UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED September 30, 20222023
or
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number: 1-35327
GENIE ENERGY LTD.
(Exact Name of Registrant as Specified in its Charter)
Delaware |
| 45-2069276 |
(State or other jurisdiction of incorporation or organization) |
| (I.R.S. Employer Identification Number) |
|
|
|
520 Broad Street, Newark, New Jersey |
| 07102 |
(Address of principal executive offices) |
| (Zip Code) |
(973) 438-3500
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b)-2 of the Exchange Act:
Title of | TradingSymbol | Name of exchange of which registered |
Class B common stock, par value $0.01 per share | GNE | New York Stock Exchange |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every InteractiveInteractive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by checkcheck mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer | ☐ | Accelerated filer | ☒ |
Non-accelerated filer | ☐ | Smaller reporting company | ☒ |
Emerging growth company | ☐ |
|
|
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with anyany new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.): Yes ☐ No ☒
As of November 7, 20222023, the registrant had the following shares outstanding:
Class A common stock, $0.01 par value: | 1,574,326 shares |
Class B common stock, $0.01 par value: |
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GENIE ENERGY LTD.
TABLE OF CONTENTS
i |
GENIEGENIE ENERGY LTD.
(in thousands, except per share amounts)
| September 30, |
| December 31, |
| September 30, |
| December 31, |
| ||||||
| (Unaudited) |
| (Note 1) |
| (Unaudited) |
| (Note 1) |
| ||||||
Assets |
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|
|
|
|
| ||||||
Current assets: |
|
|
|
|
|
|
|
| ||||||
Cash and cash equivalents | $ | 81,705 |
| $ | 93,568 |
| $ | 139,829 |
| $ | 98,571 |
| ||
Restricted cash—short-term | 5,555 | 6,657 | 3,574 | 6,007 | ||||||||||
Marketable equity securities | 471 | 1,336 | 411 | 490 | ||||||||||
Trade accounts receivable, net of allowance for doubtful accounts of $4,448 and $6,139 at September 30, 2022 and December 31, 2021, respectively |
| 43,524 |
|
| 41,309 |
| ||||||||
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 |
| 18,517 |
|
| 17,720 |
|
| 15,306 |
| 15,714 |
| |||
Prepaid expenses |
| 7,806 |
|
| 4,164 |
|
| 11,891 |
| 6,822 |
| |||
Other current assets |
| 8,156 |
|
| 2,354 |
|
| 4,625 |
|
| 6,207 |
| ||
Current assets of discontinued operations | 48,863 | 33,237 | 33,923 | 38,688 | ||||||||||
Total current assets |
| 214,597 |
|
| 200,345 |
|
| 270,241 |
| 227,633 |
| |||
Property and equipment, net | 6,112 | 891 | ||||||||||||
Goodwill |
| 9,998 |
|
| 9,998 |
|
| 9,998 |
| 9,998 |
| |||
Other intangibles, net |
| 3,232 |
|
| 3,530 |
|
| 2,834 |
| 3,133 |
| |||
Deferred income tax assets, net |
| 5,203 |
|
| 5,203 |
|
| 5,799 |
| 5,799 |
| |||
Other assets |
| 12,975 |
|
| 9,217 |
|
| 13,150 |
|
| 13,856 |
| ||
Noncurrent assets of discontinued operations | 13,851 | 1,172 | 7,553 | 16,305 | ||||||||||
Total assets | $ | 259,856 |
| $ | 229,465 |
| $ | 315,687 |
| $ | 277,615 |
| ||
Liabilities and equity |
|
|
|
|
|
|
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|
|
|
| |||
Current liabilities: |
|
|
|
|
|
|
|
|
|
|
| |||
Trade accounts payable |
| 18,783 |
|
| 14,541 |
|
| 24,857 |
| 25,313 |
| |||
Accrued expenses |
| 41,803 |
|
| 38,005 |
|
| 45,444 |
| 35,659 |
| |||
Income taxes payable |
| 17,521 |
|
| 9,512 |
|
| 16,010 |
| 22,576 |
| |||
Due to IDT Corporation, net |
| 135 |
|
| 532 |
|
| 120 |
| 165 |
| |||
Other current liabilities |
| 2,150 |
|
| 1,732 |
|
| 8,624 |
|
| 4,549 |
| ||
Current liabilities of discontinued operations | 5,731 | 51,970 | 10,736 | 10,936 | ||||||||||
Total current liabilities |
| 86,123 |
|
| 116,292 |
|
| 105,791 |
| 99,198 |
| |||
Other liabilities |
| 2,159 |
|
| 1,946 |
|
| 1,859 |
|
| 4,087 |
| ||
Noncurrent liabilities of discontinued operations | 9,502 | 438 | 668 | 686 | ||||||||||
Total liabilities |
| 97,784 |
|
| 118,676 |
|
| 108,318 |
| 103,971 |
| |||
Commitments and contingencies |
| — |
|
| — |
|
| — |
| — |
| |||
Equity: |
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| |||
Genie Energy Ltd. stockholders’ equity: |
|
|
|
|
|
|
|
|
|
|
| |||
Preferred stock, $0.01 par value; authorized shares—10,000: |
|
|
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|
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| |||
Series 2012-A, designated shares—8,750; at liquidation preference, consisting of 1,970 and 2,322 shares issued and outstanding at September 30, 2022 and December 31, 2021 | 16,743 | 19,743 | ||||||||||||
Class A common stock, $0.01 par value; authorized shares—35,000; 1,574 shares issued and outstanding at September 30, 2022 and December 31, 2021 | 16 | 16 | ||||||||||||
Class B common stock, $0.01 par value; authorized shares—200,000; 27,003 and 26,620 shares issued and 24,313 and 24,615 shares outstanding at September 30, 2022 and December 31, 2021, respectively | 270 | 266 | ||||||||||||
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 |
| 145,552 |
|
| 143,249 |
|
| 154,948 |
|
| 146,546 |
| ||
Treasury stock, at cost, consisting of 2,690 and 2,005 shares of Class B common stock at September 30, 2022 and December 31, 2021 | (18,852 | ) | (14,034 | ) | ||||||||||
Accumulated other comprehensive (loss) income | (3,075 | ) | 3,160 | |||||||||||
Retained earnings (accumulated deficit) |
| 34,782 |
|
| (29,115 | ) | ||||||||
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 |
| 175,436 |
|
| 123,285 |
| 220,955 |
|
| 187,118 | ||||
Noncontrolling interests |
| (13,364 | ) |
|
| (12,496 | ) |
| (13,586 | ) |
| (13,474 | ) | |
Total equity |
| 162,072 |
|
| 110,789 |
| 207,369 |
|
| 173,644 | ||||
Total liabilities and equity | $ | 259,856 |
| $ | 229,465 |
| $ | 315,687 |
| $ | 277,615 |
|
See accompanying notes to consolidated financial statements.
1 |
GENIE ENERGY LTD.
| Three Months Ended September 30, | Nine Months Ended September 30, | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||
| (in thousands, except per share data) | (in thousands, except per share data) | ||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||
Electricity | $ | 73,764 | $ | 82,801 | $ | 186,207 | $ | 222,005 | $ | 114,002 | $ | 73,764 | $ | 268,688 | $ | 186,207 | ||||||||||||||
Natural gas | 6,153 | 3,516 | 40,754 | 25,878 | 4,990 | 6,153 | 40,890 | 40,754 | ||||||||||||||||||||||
Other | 1,368 | 1,338 | 7,189 | 6,177 | 6,057 | 1,368 | 14,209 | 7,189 | ||||||||||||||||||||||
Total revenues | 81,285 | 87,655 | 234,150 | 254,060 | 125,049 | 81,285 | 323,787 | 234,150 | ||||||||||||||||||||||
Cost of revenues | 38,142 | 53,049 | 114,082 | 186,152 | 83,967 | 38,142 | 211,211 | 114,082 | ||||||||||||||||||||||
Gross profit | 43,143 | 34,606 | 120,068 | 67,908 | 41,082 | 43,143 | 112,576 | 120,068 | ||||||||||||||||||||||
Operating expenses and losses: | ||||||||||||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||||||
Selling, general and administrative (i) | 19,605 | 17,143 | 57,796 | 49,628 | 23,196 | 19,605 | 68,380 | 57,796 | ||||||||||||||||||||||
Income from operations | 23,538 | 17,463 | 62,272 | 18,280 | 17,886 | 23,538 | 44,196 | 62,272 | ||||||||||||||||||||||
Interest income | 194 | 8 | 259 | 28 | 1,331 | 194 | 3,313 | 259 | ||||||||||||||||||||||
Interest expense | (33 | ) | (99 | ) | (135 | ) | (311 | ) | (27 | ) | (33 | ) | (75 | ) | (135 | ) | ||||||||||||||
Unrealized gain (loss) on marketable equity securities and investments | 57 | (5,312 | ) | (742 | ) | 1,710 | 334 | 57 | 385 | (742 | ) | |||||||||||||||||||
Gain on sale of subsidiary | — | — | — | 4,226 | ||||||||||||||||||||||||||
Other income (loss), net | 156 | 35 | (712 | ) | 482 | |||||||||||||||||||||||||
Other (loss) income, net | (4 | ) | 156 | 3,137 | (712 | ) | ||||||||||||||||||||||||
Income before income taxes | 23,912 | 12,095 | 60,942 | 24,415 | 19,520 | 23,912 | 50,956 | 60,942 | ||||||||||||||||||||||
Provision for income taxes | (6,482 | ) | (3,498 | ) | (16,791 | ) | (7,149 | ) | (5,018 | ) | (6,482 | ) | (12,951 | ) | (16,791 | ) | ||||||||||||||
Net income from continuing operations | 17,430 | 8,597 | 44,151 | 17,266 | 14,502 | 17,430 | 38,005 | 44,151 | ||||||||||||||||||||||
Loss (income) from discontinued operations, net of taxes | (1,459 | ) | (10,914 | ) | 25,929 | (16,991 | ) | |||||||||||||||||||||||
Net income (loss) | 15,971 | (2,317 | ) | 70,080 | 275 | |||||||||||||||||||||||||
Net (loss) income attributable to noncontrolling interests | (2,797 | ) | (31 | ) | (1,056 | ) | (821 | ) | ||||||||||||||||||||||
Net income (loss) attributable to Genie Energy Ltd. | 18,768 | (2,286 | ) | 71,136 | 1,096 | |||||||||||||||||||||||||
(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 loss 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 | ) | (370 | ) | (1,448 | ) | (1,111 | ) | — | (454 | ) | (333 | ) | (1,448 | ) | |||||||||||||||
Net income (loss) attributable to Genie Energy Ltd. common stockholders | $ | 18,314 | $ | (2,656 | ) | $ | 69,688 | $ | (15 | ) | ||||||||||||||||||||
Net income attributable to Genie Energy Ltd. common stockholders | $ | 14,459 | $ | 18,314 | $ | 43,713 | $ | 69,688 | ||||||||||||||||||||||
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Amounts attributable to Genie Energy Ltd. common stockholders | ||||||||||||||||||||||||||||||
Income from continuing operations | $ | 22,259 | $ | 8,643 | $ | 48,368 | $ | 17,303 | ||||||||||||||||||||||
(Loss) income from discontinued operations | (3,945 | ) | (11,299 | ) | 21,320 | (17,318 | ) | |||||||||||||||||||||||
Net income (loss) attributable to Genie Energy Ltd. common stockholders | $ | 18,314 | $ | (2,656 | ) | $ | 69,688 | (15 | ) | |||||||||||||||||||||
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 per share attributable to Genie Energy Ltd. common stockholders: | ||||||||||||||||||||||||||||||
Earnings (loss) per share attributable to Genie Energy Ltd. common stockholders: | ||||||||||||||||||||||||||||||
Basic: | ||||||||||||||||||||||||||||||
Income from continuing operations | $ | 0.88 | $ | 0.34 | $ | 1.89 | $ | 0.67 | ||||||||||||||||||||||
(Loss) income from discontinued operations | (0.15 | ) | (0.44 | ) | 0.83 | (0.67 | ) | |||||||||||||||||||||||
Net income (loss) attributable to Genie Energy Ltd. common stockholders | $ | 0.73 | $ | (0.10 | ) | $ | 2.72 | $ | (0.00 | ) | ||||||||||||||||||||
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 | ||||||||||||||||||||||||||||||
Income from continuing operations | $ | 0.85 | $ | 0.34 | $ | 1.84 | $ | 0.67 | ||||||||||||||||||||||
(Loss) income from discontinued operations | (0.15 | ) | (0.44 | ) | 0.81 | (0.67 | ) | |||||||||||||||||||||||
Net income (loss) attributable to Genie Energy Ltd. common stockholders | $ | 0.70 | $ | (0.10 | ) | $ | 2.65 | $ | 0.00 | |||||||||||||||||||||
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 | 25,233 | 25,514 | 25,623 | 25,867 | 26,615 | 25,233 | 25,541 | 25,623 | ||||||||||||||||||||||
Diluted | 26,205 | 25,514 | 26,261 | 25,867 | 27,362 | 26,205 | 26,056 | 26,261 | ||||||||||||||||||||||
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Dividends declared per common share | $ | 0.075 | $ | 0.225 | $ | — | $ | — | $ | 0.075 | $ | 0.075 | $ | 0.225 | $ | 0.225 | ||||||||||||||
(i) Stock-based compensation included in selling, general and administrative expenses | $ | 713 | $ | 504 | $ | 2,232 | $ | 1,597 | $ | 649 | $ | 713 | $ | 2,254 | $ | 2,232 |
See accompanying notes to consolidated financial statements.
2 |
GENIE ENERGY LTD.
(Unaudited)
| Three Months Ended September 30, | Nine Months Ended |
| ||||||||||||
| 2022 | 2021 | 2022 |
|
| 2021 |
| ||||||||
| (in thousands) | (in thousands) | |||||||||||||
Net income | $ | 15,971 | $ | (2,317 | ) | $ | 70,080 |
| $ | 275 | |||||
Other comprehensive loss: |
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| |||||||||
Foreign currency translation adjustments | (4,210 | ) | (133 | ) | (6,047 | ) |
|
| (370 | ) | |||||
Comprehensive income | 11,761 | (2,450 | ) | 64,033 |
|
| (95 | ) | |||||||
Comprehensive gain attributable to noncontrolling interests | 2,809 | (20 | ) | 868 |
|
| 540 | ||||||||
Comprehensive income attributable to Genie Energy Ltd. | $ | 14,570 | $ | (2,470 | ) | $ | 64,901 |
| $ | 445 |
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||
| (in thousands) | (in thousands) | |||||||||||||
Net income | $ | 14,198 | $ | 15,971 | $ | 43,928 | $ | 70,080 | |||||||
Other comprehensive loss: | |||||||||||||||
Foreign currency translation adjustments | (552 | ) | (4,210 | ) | (508 | ) | (6,047 | ) | |||||||
Comprehensive income | 13,646 | 11,761 | 43,420 | 64,033 | |||||||||||
Comprehensive loss attributable to noncontrolling interests | 261 | 2,809 | 112 | 868 | |||||||||||
Comprehensive income attributable to Genie Energy Ltd. | $ | 13,907 | $ | 14,570 | $ | 43,532 | $ | 64,901 |
See accompanying notes to consolidated financial statements.
3 |
GENIE ENERGY LTD.
Genie Energy Ltd. Stockholders
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| Preferred |
| Class A |
| Class B |
| Additional |
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| Accumulated Other |
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| Preferred |
| Class A |
| Class B |
| Additional |
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| Accumulated Other |
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| Non |
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| Stock |
| Common Stock |
| Common Stock |
| Paid-In |
| Treasury |
| Comprehensive |
| Accumulated |
| Noncontrolling |
| Total |
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| Stock |
| Common Stock |
| Common Stock |
| Paid-In |
| Treasury |
| Comprehensive |
| Retained |
| controlling |
| Total |
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| Shares |
| Amount |
| Shares |
| Amount |
| Shares |
| Amount |
| Capital |
| Stock |
| Income |
| Deficit |
| Interests |
| Equity |
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| Shares |
| Amount |
| Shares |
| Amount |
| Shares |
| Amount |
| Capital |
| Stock |
| Income |
| Earnings |
| Interests |
| Equity |
| ||||||||||||||||||||||
BALANCE AT JANUARY 1, 2022 | 2,322 | $ | 19,743 | 1,574 | $ | 16 | 26,633 | $ | 266 | $ | 143,249 | $ | (14,034 | ) | $ | 3,160 | $ | (29,115 | ) | $ | (12,496 | ) | $ | 110,789 | ||||||||||||||||||||||||||||||||||||||||||||||||
Dividends on preferred stock ($ 0.1594 per share) | — | — | — | — | — | — | — | — | — | (370 | ) | — | (370 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
BALANCE AT JANUARY 1, 2023 | 983 | $ | 8,359 | 1,574 | $ | 16 | 27,126 | $ | 271 | $ | 146,546 | $ | (19,010 | ) | $ | 1,926 | $ | 49,010 | $ | (13,474 | ) | $ | 173,644 | |||||||||||||||||||||||||||||||||||||||||||||||||
Dividends on preferred stock ($ 0.1594 per share) | — | — | — | — | — | — | — | — | — | (157 | ) | — | (157 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Dividends on common stock ($0.075 per share) | — | — | — | — | — | — | — | — | — | (1,934 | ) | — | (1,934 | ) | — | — | — | — | — | — | — | — | — | (1,951 | ) | — | (1,951 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | 9 | — | 840 | — | — | — | — | 840 | — | — | — | — | 33 | — | 899 | — | — | — | — | 899 | ||||||||||||||||||||||||||||||||||||||||||||||||
Restricted Class B common stock purchased from employees | — | — | — | — | — | — | — | (71 | ) | — | — | — | (71 | ) | — | — | — | — | — | — | — | (165 | ) | — | — | — | (165 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Redemption of preferred stock | (117 | ) | (1,000 | ) | — | — | — | — | — | — | — | — | — | (1,000 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss) | — | — | — | — | — | — | — | — | 339 | — | (37 | ) | 302 | — | — | — | — | — | — | — | — | (31 | ) | — | 3 | (28 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Net income (loss) for three months ended March 31, 2022 | — | — | — | — | — | — | — | — | — | 17,889 | (1,153 | ) | 16,736 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
BALANCE AT MARCH 31, 2022 | 2,322 | $ | 19,743 | 1,574 | $ | 16 | 26,642 | $ | 266 | $ | 144,089 | $ | (14,105 | ) | $ | 3,499 | $ | (13,530 | ) | $ | (13,686 | ) | $ | 126,292 | ||||||||||||||||||||||||||||||||||||||||||||||||
Net income (loss) for three months ended March 31, 2023 | — | — | — | — | — | — | — | — | — | 14,431 | (39 | ) | 14,392 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
BALANCE AT MARCH 31, 2023 | 866 | $ | 7,359 | 1,574 | $ | 16 | 27,159 | $ | 271 | $ | 147,445 | $ | (19,175 | ) | $ | 1,895 | $ | 61,333 | $ | (13,510 | ) | $ | 185,634 |
|
| Preferred |
| Class A |
| Class B |
| Additional |
|
|
| Accumulated Other |
| (Accumulated Deficit) |
|
|
|
|
|
| Preferred |
| Class A |
| Class B |
| Additional |
|
|
| Accumulated Other |
|
|
| Non |
|
|
| ||||||||||||||||||||||||||||||||||
|
| Stock |
| Common Stock |
| Common Stock |
| Paid-In |
| Treasury |
| Comprehensive |
| Retained |
| Noncontrolling |
| Total |
|
| Stock |
| Common Stock |
| Common Stock |
| Paid-In |
| Treasury |
| Comprehensive |
| Retained |
| controlling |
| Total |
| ||||||||||||||||||||||||||||||||||
|
| Shares |
| Amount |
| Shares |
| Amount |
| Shares |
| Amount |
| Capital |
| Stock |
| Income |
| Earnings |
| Interests |
| Equity |
|
| Shares |
| Amount |
| Shares |
| Amount |
| Shares |
| Amount |
| Capital |
| Stock |
| Income |
| Earnings |
| Interests |
| Equity |
| ||||||||||||||||||||||
BALANCE AT MARCH 31, 2022 | 2,322 | $ | 19,743 | 1,574 | $ | 16 | 26,642 | $ | 266 | $ | 144,089 | $ | (14,105 | ) | $ | 3,499 | $ | (13,530 | ) | $ | (13,686 | ) | $ | 126,292 | ||||||||||||||||||||||||||||||||||||||||||||||||
BALANCE AT MARCH 31, 2023 | 866 | $ | 7,359 | 1,574 | $ | 16 | 27,159 | $ | 271 | $ | 147,445 | $ | (19,175 | ) | $ | 1,895 | $ | 61,333 | $ | (13,510 | ) | $ | 185,634 | |||||||||||||||||||||||||||||||||||||||||||||||||
Dividends on preferred stock ($ 0.1594 per share) | — | — | — | — | — | — | — | — | — | (624 | ) | — | (624 | ) | — | — | — | — | — | — | — | — | — | (176 | ) | — | (176 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Dividends on common stock ($0.075 per share) | — | — | — | — | — | — | — | — | — | (1,964 | ) | — | (1,964 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Dividends on common stock ($0.075 per share) | — | — | — | — | — | — | — | — | — | (1,958 | ) | — | (1,958 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | 730 | — | — | — | — | 730 | — | — | — | — | 300 | 3 | 753 | — | — | — | — | 756 | ||||||||||||||||||||||||||||||||||||||||||||||||
Restricted Class B common stock purchased from employees | — | — | — | — | — | — | — | (4,414 | ) | — | — | — | (4,414 | ) | — | — | — | — | — | — | — | (2,438 | ) | — | — | — | (2,438 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Exercise of Class B common stock warrants | — | — | — | — | 73 | 1 | (1 | ) | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Redemption of Preferred Stock | (235 | ) | (2,000 | ) | — | — | — | — | — | — | — | — | — | (2,000 | ) | (866 | ) | (7,359 | ) | — | — | — | — | — | — | — | — | — | (7,359 | ) | ||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss) | — | — | — | — | — | — | — | — | (2,376 | ) | — | 237 | (2,139 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income (loss) for three months ended June 30, 2022 | — | — | — | — | — | — | — | — | — | 34,479 | 2,894 | 37,373 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
BALANCE AT JUNE 30, 2022 | 2,087 | $ | 17,743 | 1,574 | $ | 16 | 26,715 | $ | 267 | $ | 144,818 | $ | (18,519 | ) | $ | 1,123 | $ | 18,361 | $ | (10,555 | ) | $ | 153,254 | |||||||||||||||||||||||||||||||||||||||||||||||||
Exercise of stock options | — | — | — | — | 257 | 3 | 1,112 | — | — | — | — | 1,115 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Exercise of warrants | — | — | — | — | 1,048 | 11 | 4,989 | — | — | — | — | 5,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | — | — | — | 70 | — | 2 | 72 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income for three months ended June 30, 2023 | — | — | — | — | — | — | — | — | — | 15,156 | 183 | 15,339 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
BALANCE AT JUNE 30, 2023 | — | $ | — | 1,574 | $ | 16 | 28,764 | $ | 288 | $ | 154,299 | $ | (21,613 | ) | $ | 1,965 | $ | 74,355 | $ | (13,325 | ) | $ | 195,985 |
|
| Preferred |
| Class A |
| Class B |
| Additional |
|
|
| Accumulated Other |
|
|
|
|
|
|
| |||||||||||||||||
|
| Stock |
| Common Stock |
| Common Stock |
| Paid-In |
| Treasury |
| Comprehensive |
| Retained |
| Noncontrolling |
| Total |
| |||||||||||||||||
|
| Shares |
| Amount |
| Shares |
| Amount |
| Shares |
| Amount |
| Capital |
| Stock |
| Income |
| Earnings |
| Interests |
| Equity |
| |||||||||||
BALANCE AT JUNE 30, 2022 | 2,087 | $ | 17,743 | 1,574 | $ | 16 | 26,715 | $ | 267 | $ | 144,818 | $ | (18,519 | ) | $ | 1,123 | $ | 18,361 | $ | (10,555 | ) | $ | 153,254 | |||||||||||||
Dividends on preferred stock ($ 0.1594 per share) | — | — | — | — | — | — | — | — | — | (454 | ) | — | (454 | ) | ||||||||||||||||||||||
Dividends on common stock ($0.075 per share) | — | — | — | — | — | — | — | — | — | (1,893 | ) | — | (1,893 | ) | ||||||||||||||||||||||
Stock-based compensation | — | — | — | — | 290 | 3 | 734 | — | — | — | — | 737 | ||||||||||||||||||||||||
Restricted Class B common stock purchased from employees | — | — | — | — | — | — | — | (333 | ) | — | — | — | (333 | ) | ||||||||||||||||||||||
Redemption of Preferred Stock | (117 | ) | (1,000 | ) | — | — | — | — | — | — | — | — | — | (1,000 | ) | |||||||||||||||||||||
Other comprehensive income (loss) | — | — | — | — | — | — | — | — | (4,198 | ) | — | (12 | ) | (4,210 | ) | |||||||||||||||||||||
Net income (loss) for three months ended September 30, 2022 | — | — | — | — | — | — | — | — | — | 18,768 | (2,797 | ) | 15,971 | |||||||||||||||||||||||
BALANCE AT SEPTEMBER 30, 2022 | 1,970 | $ | 16,743 | 1,574 | $ | 16 | 27,005 | $ | 270 | $ | 145,552 | $ | (18,852 | ) | $ | (3,075 | ) | $ | 34,782 | $ | (13,364 | ) | $ | 162,072 |
Preferred | Class A | Class B |
| Additional |
|
|
| Accumulated Other |
|
|
| Non |
|
|
| |||||||||||||||||||||
|
| Stock |
| Common Stock |
| Common Stock |
| Paid-In |
| Treasury |
| Comprehensive |
| Retained |
| controlling |
| Total |
| |||||||||||||||||
|
| Shares |
| Amount |
| Shares |
| Amount |
| Shares |
| Amount |
| Capital |
| Stock |
| Income |
| Earnings |
| Interests |
| Equity |
| |||||||||||
BALANCE AT JUNE 30, 2023 | — | $ | — | 1,574 | $ | 16 | 28,764 | $ | 288 | $ | 154,299 | $ | (21,613 | ) | $ | 1,965 | $ | 74,355 | $ | (13,325 | ) | $ | 195,985 | |||||||||||||
Dividends on common stock ($0.075 per share) | — | — | — | — | — | — | — | — | — | (2,055 | ) | — | (2,055 | ) | ||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | 649 | — | — | — | — | 649 | ||||||||||||||||||||||||
Restricted Class B common stock purchased from employees | — | — | — | — | — | — | — | (856 | ) | — | — | — | (856 | ) | ||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | — | — | — | — | (552 | ) | — | — | (552 | ) | ||||||||||||||||||||||
Net income (loss) for three months ended September 30, 2023 | — | — | — | — | — | — | — | — | — | 14,459 | (261 | ) | 14,198 | |||||||||||||||||||||||
BALANCE AT SEPTEMBER 30, 2023 | — | $ | — | 1,574 | $ | 16 | 28,764 | $ | 288 | $ | 154,948 | $ | (22,469 | ) | $ | 1,413 | $ | 86,759 | $ | (13,586 | ) | $ | 207,369 |
4 |
GENIE ENERGY LTD.
