Genie Energy Ltd. Reports Second Quarter 2020 Results

Rhea-AI Summary

Genie Energy Ltd. (NYSE: GNE, GNE.PRA) announced its Q2 2020 earnings, reporting a profit of $0.06 per share on revenue of $76.1 million, a 24.7% increase from $61 million in Q2 2019. Key highlights include a 18% rise in global RCEs to 421,000 and a significant turnaround in operating income from a loss of $9.3 million to a profit of $2.7 million. The company's Adjusted EBITDA improved to $3.5 million from a negative $9.1 million. Genie repurchased 200,873 shares for $1.5 million. Despite COVID-19 impacts, the company demonstrated strong financial performance and growth in customer acquisition.

Positive

• Adjusted EBITDA rose to $3.5 million from a negative $9.1 million.
• Operating income improved to $2.7 million from a loss of $9.3 million.
• Revenue increased by 24.7% to $76.1 million.
• Global RCEs served increased by 64,000 (18%) year-over-year to 421,000.
• Per-meter electricity consumption increased by 26%.

Negative

• Total revenue decreased from $104.1 million in Q1 2020 to $76.1 million in Q2 2020.
• Natural gas revenue decreased significantly from $16.1 million in Q1 2020 to $5.4 million in Q2 2020.
• Operating loss in Genie Energy Services increased to $1.1 million from a loss of $0.7 million in Q2 2019.

NEWARK, N.J., Aug. 6, 2020 /PRNewswire/ -- Genie Energy Ltd. (NYSE: GNE, GNEPRA) reported second quarter 2020 earnings of $0.06 per basic and diluted share on revenue of $76.1 million. 

HIGHLIGHTS

(Throughout this release, 2Q20 results are compared to 2Q19 results unless otherwise noted)

• Global RCEs served increased by 64,000 (18%) year over year and 20,000 (5%) sequentially to 421,000. Global meters served increased by 88,000 (20%) year over year and 4,000 (1%) sequentially to 536,000.
• At Genie Retail Energy (GRE), Genie's US retail energy provider business, per-meter electricity consumption increased 26%.
• Consolidated revenue increased 24.7% to $76.1 million from $61.0 million driven by increased electricity consumption.
• Consolidated income from operations improved to $2.7 million compared to a loss from operations of $9.3 million. Consolidated Adjusted EBITDA¹ increased to $3.5 million from negative Adjusted EBITDA¹ of $9.1 million.
• GRE's income from operations improved to $6.0 million compared to a loss from operations of $5.4 million, and Adjusted EBITDA¹ increased to $6.2 million from negative Adjusted EBITDA¹ of $5.1 million.
• Basic and diluted EPS improved to $0.06 from a loss per basic and diluted share of $0.29.
• During the second quarter, Genie repurchased 200,873 shares of its Class B common stock for $1.5 million.

COMMENTS OF MICHAEL STEIN, CEO

"Genie Energy delivered strong financial and operational results, much improved from the difficult year ago quarter. We again expanded our global customer base led by growth in our overseas markets, and reported the highest level of Adjusted EBITDA¹ for any second quarter in our history. 

"Given our continued favorable outlook and strong cash generation in recent quarters and after increasing our quarterly dividend last quarter, we resumed repurchasing shares in the second quarter.

"The Genie team again did an outstanding job growing our business and significantly enhancing our bottom-line results despite the challenges of the COVID-19-impacted environment while working from home.  A big 'Thank you!' to them."

