per share data) | ||||||||
| Revenues: | ||||||||
| Electricity | $ | 89,396 | $ | 74,487 | ||||
| Natural gas | 22,398 | 26,925 | ||||||
| Other | 7,894 | 3,864 | ||||||
| Total revenues | 119,688 | 105,276 | ||||||
| Cost of revenues | 85,902 | 71,990 | ||||||
| Gross profit | 33,786 | 33,286 | ||||||
| Operating expenses: | ||||||||
| Selling, general and administrative (i) | 22,901 | 22,011 | ||||||
| Provision for captive insurance liability | 1,036 | — | ||||||
| Income from operations | 9,849 | 11,275 | ||||||
| Interest income | 1,340 | 974 | ||||||
| Interest expense | (32 | ) | (19 | ) | ||||
| Gain (loss) on marketable equity securities and investments | 117 | (71 | ) | |||||
| Other income, net | 80 | 3,246 | ||||||
| Income before income taxes | 11,354 | 15,405 | ||||||
| Provision for income taxes | (2,920 | ) | (4,068 | ) | ||||
| Net income from continuing operations | 8,434 | 11,337 | ||||||
| (Loss) income from discontinued operations, net of taxes | (265 | ) | 3,055 | |||||
| Net income | 8,169 | 14,392 | ||||||
| Net income (loss) attributable to noncontrolling interests, net | 46 | (39 | ) | |||||
| Net income attributable to Genie Energy Ltd. | 8,123 | 14,431 | ||||||
| Dividends on preferred stock | — | (157 | ) | |||||
| Net income attributable to Genie Energy Ltd. common stockholders | $ | 8,123 | $ | 14,274 | ||||
| Net income (loss) attributable to Genie Energy Ltd. common stockholders | ||||||||
| Continuing operations | $ | 8,388 | $ | 11,218 | ||||
| Discontinued operations | (265 | ) | 3,056 | |||||
| Net income attributable to Genie Energy Ltd. common stockholders | $ | 8,123 | $ | 14,274 | ||||
| Earnings (loss) per share attributable to Genie Energy Ltd. common stockholders: | ||||||||
| Basic: | ||||||||
| Continuing operations | $ | 0.31 | $ | 0.44 | ||||
| Discontinued operations | (0.01 | ) | 0.12 | |||||
| Earnings per share attributable to Genie Energy Ltd. common stockholders | $ | 0.30 | $ | 0.56 | ||||
| Diluted | ||||||||
| Continuing operations | $ | 0.31 | $ | 0.42 | ||||
| Discontinued operations | (0.01 | ) | 0.12 | |||||
| Earnings per share attributable to Genie Energy Ltd. common stockholders | $ | 0.30 | $ | 0.54 | ||||
| Weighted-average number of shares used in calculation of earnings per share: | ||||||||
| Basic | 26,790 | 25,326 | ||||||
| Diluted | 27,298 | 26,620 | ||||||
| Dividends declared per common share | $ | 0.075 | $ | 0.075 | ||||
| (i) Stock-based compensation included in selling, general and administrative expenses | $ | 749 | $ | 899 | ||||
GENIE ENERGY LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| Three Months Ended March 31, | ||||||||
| 2024 | 2023 | |||||||
| (in thousands) | ||||||||
| Operating activities | ||||||||
| Net income | $ | 8,169 | $ | 14,392 | ||||
| Net (loss) income from discontinued operations, net of tax | (265 | ) | 3,055 | |||||
| Net income from continuing operations | 8,434 | 11,337 | ||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Provision for captive insurance liability | 1,036 | — | ||||||
| Depreciation and amortization | 219 | 115 | ||||||
| Provision for doubtful accounts receivable | 729 | 574 | ||||||
| Inventory valuation allowance | 417 | — | ||||||
| Unrealized gain on marketable equity securities and investments and others, net | (49 | ) | (124 | ) | ||||
| Stock-based compensation | 749 | 899 | ||||||
| Changes in assets and liabilities: | ||||||||
| Trade accounts receivable | 1,093 | (10,643 | ) | |||||
| Inventory | (2,191 | ) | (3,631 | ) | ||||
| Prepaid expenses | 581 | (1,032 | ) | |||||
| Other current assets and other assets | 505 | 1,138 | ||||||
| Trade accounts payable, accrued expenses and other liabilities | (5,694 | ) | (2,051 | ) | ||||
| Due to IDT Corporation, net | (25 | ) | (66 | ) | ||||
| Income taxes payable | 2,914 | 5,004 | ||||||
| Net cash provided by operating activities of continuing operations | 8,718 | 1,520 | ||||||
| Net cash provided by operating activities of discontinued operations | 4,208 | 9,714 | ||||||