CONSOLIDATED STATEMENTS OF EQUITY
(in thousands, except dividend per share) — (Continued)
Genie Energy Ltd. Stockholders
|
| Preferred |
| Class A |
| Class B |
| Additional |
|
|
| Accumulated Other |
|
|
|
|
|
|
|
| Preferred |
| Class A |
| Class B |
| Additional |
|
|
| Accumulated Other |
|
|
| Non |
|
|
| ||||||||||||||||||||||||||||||||||
|
| Stock |
| Common Stock |
| Common Stock |
| Paid-In |
| Treasury |
| Comprehensive |
| Accumulated |
| Noncontrolling |
| Total |
|
| Stock |
| Common Stock |
| Common Stock |
| Paid-In |
| Treasury |
| Comprehensive |
| Accumulated |
| controlling |
| Total |
| ||||||||||||||||||||||||||||||||||
|
| Shares |
| Amount |
| Shares |
| Amount |
| Shares |
| Amount |
| Capital |
| Stock |
| Income |
| Deficit |
| Interests |
| Equity |
|
| Shares |
| Amount |
| Shares |
| Amount |
| Shares |
| Amount |
| Capital |
| Stock |
| Income |
| Deficit |
| Interests |
| Equity |
| ||||||||||||||||||||||
BALANCE AT JANUARY 1, 2021 | 2,322 | $ | 19,743 | 1,574 | $ | 16 | 25,811 | $ | 260 | $ | 140,746 | $ | (9,839 | ) | $ | 3,827 | $ | (56,658 | ) | $ | (12,016 | ) | $ | 86,079 | ||||||||||||||||||||||||||||||||||||||||||||||||
BALANCE AT JANUARY 1, 2022 | 2,322 | $ | 19,743 | 1,574 | $ | 16 | 26,633 | $ | 266 | $ | 143,249 | $ | (14,034 | ) | $ | 3,160 | $ | (29,115 | ) | $ | (12,496 | ) | $ | 110,789 | ||||||||||||||||||||||||||||||||||||||||||||||||
Dividends on preferred stock ($0.1594 per share) | — | — | — | — | — | — | — | — | — | (370 | ) | — | (370 | ) | — | — | — | — | — | — | — | — | — | (370 | ) | — | (370 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Dividends on common stock ($0.075 per share) | — | — | — | — | — | — | — | — | — | (1,934 | ) | — | (1,934 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | 121 | 1 | 588 | — | — | — | — | 589 | — | — | — | — | 9 | — | 840 | — | — | — | — | 840 | ||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of Class B common stock to Howard Jonas | — | — | — | — | 20 | — | 162 | — | — | — | — | 162 | — | — | — | — | — | — | — | (71 | ) | — | — | — | (71 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive (loss) income | — | — | — | — | — | — | — | — | (572 | ) | — | 230 | (342 | ) | — | — | — | — | — | — | — | — | 339 | — | (37 | ) | 302 | |||||||||||||||||||||||||||||||||||||||||||||
Net loss for three months ended March 31, 2021 | — | — | — | — | — | — | — | — | — | (1,986 | ) | (708 | ) | (2,694 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
BALANCE AT MARCH 31, 2021 | 2,322 | $ | 19,743 | 1,574 | $ | 16 | 25,952 | $ | 261 | $ | 141,496 | $ | (9,839 | ) | $ | 3,255 | $ | (59,014 | ) | $ | (12,494 | ) | $ | 83,424 | ||||||||||||||||||||||||||||||||||||||||||||||||
Net loss for three months ended March 31, 2022 | — | — | — | — | — | — | — | — | — | 17,889 | (1,153 | ) | 16,736 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
BALANCE AT MARCH 31, 2022 | 2,322 | $ | 19,743 | 1,574 | $ | 16 | 26,642 | $ | 266 | $ | 144,089 | $ | (14,105 | ) | $ | 3,499 | $ | (13,530 | ) | $ | (13,686 | ) | $ | 126,292 |
|
| Preferred |
| Class A |
| Class B |
| Additional |
|
|
| Accumulated Other |
|
|
| Non |
|
|
| |||||||||||||||||
|
| Stock |
| Common Stock |
| Common Stock |
| Paid-In |
| Treasury |
| Comprehensive |
| Accumulated |
| controlling |
| Total |
| |||||||||||||||||
|
| Shares |
| Amount |
| Shares |
| Amount |
| Shares |
| Amount |
| Capital |
| Stock |
| Income |
| Deficit |
| Interests |
| Equity |
| |||||||||||
BALANCE AT MARCH 31, 2022 | 2,322 | $ | 19,743 | 1,574 | $ | 16 | 26,642 | $ | 266 | $ | 144,089 | $ | (14,105 | ) | $ | 3,499 | $ | (13,530 | ) | $ | (13,686 | ) | $ | 126,292 | ||||||||||||
Dividends on preferred stock ($ 0.1594 per share) | — | — | — | — | — | — | — | — | — | (624 | ) | — | (624 | ) | ||||||||||||||||||||||
Dividends on common stock ($0.075 per share) | — | — | — | — | — | — | — | — | — | (1,964 | ) | — | (1,964 | ) | ||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | 730 | — | — | — | — | 730 | ||||||||||||||||||||||||
Restricted Class B common stock purchased from employees | — | — | — | — | — | — | — | (4,414 | ) | — | — | — | (4,414 | ) | ||||||||||||||||||||||
Exercise of Class B common stock warrants | — | — | — | — | 73 | 1 | (1 | ) | — | — | — | — | — | |||||||||||||||||||||||
Redemption of Preferred Stock | (235 | ) | (2,000 | ) | — | — | — | — | — | — | — | — | — | (2,000 | ) | |||||||||||||||||||||
Other comprehensive income (loss) | — | — | — | — | — | — | — | — | (2,376 | ) | — | 237 | (2,139 | ) | ||||||||||||||||||||||
Net income (loss) for three months ended June 30, 2022 | — | — | — | — | — | — | — | — | — | 34,479 | 2,894 | 37,373 | ||||||||||||||||||||||||
BALANCE AT JUNE 30, 2022 | 2,087 | $ | 17,743 | 1,574 | $ | 16 | 26,715 | $ | 267 | $ | 144,818 | $ | (18,519 | ) | $ | 1,123 | $ | 18,361 | $ | (10,555 | ) | $ | 153,254 |
|
| Preferred |
| Class A |
| Class B |
| Additional |
|
|
| Accumulated Other |
|
|
|
|
|
|
| |||||||||||||||||
|
| Stock |
| Common Stock |
| Common Stock |
| Paid-In |
| Treasury |
| Comprehensive |
| Accumulated |
| Noncontrolling |
| Total |
| |||||||||||||||||
|
| Shares |
| Amount |
| Shares |
| Amount |
| Shares |
| Amount |
| Capital |
| Stock |
| Income |
| Deficit |
| Interests |
| Equity |
| |||||||||||
BALANCE AT MARCH 31, 2021 | 2,322 | $ | 19,743 | 1,574 | $ | 16 | 25,952 | $ | 261 | $ | 141,496 | $ | (9,839 | ) | $ | 3,255 | $ | (59,014 | ) | $ | (12,494 | ) | $ | 83,424 | ||||||||||||
Dividends on preferred stock ($0.1594 per share) | — | — | — | — | — | — | — | — | — | (370 | ) | — | (370 | ) | ||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | 560 | — | — | — | — | 560 | ||||||||||||||||||||||||
Repurchase of Class B common stock from stock purchase program | — | — | — | — | — | — | — | (2,435 | ) | — | — | — | (2,435 | ) | ||||||||||||||||||||||
Sale of subsidiary | — | — | — | — | — | — | — | — | (182 | ) | — | 113 | (69 | ) | ||||||||||||||||||||||
Other comprehensive (loss) income | — | — | — | — | — | — | — | — | 105 | — | — | 105 | ||||||||||||||||||||||||
Net loss for three months ended June 30, 2021 | — | — | — | — | — | — | — | — | — | 5,367 | (82 | ) | 5,285 | |||||||||||||||||||||||
BALANCE AT JUNE 30, 2021 | 2,322 | $ | 19,743 | 1,574 | $ | 16 | 25,952 | $ | 261 | $ | 142,056 | $ | (12,274 | ) | $ | 3,178 | $ | (54,017 | ) | $ | (12,463 | ) | $ | 86,500 |
|
| Preferred |
| Class A |
| Class B |
| Additional |
|
|
| Accumulated Other |
|
|
| Non |
|
|
| |||||||||||||||||
|
| Stock |
| Common Stock |
| Common Stock |
| Paid-In |
| Treasury |
| Comprehensive |
| Accumulated |
| controlling |
| Total |
| |||||||||||||||||
|
| Shares |
| Amount |
| Shares |
| Amount |
| Shares |
| Amount |
| Capital |
| Stock |
| Income |
| Deficit |
| Interests |
| Equity |
| |||||||||||
BALANCE AT JUNE 30, 2022 | 2,087 | $ | 17,743 | 1,574 | $ | 16 | 26,715 | $ | 267 | $ | 144,818 | $ | (18,519 | ) | $ | 1,123 | $ | 18,361 | $ | (10,555 | ) | $ | 153,254 | |||||||||||||
Dividends on preferred stock ($0.1594 per share) | — | — | — | — | — | — | — | — | — | (454 | ) | — | (454 | ) | ||||||||||||||||||||||
Dividends on common stock ($0.075 per share) | — | — | — | — | — | — | — | — | — | (1,893 | ) | — | (1,893 | ) | ||||||||||||||||||||||
Stock-based compensation | — | — | — | — | 290 | 3 | 734 | — | — | — | — | 737 | ||||||||||||||||||||||||
Restricted Class B common stock repurchased from employees | — | — | — | — | — | — | — | (333 | ) | — | — | — | (333 | ) | ||||||||||||||||||||||
Redemption of Preferred Stock | (117 | ) | (1,000 | ) | — | — | — | — | — | — | — | — | — | (1,000 | ) | |||||||||||||||||||||
Other comprehensive (loss) income | — | — | — | — | — | — | — | — | (4,198 | ) | — | (12 | ) | (4,210 | ) | |||||||||||||||||||||
Net income (loss) for three months ended September 30, 2022 | — | — | — | — | — | — | — | — | — | 18,768 | (2,797 | ) | 15,971 | |||||||||||||||||||||||
BALANCE AT SPTEMBER 30, 2022 | 1,970 | $ | 16,743 | 1,574 | $ | 16 | 27,005 | $ | 270 | $ | 145,552 | $ | (18,852 | ) | $ | (3,075 | ) | $ | 34,782 | $ | (13,364 | ) | $ | 162,072 |
|
| Preferred |
| Class A |
| Class B |
| Additional |
|
|
| Accumulated Other |
|
|
|
|
|
|
| |||||||||||||||||
|
| Stock |
| Common Stock |
| Common Stock |
| Paid-In |
| Treasury |
| Comprehensive |
| Accumulated |
| Noncontrolling |
| Total |
| |||||||||||||||||
|
| Shares |
| Amount |
| Shares |
| Amount |
| Shares |
| Amount |
| Capital |
| Stock |
| Income |
| Deficit |
| Interests |
| Equity |
| |||||||||||
BALANCE AT JUNE 30, 2021 | 2,322 | $ | 19,743 | 1,574 | $ | 16 | 25,952 | $ | 261 | $ | 142,056 | $ | (12,274 | ) | $ | 3,178 | $ | (54,017 | ) | $ | (12,463 | ) | $ | 86,500 | ||||||||||||
Dividends on preferred stock ($0.1594 per share) | — | — | — | — | — | — | — | — | — | (370 | ) | — | (370 | ) | ||||||||||||||||||||||
Stock-based compensation | — | — | — | — | 248 | 3 | 528 | — | — | — | — | 531 | ||||||||||||||||||||||||
Repurchase of Class B common stock from stock purchase program | — | — | — | — | — | — | — | (1,412 | ) | — | — | — | (1,412 | ) | ||||||||||||||||||||||
Restricted Class B common stock repurchased from employees | — | — | — | — | — | — | — | (236 | ) | — | — | — | (236 | ) | ||||||||||||||||||||||
Acquisition of noncontrolling interest of subsidiary | — | — | — | — | 228 | 2 | (797 | ) | — | — | — | 795 | — | |||||||||||||||||||||||
Other comprehensive (loss) income | — | — | — | — | — | — | — | — | (184 | ) | — | 51 | (133 | ) | ||||||||||||||||||||||
Net loss for three months ended September 30, 2021 | — | — | — | — | — | — | — | — | — | (2,286 | ) | (31 | ) | (2,317 | ) | |||||||||||||||||||||
BALANCE AT SPTEMBER 30, 2021 | 2,322 | $ | 19,743 | 1,574 | $ | 16 | 26,428 | $ | 266 | $ | 141,787 | $ | (13,922 | ) | $ | 2,994 | $ | (56,673 | ) | $ | (11,648 | ) | $ | 82,563 |
GENIE ENERGY LTD.
|
| Nine Months Ended |
|
| Nine Months Ended |
| ||||||||||
|
| 2022 |
| 2021 |
|
| 2023 |
| 2022 |
| ||||||
|
| (in thousands) |
|
| (in thousands) |
| ||||||||||
Operating activities |
|
|
|
|
|
|
|
|
|
| ||||||
Net income |
| $ | 70,080 |
| $ | 275 |
| $ | 43,928 |
| $ | 70,080 | ||||
Net income (loss) from discontinued operations, net of tax | 25,929 | (16,991 | ) | |||||||||||||
Net income from discontinued operations, net of tax | 5,923 | 25,929 | ||||||||||||||
Net income from continuing operations | 44,151 | 17,266 | 38,005 | 44,151 | ||||||||||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: |
|
|
|
|
|
|
|
| ||||||||
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
| |||||||||
Depreciation and amortization |
|
| 288 |
|
|
| 343 |
|
|
| 286 |
|
| 288 |
| |
Deferred income taxes |
|
| — |
|
| 2,880 | ||||||||||
Provision for doubtful accounts receivable |
|
| 2,116 |
|
|
| 1,372 |
|
|
| 1,722 |
|
| 2,116 |
| |
Unrealized loss (gain) marketable equity securities and investment | 742 | (1,710 | ) | |||||||||||||
Inventory valuation allowance | 829 | — | ||||||||||||||
Unrealized (gain) loss on marketable equity securities and investments and others | (386 | ) | 833 | |||||||||||||
Stock-based compensation |
|
| 2,232 |
|
|
| 1,597 |
|
|
| 2,254 |
|
| 2,232 |
| |
Equity in the net loss (income) in equity method investees |
|
| 91 |
|
| (215 | ) | |||||||||
Gain on sale of subsidiaries | — | (4,226 | ) | |||||||||||||
Change in assets and liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Trade accounts receivable |
|
| (4,331 | ) |
|
| (12,427 | ) |
|
| (7,271 | ) |
| (4,331 | ) | |
Inventory |
|
| (797 | ) |
|
| (6,718 | ) |
|
| (6,114 | ) |
| (797 | ) | |
Prepaid expenses |
|
| (3,641 | ) |
|
| (1,713 | ) |
|
| (3,753 | ) |
| (3,641 | ) | |
Other current assets and other assets |
|
| (6,084 | ) |
|
| (8,829 | ) |
|
| 2,637 |
| (6,084 | ) | ||
Trade accounts payable, accrued expenses and other current liabilities |
|
| 2,570 |
|
| 7,337 | ||||||||||
Due to IDT Corporation |
|
| (398 | ) |
|
| (148 | ) | ||||||||
Trade accounts payable, accrued expenses and other liabilities |
|
| 10,963 |
| 2,570 | |||||||||||
Due to IDT Corporation, net |
|
| (45 | ) |
| (398 | ) | |||||||||
Income taxes payable |
|
| 8,009 |
|
| 4,263 |
|
| (6,566 | ) |
|
| 8,009 | |||
Net cash provided by (used in) operating activities of continuing operations | 44,948 | (928 | ) | |||||||||||||
Net cash used in discontinued operations | 8,150 | 1,014 | ||||||||||||||
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 |
|
| 53,098 |
|
| 86 |
|
| 52,022 |
| 53,098 | |||||
Investing activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Capital expenditures |
|
| (1,058 | ) |
|
| (158 | ) |
| (878 | ) |
| (1,058 | ) | ||
Proceeds from the sale of subsidiary, net of cash disposed | — | 4,550 | ||||||||||||||
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 | ) |
|
| — | — | (1,505 | ) | ||||||
Purchase of marketable equity securities and other investments | (1,300 | ) | (1,750 | ) | ||||||||||||
Repayment of notes receivable |
|
| 19 |
|
|
| 14 |
|
|
| 19 |
|
|
| 19 |
|
Net cash (used in) provided by investing activities of continuing operations | (3,844 | ) | 2,656 | |||||||||||||
Net cash used in investing activities of discontinued operations | (43,941 | ) | — | |||||||||||||
Net cash (used in) provided by investing activities |
|
| (47,785 | ) |
|
| 2,656 |
| ||||||||
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 to Class A and Class B common stock stockholders |
|
| (1,104 | ) |
|
| — | |||||||||
Dividends paid to preferred stock stockholders | (5,790 | ) | (1,111 | ) | ||||||||||||
Dividends paid |
| (6,818 | ) |
| (6,894 | ) | ||||||||||
Repurchases of Class B common stock from employees |
|
| (409 | ) |
|
| (236 | ) |
|
| (2,338 | ) |
|
| (409 | ) |
Proceeds from the exercise of warrants | 5,000 | — | ||||||||||||||
Repurchase of Class B common stock | (4,414 | ) | (3,847 | ) | — | (4,414 | ) | |||||||||
Redemption of preferred stock | (3,000 | ) | — | (8,359 | ) | (3,000 | ) | |||||||||
Net cash used in by financing activities |
|
| (14,717 | ) |
|
| (5,194 | ) | ||||||||
Net cash used in financing activities |
| (12,515 | ) |
| (14,717 | ) | ||||||||||
Effect of exchange rate changes on cash, cash equivalents, and restricted cash |
|
| (15 | ) |
|
| (221 | ) |
|
| 61 |
|
| (15 | ) | |
Net decrease in cash, cash equivalents, and restricted cash |
|
| (9,419 | ) |
|
| (2,673 | ) | ||||||||
Cash, cash equivalents, and restricted cash at beginning of period |
|
| 102,149 |
|
|
| 43,184 |
| ||||||||
Cash, cash equivalents and restricted cash (including discontinued operations) at end of the period | 92,730 | 40,511 | ||||||||||||||
Less: Cash of discontinued operations at end of period | 5,470 | 3,910 | ||||||||||||||
Cash, cash equivalents, and restricted cash (excluding discontinued operations) at end of period |
| $ | 87,260 |
|
| $ | 36,601 |
| ||||||||
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 |
|
See accompanying notes to consolidated financial statements.
6 |
Note 1—Basis of Presentation and Business Changes and Development
The accompanying unaudited consolidated financial statements of Genie Energy Ltd. and its subsidiaries (the “Company” or “Genie”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and nine months ended September 30, 20222023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022. The balance sheet at December 31, 20212022 has been derived from the Company’s audited financial statements at that date but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. For further information, please refer to the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021,2022, as filed with the U.S. Securities and Exchange Commission (the “SEC”).
The Company owns 99.5% of Genie Energy International Corporation (“GEIC”), which owns 100% of Genie Retail Energy (“GRE”), 100% of Genie Retail Energy International ("GRE International") and 95.5% ofvaried interests in entities within the Genie Renewables.Renewables segment.
GRE owns and operates retail energy providers (“REPs”REPs”), including IDT Energy (“IDT Energy”), Residents Energy (“Residents Energy”), Town Square Energy and Town Square Energy East (collectively, "TSE"), Southern Federal Power ("Southern Federal") and Mirabito Natural Gas (“Mirabito”Mirabito”). GRE's REP businesses resell electricity and natural gas to residential and small business customers primarily in the Eastern and Midwestern United States and Texas.
Genie Renewables consists of a 95.5% interest in Genie Solar, Energy ("Genie Solar")an integrated solar energy company that develops, constructs and operates solar energy projects for commercial and industrial customers as well as its own portfolio, a solar energy operation and general contracting company, a 93.5%92.8% interest in CityCom Solar, a marketer of community solaralternative products and services complimentary to our energy solutions,offerings, a 96.0% interest in Diversegy, an energy broker for commercial customers, and a 60.0% interest in Prism Solar Technology ("Prism"), a solar solutions company that is engaged in the manufacturing of solar panels, solar installation design and solar energy project management.
One-Time Tax Credit
In the first quarter of 2023, the Company received $3.1 million in respect of a one-time tax credit related to payroll taxes incurred in prior years, which the Company recognized as a gain included in other income (expense), net in the accompanying consolidated statements of operations for the nine months ended September 30, 2023.
Discontinued Operations in Finland and Sweden
AsPrior to the third quarter of 2022, the Company had a third segment, Genie Retail Energy International, or GRE International, which supplied electricity to residential and small business customers in Scandinavia. However, as a result of recent volatility in the energy market in Europe, in the third quarter of 2022, the Company decided to discontinue the operations of Lumo Energia Oyj ("Lumo Finland") and Lumo Energi AB ("Lumo Sweden"). In July 2022, the Company entered into a series of transactions to sell most of the electricity swap instruments held by Lumo Sweden. The Company also entered into a series of transactions to transfer the customers of Lumo Finland and Lumo Sweden to other suppliers.
The Company determined that the discontinued operations in Finland and Sweden represented a strategic shift that willwould have a major effect on the Company's operations and financial statements. The Company has accountedaccounts for these businesses as discontinued operations and accordingly, has presentedpresents the results of operations and related cash flows as discontinued operations. The results of operations and related cash flows are presented as discontinued operations for all periods presented.periods. Any remaining assets and liabilities of the discontinued operations have beenare presented separately and are reflected within assets and liabilities from discontinued operations in the accompanying consolidated balance sheets as of September 30, 20222023 and December 31, 2021. 2022. Lumo Finland and Lumo Sweden will continueare continuing to liquidate their remaining receivables and settle any remaining liabilities.
InNovember 2022, Lumo Finland declared bankruptcy and the administration of Lumo Finland was transferred to an administrator (the "Lumo Administrators"). All assets and liabilities of Lumo Finland remain with Lumo Finland, in which Genie retains its ownership interest, however, the management and control of Lumo Finland were transferred to the Lumo Administrators. Since the Company lost control of the management of Lumo Finland in favor of the Lumo Administrators, the accounts of Lumo Finland were deconsolidated effectiveNovember 9, 2022.
Following the discontinuance of operations of Lumo Finland and Lumo Sweden, GRE International ceased to be a segment and the remaining assets and liabilities and results of continuing operations of GRE International were combined with corporate.