CONSOLIDATED RESULTS

$ in millions, except EPS	2Q20	1Q20	2Q19		2Q20-2Q19 Change (%/$)
Revenue	$76.1	$104.1	$61.0		+24.7%
Gross profit	$19.5	$28.9	$9.0		+117.1%
Gross margin percentage	25.6%	27.8%	14.7%		+1090 BP
SG&A expense	$16.0	$19.5	$18.3		+1.3%
Stock-based compensation included in SG&A	$0.4	$0.5	$0.3		+$0.1
Depreciation and amortization	$0.7	$0.8	$0.9		$(0.2)
Bad debt expense	$0.6	$0.6	$0.3		+$0.3
Impairment of assets	$0.8	$0.2	-		+$0.8
Income from operations	$2.7	$9.2	$(9.3)		+12.0
Adjusted EBITDA1	$3.5	$10.3	$(9.1)		+$12.6
Equity in the net loss in equity method investees2	$(1.2)	$(0.4)	$(1.1)		$(0.1)
(Provision for) benefit from income taxes	$(0.6)	$(2.6)	$1.7		$(2.3)
Net income attributable to Genie Energy common stockholders	$1.6	$5.5	$(7.8)		+$9.4
Earnings per diluted share attributable to Genie Energy common stockholders	$0.06	$0.20	$(0.29)		+$0.35
Net cash provided by (used in) operating activities	$16.4	$(2.7)	$(3.1)		+$19.5

 

GLOBAL METERS AND RCEs

Genie Energy's global customer base increased year-over-year and sequentially driven by investment in customer acquisition in overseas and domestic markets.  The pace of growth in the second quarter was slowed by COVID-19 related sales restrictions in key markets. Genie Energy's global RCE and meter totals are provided in the chart below.

Global RCEs and Meters (in thousands)3	June 30, 2020	March 31, 2020	December 31, 2019	September 30, 2019	June 30, 2019
Electricity RCEs	346	325	297	309	291
Natural gas RCEs	75	76	77	75	66
Total RCEs	421	401	374	384	357
Electricity meters	429	421	390	392	361
Natural gas meters	107	111	107	100	87
Total meters	536	532	497	492	448

 

SEGMENT RESULTS

Genie Retail Energy (GRE)

Genie Retail Energy $ in millions	2Q20	1Q20	2Q19		2Q20-2Q19 Change (%/$)
Total revenue	$66.5	$79.1	$54.4		+22.1%
Electricity revenue	$61.1	$63.1	$49.2		+24.0%
Natural gas revenue	$5.4	$16.1	$5.2		+3.9%
Gross profit	$17.1	$27.6	$8.2		+106.8%
Gross margin percentage	25.7%	34.9%	15.1%		+1060 BP
SG&A expense	$11.1	$14.6	$13.7		(18.8)%
Depreciation and amortization	$0.1	$0.1	$0.2		$(0.1)
Income from operations	$6.0	$13.0	$(5.4)		+$11.4
Adjusted EBITDA1	$6.2	$13.3	$(5.1)		+$11.3

GRE - KPIs and Take-Aways:

• RCEs served at June 30, 2020 increased to 343,000 from 318,000 a year earlier and from 330,000 at March 31, 2020. The year over year and sequential increases reflect a sustained focus on the acquisition of higher consumption meters, increased residential electricity consumption due to warmer weather in 2Q20 compared to 2Q19 and COVID-19 "stay-at-home" orders.
• Meters served at June 30, 2020 decreased to 374,000 from 379,000 a year earlier and from 384,000 at March 31, 2020. The decreases reflect a slower pace of gross meter additions, partially offset by a reduction in monthly customer churn.
• Gross meters added during 2Q20 totaled 40,000 compared to 91,000 in 2Q19 and 69,000 in 1Q20. COVID-19-related public health restrictions reduced sales activity through certain channels in 2Q20.
• Average monthly customer churn decreased to 3.9% from 4.4% in 2Q19 and 4.7% in 1Q20, reflecting decreased sales activity by competitors as a result of COVID-19-related restrictions.
• The year over year increase in electricity revenue was driven by a 26% increase in consumption per meter and, to a lesser extent, the growth of GRE's electricity customer base, which more than offset a decrease in revenue per kilowatt-hour sold.
• The year over year increases in income from operations and Adjusted EBITDA¹ were driven by increased electricity consumption and improved gross margin, augmented by a decrease in customer acquisition expense.