| Net cash provided by operating activities | 12,926 | 11,234 | ||||||
| Investing activities | ||||||||
| Capital expenditures | (1,206 | ) | (98 | ) | ||||
| Purchase of solar system facility | (1,344 | ) | — | |||||
| Purchases of marketable equity securities and other investment | (2,094 | ) | (4,559 | ) | ||||
| Purchase of equity of subsidiary | (1,200 | ) | — | |||||
| Proceeds from sale of marketable equity securities and other investments | — | 343 | ||||||
| Proceeds from settlement of equity method investment | — | 133 | ||||||
| Repayment of notes receivable | — | 19 | ||||||
| Net cash used in investing activities | (5,844 | ) | (4,162 | ) | ||||
| Financing activities | ||||||||
| Dividends paid | (2,121 | ) | (2,108 | ) | ||||
| Repurchases of Class B common stock | (4,101 | ) | — | |||||
| Repurchases of Class B common stock from employees | (1,508 | ) | (165 | ) | ||||
| Redemption of preferred stock | — | (1,000 | ) | |||||
| Net cash used in financing activities | (7,730 | ) | (3,273 | ) | ||||
| Effect of exchange rate changes on cash, cash equivalents, and restricted cash | 74 | (10 | ) | |||||
| Net increase (decrease) in cash, cash equivalents, and restricted cash | (574 | ) | 3,789 | |||||
| Cash, cash equivalents, and restricted cash (excluding cash held at discontinued operations) at beginning of period | 165,479 | 106,080 | ||||||
| Cash, cash equivalents and restricted cash (including cash held at discontinued operations) at end of the period | 164,905 | 109,869 | ||||||
| Less: Cash held at of discontinued operations at end of period | 2,886 | 858 | ||||||
| Cash, cash equivalents, and restricted cash (excluding cash held at discontinued operations) at end of period | $ | 162,019 | $ | 109,011 | ||||
Reconciliation of Non-GAAP Financial Measure for the First Quarter of 2024
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 and disclosed Non-GAAP Net Income Attributable to Genie Energy Ltd. Common Stockholders (Non-GAAP Net Income and Non-GAAP earnings per share (Non-GAAP EPS). Adjusted EBITDA, Non-GAAP Net Income and Non-GAAP EPS are non-GAAP financial measures.
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 deducts impairment of assets and equity in the net loss of equity method investees, net.
Genie's measure of Non-GAAP Net Income starts with net income attributable to Genie Energy Ltd. Common Stockholders in accordance with GAAP and adds captive insurance liability and the tax effect of this adjustment. These additions are non-cash and/or non-routine items in the relevant periods.
Adjusted EBITDA, Non-GAAP Net Income and Non-GAAP EPS 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, Non-GAAP Net Income and Non-GAAP EPS may not be comparable to similarly titled measures reported by other companies.
Management believes that Genie’s measure of Adjusted EBITDA, Non-GAAP Net Income and Non-GAAP EPS provide 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, non-GAAP Net Income and Non-GAAP EPS, among other measures, as relevant indicators of core operational strengths in its financial and operational decision-making.
Management also uses Adjusted EBITDA, Non-GAAP Net Income and Non-GAAP EPS to evaluate operating performance in relation to Genie’s competitors. Disclosure of these non-GAAP financial measures 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, Non-GAAP Net Income and Non-GAAP EPS 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 assets is a component of income (loss) from operations that is excluded from the calculation of Adjusted EBITDA. The impairment of assets 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.
Captive insurance liability is a non-cash charge incurred by Genie's insurance operations. While there may be related charges in other periods, the magnitude of these changes can fluctuate markedly and do not reflect the performance of Genie's continuing operations. Captive insurance losses are excluded from Genie's calculation of Adjusted EBITDA, Non-GAAP Net Income and Non-GAAP EPS 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.