Discontinued Operations in the United Kingdom
In the third quarter of 2021, the natural gas and energy market in the United Kingdom deteriorated which prompted the Company to start the process of orderly withdrawal from the United Kingdom market. In October 2021, as part of the orderly exit process from the U. K. market, Orbit Energy Limited ("Orbit"), a REP owed by the Company that used to operate in United Kingdom, market, Orbit and Shell U.K. Limited ("Shell") agreed to terminate the exclusive supply contract between them. As part of the termination agreement, Orbit was required to unwind all physical forward hedges with Shell which resulted in net cash proceeds after settlement of all related liabilities with Shell.
Following the termination of the contract with Shell, Orbit filed a petition with the High Court of Justice Business and Property of England and Wales (the “Court”) to declare Orbit insolvent based on the Insolvency Act of 1986. On November 29, 2021, the Court declared Orbit insolvent, revoked Orbit's license to supply electricity and natural gas in the United Kingdom, ordered the current customers to be transferred to “supplier of last resort” and transferred the administration of Orbit to Administrators effective December 1, 2021. All of the customers of Orbit were transferred to a third-party supplier effective December 1, 2021 as ordered by the Court. All assets and liabilities of Orbit, including cash and receivables, remain with Orbit, in which Genie retains a 100% interest, however, the management and control of Orbit was transferred to the Administrators.
Energy Price Volatility in TexasThe Company determined that the discontinued operations of Orbit represented a strategic shift that would have a major effect on the Company's operations and Japan
In January 2021, weather volatilityfinancial statements. Since the appointment of the Administrators, the Company accounts for the Orbit business as discontinued operations and accordingly, presents the lackresults of adequate gas reserves significantly increasedoperations and related cash flows as discontinued operations. The results of operations and related cash flows are presented as discontinued operations for all periods. Any remaining assets and liabilities of the price of energy at Japan Electric Power Exchange ("JEPX") for an extended period of time. The spike in demand associated with this situation, exposed Genie Japan to unexpected cost increases. Genie Japan incurred approximately $2.5 million in additional costs related to the price increases, which were includeddiscontinued operations are presented separately and reflected within assets and liabilities from discontinued operations in the costaccompanying consolidated balance sheets as of revenue in the nine months ended September 30, 2021.2023 and December 31, 2022.
In February of 2021, Since the State of Texas experienced unprecedented cold weather and snow, with was named Winter Storm Uri. With the grid overtaxed due to demand and weather-related reduced supply and rolling blackouts being enforced, by orderCompany lost control of the Electricity Reliability Councilmanagement of Texas ("ERCOT"), real-time commodity prices during the crisis escalated significantly. Although GRE's commitment for their customersOrbit in Texas was hedged for foreseen winter weather conditions, the market conditions exposed the Company to significant unexpected cost increases. GRE recognized approximately $1.0 million and $13.0 million in additional costs of revenue for the three and nine months ended September 30, 2021, respectively.
In June 2021, the state legislaturefavor of the StateAdministrators, the accounts of Texas passed House Bill 4492 (“HB 4492”) which includes certain provisions for financing certain costs associated with electric markets caused by Winter Storm Uri. Pursuant to HB 4492, two categories of charges associated with Winter Storm Uri are to be securitized and the proceeds of the securitization will be provided to the load serving entities who originally incurred the charges. Under HB 4492, the Company is entitled to recover a portion of the costs incurred from the effect of Winter Storm Uri with a calculated range of $1.5 million to $2.6 million. In the second quarter ofOrbit were deconsolidated effective December 1, 2021 the Company recorded a reduction in cost of revenues of $1.5 million.
In September 2021, the Public Utility Commission of Texas ("PUC") approved the Debt Obligation Order to grant ERCOT's application for a debt financing mechanism to pay for certain costs associated with Winter Storm Uri. Under the Debt Obligation Order, the amount that the Company is entitled to recover increased to approximately $3.4 million. In the third quarter of 2021, the Company recorded an additional reduction in the cost of revenues of $1.9 million for an aggregate amount of $3.4 million for the year ended December 31, 2021. In June 2022, the Company received a $3.5 million refund related to the cost of Winter Storm Uri..
Seasonality and Weather; Climate Change and Volatility in Pricing
The weather and the seasons, among other things, affect GRE’s revenues. Weather conditions have a significant impact on the demand for natural gas used for heating and electricity used for heating and cooling. Typically, colder winters increase demand for natural gas and electricity, and hotter summers increase demand for electricity. Milder winters or summers have the opposite effect. Unseasonable temperatures in other periods may also impact demand levels. Natural gas revenues typically increase in the first quarter due to increased heating demands and electricity revenues typically increase in the third quarter due to increased air conditioning use. Approximately 44.5%39.7% and 47.7%44.5% of GRE’s natural gas revenues for the relevant years were generated in the first quarters of 2022 and 2021, respectively, when demand for heating was highest.Although the demand for electricity is not as seasonal as natural gas (due, in part, to usage of electricity for both heating and cooling), approximately 30.3% 30.5% and 31.8%30.3% of GRE’s electricity revenues for the relevant years were generated in the third quarters of2022 and2021, respectively. GRE’s REPs’ revenues and operating income are subject to material seasonal variations, and the interim financial results are not necessarily indicative of the estimated financial results for the full year.
In addition to the direct physical impact that climate change may have on the Company's business, financial condition and results of operations because of the effect on pricing, demand for our offerings and/or the energy supply markets, we may also be adversely impacted by other environmental factors, including: (i) technological advances designed to promote energy efficiency and limit environmental impact; (ii) increased competition from alternative energy sources; (iii) regulatory responses aimed at decreasing greenhouse gas emissions; and (iv) litigation or regulatory actions that address the environmental impact of our energy products and services.
8 |
Note 2—Cash, Cash Equivalents, and Restricted Cash
The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported in the consolidated balance sheet and the corresponding amounts reported in the consolidated statements of cash flows:
| September 30, 2022 |
| December 31, 2021 |
| September 30, 2023 |
| December 31, 2022 |
| ||||||||
(in thousands) | (in thousands) | |||||||||||||||
Cash and cash equivalents |
| $ | 81,705 |
|
| $ | 93,568 |
| $ | 139,829 |
|
| $ | 98,571 |
| |
Restricted cash—short-term |
|
| 5,555 |
|
|
| 6,657 |
|
| 3,574 |
|
|
| 6,007 |
| |
Total cash, cash equivalents, and restricted cash |
| $ | 87,260 |
|
| $ | 100,225 |
| $ | 143,403 |
|
| $ | 104,578 |
|
Restricted cash—short-term includes amounts set aside in accordance with theGRE's Amended and Restated Preferred Supplier Agreement with BP Energy Company (“BP”) (see Note 18) and Credit Agreement with JPMorgan Chase (see Note 19).
Included in the cash and cash equivalents as of September 30, 2023 and December 31, 20212022 is cash received from Orbit EnergyLumo Sweden (see Note 5).
Note 3—Inventories
Inventories consisted of the following:
| September 30, 2022 |
| December 31, 2021 |
| September 30, 2023 | December 31, 2022 |
| |||||||||
(in thousands) | (in thousands) | |||||||||||||||
Natural gas |
| $ | 4,298 |
|
| $ | 1,891 |
| $ | 1,569 | $ | 3,302 |
| |||
Renewable credits |
|
| 11,737 |
|
| 15,610 |
| 8,630 |
| 10,531 | ||||||
Solar Panels: |
|
|
|
|
| |||||||||||
Finished goods | 2,482 | 219 | ||||||||||||||
Solar panels | 5,107 | 1,881 | ||||||||||||||
Totals |
| $ | 18,517 |
|
| $ | 17,720 | $ | 15,306 | $ | 15,714 |
In the third quarter of 2023, the Company recorded an inventory valuation allowance of $0.8 million to the cost of revenues to write down the carrying value of solar panel inventories to the estimated net realizable value.
Note 4—Revenue Recognition
Revenue from the single performance obligation to deliver a unit of electricity and/or natural gas is recognized as the customer simultaneously receives and consumes the benefit. Variable quantities in requirements contracts are considered to be options for additional goods and services because the customer has a current contractual right to choose the amount of additional distinct goods to purchase. GRE and Genie Japan (prior to its sale in May 2021) recordrecords unbilled revenues for the estimated amount customers will be billed for services rendered from the time meters were last read to the end of the respective accounting period. The unbilled revenue is estimated each month based on available per day usage data, the number of unbilled days in the period and historical trends.
Incumbent utility companies in most of the service territories in which GRE's REPs operate offer purchase of receivable, or POR programs, and GRE’sREPs participate in POR programs for a majority of their receivables. The Company estimates variable consideration related to its rebate programs using the expected value method and a portfolio approach. The Company’s estimates related to rebate programs are based on the terms of the rebate program, the customer’s historical electricity and natural gas consumption, the customer’s rate plan, and a churn factor. Taxes that are imposed on the Company’s sales and collected from customers are excluded from the transaction price.
9 |
Revenue from sales of solar panels are recognized at a point in time following the transfer of control of the solar panels to the customer, which typically occurs upon shipment or delivery depending on the terms of the underlying contracts. For sales contracts that contain multiple performance obligations, such as the shipment or delivery of solar modules, the Company allocates the transaction price to each performance obligation identified in the contract based on relative standalone selling prices, or estimates of such prices, and recognize the related revenue as control of each individual product is transferred to the customer, in satisfaction of the corresponding performance obligations. Revenues from salesales of solar panels are included in other revenues in the consolidated statements of operations.
Revenues from commissions from selling third-party products to customers, entry and other fees from the energy brokerage are recognized at the time the performance obligation is met. The Company's contacts with customers for commission revenue contain a single performance obligation and are satisfied at a point in time.
The Company recognizes the incremental costs of obtaining a contract with a customer as an asset if it expects the benefit of those costs to be longer than one year. The Company determined that certain sales commissions to acquire customers meet the requirements to be capitalized. For GRE, the Company applies a practical expedient to expense costs as incurred for sales commissions to acquire customers as the period would have been one year or less.
Disaggregated Revenues
The following table shows the Company’s revenues disaggregated by pricing plans offered to customers:
| Electricity |
|
| Natural Gas |
|
| Other |
|
| Total |
| |||||
(in thousands) | ||||||||||||||||
Three Months Ended September 30, 2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed rate |
| $ | 25,374 |
|
| $ | 1,925 |
|
| $ | — |
|
| $ | 27,299 |
|
Variable rate |
|
| 48,390 |
|
|
| 4,228 |
|
|
| — |
|
|
| 52,618 |
|
Other |
|
| — |
|
|
| — |
|
|
| 1,368 |
|
|
| 1,368 |
|
Total |
| $ | 73,764 |
|
| $ | 6,153 |
|
| $ | 1,368 |
|
| $ | 81,285 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed rate |
| $ | 42,142 |
|
| $ | 933 |
|
| $ | — |
|
| $ | 43,075 |
|
Variable rate |
|
| 40,659 |
|
|
| 2,583 |
|
|
| — |
|
|
| 43,242 |
|
Other |
|
| — |
|
|
| — |
|
|
| 1,338 |
|
|
| 1,338 |
|
Total |
| $ | 82,801 |
|
| $ | 3,516 |
|
| $ | 1,338 |
|
| $ | 87,655 |
|
Nine Months Ended September 30, 2022 | ||||||||||||||||
Fixed rate | $ | 62,822 | $ | 8,020 | $ | — | $ | 70,842 | ||||||||
Variable rate | 123,385 | 32,734 | — | 156,119 | ||||||||||||
Other | — | — | 7,189 | 7,189 | ||||||||||||
Total | $ | 186,207 | $ | 40,754 | $ | 7,189 | $ | 234,150 | ||||||||
Nine Months Ended September 30, 2021 | ||||||||||||||||
Fixed rate | $ | 108,919 | $ | 3,483 | $ | — | $ | 112,402 | ||||||||
Variable rate | 113,086 | 22,395 | — | 135,481 | ||||||||||||
Other | — | — | 6,177 | 6,177 | ||||||||||||
Total | $ | 222,005 | $ | 25,878 | $ | 6,177 | $ | 254,060 |
| Electricity | Natural Gas | Other | Total | ||||||||||||
(in thousands) | ||||||||||||||||
Three Months Ended September 30, 2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed rate |
| $ | 73,595 |
|
| $ | 2,724 |
|
| $ | — |
|
| $ | 76,319 |
|
Variable rate |
|
| 40,407 |
|
|
| 2,266 |
|
|
| — |
|
|
| 42,673 |
|
Other |
|
| — |
|
|
| — |
|
|
| 6,057 |
|
|
| 6,057 |
|
Total |
| $ | 114,002 |
|
| $ | 4,990 |
|
| $ | 6,057 |
|
| $ | 125,049 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, 2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed rate |
| $ | 25,374 |
|
| $ | 1,925 |
|
| $ | — |
|
| $ | 27,299 |
|
Variable rate |
|
| 48,390 |
|
|
| 4,228 |
|
|
| — |
|
| 52,618 |
| |
Other |
|
| — |
|
|
| — |
|
|
| 1,368 |
|
|
| 1,368 |
|
Total |
| $ | 73,764 |
|
| $ | 6,153 |
|
| $ | 1,368 |
|
| $ | 81,285 |
|
Nine Months Ended September 30, 2023 | ||||||||||||||||
Fixed rate | $ | 150,725 | $ | 11,322 | $ | — | $ | 162,047 | ||||||||
Variable rate | 117,963 | 29,568 | — | 147,531 | ||||||||||||
Other | — | — | 14,209 | 14,209 | ||||||||||||
Total | $ | 268,688 | $ | 40,890 | $ | 14,209 | $ | 323,787 | ||||||||
Nine Months Ended September 30, 2022 | ||||||||||||||||
Fixed rate | $ | 62,822 | $ | 8,020 | $ | — | $ | 70,842 | ||||||||
Variable rate | 123,385 | 32,734 | — | 156,119 | ||||||||||||
Other | — | — | 7,189 | 7,189 | ||||||||||||
Total | $ | 186,207 | $ | 40,754 | $ | 7,189 | $ | 234,150 |
Fixed and variable rate revenues are from GRE. Other revenues are revenues from Genie Renewables which includes revenues from solar projects by Genie Solar, commissions from marketing energy solutions by CityCom Solar and Diversegy and selling solar panels by Prism.
10 |
The following table shows the Company’s revenues disaggregated by non-commercial and commercial channels:
| Electricity |
|
| Natural Gas |
|
| Other |
|
| Total |
|
| Electricity |
| Natural Gas |
| Other |
| Total |
| ||||||||||||
(in thousands) | ||||||||||||||||||||||||||||||||
Three Months Ended September 30, 2023 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Non-Commercial Channel |
| $ | 95,026 |
| $ | 1,981 |
| $ | — |
| $ | 97,007 |
| |||||||||||||||||||
Commercial Channel |
|
| 18,976 |
|
| 3,009 |
|
| — |
|
| 21,985 |
| |||||||||||||||||||
Other |
|
| — |
|
| — |
|
| 6,057 |
|
| 6,057 |
| |||||||||||||||||||
Total |
| $ | 114,002 |
| $ | 4,990 |
| $ | 6,057 |
| $ | 125,049 |
| |||||||||||||||||||
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Three Months Ended September 30, 2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Non-Commercial Channel |
| $ | 61,704 |
|
| $ | 2,723 |
|
| $ | — |
|
| $ | 64,427 |
|
| $ | 61,704 |
| $ | 2,723 |
| $ | — |
| $ | 64,427 |
| |||
Commercial Channel |
|
| 12,060 |
|
|
| 3,430 |
|
|
| — |
|
| 15,490 |
|
|
| 12,060 |
|
| 3,430 |
|
| — |
|
| 15,490 |
| ||||
Other |
|
| — |
|
|
| — |
|
|
| 1,368 |
|
|
| 1,368 |
|
|
| — |
|
| — |
|
| 1,368 |
|
| 1,368 |
| |||
Total |
| $ | 73,764 |
|
| $ | 6,153 |
|
| $ | 1,368 |
|
| $ | 81,285 |
|
| $ | 73,764 |
| $ | 6,153 |
| $ | 1,368 |
| $ | 81,285 |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||
Three Months Ended September 30, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||
Nine Months Ended September 30, 2023 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Non-Commercial Channel |
| $ | 59,646 |
|
| $ | 1,855 |
|
| $ | — |
|
| $ | 61,501 |
|
| $ | 220,481 |
| $ | 28,702 |
| $ | — |
| $ | 249,183 |
| |||
Commercial Channel |
|
| 23,155 |
|
|
| 1,661 |
|
| — |
|
| 24,816 |
|
|
| 48,207 |
|
| 12,188 |
|
| — |
|
| 60,395 |
| |||||
Other |
|
| — |
|
|
| — |
|
|
| 1,338 |
|
|
| 1,338 |
|
|
| — |
|
| — |
|
| 14,209 |
|
| 14,209 |
| |||
Total |
| $ | 82,801 |
|
| $ | 3,516 |
|
| $ | 1,338 |
|
| $ | 87,655 |
|
| $ | 268,688 |
| $ | 40,890 |
| $ | 14,209 |
| $ | 323,787 |
| |||
Nine Months Ended September 30, 2022 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Non-Commercial Channel | $ | 156,425 | $ | 29,028 | $ | — | $ | 185,453 |
| $ | 156,425 |
| $ | 29,028 |
| $ | — |
| $ | 185,453 |
| |||||||||||
Commercial Channel | 29,782 | 11,726 | — | 41,508 |
|
| 29,782 |
|
| 11,726 |
|
| — |
|
| 41,508 |
| |||||||||||||||
Other | — | — | 7,189 | 7,189 |
|
| — |
|
| — |
|
| 7,189 |
|
| 7,189 |
| |||||||||||||||
Total | $ | 186,207 | $ | 40,754 | $ | 7,189 | $ | 234,150 |
| $ | 186,207 |
| $ | 40,754 |
| $ | 7,189 |
| $ | 234,150 |
| |||||||||||
Nine Months Ended September 30, 2021 | ||||||||||||||||||||||||||||||||
Non-Commercial Channel | $ | 167,794 | $ | 20,830 | $ | — | $ | 188,624 | ||||||||||||||||||||||||
Commercial Channel | 54,211 | 5,048 | — | 59,259 | ||||||||||||||||||||||||||||
Other | — | — | 6,177 | 6,177 | ||||||||||||||||||||||||||||
Total | $ | 222,005 | $ | 25,878 | $ | 6,177 | $ | 254,060 |
GRE revenues are from both non-commercial and commercial channels. Other revenues are revenues from Genie Renewables which includes revenues from solar projects by Genie Solar, commissions from marketing energy solutions by CityCom Solar and Diversegy and selling solar panels by Prism.
11 |
Contract liabilities
Certain revenue generating contracts at GES include provisions that require advance payment from customers. These advance payments are recognized as revenue as the Company satisfies the performance obligations to the other party. A portion of the traction price allocated to the performance obligations to be satisfied in future periods is recognized as a contract liability. Contract liabilities are included in other current liabilities account in the consolidated balance sheet.
The table below reconciles the change in the carrying amount of contract liabilities:
Nine Months Ended September 30, | ||||||||
2023 | 2022 |
| ||||||
(in thousands) | ||||||||
Contract liability, beginning | $ | 1,759 | $ | 367 |
| |||
Recognition of revenue included in the beginning of the year contract liability | (430 | ) | (281 | ) | ||||
Additions during the period, net of revenue recognized during the period | 3,290 | 630 | ||||||
Contract liability, end | $ | 4,619 | $ | 716 |
Note 5—Discontinued Operations and Divestiture
Lumo FinlandFinland and Lumo Sweden Operations
As a result of the continuedsustained volatility of the energy market in Europe, in July 2022, the Company initiated a plan to dispose of certain assets and liabilities of Lumo Finland and Lumo Sweden. From July 13, 2022 to July 19, 2022, the Company entered into a series of transactions to sell most of the electricity swap instruments held by Lumo Sweden for a gross aggregate amount of €41.1 million (equivalent to approximately $41.4 million at the dates of the transactions) before fees and other costs. The sale price has been, and is expected to continue to be settled monthly based on the monthly commodity volume specified in the instruments from September 2022 to March 2025. The net book value of the instruments sold was €34.2 million (equivalent to $35.8 million).
In July 2022, Lumo Sweden entered into a transaction to transfer, effective August 5, 2022, its customers to a third party for a nominal consideration. In August 2022, Lumo Finland entered into a transaction to transfer its variable rate customers to a third party for €1.9 million (equivalent to $2.0 million) and terminated the contracts of fixed rate customers.
The Company determined that exitingthe discontinued operations inof Lumo Finland and Lumo Sweden represented a strategic shift that willwould have a major effect on the Company's operations and financial statements and accordingly, the results of operations and related cash flows are presented as discontinued operations for all periods presented. The assets and liabilities of the discontinued operations have beenare presented separately and are reflected within assets and liabilities from discontinued operations in the accompanying consolidated balance sheets as of September 30, 20222023 and December 31, 2021.2022. Lumo Finland and Lumo Sweden will continueare continuing to liquidate their remaining receivables and settle any remaining liabilities.
In November 2022, Lumo Finland declared bankruptcy and the administration of Lumo Finland was transferred to the Lumo Administrators. All assets and liabilities of Lumo Finland remain with Lumo Finland, in which Genie retains its ownership interest, however, the management and control of Lumo Finland were transferred to the Lumo Administrators. Since the Company lost control of the management of Lumo Finland in favor of the Lumo Administrators, the accounts of Lumo Finland were deconsolidated effect November 9, 2022.
The following table represents summarized balance sheet information of assets and liabilities of the discontinued operations of Lumo Finland and Lumo Sweden:
| September 30, 2022 |
| December 31, 2021 |
| September 30, 2023 |
| December 31, 2022 | |||||||||
(in thousands) | (in thousands) | |||||||||||||||
Assets |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Cash |
| $ | 5,470 |
|
| $ | 1,924 |
|
| $ | 4,075 |
|
| $ | 1,503 |
|
Trade accounts receivable, net |
|
| 878 |
|
|
| 11,048 |
| ||||||||
Fair value of derivative contracts—current |
|
| — |
|
|
| 12,826 |
| ||||||||
Receivables from the settlement of the derivative contract—current | 29,063 | 4,655 | ||||||||||||||
Other current assets |
|
| 277 |
|
|
| 2,784 |
| ||||||||
Receivables from the settlement of derivative contract—current |
|
| 12,337 |
|
|
| 23,351 |
| ||||||||
Current assets of discontinued operations |
| $ | 35,688 |
|
| $ | 33,237 |
|
| $ | 16,412 |
|
| $ | 24,854 |
|
Receivables from the settlement of the derivative contract—noncurrent | $ | 13,496 | $ | — | ||||||||||||
Receivables from the settlement of derivative contract—noncurrent | $ | 4,165 | $ | 12,689 | ||||||||||||
Other noncurrent assets | 355 | 1,172 | 3,388 | 3,616 | ||||||||||||
Noncurrent assets of discontinued operations | $ | 13,851 | $ | 1,172 | $ | 7,553 | $ | 16,305 | ||||||||
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Accounts payable |
| $ | 2,424 |
|
| $ | 19,013 |
| ||||||||
Accrued expenses |
|
| 1,280 |
|
|
| 1,518 |
| ||||||||
Income taxes payable | 1,675 | 280 | 10,644 | 10,894 | ||||||||||||
Other current liabilities |
|
| 352 |
|
| 393 | ||||||||||
Accounts payable and other current liabilities |
|
| 92 |
|
| 42 | ||||||||||
Current liabilities of discontinued operations |
| $ | 5,731 |
|
| $ | 21,204 |
|
| $ | 10,736 |
|
| $ | 10,936 |
|
Deferred tax liabilities | $ | 9,502 | $ | — | 668 | 686 | ||||||||||
Other noncurrent liabilities | — | 438 | ||||||||||||||
Noncurrent liabilities of discontinued operations | $ | 9,502 | $ | 438 | $ | 668 | $ | 686 |
The summary of the results of operations of the discontinued operations of Lumo Finland and Lumo Sweden were as follows:
| Three Months Ended September 30, | Nine Months Ended September 30, | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||
| (in thousands) | (in thousands) | (in thousands) | |||||||||||||||||||||||||||
Revenues | $ | 4,558 | $ | 7,474 | $ | 25,247 | $ | 24,937 | $ | — | $ | 4,558 | $ | — | $ | 25,247 | ||||||||||||||
Cost of revenues | 7,042 | 670 | (8,358 | ) | 17,573 | — | 7,042 | — | (8,358 | ) | ||||||||||||||||||||
Gross (loss) profit | (2,484 | ) | 6,804 | 33,605 | 7,364 | |||||||||||||||||||||||||
Gross profit | — | (2,484 | ) | — | 33,605 | |||||||||||||||||||||||||
Selling, general and administrative expenses | 3,275 | 987 | 5,190 | 3,292 | — | 3,275 | — | 5,190 | ||||||||||||||||||||||
(Loss) income from operations | (5,759 | ) | 5,817 | 28,415 | 4,072 | |||||||||||||||||||||||||
Gain from the settlement of assets | 7,792 | — | 7,792 | — | ||||||||||||||||||||||||||
Income from operations | — | (5,759 | ) | — | 28,415 | |||||||||||||||||||||||||
Other (loss) income | (395 | ) | 7,792 | 800 | 7,792 | |||||||||||||||||||||||||
Income before income taxes | 2,033 | 5,817 | 36,207 | 4,072 | (395 | ) | 2,033 | 800 | 36,207 | |||||||||||||||||||||
Provision for income taxes | (3,492 | ) | (295 | ) | (10,278 | ) | (323 | ) | 91 | (3,492 | ) | (314 | ) | (10,278 | ) | |||||||||||||||
Net (loss) income from discontinued operations, net of taxes | $ | (1,459 | ) | $ | 5,522 | $ | 25,929 | $ | 3,749 | |||||||||||||||||||||
Net income from discontinued operations, net of taxes | $ | (304 | ) | $ | (1,459 | ) | $ | 486 | $ | 25,929 | ||||||||||||||||||||
Income before income taxes attributable to Genie Energy Ltd. | $ | 4,836 | $ | 5,352 | $ | 36,206 | $ | 3,572 | $ | (395 | ) | $ | 4,836 | $ | 800 | $ | 36,206 |
The following table presents a summary of cash flows of the discontinued operations:operations ofLumo Finland andLumo Sweden:
Nine Months Ended September 30, 2022 | Nine Months Ended September 30, 2021 | |||||||
(in thousands) | ||||||||
Net income from discontinued operations, net of taxes | $ | 25,929 |
| $ | 3,749 |
| ||
Non-cash items | 1,546 | 728 | ||||||
Changes in assets and liabilities | (19,325 | ) |
|
| (5,233 | ) | ||
Cash flows from (used in) operating activities of discontinued operations | $ | 8,150 |
| $ | (756 | ) |
| Nine Months Ended September 30, | ||||||||||||||
| 2023 | 2022 | |||||||||||||
| (in thousands) | ||||||||||||||
Net income | $ | 486 | $ | 25,929 | |||||||||||
Non-cash items | 1,170 | 1,546 | |||||||||||||
Changes in assets and liabilities | 17,805 | (19,325 | ) | ||||||||||||
Cash flows provided by operating activities of discontinued operations | $ | 19,461 | $ | 8,150 |
OnIn furtherance of the Company's exit from the retail energy markets in Finland and Sweden and to facilitate the maximization of value at Lumo Sweden, on November 3, 2022, the Company acquired additional minority interests in Lumo Finland and Lumo Sweden from an employee in exchange for 132,302 restricted shares of Class B common stock of the Company, which will vestare vesting ratably frombetween November 2022 toand May 2025. The Company increased its interest in Lumo Finland from 91.6% to 96.6% and increasedin Lumo Sweden from 98.8% to 100%.