Genie Retail Energy International (GRE International)

GRE International $ in millions	2Q20	1Q20	2Q19		2Q20-2Q19 Change (%/$)
Total revenue	$5.0	$7.0	$2.9		+75.5%
Gross profit (loss)	$1.9	$(0.3)	$0.2		+$1.7
Gross margin percentage	38.0%	(4.0)%	8.4%		+2960 BP
SG&A expense	$2.5	$2.2	$1.8		+$0.7
Loss from operations	$(0.6)	$(2.5)	$(1.6)		+$1.0
Adjusted EBITDA1	$(1.6)	$(2.0)	$(1.9)		+$0.3
Equity in the net loss in Orbit Energy4	$(1.5)	-	$(0.9)		$(0.6)

GRE International – KPIs and Take-Aways: 

• RCE's served³ at June 30, 2020 increased to 79,000 from 39,000 a year earlier and from 72,000 at March 31, 2020 led by growth of Orbit Energy's customer base in the U.K.   
• Meters served³ at June 30, 2020 increased to 161,000 from 69,000 a year earlier and from 148,000 at March 31, 2020.
• On a pro forma basis⁵, inclusive of Orbit Energy's revenue, GRE International's revenue increased to $19.9 million in 2Q20 from $7.7 million in 2Q19.
• Loss from operations decreased year over year reflecting increases in revenue and gross margin, specifically within our Lumo Energia operations in Finland.  
• On a pro forma basis⁵, inclusive of Orbit Energy's loss from operations, GRE International's loss from operations decreased to $2.4 million in 2Q20 from $3.9 million in 2Q19.

Genie Energy Services (GES)

GES comprises Diversegy, a commercial energy consulting business, Genie's interest in Prism Solar, a supplier of solar panels and solutions, and Genie Solar Energy.

• GES' revenue increased to $4.6 million from $3.7 million reflecting increased revenue at Genie Solar Energy.
• GES' loss from operations was $1.1 million compared to a loss from operations of $0.7 million in 2Q19. The increase was attributable to a write-down of Prism Solar assets.

Genie Oil and Gas (GOGAS)

• Operations at GOGAS' Afek oil and gas exploration subsidiary remain suspended pending final testing on an existing well.
• GOGAS' loss from operations⁶ decreased to $0.2 million from $0.4 million in 2Q19.

Corporate

• Corporate loss from operations was $1.2 million in both 2Q20 and 2Q19.  The losses include the impact of corporate stock-based compensation which increased to $0.2 million from $0.1 million in 2Q19.

BALANCE SHEET AND CASH FLOW HIGHLIGHTS

At June 30, 2020, Genie Energy had $142.4 million in total assets, including $41.8 million in cash, cash equivalents and restricted cash.  Liabilities totaled $59.8 million and working capital (current assets less current liabilities) totaled $49.1 million.

Cash provided by operating activities in 2Q20 was $16.4 million compared to cash used in operating activities of $3.1 million in 2Q19. 

DIVIDEND ON GENIE ENERGY COMMON STOCK

Genie's Board of Directors has declared a second quarter dividend of $0.085 with a record date of August 18, 2020.  The dividend will be paid on or about August 26, 2020.  The distribution will be treated as an ordinary dividend for income tax purposes.

GENIE ENERGY EARNINGS CONFERENCE CALL

This earnings press release is available for download in the "Investors" section of the Genie Energy website (https://genie.com/investors/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, 2020, 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 1-888-224-3760 (toll-free from the US) or 1-303-223-4373 (international) and request the Genie Energy conference call.

Approximately three hours after the call, a call replay will be accessible by dialing 1-844-512-2921 (toll-free from the US) or 1-412-317-6671 (international) and providing the replay PIN: 21967026. The replay will remain available through August 13, 2020.  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 to have earnings releases and other press releases e-mailed directly to them. 