Following are the reconciliations of Adjusted EBITDA, Non-GAAP Net Income and Non-GAAP EPS 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
| (in millions) | 1Q22 | 2Q22 | 3Q22 | 4Q22 | 1Q23 | 2Q23 | 3Q23 | 4Q23 | 1Q24 | 2022 | 2023 | |||||||||||||||||||||||||||||||||
| Income (loss) from Operations | $ | 26.9 | $ | 11.8 | $ | 23.5 | $ | 15.5 | $ | 11.3 | $ | 15.0 | $ | 17.9 | $ | (34.2 | ) | $ | 9.8 | $ | 78.4 | $ | 10.0 | |||||||||||||||||||||
| Add back | ||||||||||||||||||||||||||||||||||||||||||||
| Captive insurance liability | $ | 0.0 | $ | 0.0 | $ | 0.0 | $ | 0.0 | $ | 0.0 | $ | 0.0 | $ | 0.0 | $ | 45.1 | $ | 1.0 | $ | 0.0 | $ | 0.0 | ||||||||||||||||||||||
| Depreciation and Amortization | $ | 0.1 | $ | 0.1 | $ | 0.1 | $ | 0.1 | $ | 0.1 | $ | 0.1 | $ | 0.1 | $ | 0.2 | $ | 0.2 | $ | 0.4 | $ | 0.5 | ||||||||||||||||||||||
| Non-Cash Compensation | $ | 0.8 | $ | 0.7 | $ | 0.7 | $ | 0.7 | $ | 0.8 | $ | 0.8 | $ | 0.6 | $ | 0.5 | $ | 0.7 | $ | 2.9 | $ | 2.7 | ||||||||||||||||||||||
| Impairment | $ | 0.0 | $ | 0.0 | $ | 0.0 | $ | 2.1 | $ | 0.0 | $ | 0.0 | $ | 0.0 | $ | 0.0 | $ | 0.0 | $ | 2.1 | $ | 0.0 | ||||||||||||||||||||||
| Equity in net loss (income) of equity method investees | $ | 0.1 | $ | (0.4 | ) | $ | 0.2 | $ | 0.1 | $ | 0.2 | $ | (0.1 | ) | $ | (0.1 | ) | $ | (0.1 | ) | $ | (0.1 | ) | $ | (0.0 | ) | $ | 0.2 | ||||||||||||||||
| Adjusted EBITDA | $ | 27.9 | $ | 12.2 | $ | 24.5 | $ | 18.5 | $ | 12.4 | $ | 15.9 | $ | 18.6 | $ | 11.6 | $ | 11.7 | $ | 83.8 | $ | 58.5 | ||||||||||||||||||||||
Non-GAAP Reconciliation - GRE Adjusted EBITDA
| (in millions) | 1Q24 | 1Q23 | 2023 | 2022 | ||||||||||||
| Income from Operations | $ | 14.2 | $ | 16.4 | $ | 71.9 | $ | 92.6 | ||||||||
| Add back | ||||||||||||||||
| Depreciation and Amortization | $ | 0.1 | $ | 0.1 | $ | 0.3 | $ | 0.3 | ||||||||
| Stock-based Compensation | $ | 0.2 | $ | 0.3 | $ | 1.0 | $ | 1.0 | ||||||||
| Impairment | $ | 0.0 | $ | 0.0 | $ | 0.0 | $ | 0.0 | ||||||||
| Equity in the income of equity method investee | $ | 0.0 | $ | 0.0 | $ | 0.0 | $ | 0.0 | ||||||||
| Adjusted EBITDA | $ | 14.6 | $ | 16.8 | $ | 73.2 | $ | 93.9 | ||||||||
Non-GAAP Reconciliation - Consolidated Non-GAAP Net Income Attributable to Genie Energy Ltd. Common Stockholders and Non-GAAP Diluted Income Per Share
| (in millions except for EPS) | 1Q24 | 1Q23 | 2023 | 2022 | ||||||||||||
| Net income attributable to Genie Energy Ltd. Common Stockholders | $ | 8.1 | $ | 14.3 | $ | 19.2 | $ | 85.9 | ||||||||
| Add back | ||||||||||||||||
| Captive insurance liability | $ | 1.0 | $ | 0.0 | $ | 45.1 | $ | 0.0 | ||||||||
| Income tax effect of adjustment | $ | (0.3 | ) | 0.0 | $ | (10.5 | ) | $ | 0.0 | |||||||
| Non-GAAP net income attributable to Genie Energy Ltd. Common Stockholders | $ | 8.9 | $ | 14.3 | $ | 53.7 | $ | 85.9 | ||||||||
| Diluted earnings per share | $ | 0.30 | $ | 0.54 | $ | 0.74 | $ | 3.26 | ||||||||
| Total adjustments | $ | 0.03 | $ | 0.00 | $ | 1.33 | $ | 0.00 | ||||||||
| Non-GAAP diluted earnings per share | $ | 0.33 | $ | 0.54 | $ | 2.07 | $ | 3.26 | ||||||||
| Weighted average number of shares used in the calculation of diluted earnings per share | 27.3 | 26.6 | 26.1 | 26.4 | ||||||||||||
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