Prior to being treated as discontinued operations or consolidated, the assets and liabilities of Lumo Finland and Lumo Sweden were included in Lumo Sweden.GRE International segment.
United KingdomU.K. Operations
On July 17, 2017, the Company’s subsidiary, Genie Energy UK Ltd. (“GEUK”), entered into a definitive agreement with Energy Global Investments Pty Ltd (“EGC”) to launch Shoreditch Energy Limited (“Shoreditch”), a joint venture to offer electricity and natural gas service to residential and small business customers in the U.K., under the trade name Orbit Energy. Prior to October 8, 2020, the Company owned 77.0% of the outstanding equity of Shoreditch.
OnOctober 8, 2020, the Company entered into an agreement (the “Purchase Agreement”) with EGC under which GEUK purchased EGC’s remaining interest in Shoreditch. Following the transaction, Shoreditch became a wholly-owned subsidiary of GEUK.
In the third quarter of 2021, the natural gas and energy market in the U.K.United Kingdom deteriorated which prompted the Company to start the process of orderly withdrawal from the U.K. market.United Kingdom. In October 2021, as part of the orderly exit process, Orbit and Shell U.K. Limited agreed to terminate the exclusive supply contract between them. As part of the termination agreement, Orbit was required to unwind all physical forward hedges with Shell which resulted in net cash proceeds after settlement of all related liabilities with Shell.
Following the termination of the contract with Shell, Orbit filed a petition with the High Court of Justice Business and Property of England and Wales (the “Court”) to declare Orbit insolvent based on the Insolvency Act of 1986. On November 29, 2021, the Court declared Orbit insolvent, revoked Orbit's license to supply electricity and natural gas in the United Kingdom, ordered the current customers to be transferred to “supplier of last resort” and transfer the administration of Orbit to Administrators effective December 1, 2021. All of the customers of Orbit were transferred to a third-party supplier2021, which transfer was effective December 1, 2021 as ordered by the Court.2021. All assets and liabilities of the Orbit, including cash and receivables remain with Orbit and the management and control of which was transferred to Administrators. The Company expects that the administration of Orbit will be completed in 2022.2023.
In the fourth quarter of 2021, Orbit transferred to GEIC a net amount of $49.7 million from the proceeds of the settlement of the contract with Shell which is included in cash and cash equivalents in the consolidated balance sheet as of December 31, 2021. In January 2022, the Company transferred $21.5 million to the Administrators of Orbit Energy to fund the settlement of the expected remaining liabilities of Orbit of $30.8 million, which were included in the current liabilities of discontinued operations in the consolidated balance sheet as of December 31, 2021. In February 2022, the Company deposited $28.3$28.3 million into an attorney trust account to hold, preserve, and dispense funds to the extent needed in connection with the administration process. On February 24, 2022, the Administrators filed a petition under Chapter 15 of the U.S. Bankruptcy Code with the Bankruptcy Court of the Southern District of New York seeking (i) recognition of the U.K. administration proceeding as a foreign main proceeding and the U.K. Administrators as its foreign representatives, and (ii) entrusting distribution of the funds the Company deposited into its attorney’s trust fund to the U.K. Administrators. In the second quarter of 2022, the Administrators filed an application to transfer the funds back to the Administrators’ control in the U.K.United Kingdom. Subject to certain representations and expectations regarding use and application of the funds to efficiently and expeditiously pay off creditors and bring a timely close to the insolvency administration, the Company decided not to oppose the application, and the $28.3$28.3 million was transferred to the account of the Administrator. In Augustthe nine months ended September 30, 2023 and 2022, the Administrator paid the Company a partial return of its interest in Orbit of £4.6£2.0 million (equivalent to $5.4 million). $2.6 million on the dates of transfer) and £4.6 million (equivalent to $5.4 million on the dates of transfer), respectively.The Company believes that the funds remaining with the Administrators are more than sufficient to pay any remaining creditors of Orbit (with any surplus, which the Company expects to be significant, to be returned to the Company).
The Company determined that exitingthe discontinued operations in the United Kingdomof Orbit represented a strategic shift that willwould have a major effect on the Company's operations and financial statements and accordingly, the results of operations and related cash flows are presented as discontinued operations for all periods presented. The assets and liabilities of the discontinued operations have beenare presented separately and are reflected within assets and liabilities from discontinued operations in the accompanying consolidated balance sheets as of September 30, 20222023 and December 31, 2021.2022.
As a result of loss of control, the Company deconsolidated Orbit effective December 1, 2021 and estimated the remaining liability related to its ownership of Orbit.
The summary of results of operations of theThere were no income or loss from discontinued operations were as follows:recognized in the three months ended September 30, 2023
Three Months Ended September 30, 2021 | Nine Months Ended September 30, 2021 | |||||||
(in thousands) | ||||||||
Total revenues | $ | 18,036 |
| $ | 67,214 |
| ||
Cost of revenues | 17,070 |
|
| 58,814 | ||||
Gross profit | 966 |
|
| 8,400 | ||||
Selling, general and administrative expenses | 10,724 | 22,447 | ||||||
Impairment of assets | 6,650 | 6,650 | ||||||
Net loss before taxes | (16,408 | ) | (20,697 | ) | ||||
Provision for income taxes | 28 | 43 | ||||||
Loss from discontinued operations, net of taxes | $ | (16,436 | ) |
| $ | (20,740 | ) |
and 2022. In the nine months ended September 30, 2023, the Company recognized income from discontinued operation, net of taxes $5.4 million, mainly from the increase in the estimated value of our investments in Orbit due to a change in estimated net assets of Orbit after the Administrator settles the remaining liabilities. There was no income or loss from discontinued operations recognized in the nine months ended September 30, 2022. The carrying value of the Company's interest in Orbit was net investments of $13.217.5 million and $13.8 million as of September 30, 20222023 and net liabilities of $30.8 million as December 31, 2021.2022, respectively. The carrying value was determined by estimating the net realizable values of assets and fair values of remaining liabilities which approximates its carrying values as of September 30, 20222023 and December 31, 2021.2022.
The following table presents a summary of cash flows of thePrior to being treated as discontinued operations forand consolidated, the Nine Months Ended September 30, 2021:
Net loss | $ | (20,740 | ) | |
Non-cash items |
|
| 15,630 | |
Changes in assets and liabilities | 6,880 | |||
Cash flows from operating activities of discontinued operations | $ | 1,770 |
The assets and liabilities of Orbit were included in the GRE International segment.
Divestiture of Genie Japan
In March 2021, the Company initiated a plan to sell certain assets and liabilities of Genie Japan. In the first quarter of 2021, certain assets and liabilities of Genie Japan were reclassified as assets and liabilities held for sale and reported at lower of fair value less cost to sell and net book value.
On April 26, 2021, the Company entered into an Equity Purchase Agreement ("Purchase Agreement") with Hanhwa Q Cells Japan Co., Ltd. ("Hanhwa"), pursuant to which, the Company agreed to sell its interest in Genie Japan for ¥570.0 million (equivalent to approximately $5.3 million at April 26, 2021) subject to certain terms and conditions set forth in the Purchase Agreement. On May 11, 2021, upon the terms and subject to the conditions of Purchase Agreement, the Company completed the divestiture of Genie Japan for an aggregate cash consideration of ¥570.0 million (equivalent to approximately $5.2 million at May 11, 2021). Hanhwa also assumed the outstanding balance of the loan payable of Genie Japan. The Company paid $0.6 million of commission to certainCompany's former employees of Genie Japan and recognized a pre-tax gain of $4.2 million from the divestiture.
The carrying values of assets and liabilities divested at May 11, 2021 which were previously classified as held for sale included the following:
(in thousands) |
|
|
| |
Cash | $ | 83 | ||
Trade accounts receivable |
| 1,737 |
| |
Prepaid and other current assets |
|
| 391 |
|
Intangible (license) | 540 | |||
Other noncurrent assets | 296 | |||
Accounts payables |
|
| (611 | ) |
Accrued expenses and other current liabilities |
|
| (588 | ) |
Loan payable | (1,372 | ) | ||
Cumulative translation adjustment |
|
| (181 | ) |
Noncontrolling interest | 114 | |||
Net assets |
| $ | 409 |
|
The assets and liabilities of Genie Japan were included in GRE International segment.
15 |
Note 6—Fair Value Measurements
The following table presents the balance of assets and liabilities measured at fair value on a recurring basis:
|
| Level 1 (1) |
| Level 2 (2) |
| Level 3 (3) |
|
| Total |
| Level 1 (1) | Level 2 (2) | Level 3 (3) | Total | ||||||||||||||||||
|
| (in thousands) |
| (in thousands) | ||||||||||||||||||||||||||||
September 30, 2022 |
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||
September 30, 2023 | ||||||||||||||||||||||||||||||||
Assets: |
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||
Marketable equity securities | $ | 471 | $ | — | $ | — | $ | 471 | $ | 411 | $ | — | $ | — | $ | 411 | ||||||||||||||||
Derivative contracts |
| $ | 7,607 |
| $ | — |
| $ | — |
|
| $ | 7,607 |
| $ | 1,595 | $ | — | $ | — | $ | 1,595 | ||||||||||
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||
Derivative contracts |
| $ | 1,217 |
| $ | — |
| $ | — |
|
| $ | 1,217 |
| $ | 2,392 | $ | — | $ | — | $ | 2,392 | ||||||||||
December 31, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||
December 31, 2022 | ||||||||||||||||||||||||||||||||
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||
Marketable equity securities | $ | 1,336 | $ | — | $ | — | $ | 1,336 | $ | 490 | $ | — | $ | — | $ | 490 | ||||||||||||||||
Derivative contracts |
| $ | 1,579 |
| $ | 44 |
| $ | — |
|
| $ | 1,623 |
| $ | 4,060 | $ | — | $ | — | $ | 4,060 | ||||||||||
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||
Derivative contracts |
| $ | 684 |
| $ | — |
| $ | — |
|
| $ | 684 |
| $ | 2,857 | $ | — | $ | — | $ | 2,857 |
(1)(1) – quoted prices in active markets for identical assets or liabilities
(2)(2) – observable inputs other than quoted prices in active markets for identical assets and liabilities
(3)(3) – no observable pricing inputs in the market
The Company’s derivative contracts consist of natural gas and electricity put and call options and swaps. The underlying asset in the Company’s put and call options is a forward contract. The Company’s swaps are agreements whereby a floating (or market or spot) price is exchanged for a fixed price over a specified period.
The Company did not have any transfers of assets or liabilities between Level 1, Level 2 or Level 3 of the fair value measurement hierarchy during the nine months ended September 30, 2022 and 2021.2023 or 2022.
16 |
Fair Value of Other Financial Instruments
The estimated fair value of the Company’s other financial instruments was determined using available market information or other appropriate valuation methodologies. However, considerable judgment is required in interpreting this data to develop estimates of fair value. Consequently, the estimates are not necessarily indicative of the amounts that could be realized or would be paid in a current market exchange.
Restricted cash—short-term, trade receivables, due to IDT Corporation, other current assets and other current liabilities. At September 30, 20222023 and December 31, 2021,2022, the carrying amounts of these assets and liabilities approximated fair value. The fair value estimate for restricted cash—short-term was classified as Level 1. The carrying value of other current assets, due to IDT Corporation, and other current liabilities approximated fair value.
Other assets. At September 30, 20222023 and December 31, 2021,2022, other assets included notes receivable. At September 30, 2022,2023, the carrying amount of the notes receivable and loans payable approximated fair value. The fair values were estimated based on the Company’s assumptions, and were classified as Level 3 of the fair value hierarchy.
The primary non-recurring fair value estimates typically are in the context of goodwill impairment testing, which involves Level 3 inputs, and asset impairments (Note 9) which utilize Level 3 inputs.
Concentration of Credit Risks
The Company holds cash, cash equivalents, and restricted cash at several major financial institutions, which may exceed Federal Deposit Insurance Corporation insured limits. Historically, the Company has not experienced any losses due to such concentration of credit risk. The Company’s temporary cash investments policy is to limit the dollar amount of investments with any one financial institution and monitor the credit ratings of those institutions. While the Company may be exposed to credit losses due to the nonperformance of the holders of its deposits, the Company does not expect the settlement of these transactions to have a material effect on its results of operations, cash flows or financial condition.
The following table summarizes the percentage of consolidated trade receivable by customers that equal or exceed 10.0% 10.0% of consolidated net trade receivables at September 30, 20222023 and December 31, 20212022 (no other single customer accounted for 10.0% 10.0% or greater of our consolidated net trade receivable as September 30, 20222023 or December 31, 2021)2022):
| September 30, 2022 |
|
| December 31, 2021 |
| September 30, 2023 | December 31, 2022 | |||||||||
Customer A |
| 15.2 | % |
| 12.5 | % | 21.9 | % | na | % | ||||||
Customer B | 11.0 | na | ||||||||||||||
Customer C | 11.7 | 10.2 |
na—less than 10.0% of consolidated net trade receivables at the relevant date
The following table summarizes the percentage of revenues by customers that equal or exceed 10.0% of consolidated revenues for the three and nine months ended September 30, 2022 and 2021 (no other single customer accounted for 10.0% or greater of our consolidated revenues for the three and nine months ended September 30, 2023 and 2022 (no other single customer accounted for 10.0% or 2021)greater of our consolidated revenues in these periods):
Three Months Ended September 30 | Nine Months Ended September 30 | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||||
Customer A | 11.4 | % | na | % | 11.4 | % |
| na | % | 24.1 | % | na | % | 17.4 | % | na | % | |||||||||||||||
Customer B | 11.6 | na | na | na | na | 11.6 | na | na | ||||||||||||||||||||||||
Customer C | na | 15.8 | na | 12.5 | na | 11.4 | na | 10.4 |
na—less than 10.0% of consolidated revenue in the period
Note 7—Derivative Instruments
The primary risk managed by the Company using derivative instruments is commodity price risk, which is accounted for in accordance with Accounting Standards Codification 815 — Derivatives and Hedging. Natural gas and electricity put and call options and swaps are entered into as hedges against unfavorable fluctuations in market prices of natural gas and electricity. The Company does not apply hedge accounting to these options or swaps, therefore the changes in fair value are recorded in earnings. By using derivative instruments to mitigate exposures to changes in commodity prices, the Company exposes itself to credit risk and market risk. Credit risk is the failure of the counterparty to perform under the terms of the derivative contract. When the fair value of a derivative contract is positive, the counterparty owes the Company, which creates credit risk. The Company minimizes the credit or repayment risk in derivative instruments by entering into transactions with high-quality counterparties. At September 30, 2022,2023, GRE’s swaps and options were traded on the Intercontinental Exchange.
The summarized volume of GRE’s outstanding contracts and options at September 30, 20222023 was as follows (MWh – Megawatt hour and Dth – Decatherm):
Settlement Dates |
| Volume |
| Volume | ||||||||||||
|
| Electricity (in MWH) |
| Gas (in Dth) |
| Electricity (in MWH) | Gas (in Dth) | |||||||||
Fourth quarter 2022 | 13,600 | 454,600 | ||||||||||||||
First quarter 2023 | 22,736 | 691,990 | ||||||||||||||
Second quarter 2023 | 26,496 | 175,250 | ||||||||||||||
Third quarter 2023 | 30,528 | 131,250 | ||||||||||||||
Fourth quarter 2023 | 29,232 | 602,200 | 789,300 | 19,152 | ||||||||||||
First quarter 2024 | 1,360 | 841,300 | 13,040 | 1,137,500 | ||||||||||||
Second quarter 2024 | — | 107,250 | — | — | ||||||||||||
Third quarter of 2024 | 13,520 | 70,950 | 24,208 | — | ||||||||||||
Fourth quarter of 2024 | — | 71,400 | — | — | ||||||||||||
First quarter of 2025 | — | 299,750 | — | 225,000 | ||||||||||||
Second quarter of 2025 | — | 269,100 | — | 227,500 | ||||||||||||
Third quarter of 2025 | — | 236,250 | — | 230,000 | ||||||||||||
Fourth quarter of 2025 | — | 230,000 | — | 230,000 | ||||||||||||
First quarter of 2026 | — | — | — | — | ||||||||||||
Second quarter of 2026 | — | — | — | — | ||||||||||||
Third quarter of 2026 | 3,520 | — | 3,520 | — |
The fair value of outstanding derivative instruments recorded in the accompanying consolidated balance sheets were as follows:
Asset Derivatives |
| Balance Sheet Location |
| September 30, |
| December 31, |
| Balance Sheet Location | September 30, | December 31, | ||||||||||
|
| (in thousands) |
| (in thousands) | ||||||||||||||||
Derivatives not designated or not qualifying as hedging instruments: |
|
|
|
|
|
|
| |||||||||||||
Energy contracts and options1 | Other current assets | $ | 5,700 | $ | 924 | Other current assets | $ | 865 | $ | 2,799 | ||||||||||
Energy contracts and options | Other assets | 1,907 | 699 | Other assets | 730 | 1,261 | ||||||||||||||
Total derivatives not designated or not qualifying as hedging instruments — Assets |
|
| $ | 7,607 |
| $ | 1,623 |
| $ | 1,595 | $ | 4,060 | ||||||||
|
|
|
|
|
| |||||||||||||||
Liability Derivatives |
| Balance Sheet Location |
| September 30, 2022 |
| December 31, 2021 |
| Balance Sheet Location | September 30, 2023 | December 31, 2022 | ||||||||||
|
| (in thousands) |
| (in thousands) | ||||||||||||||||
Derivatives not designated or not qualifying as hedging instruments: |
|
|
|
|
| |||||||||||||||
Energy contracts and options1 | Other current liabilities | $ | 656 | $ | 520 | Other current liabilities | $ | 2,380 | $ | 1,800 | ||||||||||
Energy contracts and options | Other liabilities | 561 | 164 | Other liabilities | 12 | 1,057 | ||||||||||||||
Total derivatives not designated or not qualifying as hedging instruments — Liabilities |
| $ | 1,217 |
| $ | 684 |
| $ | 2,392 | $ | 2,857 |
(1) (1) The Company classifies derivative assets and liabilities as current based on the cash flows expected to be incurred within the following 12 months.
18 |
The effects of derivative instruments on the consolidated statements of operations was as follows:
|
| Amount of Gain Recognized on Derivatives | Amount of (Loss) Gain Recognized on Derivatives | |||||||||||||||||||||||||||||||||
Derivatives not designated or not qualifying as |
| Location of Gain Recognized | Three Months Ended September 30, | Nine Months Ended September 30, | Location of Gain Recognized | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||||||
hedging instruments |
| on Derivatives | 2022 | 2021 | 2022 |
| 2021 | on Derivatives | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||||
|
|
| (in thousands) | (in thousands) | (in thousands) | (in thousands) | ||||||||||||||||||||||||||||||
Energy contracts and options |
| Cost of revenues | $ | 35,011 | $ | 13,795 | $ | 102,060 | $ | 32,845 | Cost of revenues | $ | (4,461 | ) | $ | 35,011 | $ | (21,590 | ) | $ | 102,060 |
Other assets consisted of the following:
September 30, 2022 |
| December 31, 2021 |
| September 30, 2023 |
| December 31, 2022 |
| |||||||||
(in thousands) | (in thousands) | |||||||||||||||
Security deposit |
| $ | 5,085 |
|
| $ | 4,867 |
|
| $ | 7,353 |
|
| $ | 7,341 |
|
Right-of-use assets, net of amortization Security deposits |
|
| 1,556 |
|
|
| 1,656 |
| ||||||||
Right-of-use assets, net of amortization |
|
| 1,874 |
|
| 1,892 |
| |||||||||
Fair value of derivative contracts—noncurrent | 1,907 | 699 | 730 | 1,261 | ||||||||||||
Notes receivables | 1,505 | 115 | ||||||||||||||
Other assets |
|
| 2,922 |
|
|
| 1,880 |
|
|
| 3,193 |
|
|
| 3,362 |
|
Total other assets |
| $ | 12,975 |
|
| $ | 9,217 |
|
| $ | 13,150 |
|
| $ | 13,856 |
|
Note 9—Goodwill and Other Intangible Assets
The table below reconciles the change in the carrying amount of goodwill for the period from January 1, 20222023 to September 30, 2022:2023:
| GRE | Genie Renewables | Total | |||||||||
(in thousands) | ||||||||||||
Balance at January 1, 2022 |
| $ | 9,998 | $ | — | $ | 9,998 | |||||
Additions/deductions during the period | — | — | — | |||||||||
Balance at September 30, 2022 |
| $ | 9,998 | $ | — | $ | 9,998 |
| GRE | Genie Renewables | Total | |||||||||
(in thousands) | ||||||||||||
Balance at January 1, 2023 |
| $ | 9,998 | $ | — | $ | 9,998 | |||||
Additions/deductions during the period | — | — | — | |||||||||
Balance at September 30, 2023 |
| $ | 9,998 | $ | — | $ | 9,998 |
19 |
The table below presents information on the Company’s other intangible assets:
| Weighted Average Amortization Period |
| Gross Carrying Amount |
| Accumulated Amortization |
| Net |
|
| Weighted Average Amortization Period |
|
| Gross Carrying Amount |
| Accumulated Amortization |
| Net |
| ||||||||||||||
(in thousands) | (in thousands) | |||||||||||||||||||||||||||||||
September 30, 2022 |
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||
September 30, 2023 |
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||
Patents and trademarks |
|
| 18.1 years |
| $ | 3,510 |
| $ | (1,098 | ) |
| $ | 2,412 |
|
|
| 18.1 years |
|
| $ | 3,510 |
| $ | (1,325 | ) |
| $ | 2,185 |
| |||
Customer relationships |
|
| 9.0 years |
|
| 1,100 |
|
| (621 | ) |
|
| 479 |
|
|
| 9.0 years |
|
|
| 1,100 |
|
| (744 | ) |
|
| 356 |
| |||
Licenses |
| 10.0 years |
|
|
| 479 |
|
| (138 | ) |
|
| 341 |
|
| 10.0 years |
|
|
| 479 |
|
| (186 | ) |
|
| 293 |
| ||||
Total |
|
|
| $ | 5,089 |
| $ | (1,857 | ) |
| $ | 3,232 |
|
|
|
|
| $ | 5,089 |
| $ | (2,255 | ) |
| $ | 2,834 |
| |||||
December 31, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||
Trademark |
|
| 18.1 years |
| $ | 3,510 |
| $ | (926 | ) |
| $ | 2,584 |
| ||||||||||||||||||
December 31, 2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Patent and trademark |
|
| 18.1 years |
|
| $ | 3,510 |
| $ | (1,154 | ) |
| $ | 2,356 |
| |||||||||||||||||
Customer relationships |
|
| 9.0 years |
|
| 1,100 |
|
| (530 | ) |
|
| 570 |
|
|
| 9.0 years |
|
|
| 1,100 |
|
| (652 | ) |
|
| 448 |
| |||
Licenses |
|
| 10.0 years |
|
|
| 479 |
|
| (103 | ) |
|
| 376 |
|
|
| 10.0 years |
|
|
| 479 |
|
| (150 | ) |
|
| 329 |
| ||
Total |
|
|
| $ | 5,089 |
| $ | (1,559 | ) |
| $ | 3,530 |
|
|
|
|
| $ | 5,089 |
| $ | (1,956 | ) |
| $ | 3,133 |
|
Amortization expense of intangible assets was $0.1 million and $0.30.1 million and $0.3 million in the three and nine months ended September 30, 2023, respectively. Amortization expense of intangible assets was $0.1 million and $0.3 million in the three and nine months ended September 30, 2022, respectively. Amortization expense of intangible assets was $0.9 million and $0.3million in the three and nine months ended September 30, 2021, respectively. The Company estimates that amortization expense of intangible assets will be $0.1 million, $0.4 million, $0.4 million, $0.4$0.3 million, $0.3 million and $1.7$1.4 million for the remainder of 2022,2023, and for 2023, 2024, 2025, 2026, 2027 and thereafter, respectively.