ABOUT GENIE ENERGY LTD.

Genie Energy Ltd. (NYSE: GNE, GNEPRA), is a global provider of energy services.  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 Retail Energy International division supplies customers in Europe and Asia.  The Genie Energy Services division includes Diversegy, a commercial and industrial brokerage and consultative services company, and Genie Solar Energy and Prism Solar, which design, supply and install commercial solar 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.

FOOTNOTES:

¹ Adjusted EBITDA for all periods presented is a non-GAAP measure.  The 'Reconciliation of Non-GAAP Financial Measures' at the end of this release provides an explanation of Adjusted EBITDA and reconciliations to its most directly comparable GAAP measures.

²Genie Energy accounts for its investments in Orbit Energy, its joint venture operating in the U.K., and Atid, a drilling contractor based in Israel in which it holds a minority stake, under the equity method of accounting. Under this method, Genie Energy records its share in the net income or loss of the venture. Therefore, revenue generated and expenses incurred are not reflected in Genie Energy's consolidated revenue and expenses.  However, Orbit Energy's customers are included in metrics regarding our global customer base.

³Includes RCEs and meters acquired and served by Genie Energy's domestic and international retail energy provider businesses including operations in Scandinavia and Japan and at Genie's joint venture in the U.K. (although U.K. operations are not included in our consolidated results of operations).

⁴Genie Energy accounts for its investments in Orbit Energy, its joint venture operating in the U.K., under the equity method of accounting. Revenue generated, and expenses incurred, are not reflected in segment revenue and operating expenses. RCE and meter counts do, however, include Orbit Energy customers.

⁵Pro forma results for all periods presented are non-GAAP measures intended to provide useful information that supplement the core operating results in accordance with GAAP of the relevant segment.  Please refer to the 'Reconciliation of Non-GAAP Financial Measures' at the end of this release for an explanation of the pro forma results as well as for reconciliations to their most directly comparable GAAP measures. 

⁶Genie Energy accounts for its minority interest in Atid, a drilling company based in Israel, under the equity method of accounting. Atid's revenue generated, and expenses incurred, are not reflected in segment revenue and operating expenses.

 

GENIE ENERGY LTD.  CONSOLIDATED BALANCE SHEETS (in thousands, except per share amounts)
		June 30, 2020				December 31, 2019
		(Unaudited)				(Audited)
Assets
Current assets:
Cash and cash equivalents		$	33,390			$	31,242
Restricted cash—short-term			7,876				6,792
Trade accounts receivable, net of allowance for doubtful accounts of $3,552 and $2,631 at June 30, 2020 and December 31, 2019, respectively			41,761				49,822
Inventory			14,702				16,632
Prepaid expenses			4,331				6,318
Other current assets			4,753				2,133
Total current assets			106,813				112,939
Property and equipment, net			435				3,607
Goodwill			12,137				12,135
Other intangibles, net			5,440				6,837
Investment in equity method investees			624				675
Restricted cash—long-term			493				520
Deferred income tax assets, net			9,617				12,154
Other assets			6,862				7,377
Total assets		$	142,421			$	156,244
Liabilities and equity
Current liabilities:
Loan payable		$	1,392			$	921
Trade accounts payable			21,578				24,387
Accrued expenses			28,652				26,116
Contract liability			834				13,426
Income taxes payable			2,206				1,591
Due to IDT Corporation, net			95				381
Short-term revolving line of credit			—				2,514
Other current liabilities			2,961				2,820
Total current liabilities			57,718				72,156
Long-term notes payable			—				777
Other liabilities			2,101				2,381
Total liabilities			59,819				75,314
Commitments and contingencies
Equity:
Genie Energy Ltd. stockholders' equity:
Preferred stock, $0.01 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, 2020 and December 31, 2019			19,743				19,743
Class A common stock, $0.01 par value; authorized shares—35,000; 1,574 shares issued and outstanding at June 30, 2020 and December 31, 2019			16				16
Class B common stock, $0.01 par value; authorized shares—200,000; 25,805 and 25,785 shares issued and 24,562 and 24,755 shares outstanding at June 30, 2020 and December 31, 2019, respectively			258				258
Additional paid-in capital			140,470				139,615
Treasury stock, at cost, consisting of 1,243 and 1,030 shares of Class B common stock at June 30, 2020 and December 31, 2019			(9,221)				(7,675)
Accumulated other comprehensive income			2,553				2,519
Accumulated deficit			(56,831)				(59,671)
Total Genie Energy Ltd. stockholders' equity			96,988				94,805
Noncontrolling interests			(14,386)				(13,875)
Total equity			82,602				80,930
Total liabilities and equity		$	142,421			$	156,244