Note 10—Accrued Expenses and Other Current Liabilities
Accrued expenses consisted of the following:
| September 30, 2022 |
| December 31, 2021 |
|
| September 30, 2023 |
| December 31, 2022 |
| |||||||
(in thousands) | (in thousands) | |||||||||||||||
Renewable energy |
| $ | 24,345 |
|
| $ | 23,247 |
|
| $ | 26,844 |
|
| $ | 18,444 |
|
Liability to customers related to promotions and retention incentives |
|
| 9,031 |
|
| 9,036 |
|
|
| 7,011 |
|
| 9,111 |
| ||
Payroll and employee benefit | 5,430 | 3,297 | 5,062 | 4,251 | ||||||||||||
Other accrued expenses |
|
| 2,997 |
|
|
| 2,425 |
|
|
| 5,922 |
|
|
| 3,853 |
|
Total accrued expenses |
| $ | 41,803 |
|
| $ | 38,005 |
| $ | 44,839 | $ | 35,659 |
|
Other current liabilities consisted of the following:
| September 30, 2023 |
|
| December 31, 2022 |
| |||
(in thousands) | ||||||||
Contract liabilities |
| $ | 4,619 |
|
| $ | 1,759 |
|
Current hedge liabilities | 2,380 | 1,800 | ||||||
Current lease liabilities | 323 | 250 | ||||||
Others |
|
| 1,302 |
|
|
| 740 |
|
Total other current liabilities | $ | 8,624 | $ | 4,549 |
|
20 |
|
| September 30, 2022 |
| December 31, 2021 |
| September 30, 2023 |
| December 31, 2022 | ||||||
(in thousands) | (in thousands) | |||||||||||||
ROU Assets | $ | 1,556 | $ | 1,656 | $ | 1,874 | $ | 1,892 | ||||||
Current portion of operating lease liabilities | 249 | 229 | 323 | 250 | ||||||||||
Noncurrent portion of operating lease liabilities | 1,385 | 1,495 | 1,645 | 1,699 | ||||||||||
Total |
| $ | 1,634 |
| $ | 1,724 |
| $ | 1,968 |
| $ | 1,949 |
Nine Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
2022 | 2021 | 2023 | 2022 | |||||||||||
Cash paid for amounts included in the measurement of lease liabilities: | (in thousands) | (in thousands) | ||||||||||||
Operating cash flows from operating activities | $ | 380 | $ | 551 | $ | 487 | $ | 380 | ||||||
ROU assets obtained in the exchange for lease liabilities | ||||||||||||||
Operating leases | $ | — | $ | — | $ | 237 | $ | — |
(in thousands) | ||||||||
Remainder of 2022 |
| $ | 160 |
| ||||
2023 | 352 | |||||||
Remainder of 2023 |
| $ | 141 |
| ||||
2024 | 319 | 438 | ||||||
2025 | 245 | 369 | ||||||
2026 | 239 | 272 | ||||||
2027 | 277 | |||||||
Thereafter | 832 | 1,616 | ||||||
Total future lease payments | 2,147 | 3,113 | ||||||
Less imputed interest | 513 | 1,145 | ||||||
Total operating lease liabilities |
| $ | 1,634 |
|
| $ | 1,968 |
|
21 |
Note 12—Equity
Dividend Payments
The following table summarizes the quarterly dividends paiddeclared by the Company during the nine months ended September 30, 20222023 (in thousands, except per share amounts):
Declaration Date |
| Dividend Per Share |
|
| Aggregate Dividend Amount |
|
| Record Date |
| Payment Date | ||
|
|
|
|
|
|
| ||||||
Series 2012-A Preferred Stock ("Preferred Stock") | ||||||||||||
January 14, 2022 |
| $ | 0.1594 |
|
| $ | 370 |
|
| February 7, 2022 |
| February 15, 2022 |
April 14, 2022 | 0.1594 | 370 | May 6, 2022 | May 16, 2022 | ||||||||
May 12, 2022 | 0.1296 | 31 | May 12, 2022 | June 13, 2022 | ||||||||
July 14, 2022 | $ | 0.1594 | $ | 333 | August 8, 2022 | August 15, 2022 | ||||||
Class A Common Stock and Class B Common Stock | ||||||||||||
February 7, 2022 | $ | 0.0750 | $ | 1,934 | February 22, 2022 | March 1, 2022 | ||||||
May 3, 2022 | 0.0750 | 1,964 | May 20, 2022 | May 31, 2022 | ||||||||
August 3, 2022 | 0.0750 | 1,892 | August 18, 2022 | August 26, 2022 |
Declaration Date |
| Dividend Per Share |
|
| Aggregate Dividend Amount |
|
| Record Date |
| Payment Date | ||
|
|
|
|
|
|
| ||||||
Series 2012-A Preferred Stock ("Preferred Stock") | ||||||||||||
January 12, 2023 |
| $ | 0.1594 |
|
| $ | 157 |
|
| February 7, 2023 |
| February 15, 2023 |
April 17, 2023 | 0.6895 | 370 | May 5, 2023 | May 15, 2023 | ||||||||
Class A Common Stock and Class B Common Stock | ||||||||||||
February 9, 2023 | $ | 0.0750 | $ | 1,951 | February 21, 2023 | March 1, 2023 | ||||||
May 3, 2023 | 0.0750 | 1,958 | May 20, 2023 | May 31, 2023 | ||||||||
August 3, 2022 | 0.0750 | 2,055 | August 14, 2023 | August 21, 2023 |
In March 2021, in light of the losses incurred from the effects of events in Texas and Japan discussed above, the Company suspended the payment of quarterly dividends on its common stock. In Februaryyear ended December 31, 2022, the Company reinstated the quarterly dividends on our Class A and Class B common stock.
On December 31, 2021, The Company accrued Additional Dividends of $0.0848 per share on its Preferred Stock of $0.5301 per share outstanding as of May 5, 2023, equal to $0.2$0.5 million in the aggregate, in respect of the GREGRE's results of operations through December 31, 2021, which the2022. The Company paid these Additional Dividends in May 2022.2023
.
The Company accrued Additional Dividends in respect of the GRE results of operations through September 30, 2022 amounting to $0.1227 per share on its Preferred Stock, equal to $0.1 million for the three months ended September 30, 2022 and $0.3495 per share on its Preferred Stock, equal to $0.3 million for the nine months ended September 30, 2022, The Additional Dividends on Preferred Shares are expected to be paid around May 15, 2023.
On October 13, 2022, the Company’s Board of Directors declared a quarterly Base Dividend of $0.1594 per share on the Preferred Stock for the third quarter of 2022. The dividend will be paid on or about November 15, 2022 to stockholders of record as of the close of business November 8, 2022.
On November 2, 2022,1, 2023, the Company’s Board of Directors declared a quarterly dividend of $0.0750 per share on its Class A common stock and Class B common stock for the thirdsecond quarter of 2022.2023. The dividend will be paid on or about November 21, 20222023 to stockholders of record as of the close of business on November 14, 2022.13, 2023.
The Delaware General Corporation Law allows companies to declare dividends out of “Surplus,” which is calculated by deducting the par value of the company’s stock from the difference between total assets and total liabilities. The Company has elected to record dividends declared against accumulated deficit.
Stock Repurchases and Redemption; Treasury Shares
On March 11, 2013, the Board of Directors of the Company approved a program for the repurchase of up to an aggregate of 7.0 million shares of the Company’s Class B common stock. There were no purchases under this program in the three and nine months ended September 30, 2023 or in the three months ended September 30, 2022,2022. In the nine months ended September 30, 2022, the Company acquired 639,393 shares of Class B common stock under the stock purchase program for an aggregate amount of $4.4 million. In the three months ended September 30, 2021, the Company acquired 230,000 shares Class B common stock under the stock purchase program for an aggregate amount of $1.4 million. In the nine months ended September 30, 2021, the Company acquired 623,000 shares of Class B common stock under the stock purchase program for an aggregate amount of $3.8 million. At September 30, 2022,2023, 4.7 million shares of Class B common stock remained available for repurchase under the stock repurchase program.
As of September 30, 20222023 and December 31, 2021,2022, there were 2.72.9 million and 2.02.7 million outstanding shares of Class B common stock held in the Company's treasury, respectively, with a cost of $18.9$22.5 million and $14.119.0 million, respectively, at a weighted average cost per share of $7.01.$7.63 and $7.03, respectively.
On February 7, 2022, the Board of Directors of the Company authorized a program to redeem up to $1.0 million per quarter of the Company's Preferred Stock at the liquidation preference of $8.50 per share beginning in the second quarter of 2022. In the nine months ended September 30, 2023, the Company redeemed 235,294 shares of Preferred Stock under this program for an aggregate amount of $2.0 million.
On May 3, 2022, the Board of Directors authorized to redeem $2.0the redemption of $2.0 million of the Company's Preferred Stock during the second quarter of 2022. In the three months ended September 30, 2022, the Companyand onJune 13, 2022 redeemed 235,294117,647 Preferred Stock under this program for an aggregate amount of $1.0$2.0 million.
InOn May 16, 2023, the nine months ended September 30, 2022,Company's Board of Directors approved the redemption of all outstanding Preferred Stock on June 16, 2023 (the "Redemption Date") at the liquidation preference of $8.50 per share, together with an amount equal to all dividends accrued and unpaid up to, but not including, the Redemption Date. On the Redemption Date, the Company redeemed 352,941completed the redemption of 748,064 shares of Preferred Stock under this program for an aggregate amount of $3.0$6.5 million and the related accrued dividends of $0.1349 per share equivalent to $0.1 million. Following the redemption, there are no shares of Preferred Stock outstanding, all rights of Preferred Stockholders have terminated, and the Preferred Stock’s ticker symbol, "GNEPRA", has been retired.
22 |
Warrants to Purchase Class B Common Stock
On June 8, 2018, the Company sold to Howard S. Jonas, the Chairman of the Company’s Board of Directors and then the holder of the controlling portion of the Company's common stock, shares of the Company’s Class B common stock and warrants to purchase an additional 1,048,218 shares of the Company’s Class B common stock at an exercise price of $4.77 per share for an aggregate exercise price of $5.0 million. TheIn June 2023, the holders of these warrants will expire in exercised the warrants to purchase 1,048,218 shares of Class B common stock warrants for $5.0 millionJune 2023..
In addition, on June 12, 2018, the Company sold to a third-party investor treasury shares of the Company’s Class B common stock for an aggregate sales price of $1.0 million and warrants to purchase an additional 209,644 shares of the Company’s Class B common stock at an exercise price of $4.77 per share, for an aggregate exercise price of $1.0 million.
In May 2022, athe holder of common stockthese warrants exercised the warrants to purchase 209,644 shares of Class B common stock warrants through a cashlessexercise and the Company issued 72,657 common shares with the remaining 136,987 warrants being cancelled to settlein payment of the exercise price.
As of September 30, 20222023, there were nooutstanding1,048,218 warrants to purchase shares of the Company’sCompany's common stock.
Exercise of Stock Options
In May 2023, Howard S. Jonas exercised options to purchase 256,818 shares of Class B common stock at $through a 4.77cashlessexercise and the Company issued 98,709 per share, allClass B common stock to Howard S. Jonas with the remaining 158,109 Class B Common used for payment of which will expirethe exercise price or retained by the Company to satisfy withholding tax obligations in June 2023connection to the exercise of the options..
Purchase of Equity of Subsidiaries
In September 2021,November 2022, the Company purchased from Howard S. Jonas, the Chairman of the Board of Directors of the Company, Michael Stein, the Chief Executive Officer of the Company, Avi Goldin, the Chief Financial Officer of the Company,a certain employeesemployee 5.1% and consultant an aggregate of 4.3% fully vested interest2.3% interests in GRE InternationalLumo Finland and Lumo Sweden, respectively, by issuing 218,862123,302 shares of the Company's Class B restricted common stock.
In October 2021, the Company purchased from Wes Perry, the Chairman of the Audit Committee of the Company's Board of Directors,stock, which will ratably vest on a 0.2% interest in GEIC by issuing 36,591 of the Company's Class B common stock.bi-annual basis between May 2023 and up to May 2025.
Stock-Based Compensation
The Company’s 2011 Stock Option and Incentive Plan (as amended, the "2011 Plan") is intended to provide incentives to executives, employees, directors and consultants of the Company. Incentives available under the Plan include stock options, stock appreciation rights, limited rights, deferred stock units, and restricted stock. The 2011 Plan expired in 2021 and no new grants are to be issued thereunder, however, outstanding grants are not impacted by the expiration of the plan.
On March 8, 2021, thethe Board of Directors adopted the CompanyCompany's 2021 Stock Option and Incentive Plan (the "2021 Plan"), subject to the approval of the Company's stockholders. In May 2021, the 2021 Plan became effective and replaced the 2011 Plan. Similar to the 2011 Plan, theThe 2021 Plan provides incentives to executives, employees, directors and consultants of the Company. Incentives available under the 2021 Plan includeprovides for grants of stock options, stock appreciation rights, limited stock appreciation rights, deferred stock units, and restricted stock. The Plan is administered by the Compensation Committee of the Company’s Board of Directors. The maximum number of shares reserved for the grant of awards under the 2021 Plan is 1.0 million shares of Class B Common Stock. on May 10, 2023, the Company's stockholders approved an amendment to the 2021 Plan that, among other things, increased the number of shares of the Company’s Class B common stock available for the grant of awards thereunder by 0.5 million shares of Class B Common Stock.
In February 2022, the Company granted certain employees and members of its Board of Directors an aggregate of 290,000 deferred stock units which will vest in two tranches contingent upon the achievement of a specified thirty-day average closing price of the Company's Class B common stock within a specified period of time (the "2022 market conditions") and the satisfaction of service-based vesting conditions. Each deferred stock unit entitles the recipient to receive, upon vesting, up to two shares of Class B common stock of the Company depending on market conditions. The Company used a Monte Carlo simulation model to estimate the grant-date fair value of the awards. Assumptions and estimates utilized in the model include the risk-free interest rate, dividend yield, expected stock volatility based on a combination of the Company’s historical stock volatility. In the second quarter of 2022, a certain portion of the 2022 market condition wasconditions were partially achieved and the Company issued 290,000 shares of its restricted Class B common stock. In February 2023, the remaining portion of the 2022 market conditions was achieved and the Company will issue an additional 290,000 restricted shares of its Class B common stock in May 2023. The restricted shares issued are subject to service-based vesting conditions as described above.
As of September 30, 20222023, there were approximately $4.11.7 million of total unrecognized stock-based compensation costs related to outstanding and unvested equity-based grants. These costs are expected to be recognized over a weighted-average period of approximately 1.61.0 years.
Note 13—Variable Interest Entity
Citizens Choice Energy, LLC (“CCE”), is a REP that resells electricity and natural gas to residential and small business customers in the State of New York. The Company does not own any interest in CCE. Since 2011, the Company has provided CCE with substantially all of the cash required to fund its operations. The Company determined that it has the power to direct the activities of CCE that most significantly impact its economic performance and it has the obligation to absorb losses of CCE that could potentially be significant to CCE on a stand-alone basis. The Company therefore determined that it is the primary beneficiary of CCE, and as a result, the Company consolidates CCE within its GRE segment. The net income or loss incurred by CCE was attributed to noncontrolling interests in the accompanying consolidated statements of operations.
The Company has anhad the option to purchase 100% of the issued and outstanding limited liability company interests of CCE for one dollar plus the forgiveness of $0.5 million that the Company loaned to CCE in October 2015. The option expiresexpired on October 22, 2023.2023 without being exercised by the Company.
Net loss related to CCE and aggregate net funding provided by the Company were as follows:
Three Months Ended September 30, | Nine Months Ended September 30, |
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||||||
(in thousands) | (in thousands) | (in thousands) | (in thousands) | ||||||||||||||||||||||||||||||
Net loss | $ | (336 | ) | $ | (445 | ) | $ | (700 | ) | $ | (818 | ) | $ | (148 | ) | $ | (336 | ) | $ | (167 | ) | $ | (700 | ) | |||||||||
Aggregate provided by the Company, net | $ | (191 | ) | $ | (393 | ) | $ | (268 | ) | $ | (921 | ) | |||||||||||||||||||||
Aggregate funding (provided by) paid to the Company, net | $ | (12 | ) | $ | (191 | ) | $ | 22 | $ | (268 | ) |
Summarized combined balance sheet amounts related to CCE was as follows:
| September 30, |
| December 31, 2021 |
|
| September 30, |
| December 31, 2022 |
| |||||||
(in thousands) | (in thousands) | |||||||||||||||
Assets |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Cash, cash equivalents and restricted cash |
| $ | 256 |
|
| $ | 559 |
|
| $ | 261 |
|
| $ | 295 |
|
Trade accounts receivable |
|
| 349 |
|
|
| 544 |
|
| 226 |
|
| 549 |
| ||
Prepaid expenses and other current assets |
|
| 473 |
|
|
| 367 |
|
| 386 |
|
| 363 |
| ||
Other assets |
|
| 359 |
|
|
| 359 |
|
|
| 360 |
|
|
| 359 |
|
Total assets |
| $ | 1,437 |
|
| $ | 1,829 |
|
| $ | 1,233 |
|
| $ | 1,566 |
|
Liabilities and noncontrolling interests |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Current liabilities |
| $ | 586 |
|
| $ | 547 |
|
| $ | 598 |
|
| $ | 700 |
|
Due to IDT Energy |
|
| 5,936 |
|
|
| 5,668 |
|
| 5,975 |
|
| 5,997 |
| ||
Noncontrolling interests |
|
| (5,085 | ) |
|
| (4,386 | ) |
|
| (5,340 | ) |
|
| (5,131 | ) |
Total liabilities and noncontrolling interests |
| $ | 1,437 |
|
| $ | 1,829 |
|
| $ | 1,233 |
|
| $ | 1,566 |
|
The assets of CCE may only be used to settle obligations of CCE, and may not be used for other consolidated entities. The liabilities of CCE are non-recourse to the general credit of the Company’s other consolidated entities.
24 |
Note 14—Income Taxes
The following table provides a summary of Company's effective tax rate:
| Three Months Ended September 30, | Nine Months Ended September 30, |
| |||||||||
| 2022 | 2021 | 2022 | 2021 |
| |||||||
Reported tax rate | 27.1 | % | 28.9 | % | 27.6 | % | 29.3 | % |
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||
Reported tax rate | 25.7 | % | 27.1 | % | 25.4 | % | 27.6 | % |
The reported tax raterates for the three and nine months ended September 30, 2022 2023 was 27.1%, a slight decreasedecreased compared to the same periodperiods in 2021.2022. The decrease isdecreases are mainly from the change in the mix of tax rates in the jurisdictions where the Company earned taxable income. The decrease in the reported tax rate for the nine months ended September 30, 2022 compared to the same period in 2021 is a result of favorable results of operations in the U.S. and changes in the mix of jurisdictions in which the taxable income was earned which was not offset by income tax benefit in some jurisdictions that had losses due to valuation allowances in those jurisdictions in the prior period.
Note 15—Earnings Per Share
Basic earnings per share is computed by dividing net income or loss attributable to all classes of common stockholders of the Company by the weighted average number of shares of all classes of common stock outstanding during the applicable period. Diluted earnings per share is computed in the same manner as basic earnings per share, except that the number of shares is increased to include restricted stock still subject to risk of forfeiture and to assume exercise of potentially dilutive stock options using the treasury stock method, unless the effect of such increases is anti-dilutive.
The weighted-average number of shares used in the calculation of basic and diluted earnings per share attributable to the Company’s common stockholders consists of the following:
| Three Months Ended September 30, | Nine Months Ended September 30, | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||
(in thousands) | (in thousands) | (in thousands) | (in thousands) | ||||||||||||||||||||||||||
Basic weighted-average number of shares | 25,233 | 25,514 | 25,623 | 25,867 | 26,615 | 25,233 | 25,541 | 25,623 | |||||||||||||||||||||
Effect of dilutive securities: | |||||||||||||||||||||||||||||
Stock options and warrants | 695 | — | 508 | — | 56 | 695 | 49 | 508 | |||||||||||||||||||||
Non-vested restricted Class B common stock | 277 | — | 130 | — | 691 | 277 | 466 | 130 | |||||||||||||||||||||
Diluted weighted-average number of shares | 26,205 | 25,514 | 26,261 | 25,867 | 27,362 | 26,205 | 26,056 | 26,261 |
Unissued vested deferred stock units in three months ended September 30, 2023 pertain to the weighted average of restricted shares of the company's Class B common stock that the Company expects to issue related to satisfaction of 2022 market conditions (see Note 12 — Equity) to the vesting of certain outstanding options.
The following shares were excluded from the diluted earnings per share computations:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||
(in thousands) | (in thousands) | |||||||||||||
Shares underlying options and warrants | — | 665 | 126 | 731 | ||||||||||
Non-vested restricted Class B common stock | — | 27 | — | 33 | ||||||||||
Non-vested deferred stock units | 290 | 610 | 290 | 610 |
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||
(in thousands) | (in thousands) | ||||||||||||||
Shares underlying options | — | — | — | 126 | |||||||||||
Non-vested deferred stock units | — | 290 | — | 290 |
Stock options were excluded from the diluted earnings per share computation for the nine months ended September 30, 2022 and 2021 because the exercise prices of the stock options were greater than the average market prices of the Company's stock during the period.
In the three and nine months ended September 30, 2021, the diluted loss per share computation equals basic loss per share because the Company has a net loss and the impact of the assumed exercise of the stock options and warrants and the vesting of the restricted stock would have been anti-dilutive.
Non-vested deferred stock units were excluded from the basic and diluted weighted average shares outstanding calculation because the market conditionconditions for vesting of those deferred stock units were not met as of September 30, 2022 and 2021.2022.
Note 16—Related Party Transactions
On December 7, 2020, the Company invested $5.0 million to purchase 218,245 shares of Class B common stock of Rafael Holdings, Inc. ("Rafael"). Rafael, a publicly-traded company, is also a related party. Rafael is a former subsidiary of IDT that was spun off from IDT in March 2018. Howard S. Jonas is the Executive Chairman and Chairman of the Board of Directors of Rafael. In connection with the purchase, Rafael issued to the Company warrants to purchase an additional 43,649 shares of Rafael's Class B common stock with an exercise price of $22.91 per share. The warrants had a term expiring on June 6, 2022. The Company exercised the warrants in full on March 31, 2021 for a total exercise price of $1.0 million. TheIn March 2023, the Company does not exercise significant influence oversold 195,501shares of Class B common stock of Rafael for $0.3million. In the operating or financial policiessecond quarter of Rafael. 2023, the Company acquired 150,000 Class B common stock of Rafael for $0.3 million. For the three and nine months ended September 30, 2023, the Company recognized minimal loss in connection with the investment.For the three and nine months ended September 30, 2022, the Company recognized unrealized loss on investment of minimal amount million and $0.9 million, respectively. For the three months ended September 30, 2021, the Company recognized unrealized loss on investment of $5.3 million, in connection with the investments. For the nine months ended September 30, 2021, the Company recognized unrealized gain on investment of $1.1 million, in connection with the investment.At September 30, 2022,2023, the carrying values of investments in theCompany holds 216,393 Class B common stock was $0.5of Rafael with a carrying value of $0.4 million.The Company does not exercise significant influence over the operating or financial policies of Rafael.
The Company was formerly a subsidiary of IDT Corporation (“IDT”). On October 28, 2011, the Company was spun-off by IDT. The Company entered into various agreements with IDT prior to the spin-off including an agreement for certain services to be performed by the Company and IDT. The Company also provides specified administrative services to certain of IDT’s foreign subsidiaries. Howard Jonas is the Chairman of the Board of IDT.
The Company leases office space and parking in New Jersey. Until August 2022, the space was leased from Rafael. The leases expire in April 2025. On August 22, 2022, Rafael completed the sale of the leased office space and parking in New Jersey, including the lease of the Company, to a third-party buyer. The leases expire in April 2025.
The charges for services provided by IDT to the Company, and rent charged by Rafael, net of the charges for the services provided by the Company to IDT, are included in “Selling, general and administrative” expense in the consolidated statements of operations.
Three Months Ended | Nine Months Ended September 30, | Three Months Ended | Nine Months Ended September 30, | |||||||||||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||
| (in thousands) | (in thousands) | (in thousands) | (in thousands) | ||||||||||||||||||||||||||
Amount IDT charged the Company | $ | 276 | $ | 247 | $ | 1,075 | $ | 766 | $ | 225 | $ | 276 | $ | 866 | $ | 1,075 | ||||||||||||||
Amount the Company charged IDT | $ | 34 | $ | 33 | $ | 101 | $ | 105 | $ | 34 | $ | 34 | $ | 101 | $ | 101 | ||||||||||||||
Amount Rafael charged the Company | $ | 39 | $ | 57 | $ | 154 | $ | 170 | $ | — | $ | 39 | $ | — | $ | 154 |
The following table presents the balance of receivables and payables to IDT and Rafael:
| September 30, 2022 |
| December 31, 2021 |
|
| September 30, 2023 |
| December 31, 2022 |
| |||||||
|
| (in thousands) |
|
| (in thousands) |
| ||||||||||
Due to IDT |
| $ | 169 |
|
| $ | 551 |
|
| $ | 144 |
|
| $ | 169 |
|
Due from IDT |
| $ | 34 |
|
| $ | 19 |
|
| $ | 24 |
|
| $ | 34 |
|
Due to Rafael |
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
On August 31, 2018, the Company extended a loan to a former employee for $0.1 million. The loan agreement requires scheduled payments from December 31, 2020 to December 2052. The loan bears the same interest equivalent to a minimum rate, in effect from time to time required by local regulations and is compounded annually. The Company recorded nominal amounts of interest income for the nine months ended September 30, 2022 and 2021 related to this debt. The outstanding balance, including accrued interest was $0.1 million as of September 30, 2022.
The Company obtains insurance policies from several insurance brokers, one of which is IGM Brokerage Corp. (“IGM”). IGM is owned by the mother of Howard S. Jonas and Joyce Mason, who is a Director and Corporate Secretary of the Company. Jonathan Mason, husband of Joyce Mason and brother-in-law of Howard S. Jonas, provides insurance brokerage services via IGM. Based on information the Company received from IGM, the Company believes that IGM received commissions and fees from payments made by the Company (including payments from third party brokers). The Company paid IGM a total of $0.3$0.5 million in 20212022 related to premium of various insurance policies that were brokered by IGM. There was no outstanding payable to IGM was as of September 30, 2022.2023. Neither Howard S. Jonas nor Joyce Mason has any ownership or other interest in IGM other than via the familial relationships with their mother and Jonathan Mason.
26 |
In September and October of 2021, the Company purchased from certain related parties interests in GRE International and GEIC (see Note 12 —Equity).
On February 21, 2022, the Company entered into a Loan and Security Agreement to extend up to 5.5 million New Israel Shekel, or NIS (equivalent to $1.5 million as at September 30, 2022)million) with Natan Ohayon (the "Ohayon Loan"). Natan Ohayon holds a minority interest in Petrocycle Ltd ("Petrocycle"), a subsidiary of the Company. Petrocycle is a preoperating entity engaged in the development of a process to recycle used engine oil into usable gasoline.TheOhayonLoan, which is secured by all assets that Mr. Ohayon acquired using the proceeds of the loan bears a minimum interest as set by the Income Tax Regulations of Israel (3.23% in 2022) and is due, together with the principal amount on or before December 31, 2023. As of September 30,In 2022, the outstanding balance, including accrued interest, of the Ohayon Loan was NIS5.5 Company extended an additional NIS 0.7million (equivalent to $1.5 $0.2million), included in other assets in to Mr.Ohayon related to his share of operations ofPetrocycle. In December 2022, the consolidated balance sheets. Company suspended the development of business operations ofPetrocycle after it was determined that it will not meet the expected results.Petrocycle provided full impairment of its property and equipment, theOhayon Loan and advances to Mr.Ohayon for an aggregate amount of $2.1 million.
Investments in Atid 613
In September 2018, the Company divested a majority interestinterest in Atid Drilling Ltd. in exchange for a 37.5% interest in a contracting drilling company in Israel ("Atid 613") which the Company accountsaccounted for using equity method of accounting. The Company did not recognize any equity in net loss from Atid 613 for the three and nine months ended September 30, 20222023 or 2022. In March 2023, the Company received $0.1 million from Atid 613 for the full settlement of its investments in Atid 613. The Company recognized a minimal gain from settlement of investment included in other income (loss), net in its consolidated statements of operations for the three and 2021.nine months ended September 30, 2023. The carrying value of the Company's investments in Atid was $0.1 million at September 30, 2022 and December 31, 20212022 included in other noncurrent assets in the consolidated balance sheets.
The Company also entered into a Shareholder Agreement with Atid 613's other shareholders to govern certain issues regarding management of the new company. Under the Shareholder Agreement, among other things, a Company subsidiary agreed to make available to Atid 613 working capital financing up to $0.4 million ("Credit Facility"). Any outstanding borrowing under the Credit Facility would bear interest at a variable rate as described in the Shareholder Agreement. As of September 30, 2022, the outstanding balance of Credit Facility was nil.
On August 12, 2019, the Company, together with the other shareholders of Atid 613 signed a Funding Agreement to provide aggregate loans to Atid 613 in an amount of up to NIS5.1 million (equivalent to $1.4 million at September 30, 2022), including the Company's commitment to extend up to NIS1.9 million (equivalent to $0.5 million at September 30, 2022) of such amount. In August 2019, the Company extended NIS0.8 million (equivalent to $0.2 million) in loans. The loans which are secured by Atid 613’s assets bore no interest until March 1, 2020 and bear interest at 5.5% for all subsequent periods. In May 2021, Atid 613 paid the outstanding balance of the loan of $0.2 million. At September 30, 2022, the balance of loan receivables from Atid 613 was nil.
The Company has two reportable business segments: GRE and Genie Renewables. Prior to the third quarter 2022, the Company had a third segment, GRE International. Following the discontinuance of operations ofLumo Finland andLumo Sweden, in third quarter of 2022, GRE International ceased to be a segment and the remaining assets and liabilities and results of continuing operations of GRE International were combined with corporate. There are no other changes in other reportable segments.
The Company has two reportable business segments: GRE and Genie Renewables (formerly Genie Energy Services, or GES). GRE owns and operates REPs, including IDT Energy, Residents Energy, TSE, Southern Federal and Mirabito. GRE's REP businesses resell electricity and natural gas to residential and small business customers in the Eastern and Midwestern United States and Texas. Genie Renewables designs, manufactures and distributes solar panels, offers energy brokerage and advisory services and also sells third-party products to customers. Corporate costs include unallocated compensation, consulting fees, legal fees, business development expenses and other corporate-related general and administrative expenses. Corporate does not generate any revenues, nor does it incur any cost of revenues.
The Company’s reportable segments are distinguished by types of service, customers and methods used to provide their services. The operating results of these business segments are regularly reviewed by the Company’s chief operating decision-maker.
The accounting policies of the segments are the same as the accounting policies of the Company as a whole. The Company evaluates the performance of its business segments based primarily on income (loss) from operations. There are no significant asymmetrical allocations to segments.
27 |
Operating results for the business segments of the Company were as follows:
(in thousands) |
| GRE | Genie Renewables |
|
| Corporate |
|
| Total |
|
| GRE | Genie Renewables |
|
| Corporate |
|
| Total |
| |||||||||||
Three Months Ended September 30, 2023 | |||||||||||||||||||||||||||||||
Revenues | $ | 120,313 | $ | 4,736 | $ | — | $ | 125,049 | |||||||||||||||||||||||
Income (loss) from operations | 21,998 | (2,051 | ) | (2,061 | ) | 17,886 | |||||||||||||||||||||||||
Depreciation and amortization | 83 | 12 | — | 95 | |||||||||||||||||||||||||||
Stock-based compensation | 242 | 9 | 398 | 649 | |||||||||||||||||||||||||||
Provision for doubtful accounts receivables | 350 | — | — | 350 | |||||||||||||||||||||||||||
Provision for (benefit from) income taxes | 5,985 | (318 | ) | (649 | ) | 5,018 | |||||||||||||||||||||||||
Three Months Ended September 30, 2022 | |||||||||||||||||||||||||||||||
Revenues | $ | 79,917 | $ | 1,368 | $ | — | $ | 81,285 | $ | 79,917 | $ | 1,368 | $ | — | $ | 81,285 | |||||||||||||||
Income (loss) from operations | 27,415 | (1,503 | ) | (2,374 | ) | 23,538 | 27,415 | (1,503 | ) | (2,374 | ) | 23,538 | |||||||||||||||||||
Depreciation and amortization | 83 | 13 | — | 96 | 83 | 13 | — | 96 | |||||||||||||||||||||||
Stock-based compensation | 238 | — | 475 | 713 | 238 | — | 475 | 713 | |||||||||||||||||||||||
Provision for (benefit from) income taxes | 7,008 | — | (526 | ) | 6,482 | 7,008 | — | (526 | ) | 6,482 | |||||||||||||||||||||
Three Months Ended September 30, 2021 | |||||||||||||||||||||||||||||||
Nine Months Ended September 30, 2023 | |||||||||||||||||||||||||||||||
Revenues | $ | 86,317 | $ | 1,338 | $ | — | $ | 87,655 | $ | 311,458 | $ | 12,329 | $ | — | $ | 323,787 | |||||||||||||||
Income (loss) from operations | 19,714 | (203 | ) | (2,048 | ) | 17,463 | 56,862 | (4,477 | ) | (8,189 | ) | 44,196 | |||||||||||||||||||
Depreciation and amortization | 90 | 12 | — | 102 | 248 | 38 | — | 286 | |||||||||||||||||||||||
Stock-based compensation | 155 | — | 332 | 487 | 790 | 19 | 1,445 | 2,254 | |||||||||||||||||||||||
Provision for income taxes | 3,481 | — | 17 | 3,498 | |||||||||||||||||||||||||||
Provision for doubtful accounts receivables | 1,722 | — | — | 1,722 | |||||||||||||||||||||||||||
Provision for (benefit from) income taxes | 16,004 | (1,107 | ) | (1,946 | ) | 12,951 | |||||||||||||||||||||||||
Nine Months Ended September 30, 2022 | |||||||||||||||||||||||||||||||
Revenues | $ | 226,961 | $ | 7,189 | $ | — | $ | 234,150 | |||||||||||||||||||||||
Income (loss) from operations | 72,004 | (2,500 | ) | (7,232 | ) | 62,272 | |||||||||||||||||||||||||
Depreciation and amortization | 253 | 35 | — | 288 | |||||||||||||||||||||||||||
Stock-based compensation | 714 | — | 1,518 | 2,232 | |||||||||||||||||||||||||||
Provision for (benefit from) income taxes | 18,546 | — | (1,755 | ) | 16,791 |
Nine Months Ended September 30, 2022 | ||||||||||||||||
Revenues | $ | 226,961 | $ | 7,189 | $ | — | $ | 234,150 | ||||||||
Income (loss) from operations | 72,004 | (2,500 | ) | (7,232 | ) | 62,272 | ||||||||||
Depreciation and amortization | 253 | 35 | 1 | 289 | ||||||||||||
Stock-based compensation | 714 | — | 1,518 | 2,232 | ||||||||||||
Provision for (benefit from) income taxes | 18,546 | — | (1,755 | ) | 16,791 | |||||||||||
Nine Months Ended September 30, 2021 | ||||||||||||||||
Revenues | $ | 243,960 | $ | 6,170 | $ | 3,930 | $ | 254,060 | ||||||||
Income (loss) from operations | 26,427 | 690 | (8,837 | ) | 18,280 | |||||||||||
Depreciation and amortization | 295 | 34 | 14 | 343 | ||||||||||||
Stock-based compensation | 503 | — | 1,061 | 1,564 | ||||||||||||
Provision for income taxes | 6,930 | 128 | 91 | 7,149 |
Total assets for the business segments of the Company were as follows:follows
(in thousands) |
| GRE | Genie Renewables |
|
| Corporate |
|
| Total |
| ||||||
Total assets: |
|
|
|
|
|
|
|
|
|
| ||||||
September 30, 2022 |
| $ | 172,931 | $ | 7,959 |
|
| $ | 78,966 |
|
| $ | 259,856 |
| ||
December 31, 2021 | 174,442 | 3,946 | 51,077 | 229,465 |
(in thousands) |
| GRE | Genie Renewables |
|
| Corporate |
|
| Total |
| ||||||
Total assets: |
|
|
|
|
|
|
|
|
|
| ||||||
September 30, 2023 |
| $ | 233,720 | $ | 25,506 |
|
| $ | 56,461 |
|
| $ | 315,687 |
| ||
December 31, 2022 | 191,839 | 12,191 | 73,585 | 277,615 |
The total assets of corporate segment includes total assets of discontinued operations of Orbit, Lumo Finland and Lumo Sweden with aggregate net book value of $62.7$41.5 million and $34.4$55.0 million at September 30, 20222023 and December 31, 2021,2022, respectively.
28 |
Note 18 — Commitments and Contingencies
Legal Proceedings
Illinois
On September 29, 2023, the Attorney General of the State of Illinois filed a complaint against Residents Energy in the Circuit Court of Cook County, Illinois, Chancery Division.The Complaint alleges several counts of violations of the Illinois Consumer Fraud and Deceptive Business Practices Act, 815 ILCS 505/1 et seq., and the Illinois Telephone Solicitations Act, 815 ILCS 413/1 et seq., in connection with Residents Energy’s marketing practices, and seeks monetary damages to redress any resulting losses alleged to have been incurred by customers, civil penalties for certain alleged violations in the amount of $50.0 thousand per violation, and other forms of injunctive and equitable relief to prevent future violations.The Company denies these allegations and intends to vigorously defend itself against any and all claims. As of September 30, 2023, there is insufficient basis to deem any loss probable or to assess the amount of any possible loss. For the three and nine months ended September 30, 2023, Resident Energy's gross revenues from sales in Illinois were $13.5 million and $37.5 million, respectively. For the three and nine months ended September 30, 2022, Resident Energy's gross revenues from sales in Illinois were $8.2 million and $22.6 million, respectively.
Other
The Company may from time to time be subject to legal proceedings that arise in the ordinary course of business. Although there can be no assurance in this regard, the Company does not expect any of those legal proceedings to have a material adverse effect on the Company’s results of operations, cash flows or financial condition.
Refer to Note 5—Discontinued Operations and Divestiture, for discussion related to the administration of Orbit.
Agency and Regulatory Proceedings
From time to time, the Company receives inquiries or requests for information or materials from public utility commissions or other governmental regulatory or law enforcement agencies related to investigations under statutory or regulatory schemes, and the Company responds to those inquiries or requests. The Company cannot predict whether any of those matters will lead to claims or enforcement actions or whether the Company and the regulatory parties will enter into settlements before a formal claim is made.
State of Connecticut Public Utilities Regulatory Authority
Town Square
On September 19, 2018, the State of Connecticut Public Utilities Regulatory Authority (“PURA”) commenced an investigation into Town Square following customer complaints of allegedly misleading and deceptive sales practices on the part of Town Square. The Connecticut Office of Consumer Counsel subsequently joined in the investigation. On June 17, 2020, PURA notified Town Square that it was advancing its investigation by assigning Prosecutorial staff for the purpose of investigating Town Square’s compliance with licensed electric supplier billing, marketing, and licensing requirements, and, if appropriate, facilitating settlement discussions among the parties.
Although Town Square denies any basis for those complaints and any wrongdoing on its part, in July 2021, the parties settled the dispute. Pursuant to the terms of the settlement agreement, Town Square paid $0.4 million.Town Square has also agreed to voluntarily refrain from in-person marketing activities in Connecticut for a period of 15 months. For the three and six months ended September 30, 2022, Town Square’s gross revenues from sales in Connecticut was $6.0 million and $14.1 million, respectively.
Residents Energy
In August 2020, Residents Energy began marketing retail energy services to Connecticut. For the year ended December 31, 2021, Residents Energy's gross revenues from sales in Connecticut was $0.2 million. During the fourth quarter of 2020, the enforcement division of PURA contacted Residents Energy concerning customer complaints received in connection with alleged door-to-door marketing activities in violation of various rules and regulations. On March 12, 2021, the enforcement division filed a motion against Resident Energy with the adjudicating body of PURA, seeking the assessment of $1.5 million in penalties, along with a suspension of license, auditing of marketing practices upon reinstatement and an invitation for settlement discussions.
In June 2021, the parties settled the dispute. Pursuant to the terms of the settlement agreement, Residents Energy paid $0.3 million and volunteered to withdraw from the market in Connecticut for a period of 36 months.
Other Reviews or Investigations
From time to time regulators may initiate reviews, compliance checks or issue subpoenas for information as means to evaluate the Company and its subsidiaries’ compliance with applicable laws, rules, regulations and practices.
On October 25, 2019, the Office of the Attorney General of the State of Illinois ("IL AG") notified Residents Energy (by way of subpoena) that it is conducting an investigation to assess compliance with the Illinois Consumer Fraud and Deceptive Business Practices Act. The notice was issued in the form of a subpoena in the course of the foregoing. The Company, which has responded as required, has challenged the merits of the subpoena and investigation. Residents Energy denies any wrongdoing on its part. As of September 30, 2022, no claims or demands have been made against Residents Energy by the IL AG, and there is insufficient basis to deem any loss probable or to assess the amount of any possible loss. For the three and nine months ended September 30, 2022, Resident Energy’s gross revenues from sales in Illinois was $8.2 million and $22.6 million, respectively.
29 |
In response to certain customers complaints, the State of Maine Public Utility Commission ("MPUC") has opened a review of the door to door marketing practices of Town Square. In connection with the review, the MPUC has requested information from Town Square demonstrating compliance in the form of an order to show cause as to why its marketing practices are in compliance and it should be permitted to continue licensed operations in Maine. In August 2021, the parties settled the dispute without any obligation for payment by Town Square. In connection with the settlement, Town Square has agreed to voluntarily refrain from door-to-door marketing activities in Maine through June 30, 2023, and to voluntarily refrain from outbound telemarketing to obtain new residential customers for a period of six months, along with certain compliance procedures.For the three and nine months ended September 30, 2022, Town Square’s gross revenues from sales in Maine was $0.5 million and $1.3million, respectively.
Other Commitments
Purchase Commitments
The Company had future purchase commitments of $133.8170.4 million at September 30, 2022,2023, of which $103.7148.1 million was for future purchase of electricity. The purchase commitments outstanding as of September 30, 20222023 are expected to be paid as follows:
(in thousands) |
|
|
|
|
|
| ||
Remainder of 2022 |
| $ | 29,463 |
| ||||
2023 |
|
| 75,871 |
| ||||
Remainder of 2023 |
| $ | 50,374 |
| ||||
2024 |
|
| 24,670 |
|
|
| 84,147 |
|
2025 | 3,934 |
|
| 33,579 |
| |||
2026 | — | 2,262 | ||||||
2027 | — | |||||||
Thereafter |
|
| — |
|
|
| — |
|
Total payments |
| $ | 133,938 |
|
| $ | 170,362 |
In the three months ended September 30, 20222023, the Company purchased $19.631.2 million and $4.22.1 million of electricity and renewable energy credits, respectively, under these purchase commitments. In the nine months ended September 30, 20222023, the Company purchased $34.332.6 million and $15.713.7 million of electricity and renewable energy credits, respectively, under these purchase commitments. In the three months ended September 30, 20212022, the Company purchased $10.719.6 million and $8.54.2 million of electricity and renewable energy credits, respectively, under these purchase commitments. In the nine months ended September 30, 20212022, the Company purchased $10.4$34.3 million and $16.4$15.7 million of electricity and renewable energy credits, respectively, under these purchase commitments.
Renewable Energy Credits
GRE must obtain a certain percentage or amount of its power supply from renewable energy sources in order to meet the requirements of renewable portfolio standards in the states in which it operates. This requirement may be met by obtaining renewable energy credits that provide evidence that electricity has been generated by a qualifying renewable facility or resource. At September 30, 2022, 2023, GRE had commitments to purchase renewable energy credits of $30.122.3 million.
Performance Bonds and Unused Letters of Credit
GRE has performance bonds issued through a third party for certain utility companies and for the benefit of various states in order to comply with the states’ financial requirements for REPs. At September 30, 2022,2023, GRE had aggregate performance bonds of $15.219.4 million outstanding and minimal amount of unused letters of credit.
BP Energy Company Preferred Supplier Agreement
Certain of GRE’s REPs are party to an Amended and Restated Preferred Supplier Agreement with BP, which is to be in effect through November 30, 2023.2026. Under the agreement, the REPs purchase electricity and natural gas at market rate plus a fee. The obligations to BP are secured by a first security interest in deposits or receivables from utilities in connection with their purchase of the REPs’ customer’s receivables, and in any cash deposits or letters of credit posted in connection with any collateral accounts with BP. The ability to purchase electricity and natural gas under this agreement is subject to satisfaction of certain conditions including the maintenance of certain covenants. At September 30, 2022,2023, the Company was in compliance with such covenants. At September 30, 2022,2023, restricted cash—short-term of $0.40.3 million and trade accounts receivable of $46.865.6 million were pledged to BP as collateral for the payment of trade accounts payable to BP of $46.819.8 million at September 30, 2022.2023.
30 |
Note 19—Debt
Loan with Tokyo Star Bank
On May 13, 2020, Genie Japan entered into a Loan Agreement with Tokyo Star Bank for a ¥150.0 million (equivalent to $1.4 million) short-term credit facility ("May 2020 Loan") with maturity date of November 13, 2020. On November 13, 2020, Genie Japan and Tokyo Star Bank amended the May 2020 Loan to extend the maturity date to May 13, 2021. Genie Japan provided a letter of credit issued by JPMorgan Chase in the amount of ¥150.0 million (equivalent to $1.4 million) as collateral. The outstanding principal amount incurred interest at 3.0% per annum and was payable monthly.In May 2021, the Company completed the divestiture of Genie Japan including balance of the May 2020 Loan (see Note 5)
Credit Agreement with JP Morgan Chase Bank
On December 13, 2018, the Company entered into a Credit Agreement with JPMorgan Chase Bank (“Credit Agreement”). On December 23, 2021,27, 2022, the Company entered into the third amendment of its existing Credit Agreement to extend the maturity date to December 31, 2022.2023. The Company continues to have the aggregate principal amount of $5.0was reduced to $3.0 million credit line facility (“Credit Line”). The Company pays a commitment fee of 0.1% per annum on the unused portion of the Credit Line as specified in the Credit Agreement. The borrowed amounts will be in the form of letters of credit which will bear interest of 1.0% per annum. The Company will also pay a fee for each letter of credit that is issued equal to the greater of $500 or 1.0% of the original maximum available amount of the letter of credit. The Company agreed to deposit cash in a money market account at JPMorgan Chase Bank as collateral for the line of credit equal to $5.1$3.1 million. As of September 30, 2022,2023, there are no letters of credit issued by JP Morgan Chase Bank. At September 30, 2022,2023, the cash collateral of $5.2$3.2 million was included in restricted cash—short-term in the consolidated balance sheet.
Note 20—Recently Issued Accounting Standards
In June 2016, the FASB issued ASU No. 2016-13, Measurement of Credit Losses on Financial Instruments, that changes the impairment model for most financial assets and certain other instruments. For receivables, loans and other instruments, entities will be required to use a new forward-looking “expected loss” model that generally will result in the earlier recognition of allowance for losses. For available-for-sale debt securities with unrealized losses, entities will measure credit losses in a manner similar to current practice, except the losses will be recognized as allowances instead of reductions in the amortized cost of the securities. In addition, an entity will have to disclose significantly more information about allowances, credit quality indicators and past due securities. The new provisions will be applied as a cumulative-effect adjustment to retained earnings. The Company will adoptadopted the new standard on January 1, 2023. The Company is currently evaluating the requirements of this guidance and has not yet determined the2023 with no significant impact ofon its adoption on the Company's consolidated financial statements.
Note 21—Subsequent Event
Note 21—SubseAcquisition of Solar System Facilitiesquent Events
On November 3, 2023, the Company acquired from OCH Holding Company and Entrust Green Initiative Fund (“Sellers”), LLC, a 100% interest in ten special purpose entities that own and operate solar system facilities in Ohio and Michigan. The Company paid a total of $7.5 million, including $1.0 million being held in escrow to be released to the Sellers upon satisfaction of the conditions set forth in the related purchase agreement.