 

 

GENIE ENERGY LTD. CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
	Three Months Ended June 30,							Six Months Ended June 30,
	2020				2019			2020				2019
	(in thousands, except per share data)
Revenues:
Electricity	$	65,906			$	52,055		$	135,877			$	114,669
Natural gas		5,396				5,194			21,467				23,900
Other		4,773				3,760			22,782				9,057
Total revenues		76,075				61,009			180,126				147,626
Cost of revenues		56,588				52,031			131,734				113,057
Gross profit		19,487				8,978			48,392				34,569
Operating expenses and losses:
Selling, general and administrative (i)		15,956				18,254			35,456				34,011
Impairment of assets		801				—			993				—
Income from operations		2,730				(9,276)			11,943				558
Interest income		20				189			143				281
Interest expense		(58)				(178)			(175)				(319)
Equity in the net loss in equity method investees, net		(1,173)				(1,071)			(1,552)				(1,868)
Other (expenses) income, net		(52)				157			98				232
Income (loss) before income taxes		1,467				(10,179)			10,457				(1,116)
(Provision for) benefit from income taxes		(587)				1,678			(3,156)				(1,225)
Net income (loss)		880				(8,501)			7,301				(2,341)
Net (loss) attributable to noncontrolling interests		(1,083)				(1,035)			(494)				(944)
Net income (loss) attributable to Genie Energy Ltd.		1,963				(7,466)			7,795				(1,397)
Dividends on preferred stock		(370)				(370)			(740)				(740)
Net income (loss) attributable to Genie Energy Ltd. common stockholders	$	1,593			$	(7,836)		$	7,055			$	(2,137)
Earnings (loss) per share attributable to Genie Energy Ltd. common stockholders:
Basic	$	0.06			$	(0.29)		$	0.27			$	(0.08)
Diluted	$	0.06			$	(0.29)		$	0.26			$	(0.08)
Weighted-average number of shares used in calculation of earnings (loss) per share:
Basic		26,087				26,595			26,098				26,614
Diluted		26,853				26,595			26,804				26,614
Dividends declared per common share	$	0.085			$	0.075		$	0.160			$	0.150
(i) Stock-based compensation included in selling, general and administrative expenses	$	401			$	323		$	884			$	772

 

 

GENIE ENERGY LTD.  CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
		Six Months Ended June 30,
		2020				2019
		(in thousands)
Operating activities
Net income (loss)		$	7,301			$	(2,341)
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			1,548				1,855
Impairment of assets			993				—
Deferred income taxes			2,537				777
Provision for doubtful accounts receivable			1,215				314
Loss on sale of assets held for sale			78				—
Stock-based compensation			884				772
Equity in the net loss in equity method investees			1,552				1,868
Gain on deconsolidation of subsidiaries			(98)				—
Change in assets and liabilities:
Trade accounts receivable			6,847				2,917
Inventory			1,930				(961)
Prepaid expenses			2,016				(2,069)
Other current assets and other assets			223				(698)
Trade accounts payable, accrued expenses and other current liabilities			(1,006)				2,348
Contract liability			(12,707)				(357)
Due to IDT Corporation			(286)				(42)
Income taxes payable			615				(511)
Net cash provided by operating activities			13,642				3,872
Investing activities
Capital expenditures			(99)				(329)
Proceeds from disposal of assets held for sale			5				—
Payment for acquisition of intangible			(298)				—
Investments in equity method investee			(1,502)				—
Payments for business acquisition, net of cash acquired			—				(1,852)
Investments in notes receivables			—				(177)
Repayment of notes receivable			12				282
Net cash used in investing activities			(1,882)				(2,076)
Financing activities
Dividends paid			(4,955)				(4,809)
Repayment of short-term debt—Lumo			—				(2,260)
Proceeds from revolving line of credit			1,000				—
Repayment of revolving line of credit			(3,514)				—
Proceeds from loan			1,395				—
Repayment of notes payable			(930)				—
Exercise of stock options			—				965
Purchases of Class B common stock			(1,546)				—
Repayment of notes payable			(17)				(28)
Net cash used in financing activities			(8,566)				(6,132)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash			12				12
Net increase (decrease) in cash, cash equivalents, and restricted cash			3,205				(4,324)
Cash, cash equivalents, and restricted cash at beginning of period			38,554				44,197
Cash, cash equivalents, and restricted cash at end of period		$	41,759			$	39,873

 

Reconciliation of Non-GAAP Financial Measures for the Second Quarter 2020

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 2020, as well as for comparable periods, pro forma results and Adjusted EBITDA, which are non-GAAP 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 Energy's measure of pro forma results consist of the corresponding GAAP metric with the addition of the corresponding results for Orbit Energy, the company's joint venture operating in the United Kingdom. GAAP results for Orbit Energy are accounted for under the equity method of accounting. Under this method, Genie Energy records its share in the net income or loss of the venture. Therefore, revenue generated, expenses incurred and income from operations are not reflected in Genie Energy's consolidated revenue and expenses. However, Orbit Energy's customers are included in metrics regarding our customer base.  Pro forma results are calculated by adding the result for Orbit Energy to its corresponding GAAP result.  Pro forma results are provided for the second quarter 2020 and second quarter 2019 to supplement the following results: revenue of the Genie Retail Energy International segment; and loss from operations for the Genie Retail Energy International segment.

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 in equity method investees, net, 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 from operations and add depreciation, amortization, stock-based compensation and impairment of goodwill and subtract equity in net loss in equity method investees, net.

Management believes that Genie Energy's pro forma results and Adjusted EBITDA provide 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 the pro forma results and Adjusted EBITDA, among other measures, as relevant indicators of core operational strengths in its financial and operational decision making. In addition, management uses and 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.

The pro forma results facilitates evaluation of the results of all of the company's retail energy provider (REP) businesses as if they were fully consolidated, which provides useful information regarding the size, growth and financial performance of all of the company's REP businesses, In contrast, GAAP results only include the company's equity in the results of the operations of its U.K. venture.

Management refers to pro forma results and Adjusted EBITDA, as well as the GAAP measures revenue, 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.

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 Energy's continuing operations.

Pro forma revenue and pro forma income from operations as well as 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 Energy's measurements of pro forma revenue, pro forma income from operations and Adjusted EBITDA may not be comparable to similarly titled measures reported by other companies.

Following is the reconciliation of pro forma results and Adjusted EBITDA to their most directly comparable GAAP measures.  Pro forma revenue for the Genie Retail Energy International segment is reconciled to the segment's revenue, and Genie Retail Energy International's pro forma loss from operations is reconciled to the segment's loss from operation.  Adjusted EBITDA is reconciled to income from operations for Genie Energy's reportable segments and net income for Genie Energy on a consolidated basis.