On November 3, 2023, the Company also signed an agreement to purchase from the Sellers another special purpose entity that owns and operates a solar system facility in Indiana, for $1.3 million, subject to the satisfaction of certain closing conditions.
The acquisitions will be accounted for as asset acquisitions under ASC 805, Business Combinations. The Company will provide details of the assets acquired in the Company’s Annual Report on Form 10-K for the year ending December 31, 2023.
Lumo Finland Administration
In October 2022,2023, the Company declared its exercisereceived notice from the Lumo Administrators of its rightsrecovery claims against (i) Lumo Sweden pertaining to redeem 986,400 sharesthe distribution of the outstanding Preferred Stockproceeds related to Lumo Sweden's swap instruments, and (ii) the Company based on November 15, 2022 (the "Redemption Date") at a price,guarantee provided to a third party. The Company disputes these claims, has engaged counsel and intends to vigorously defend against the claims. At this time, there is insufficient basis to deem any loss probable or to assess the amount of $8.50 per share (an aggregate of $8.4 million), together with an amount equal to all dividends accrued and unpaid up to, but not including the Redemption Date. any possible loss.
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The following following information should be read in conjunction with the accompanying consolidated financial statements and the associated notes thereto of this Quarterly Report, and the audited consolidated financial statements and the notes thereto and our Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our Annual Report on Form 10-K for the year ended December 31, 2021,2022, as filed with the U.S. Securities and Exchange Commission (or SEC).
As used below, unless the context otherwise requires, the terms “the Company,” “Genie,” “we,” “us,” and “our” refer to Genie Energy Ltd., a Delaware corporation, and its subsidiaries, collectively.
Forward-Looking Statements
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section21E of the Securities Exchange Act of 1934, including statements that contain the words “believes,” “anticipates,” “expects,” “plans,” “intends,” and similar words and phrases. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from the results projected in any forward-looking statement. In addition to the factors specifically noted in the forward-looking statements, other important factors, risks and uncertainties that could result in those differences include, but are not limited to, those discussed below under Part II, Item IA and under Item 1A to Part I “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2021.2022. The forward-looking statements are made as of the date of this report and we assume no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those projected in the forward-looking statements. Investors should consult all of the information set forth in this report and the other information set forth from time to time in our reports filed with the SEC pursuant to the Securities Act of 1933 and the Securities Exchange Act of 1934, including our Annual Report on Form 10-K for the year ended December 31, 2021.2022.
Overview
We are comprised of Genie Retail Energy ("GRE") and Genie Renewables. In the third quarter of 2022, we discontinued the operations of Lumo Finland and Sweden as discussed below. Following thesethis discontinuance of operations, Genie Retail Energy International ("GRE InternationalInternational") ceased to be a segment and the remaining assets and liabilities and results of any continuing operations of GRE International were combined with corporate.
GRE owns and operates retail energy providers ("REPs"), including IDT Energy, Residents Energy, Town Square Energy ("TSE"), Southern Federal and Mirabito Natural Gas. GRE's REPREPs' businesses resell electricity and natural gas primarily to residential and small business customers, with the majority of the customers in the Eastern and Midwestern United States and Texas.
Genie Renewables holds a 95.5% interest in Genie Solar, Energy,an integrated solar energy company that develops, constructs and operates solar energy projects for commercial and industrial customers as well as its own portfolio, a rooftop solar system sales and general contracting company, a 93.5%92.8% interest in CityCom Solar, a marketer of community solaralternative products and services complementary to our energy solutions,offerings, a 96.0% interest in Diversegy, an energy broker for commercial customers, and a 60.0% controlling interest in Prism Solar Technology ("Prism"), a solar solutions company that is engaged in U.S. manufacturing of solar panels, solar installation design and solar energy project management.
As part of our ongoing business development efforts, we seek out new opportunities, which may include complementary operations or businesses that reflect horizontal or vertical expansion from our current operations. Some of these potential opportunities are considered briefly and others are examined in further depth. In particular, we seek out acquisitions to expand the geographic scope and size of our REP businesses.
32 |
Discontinued Operations in Finland and Sweden
As a result of continued volatility in the energy market in Europe, in the third quarter of 2022, we decided to discontinue the operations of Lumo Energia Oyj ("Lumo Finland") and Lumo Energi AB ("Lumo Sweden"). From July 13, 2022 to July 19, 2022, the Company entered into a series of transactions to sell most of the electricity swap instruments held by Lumo Sweden for a gross aggregate amount of €41.1€41.1 million (equivalent to approximately $41.4$41.4 million at the dates of the transactions) before fees and other costs. The sale price is expected to be settled monthly based on the monthly commodity volume specified in the instruments from September 2022 to March 2025. The net book value of the instruments sold was €34.2€34.2 million (equivalent to $35.8$35.8 million).
In July 2022, Lumo Sweden entered into a transaction to transfer, effective August 5, 2022, its customers to a third party for nominal consideration. In August 2022 Lumo Finland entered in a transaction to transfer its variable rate customers to a third party for €$1.9 million (equivalent to $2.0 million), and transferred the fixed rate customers to other utilities with no considerations.
We determined that exiting Finland and Sweden markets represented a strategic shift that would have a major effect on our operations and accordingly, presentedpresents the results of operations and related cash flows as discontinued operations for all periods presented.periods. The assets and liabilities of the discontinued operations have beenare presented separately and are reflected within assets and liabilities from discontinued operations in the accompanying consolidated balance sheets as of SeptemberJune 30, 20222023 and December 31, 2021.2022.Lumo Finland and Lumo Sweden will continueare continuing to liquidate their remaining receivables and settle any remaining liabilities.
In November 2022, Lumo Finland declared bankruptcy and the administration of Lumo Finland was transferred to an administrator (the "Lumo Administrator"). All assets and liabilities of Lumo Finland remain with Lumo Finland, in which Genie retains its ownership interest, however, the management and control of Lumo Finland were transferred to the Lumo Administrator. Since the Company lost control of the management of Lumo Finland in favor of the Lumo Administrator, the accounts of Lumo Finland were deconsolidated effective November 9, 2022.
On November 3, 2022, we acquired additional minority interests in Lumo Finland and Lumo Sweden from an employee for 132,302 of our restricted Class B common stock, which will vest ratably from November 2022 to May 2025. We increased our interest in Lumo Finland from 91.6%91.6% to 96.6%96.6% and increased from 98.8%97.1% to 100% in Lumo Sweden.
Net loss from discontinued operations of Lumo Finland and Lumo Sweden, net of taxes was $0.3 million and $1.5 million for the three months ended September 30, 2023 and 2022, respectively.Net income from discontinued operations of Lumo Finland and Lumo Sweden, net of taxes was $0.5 million and $25.9 million for the three months ended September 30, 2022. Net income from discontinued operations of Lumo Finland2023 and Lumo Sweden, net of taxes was $25.9 million for the nine months ended September 30, 2022, and $5.5 million $3.7 million for the three and nine months ended September 30, 2021, respectively.
Following the discontinuance of operations of Lumo Finland and Lumo Sweden, GRE International ceased to be a segment and the remaining assets and liabilities and results of continuing operations of GRE International were combined with corporate.
In October 2023, we Company received notice from the Lumo Administrators of recovery claims against (i) Lumo Sweden pertaining to the distribution of the proceeds related to Lumo Sweden's swap instruments, and (ii) the Company based on a guarantee provided to a third party. We dispute these claims, have engaged counsel and intend to vigorously defend against the claims. At this time, there is insufficient basis to deem any loss probable or to assess the amount of any possible loss.
Discontinued Operations in the United Kingdom
In 2021, the natural gas and energy market in the United Kingdom deteriorated which prompted us to suspend the then contemplated spin-off of our international operations and start the process of orderly withdrawal from the United KingdomU.K. market. In October 2021, as part of the orderly exit process from the U.K. market, Orbit Energy Limited ("Orbit"), a REP that used to operate in the United Kingdom, market, Orbit and Shell U.K. Limited ("Shell") agreed to terminate the exclusive supply contract between them. As part of the termination agreement, Orbit was required to unwind all physical forward hedges with Shell which resulted in net cash proceeds after settlement of all related liabilities with Shell. A portion of the net cash proceeds was transferred to us (see Note 5, Discontinued Operations and Divestiture, to our financial statements included elsewhere in this Quarterly Report on Form 10-Q).
Following the termination of the contract withbetween Orbit and Shell, we filed a petition with the High Court of Justice Business and Property of England and Wales (the “Court”) to declare Orbit insolvent based on the Insolvency Act of 1986. On November 29, 2021, the Court declared Orbit insolvent based on the Insolvency Act of 1986, revoked Orbit's license to supply electricity and natural gas in the United Kingdom, ordered that Orbit's current customers be transferred to a “supplier of last resort” and transferred the administration of Orbit to Administrators effective December 1, 2021. All of the customers of Orbit were transferred to a third-party supplier effective December 1, 2021 as ordered by the Court. All assets and liabilities of Orbit, including cash and receivables remain with Orbit, the management and control of which was transferred to Administrators.
We determined that exiting the United Kingdomdiscontinued operations of Orbit represented a strategic shift that would have a major effect on our operations and accordingly, presentedpresents the results of operations and related cash flows as discontinued operations for all periods presented.periods. The assets and liabilities of the discontinued operations have beenare presented separately and are reflected within assets and liabilities from discontinued operations in the accompanying consolidated balance sheets as of September 30, 20222023 and December 31, 2021.2022.
Coronavirus Disease (COVID 19)(COVID-19)
Starting in the first quarter 2020, the world and the United States experienced the unprecedented impactsimpact of the coronavirus disease 2019 (COVID-19) pandemic.
For the year ended December 31, 2021,The COVID-19 pandemic has impacted our business, however, as our service territories have reopened, we expect the impacts of COVID-19 are evidentthe pandemic will be less severe than in several key aspects of our business operations and2020-2021, as was the corresponding financial impact has been mixed. Our consolidated income from operations forcase in the three and nine months ended September 30, 2022 increased by $6.1 million and $44.0 million compared to the same periods in 2021.
Our customer base is predominantly residential, so we benefited from the increased demand for electricity when customers are working from their homes. On the other hand, like other retail energy providers, we suspended our face-to-face customer acquisition programs in March 2020 as public health measures were implemented to combat COVID-19, resulting in a decrease in gross meter acquisitions and a decrease in U.S. domestic meters served. The reduction in gross meter acquisitions decreased our customer acquisition expense in the year ended December 31, 2021 and 2020 compared to the period before the pandemic.
We did not experience any significant changes in our workforce composition and were able to implement our business continuity plans with no significant impact to our ability to maintain our operations. We continue to maintain strong physical and cybersecurity measures in order to both serve our operational needs with a remote workforce and to ensure that we continue to provide services to our customers. We face challenges due to the need to operate with a remote workforce and are continuing to address those challenges so as to minimize the impact on our ability to operate.2023.
Beginning in 2021, public health restrictions were eased in most of our markets which has allowed us to resume face-to-face sales and marketing. We believe that the impact of public health restrictions on our meter acquisition efforts has dissipated, however, any reversal of the easing of restrictions would impact that situation.
There are many uncertainties regarding the impactsimpact of the COVID-19 pandemic, and we are closely monitoring those impacts of on all aspects of itsour business, including how it will impact our customers, employees, suppliers, vendors and business partners. We are currently unable tocannot predict howCOVID-19pandemic may affect our results of operations, financial conditions and cash flows in the impact that COVID-19 will have on our financial position and operating results due to the complexities of the impacts and numerous uncertainties that are beyond the Company's control. We expect to continue to assess the evolving impact of COVID-19 on our business and assets and intend to make adjustments accordingly.future.
Genie Retail Energy
GRE operates REPs that resell electricity and/or natural gas to residential and small business customers in Connecticut, Delaware, Florida, Georgia, Illinois, Indiana, Maine, Maryland, Massachusetts, Michigan, New Hampshire, New Jersey, New York, Ohio, Pennsylvania, Florida, Texas, Rhode Island, and Washington, D.C. GRE’s revenues represented approximately 96.2% of our consolidated revenues for each of the three and nine months ended September 30, 2023, respectively and 98.3% and 96.9% of our consolidated revenues in the three and nine months ended September 30, 2022, respectively and 98.4% and 96.9% of our consolidated revenues in the three and nine months ended September 30, 2021, respectively.
Seasonality and Weather; Climate Change and Volatility in Pricing
The weather and the seasons, among other things, affect GRE’s REPs' revenues. Weather conditions have a significant impact on the demand for natural gas used for heating and electricity used for heating and cooling. Typically, colder winters increase demand for natural gas and electricity, and hotter summers increase demand for electricity. Milder winters and/or summers have the opposite effects. Unseasonable temperatures in other periods may also impact demand levels. Potential changes in global climate may produce, among other possible conditions, unusual variations in temperature and weather patterns, resulting in unusual weather conditions, more intense, frequent and extreme weather events and other natural disasters. Some climatologists believe that these extreme weather events will become more common and more extreme, which will have a greater impact on our operations. Natural gas revenues typically increase in the first quarter due to increased heating demands and electricity revenues typically increase in the third quarter due to increased air conditioning use. Approximately 44.5%39.7% and 47.9%44.5% of GRE’s natural gas revenues for the relevant years were generated in the first quarter of 20212022 and 2020,2021 respectively, when demand for heating was highest. Although the demand for electricity is not as seasonal as natural gas (due, in part, to usage of electricity for both heating and cooling), approximately 30.8%30.5% and 31.8%30.3% of GRE’s electricity revenues for 20212022 and 2020,2021 respectively, were generated in the third quarters of those years. GRE's REP's revenues and operating income are subject to material seasonal variations, and the interim financial results are not necessarily indicative of the estimated financial results for the full year.
In addition to the direct physical impact that climate change may have on our business, financial condition and results of operations because of the effect on pricing, demand for our offerings and/or the energy supplesupply markets, we may also be adversely impacted by other environmental factors, including: (i) technological advances designed to promote energy efficiency and limit environmental impact; (ii) increased competition from alternative energy sources; (iii) regulatory responses aimed at decreasing greenhouse gas emissions; and (iv) litigation or regulatory actions that address the environmental impact of our energy products and services.
Winter Storm in Texas
In February of 2021, the State of Texas experienced unprecedented cold weather and snow, which was named Winter Storm Uri. With the grid overtaxed due to demand and weather-related reduced supply and rolling blackouts being enforced, by order of the Electricity Reliability Council of Texas ("ERCOT"), real-time commodity prices during the crisis escalated significantly. Although GRE's commitment for their customers in Texas was hedged for foreseen winter weather conditions, the market conditions exposed the Company to significant unexpected cost increases. In the year ended December 31, 2021, GRE recognized approximately $13.0 million in additional costs related to the situation, which were included in the cost of revenue in the consolidated statements of operation.
In June 2021, the state legislature of the State of Texas passed House Bill 4492 (“HB 4492”) which includes certain provisions for financing certain costs associated with electric markets caused by Winter Storm Uri. Pursuant to HB 4492, two categories of charges associated with Winter Storm Uri are to be securitized and the proceeds of the securitization will be provided to the load serving entities who originally incurred the charges. Under HB 4492, the Company is entitled to recover a portion of the costs incurred from the effect of Winter Storm Uri with a calculated range of $1.5 million to $2.6 million. In the second quarter of 2021, the Company recorded a reduction in cost of revenues of $1.5 million.
In September 2021, the Public Utility Commission of Texas ("PUC") approved the Debt Obligation Order to grant ERCOT's application for a debt financing mechanism to pay for certain costs associated with Winter Storm Uri. Under the Debt Obligation Order, the amount that the Company is entitled to recover increased to approximately $3.4 million. In the third quarter of 2021, the Company recorded an additional reduction in the cost of revenues of $1.9 million for an aggregate amount of $3.4 million for the year ended December 31, 2021. In June 2022, the Company received a $3.5 million refund related to the cost of Winter Storm Uri.
Purchase of Receivables and Concentration of Credit Risk
Utility companies offer purchase of receivable, or POR, programs in most of the service territories in which GRE operates. GRE’s REPs reduce their customer credit risk by participating in POR programs for a majority of their receivables. In addition to providing billing and collection services, utility companies purchase those REPs’ receivables and assume all credit risk without recourse to those REPs. GRE’s REPs’ primary credit risk is therefore nonpayment by the utility companies. In the three and nine months ended September 30, 20222023 thethe associated cost was approximately 1.2% 0% of GRE revenue and approximately 1.0%1.2% for the three and ninesix months ended September 30, 2021. 2022, respectively.At September 30, 2022, 85.1%2023, 85.7% of GRE’s net accounts receivablesreceivable were under a POR program. Certain of the utility companies represent significant portions of our consolidated revenues and consolidated gross trade accounts receivable balance during certain periods, and such concentrations increase our risk associated with nonpayment by those utility companies.
The following table summarizes the percentage of consolidated trade receivablereceivables by customers that equal or exceed 10.0% of consolidated net trade receivables at September 30, 20222023 and December 31, 20212022 (no other single customer accounted for 10.0% or greater of our consolidated net trade receivable as of September 30, 20222023 or December 31, 2021)2022).
September 30, 2022 | December 31, 2021 | September 30, 2023 | December 31, 2022 | |||||||||||||
Customer A |
| 15.2 | % |
| 12.5 | % |
| 21.9 | % |
| na | % | ||||
Customer B | 11.0 | na | ||||||||||||||
Customer C | 11.7 | 10.2 |
na—less than10.0% of consolidated net trade receivables at the relevant date
The following table summarizes the percentage of revenues by customers that equal or exceed 10.0% 10.0% of consolidated revenues for the three and ninesix months ended September 30, 2023 or 2022 and 2021 (no(no other single customer accounted for 10.0% 10.0% or greater of our consolidated revenues for the three and ninesix months ended September 30, 20222023 or 2021)2022):
Three Months Ended September 30 | Nine Months Ended September 30 | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||||
Customer A | 11.4 | % | na | % | 10.6 | % |
| na | % | 24.1 | % | na | % | 17.4 | % | na | % | |||||||||||||||
Customer B | 11.6 | na | na | na | na | 11.6 | na | na | ||||||||||||||||||||||||
Customer C | na | 15.8 | na | 12.5 | na | 11.4 | na | 10.4 |
na—less than 10.0% 10.0% of consolidated revenue in the period
Legal Proceedings
Although GRE endeavors to maintain best sales and marketing practices, such practices have been the subject of class action lawsuits.lawsuits in the past.
See Note 18, Commitments and Contingencies, in this Quarterly Report on Form 10-Q, which is incorporated by reference.
Agency and Regulatory Proceedings
From time to time, the Company responds to inquiries or requests for information or materials from public utility commissions or other governmental regulatory or law enforcement agencies related to investigations under statutory or regulatory schemes. The Company cannot predict whether any of those matters will lead to claims or enforcement actions or whether the Company and the regulatory parties will enter into settlements before a formal claim is made. See Notes 18, Commitments and Contingencies, in this Quarterly Report on Form 10-Q, which is incorporated by reference, for further detail on agency and regulatory proceedings.
State of Connecticut Public Utilities Regulatory Authority
Town Square
On September 19, 2018, the State of Connecticut Public Utilities Regulatory Authority (“PURA”) commenced an investigation into Town Square following customer complaints of allegedly misleading and deceptive sales practices on the part of Town Square. The Connecticut Office of Consumer Counsel joined in the investigation.On June 17, 2020, the PURA notified Town Square that it was advancing its investigation by assigning Prosecutorial ("PRO") staff for the purpose of investigating Town Square’s compliance with licensed electric supplier billing, marketing, and licensing requirements, and, if appropriate, facilitating settlement discussions among the parties.
Although Town Square denies any basis for those complaints and any wrongdoing on its part, in May 2021, the parties reached a settlement in principle, subject to finalization of a definitive settlement agreement, pursuant to which Town Square paid $0.4 million.Town Square has also volunteered to refrain, from door-to-door marketing activities in Connecticut for a period of 15 months.
As of September 30, 2022, Town Square’s Connecticut customer base represented 6.9% of GRE’s total meters served and 7.8% of the total RCEs of GRE’s customer base. For three and nine months ended September 30, 2022 and 2021, Town Square’s gross revenues from sales in Connecticut were $6.0 million and $14.1 million, respectively.
An RCE represents a natural gas customer with annual consumption of 100 mmbtu or an electricity customer with annual consumption of 10 MWh. Because different customers have different rates of energy consumption, RCEs are an industry standard metric for evaluating the consumption profile of a given retail customer base.
Residents Energy
In August of 2020, Residents Energy began marketing retail energy services in Connecticut. For the year ended December 31, 2021 Residents Energy's gross revenues from sales in Connecticut was $0.2 million. During the fourth quarter of 2020, the enforcement division of PURA contacted Residents Energy concerning customer complaints received in connection with alleged door-to-door marketing activities in violation of various rules and regulations. On March 12, 2021, the enforcement division filed a motion against Resident Energy with the adjudicating body of PURA, seeking the assessment of $1.5 million in penalties, along with a suspension of license for eighteen months, auditing of marketing practices upon reinstatement and an invitation for settlement discussions.
In May 2021, the parties reached a settlement, pursuant to which Residents will pay $0.3 million. Residents Energy has also volunteered to withdraw from the market in Connecticut for a period of 36 months.
Critical Accounting Policies
Our consolidated financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States of America, or U.S. GAAP. Our significant accounting policies are described in Note 1 to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2021.2022. The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses as well as the disclosure of contingent assets and liabilities. Critical accounting policies are those that require the application of management’s most subjective or complex judgments, often as a result of matters that are inherently uncertain and may change in subsequent periods. Our critical accounting policies include those related to revenue recognition, allowance for doubtful accounts, acquisitions, goodwill, and income taxes. Management bases its estimates and judgments on historical experience and other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. For additional discussion of our critical accounting policies, see our Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2021.2022.
Recently Issued Accounting Standards
Information regarding new accounting pronouncements is included in Note 20—Recently Issued Accounting Standards, to the current period’s consolidated financial statements.
Results of Operations
We evaluate the performance of our operating business segments based primarily on income (loss) from operations. Accordingly, the income and expense line items below income (loss) from operations are only included in our discussion of the consolidated results of operations.
Three and Nine Months Ended September 30, 2023 Compared toThree and Nine Months Ended September 30, 2022 and Compared to Three and Nine Months Ended September 30, 2021
Genie Retail Energy Segment
| Three months ended September 30, | Change | Nine months ended | Change | Three months ended September 30, | Change | Nine months ended September 30, | Change | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(amounts in thousands) | 2022 | 2021 | $ | % | 2022 | 2021 | $ | % | 2023 | 2022 | $ | % | 2023 | 2022 | $ | % | ||||||||||||||||||||||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Electricity | $ | 73,764 | $ | 82,801 | $ | (9,037 | ) | (10.9 | ) | % | $ | 186,207 | $ | 218,082 | $ | (31,875 | ) | (14.6 | ) | % | $ | 114,002 | $ | 73,764 | $ | 40,238 | 54.5 | % | $ | 268,688 | $ | 186,207 | $ | 82,481 | 44.3 | % | ||||||||||||||||||||||||||||||
Natural gas | 6,153 | 3,516 | 2,637 | 75.0 | 40,754 | 25,878 | 14,876 | 57.5 | 4,990 | 6,153 | (1,163 | ) | (18.9 | ) | 40,890 | 40,754 | 136 | 0.3 | ||||||||||||||||||||||||||||||||||||||||||||||||
Others | 1,321 | — | 1,321 | nm | 1,880 | — | 1,880 | nm | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total revenues | 79,917 | 86,317 | (6,400 | ) | (7.4 | ) | 226,961 | 243,960 | (16,999 | ) | (7.0 | ) | 120,313 | 79,917 | 40,396 | 50.5 | 311,458 | 226,961 | 84,497 | 37.2 | ||||||||||||||||||||||||||||||||||||||||||||||
Cost of revenues | 36,689 | 52,166 | (15,477 | ) | (29.7 | ) | 108,148 | 176,523 | (68,375 | ) | (38.7 | ) | 79,484 | 36,689 | 42,795 | 116.6 | 200,613 | 108,148 | 92,465 | 85.5 | ||||||||||||||||||||||||||||||||||||||||||||||
Gross profit | 43,228 | 34,151 | 9,077 | 26.6 | 118,813 | 67,437 | 51,376 | 76.2 | 40,829 | 43,228 | (2,399 | ) | (5.5 | ) | 110,845 | 118,813 | (7,968 | ) | (6.7 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
Selling, general and administrative expenses | 15,813 | 14,437 | 1,376 | 9.5 | 46,809 | 41,010 | 5,799 | 14.1 | 18,831 | 15,813 | 3,018 | 19.1 | 53,983 | 46,809 | 7,174 | 15.3 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Income from operations | $ | 27,415 | $ | 19,714 | $ | 7,701 | 39.1 | % | $ | 72,004 | $ | 26,427 | $ | 45,577 | 172.5 | % | $ | 21,998 | $ | 27,415 | $ | (5,417 | ) | (19.8 | ) | $ | 56,862 | $ | 72,004 | $ | (15,142 | ) | (21.0) | % |
Revenues. Electricity revenues decreasedincreased by 10.9%54.5% in thethree months ended September 30, 20222023 compared to the same period in 20212022. The decreaseincrease was due to a declinean increase in electricity consumption partially offset by an increasea decrease in the average price per kilowatt hour charged to customers in thethree months ended September 30, 20222023compared to the same period in 2021. 2022. Electricity consumption byGRE’sREPs' customers decreasedincreased by 36.172.7% in the three months ended September 30, 20222023, compared to the same period in 20212022. The decrease in electricity consumption reflected, reflecting a 5.9% decrease in average consumption per meter and a 32.1% decrease53.2% increase in the average number of meters served.served and a 12.8% increase in average consumption per meter. The reductionincrease in meters served was driven by strong customer acquisitions during 2023 which had been reduced during 2022. The increase in part, by our decisionper meter consumption is due to pause certain customer acquisition efforts and allow certain lower margin customers, including those acquired through municipal aggregation dealswarmer weather in the three months ended September 30, 2023 compared to move to other suppliers.the same period in 2022. The average rate per kilowatt hour sold increased 39.4decreased 10.5% in thethree months ended September 30, 20222023 compared to the same period in 2021. The increase is2022 due to the increasea decrease in the average wholesale price of electricity in the three months ended September 30, 2022 compared to the same period in 2021. electricity.