Reconciliation of pro forma GRE International revenue and loss from operations

	Genie Retail Energy  International (GREI) Segment Results
		(results in millions)		2Q20		2Q19
	GREI segment revenue			$             5.0		$                  2.9
	plus	Orbit Energy revenue		$           14.9		$                  4.8
	Pro forma GREI segment revenue			$           19.9		$                  7.7
	GREI segment loss from operations			$           (0.6)		$               (1.6)
	plus	Orbit Energy loss from operations		$           (1.8)		$               (2.3)
	Pro forma GREI segment loss from operations			$           (2.4)		$               (3.9)

 

Reconciliation of Adjusted EBITDA

		Total		GRE		GES		GREI		GOGAS		CORP
Three months ended June 30, 2020 (2Q20)
Net income attributable to Genie Energy Limited		$       1,963
Net loss attributable to non-controlling interests		(1,083)
Net income		$          880
Provision for income taxes		587
Other expenses, net		52
Interest expense		58
Interest income		(20)
Equity in the net loss of equity method investees		1,173
Income (loss) from operations		$       2,730		$   5,957		$ (1,113)		$    (607)		$    (172)		$ (1,335)
Add:
	Stock-based compensation	401		175				14				213
	Depreciation and amortization	722		118		95		495		14
	Impairment	801				801
Subtract:
	Equity in the net loss of equity method investees	1,173						1,502		(224)		(105)
Adjusted EBITDA		$       3,481		$   6,250		$    (217)		$ (1,600)		$         66		$ (1,017)
		Total		GRE		GES		GREI		GOGAS		CORP
Three months ended March 31, 2020 (1Q20)
Net income attributable to Genie Energy Limited		$       5,832
Net loss attributable to non-controlling interests		589
Net income		$       6,421
Provision for income taxes		2,569
Other income, net		(150)
Interest expense		123
Interest income		(128)
Equity in the net loss of equity method investees		379
Income from operations		$       9,214		$ 13,017		$       342		$ (2,520)		$    (224)		$ (1,403)
Add:
	Stock-based compensation	483		156				37				291
	Depreciation and amortization	826		112		208		490		15
	Impairment	192				192
Subtract:
	Equity in the net loss of equity method investees	379								260		119
Adjusted EBITDA		$    10,336		$ 13,285		$       742		$ (1,993)		$    (469)		$ (1,231)
		Total		GRE		GES		GREI		GOGAS		CORP
Three months ended June 30, 2019 (2Q19)
Net loss attributable to Genie Energy Limited		$    (7,466)
Net loss attributable to non-controlling interests		(1,035)
Net income		$    (8,501)
Benefit from income taxes		(1,678)
Other income, net		(157)
Interest expense		178
Interest income		(189)
Equity in the net loss of equity method investees		1,071
(Loss) income from operations		$    (9,276)		$ (5,418)		$    (682)		$ (1,607)		$    (381)		$ (1,188)
Add:
	Stock-based compensation	323		108				94				122
	Depreciation and amortization	926		186		244		481		14
	Impairment
Subtract:
	Equity in the net loss of equity method investees	1,071						867		204
Adjusted EBITDA		$    (9,098)		$ (5,124)		$    (438)		$ (1,899)		$    (571)		$ (1,066)

 

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SOURCE Genie Energy Ltd.

FAQ

What were Genie Energy's Q2 2020 earnings per share?

Genie Energy reported earnings of $0.06 per basic and diluted share for Q2 2020.

How much revenue did Genie Energy generate in Q2 2020?

Genie Energy generated $76.1 million in revenue for Q2 2020.

How many global RCEs does Genie Energy serve?

As of Q2 2020, Genie Energy serves 421,000 global RCEs, an 18% increase year-over-year.

What was Genie Energy's Adjusted EBITDA for Q2 2020?

Genie Energy's Adjusted EBITDA for Q2 2020 was $3.5 million.

Did Genie Energy repurchase any shares in Q2 2020?

Yes, Genie Energy repurchased 200,873 shares of its Class B common stock for $1.5 million in Q2 2020.