Electricity revenues decreasedincreased by 14.6%44.3% in the nine months ended September 30, 20222023 compared to the same period in 2021.2022. The decreaseincrease was due to a declineincreases in electricity consumption partially offset by an increase inand the average price charged per kilowatt hour charged to customers in the nine months ended September 30, 20222023 compared to the same period in 2021.2022. Electricity consumption by GRE’s REPs' customers decreasedincreased by 42.5% in the 35.6nine months ended September 30, 2023, compared to the same period in 2022. The increase in electricity consumption reflected a 38.0% increase in the average number of meters served and a 3.3% increase in average consumption per meter. The increase in meters served was driven by strong customer acquisition efforts during 2023. Electricity consumption per meter increased in the nine months ended September 30, 2023 due to warmer weather conditions in our service areas compared to the same period in 2022. The average rate per kilowatt hour sold increased 1.3% in the nine months ended September 30, 2022, compared to the same period in 2021. The decrease in electricity consumption reflected a 4.1% decrease in average consumption per meter and a 32.8% decrease in the average number of meters served. As discussed above, the reduction in meters served was driven, in part, by the decision to pause certain customer acquisition efforts and allow certain lower margin customers to move to other suppliers. The average rate per kilowatt hour sold increased 32.6% in the nine months ended September 30, 20222023 compared to the same period in 20212022. The increase is due to thean increase in the wholesale price of electricity in the nine months ended September 30, 20222023 compared to the same period in 2021.2022.
GRE’snatural gas revenues increaseddecreased by 75.0%18.9% in the three months ended September 30, 2023 compared to the same period in 2022.The decrease was a result of a decrease in average revenue per therm sold partially offset by an increase in natural gas consumption. The average revenue pertherm sold decreased by 21.0% in thethree months ended September 30, 2023, compared to the same period in2022. The decrease in revenue per therm was driven by an increase in the portion of the customer base consisting of commercial customers with fixed rates compared to customers with variable rates in the three months ended September 30, 20222023 compared to the same period in 2021. The increase in natural gas revenues in the three months ended September 30, 2022 compared to the same period in 2021 was a result of increases in natural gas consumption and in average revenue per therm sold.2022. Natural gas consumption byGRE’sREPs’ customers increased by 32.1% 2.7% in the three months ended September 30, 2022 2023 compared to the same period in 2021,2022, reflecting a 22.3% increase in average consumption per meter and a 8.0%5.2% increase in average meters served in the three months ended September 30, 20222023 compared to the same period in 2021. The increase2022 partially offset by a 2.4% decrease in average consumption per meter in the three months ended September 30, 2022 compared to the same period in 2021 was a result of entering new, natural gas-only markets during the last five quarters and enrolling relatively high average consumption natural gas meters. The average revenue per therm sold increased by 32.5% in the three months ended September 30, 2022, compared to the same period in 2021. .
GRE’s natural gas revenues increased by 57.5%0.3% in the nine months ended September 30, 20222023 compared to the same period in 20212022. The increase was a result of an increase in average revenue per therm sold partially offset by a decrease in natural gas revenuesconsumption.The average revenue per therm sold increased by 2.6% in the nine months ended September 30, 2023, compared to the same period in 2022due to an increase in the wholesale price of natural gas in the nine months ended September 30, 20222023 compared to the same period in 2021 was a result of increases in natural gas consumption partially offset by a decrease in average revenue per therm sold.2022. Natural gas consumption by GRE’s REPs’REPs’ customers increaseddecreased by 29.5% 2.2% in the nine months ended September 30, 20222023 compared to the same period in 20212022, reflecting a 21.4% increase13.5% decrease in average consumption per meter and a 6.7% increase in average meters served in the nine months ended September 30, 20222023 compared to the same period in 20212022., partially offset by 13.5% increase in average meters served. The average revenue per therm sold increasedThe increase in meters served was driven by a strong customer acquisition efforts during 2023.21.6%
Other revenues in the three and nine months ended September 30, 2022, compared to2023 included revenues from the same periodsale of petroleum products in 2021. Israel.
The customer base for GRE’s REPs as measured by meters served consisted of the following:
(in thousands) |
| September 30, 2022 | June 30, 2022 |
| March 31, 2022 |
| December 31, 2021 |
| September 30, 2021 |
|
| September 30, 2023 | June 30, 2023 |
| March 31, 2023 |
| December 31, 2022 |
| September 30, 2022 |
| ||||||||||||||||||
Meters at end of quarter: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||
Electricity customers |
| 193 |
| 203 |
|
| 209 |
|
| 210 |
|
| 289 |
|
| 304 |
| 301 |
| 271 |
| 196 |
| 193 |
| |||||||||||||
Natural gas customers |
| 77 |
| 77 |
|
| 77 |
|
| 75 |
|
| 72 |
|
| 81 |
| 80 |
|
| 78 |
|
| 76 |
|
| 77 |
| ||||||||||
Total meters |
| 270 |
| 280 |
|
| 286 |
|
| 285 |
|
| 361 |
|
| 385 |
| 381 |
|
| 349 |
|
| 272 |
|
| 270 |
|
Gross meter acquisitions in the three months ended September 30, 2022,2023, were 33,00060,000 compared to 46,00033,000 for the same period in 2021. 2022. Gross meter acquisitions in the nine months ended September 30, 20222023, were 112,000264,000 compared to 112144,000,000 for the same period in 20212022. The decreaseincrease in the gross meter acquisitions for the three and nine months ended September 30, 20222023 compared to the same period in 20212022 was due to a “strategic pause” on certain customer acquisition channels to protect margins due to unfavorable market conditions that started in the fourth quarter 2021. 2021 and continued through 2022. In the first quarter of 2023, we resumed customer acquisition activities using a variety of new and existing channels.
Meters served slightly decreased by 10,000 meters or 3.6% from June 30, 2022 to September 30, 2022. Meters served decreasedincreased by 15,0004,000 meters or 5.3%1.0% from December 31, 2021June 30, 2023 to September 30, 20222023. Meters served increased by 113,000 meters or 41.5% fromDecember 31, 2022toSeptember 30, 2023. The decreasesincreases in the number of meters served at September 30, 20222023 compared to June 30, 20222023 and December 31, 2021 were2022 was due to an increase in average churn during the period and the "strategic pause" on certainresumption of customer acquisition channelsactivities in 2023 as discussed above.GRE's REPs also returned some customers to their underlying utility in certain markets in the fourth quarter of 2021 to minimize the impact of expected higher prices on our margins.
In the three months ended September 30, 2022,2023, average monthly churn increasedslightly decreased to 4.7%4.4% compared to 4.0%4.7% for same period in 20212022. In thenine months ended September 30, 20222023, the average monthly churn slightly increaseddecreased to 4.4% compared to 4.5% compared to 4.2% for same period in 2021. 2022.
The average rates of annualized energy consumption, as measured by RCEs, are presented in the chart below. An RCE represents a natural gas customer with annual consumption of 100 mmbtu or an electricity customer with annual consumption of 10 MWh. Because different customers have different rates of energy consumption, RCEs are an industry standard metric for evaluating the consumption profile of a given retail customer base.
(in thousands) |
| September 30, 2022 | June 30, 2022 |
| March 31, 2022 |
| December 31, 2021 |
| September 30, 2021 |
|
| September 30, 2023 | June 30, 2023 |
| March 31, 2023 |
| December 31, 2022 |
| September 30, 2022 |
| ||||||||||||||||||
RCEs at end of quarter: |
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||
Electricity customers |
| 174 |
| 185 |
| 182 |
| 189 |
| 276 |
|
| 298 |
| 304 |
| 276 |
| 181 |
| 174 |
| ||||||||||||||||
Natural gas customers |
| 77 |
| 77 |
|
| 78 |
|
| 71 |
|
| 60 |
|
| 77 |
| 76 |
|
| 77 |
|
| 81 |
|
| 77 |
| ||||||||||
Total RCEs |
| 251 |
| 262 |
|
| 260 |
|
| 260 |
|
| 336 |
|
| 375 |
| 380 |
|
| 353 |
|
| 262 |
|
| 251 |
|
RCEs at September 30, 2023 decreased 1.3% compared to June 30, 2023. RCEs increased by 43.1% at September 30, 2023 compared to December 31, 2022. The increase is due to the resumption of customer acquisition activities as discussed above.
RCEs decreased 25.3% at September 30, 2022 compared to September 30, 2021. The decreases are primarily due to the "strategic pause" on customer acquisitions and transfer of some customers to their underlying utilities as discussed above. RCEs slightly increased by 3.5% at September 30, 2022 compared to December 31, 2021, mostly due to the seasonal increase in usage during third quarter due to increased air conditioning use, partially offset by the decrease in number of meters as discussed above.
Cost of Revenues and Gross Margin Percentage. GRE’s cost of revenues and gross margin percentage were as follows:
Three Months Ended September 30, | Change | Nine Months Ended September 30, | Change | Three Months Ended September 30, | Change | Nine Months Ended September 30, | Change | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(amounts in thousands) | 2022 | 2021 | $ | % | 2022 | 2021 | $ | % | 2023 | 2022 | $ | % | 2023 | 2022 | $ | % | |||||||||||||||||||||||||||||||||||||||||||||||||
Cost of revenues: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Electricity | $ | 33,997 | $ | 52,096 | $ | (18,099 | ) | (34.7 | )% | $ | 83,720 | $ | 164,440 | $ | (80,720 | ) | (49.1 | )% | $ | 75,117 | $ | 33,997 | $ | 41,120 | 121.0 | $ | 166,206 | $ | 83,720 | $ | 82,486 | 98.5 | |||||||||||||||||||||||||||||||||
Natural gas | 2,692 | 70 | 2,622 | nm | 24,428 | 12,083 | 12,345 | 102.2 | 3,327 | 2,692 | 635 | 23.6 | 32,858 | 24,428 | 8,430 | 34.5 | |||||||||||||||||||||||||||||||||||||||||||||||||
Others | 1,040 | — | 1,040 | nm | 1,549 | — | 1,549 | nm | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total cost of revenues | $ | 36,689 | $ | 52,166 | $ | (15,477 | ) | (29.7 | )% | $ | 108,148 | $ | 176,523 | $ | (68,375 | ) | (38.7 | )% | $ | 79,484 | $ | 36,689 | $ | 42,795 | 116.6 | $ | 200,613 | $ | 108,148 | $ | 92,465 | 85.5 |
nm—notmeaningful
Three months ended September 30, | Nine months ended September 30, | Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||||||||||||||||
(amounts in thousands) | 2022 | 2021 | Change | 2022 | 2021 | Change | 2023 | 2022 | Change | 2023 | 2022 | Change | |||||||||||||||||||||||||||
Gross margin percentage: | |||||||||||||||||||||||||||||||||||||||
Electricity | 53.9 | % | 37.1 | % | 16.8 | % | 55.0 | % | 24.6 | % | 30.4 | % | 34.1 | % | 53.9 | % | (19.8 | ) | 38.1 | % | 55.0 | % | (16.9 | ) | |||||||||||||||
Natural gas | 56.2 | 98.0 | (41.8 | ) | 40.1 | 53.3 | (13.2 | ) | 33.3 | 56.2 | (22.9 | ) | 19.6 | 40.1 | (20.4 | ) | |||||||||||||||||||||||
Others | 21.3 | — | 21.3 | 17.6 | — | 17.6 | |||||||||||||||||||||||||||||||||
Total gross margin percentage | 54.1 | % | 39.6 | % | 14.5 | % | 52.3 | % | 27.6 | % | 24.7 | % | 33.9 | % | 54.1 | % | (20.2 | ) | 35.6 | % | 52.3 | % | (16.8 | ) |
Cost of revenues for electricity decreasedincreased in the three months ended September 30, 20222023 compared to the same period in 20212022 primarily because of the decrease in electricity consumption by GRE’s REPs’ customers partially offset by an increase in the average unit cost of electricity. The average unit cost of electricity increased 2.1% in the three months ended September 30, 2022 compared to the same period in 2021. Gross margin on electricity sales increased in the three months ended September 30, 2022 compared to the same period in 2021 because the average rate charged to customers increased more than the increase in the average unit cost of electricity.
Cost of revenues for electricity decreased in the nine months ended September 30, 2022 compared to the same period in 2021 primarily because of decreasesincreases in electricity consumption by GRE’s REPs’ customers and the average unit cost of electricity. The average unit cost of electricity increased 27.9% in the three months ended September 30, 2023 compared to the same period in 2022 due to a rise in the wholesale price of electricity. The gross margin on electricity sales decreased 21.0in the three months ended September 30, 2023 compared to the same period in 2022 because the average unit cost of electricity increased while the average rate charged to customers decreased and due to the impact on the cost of revenues in 2022 related to the favorable results of hedges.
Cost of revenues for electricity increased in the nine months ended September 30, 2023 compared to the same period in 2022 primarily because of increases in electricity consumption by GRE’s REPs’ customers and the average unit cost of electricity. The average unit cost of electricity increased 39.3% in the nine months ended September 30, 20222023 compared to the same period in 20212022. A significant portion of the decrease due to a rise in the average costwholesale price of electricity resulted from the favorable results of hedging activities for the nine months ended September 30, 2022 compared to the same period in 2021 and the incremental cost incurred in the nine months ended September 30, 2021 as an effect of a major winter storm in Texas as discussed above. We recognized gains from derivative instruments of $88.3electricity. million in the nine months ended September 30, 2022 compared to $16.3The million recognized in the same period of 2021. Grossgross margin on electricity sales increaseddecreased in the nine months ended September 30, 20222023 compared to the same period in 20212022 because the average rate charged to customers increased whileless than the increase in average unit cost of electricity decreased. electricity.
Cost of revenues for natural gas increased in the three months ended September 30, 2022 2023 compared to the same period in 2021 2022 primarily because of increases in the average unit cost of natural gas and the natural gas consumption by GRE's REPs' customers and in average unit cost of natural gas.. The average unit cost of natural gas increased to $0.380by 20.4% per therm in the three months ended September 30, 2022 2023 compared to $0.013 for the same period in 2021. The significant increase is due 2022 to an increase in the wholesale price of natural gas. Gross margin on natural gas duringsales increased in the three months ended September 30, 2022 2023 compared to the same period in 2021 as well as a more favorable fluctuation 2022 because the average rate charged to customers decreased less than the decrease in the average unit cost of the fair valuenatural gas.
Cost of the Company'srevenues for natural gas hedgesincreased in the three nine months ended September 30, 2021 2023 compared to the same period in 2022. 2022primarily because of an increase in the average unit cost of natural gas partially offset by a decrease innatural gas consumption byGRE's REPs' customers. The average unit cost of natural gas increased 37.5% in the nine months ended September 30, 2023 compared to the same period in2022 due to rise in the wholesale price of natural gas, particularly in the first quarter of 2023. Gross margin on natural gas sales decreased in the three nine months ended September 30, 2022 2023 compared to the same period in 2021 2022because the average rate charged to customers increased less than the increase in the average unit cost of natural gas.
Cost of revenues for natural gas increased in the nine months ended September 30, 2022 compared to the same period in 2021 primarily because of increases in natural gas consumption byGRE'sREPs' customers and in average unit cost of natural gas. The average unit cost of natural gas increased 56.1% in the nine months ended September 30, 2022 compared to the same period in 2021. The significant increase is due to an increase in the wholesale price of natural gas during nine months ended September 30, 2022 compared to the same period in 2021. Gross margin on natural gas sales decreased in the nine months ended September 30, 2022 compared to the same period in 2021 because the average rate charged to customers increased less than the increase in the average unit cost of natural gas.
Selling, General and Administrative. The increase in selling,Selling, general and administrative expenses increased by 19.1% in the three months ended September 30, 20222023 compared to the same period in 20212022 was primarily due to increases in marketing and customer acquisition costs, employee-related costs, POR program fees and provision for bad debt expenses. processing fees. Marketing and customer acquisition expenses increased by $2.1 million in the three months ended September 30, 2023 compared to the same period in 2022 as a result of an increase in the number of meters acquired during 2023 period.Employee-related expenses increased by $0.4$0.4 million in the three months ended September 30, 20222023 compared to the same period in 20212022 primarily due to an increase in accrued bonusesthe number of employees. POR program fees increased by $0.1 million in the three months ended September 30, 2023compared to the same period in2022 as a result of improved results of operations during the period. Marketingchanges in rates implemented by several utilities. Processing and customer acquisition expensesregulatory fees increased by $0.4$0.5 million in the three months ended September 30, 20222023 compared to the same period in 20212022 as a result of a higher level of activities from an increase in spending in our commercial businessthe number of expansion and to offset the effect of COVID-19 related to public health restrictions to traditional customer acquisition methods, partially offset by the decrease in residential customer acquisition. Provision for bad debt expenses increased by $0.5 million in the three months ended September 30, 2022 compared to the same period in 2021 as a result of expansion of activities in non-POR markets.meters. As a percentage of GRE’s total revenues, selling, general and administrative expense increaseddecreased from 16.7%19.8% in the three months ended September 30, 20212022 to 19.8%15.7% in the three months ended September 30, 2022. 2023.
39 |
The increase in selling,Selling, general and administrative expenses increased by 15.3% in the nine months ended September 30, 20222023 compared to the same period in 20212022 was primarily due to increases in marketing and customer acquisition costs, processing and regulatory fees, POR processing and employee-related costscosts. Marketing and provision for bad debt partially offset by a decrease in legal settlement costs. Employee-relatedcustomer acquisition expenses increased by $2.3$5.6 million in the nine months ended September 30, 2023compared to the same period in2022 as a result of an increase in the number of meters acquired. Bad debt and POR processing and regulatory fees increased by $0.2 million in the nine months ended September 30, 20222023 compared to the same period in 20212022 primarily due to an increase in accrued bonuses as a result of improved results of operations during the period. Marketingchanges in rates implemented by several utilities. Processing and customer acquisition expensesregulatory fees increased by $3.5$0.8 million in the ninethree months ended September 30, 2022 2023compared to the same period in 20212022 as a result of a higher level of activities from an increase in spending in our commercial business andthe number of meters. to offset the effect of COVID-19 related to public health restrictions to traditional customer acquisition methods partially offset by the decrease in residential customer meter acquisition. Provision for bad debtEmployee-related expenses increased by $0.7$0.4 million in the threenine months ended September 30, 20222023 compared to the same period in 2021 as a result of expansion of activities in non-POR markets. As discussed above, Residents Energy and Town Square paid $0.8 million in a legal settlement in Connecticut in the nine months ended September 30, 2021. No legal settlement paid in nine months ended September 30, 2022. As a percentage of GRE’s total revenues, selling, general and administrative expense increaseddecreased from16.8% in the nine months ended September 30, 2021 to 20.6% in the nine months ended September 30, 2022. 2022 to 17.3% in the nine months ended September 30, 2023.
Genie Renewables Segment
The Genie Renewables (formerly GES) segment is composed of Genie Solar, CityCom Solar, Diversegy and Prism in which we hold a 60.0% controlling interest. Genie Solar is an integrated solar energy company that develops, constructs and operates solar energy projects for commercial and industrial customers as well as its own portfolio. CityCom Solar is a marketer of alternative products and services complementary to our energy offerings. Diversegy provides energy brokerage and advisory services to commercial customers. Prism provides solar and manufacturing of solar panels, solar installation design and solar energy project management.
Three Months Ended September 30, | Change | Nine Months Ended September 30, | Change | |||||||||||||||||||||||||||||
(amounts in thousands) | 2022 | 2021 | $ | % | 2022 | 2021 | $ | % | ||||||||||||||||||||||||
Revenues | $ | 1,368 | $ | 1,338 | $ | 30 | 2.2 | $ | 7,189 | $ | 6,170 | $ | 1,019 | 16.5 | % | |||||||||||||||||
Cost of revenue | 1,453 | 883 | 570 | 64.6 | 5,934 | 3,675 | 2,259 | 61.5 | ||||||||||||||||||||||||
Gross profit | (85 | ) | 455 | (540 | ) | (118.7 | ) | 1,255 | 2,495 | (1,240 | ) | (49.7 | ) | |||||||||||||||||||
Selling, general and administrative expenses | 1,418 | 658 | 760 | 115.5 | 3,755 | 1,805 | 1,950 | 108.0 | ||||||||||||||||||||||||
(Loss) income from operations | $ | (1,503 | ) | $ | (203 | ) | $ | 1,300 | 640.4 | % | $ | (997 | ) | $ | 690 | $ | (3,190 | ) | (462.3 | )% |
Three Months Ended September 30, | Change | Nine Months Ended September 30, | Change | |||||||||||||||||||||||||||||
(amounts in thousands) | 2023 | 2022 | $ | % | 2023 | 2022 | $ | % | ||||||||||||||||||||||||
Revenues | $ | 4,736 | $ | 1,368 | $ | 3,368 | 246.2 | % | $ | 12,329 | $ | 7,189 | $ | 5,140 | 71.5 | |||||||||||||||||
Cost of revenue | 4,483 | 1,453 | 3,030 | 208.5 | 10,598 | 5,934 | 4,664 | 78.6 | ||||||||||||||||||||||||
Gross profit (loss) | 253 | (85 | ) | 338 | (397.6 | ) | 1,731 | 1,255 | 476 | 37.9 | ||||||||||||||||||||||
Selling, general and administrative expenses | 2,304 | 1,418 | 886 | 62.5 | 6,208 | 3,755 | 2,453 | 65.3 | ||||||||||||||||||||||||
Loss from operations | $ | (2,051 | ) | $ | (1,503 | ) | $ | 548 | 36.5 | $ | (4,477 | ) | $ | (2,500 | ) | $ | (1,977 | ) | 79.1 |
Revenue. Genie Renewables' revenues increased in the three and nine months ended September 30, 20222023 compared to the same periods in 20212022. The increases in revenues were the result of increases in the activities of Genie Solar projects andrevenues from commissions from selling third-party products to customers by CityCom Solar.Solar and Revenuesrevenues from Diversegy includethat includes commissions, entry fees and other fees from our energy brokerage andbrokerage and marketing services businesses.businesses in the first quarter of 2023.
Cost of Revenues. Cost The variations in the cost of revenue increased inrevenues for the three and nine months ended September 30, 20222023 compared to the same periods in 2021. The increases2022 are consistent with the variations in revenues of CityCom Solar and Diversegy. In the third quarter of 2023, we recorded a $0.8 million charge to the cost revenues reflects the increase inof revenues of Genie Solar and CityCom Solar. to write down the carrying value of solar panel inventories to the estimated net realizable value.
Selling, General and Administrative. Selling, general and administrative expenses increased in the three and nine months ended September 30, 20222023 compared to the same periodperiods in 20212022 primarily due to increases in headcount in Genie Solar and Diversegy and consulting fees and warehousing costs at Genie Solar.
Corporate
As discussed above, the remaining accounts of GREIGRE International were transferred to the corporate starting in the third quarter of 2022, which includes accounts of Genie Japan before we sold our stake in May 2021. Other entities2022. Entities under corporate do not generate any revenues, nor does it incur any cost of revenues. Corporate costs include unallocated compensation, consulting fees, legal fees, business development expense and other corporate-related general and administrative expenses.
Three Months Ended September 30, | Change | Nine Months Ended September 30, | Change | |||||||||||||||||||||||||||||
(amounts in thousands) | 2022 | 2021 | $ | % | 2022 | 2021 | $ | % | ||||||||||||||||||||||||
Revenues | $ | — | $ | — | $ | — | nm | $ | — | $ | 3,930 | $ | (3,930 | ) | nm | % | ||||||||||||||||
Cost of revenue | — | — | — | nm | — | 5,954 | (5,954 | ) | nm | |||||||||||||||||||||||
Gross loss | — | — | — | nm | — | (2,024 | ) | (2,024 | ) | nm | ||||||||||||||||||||||
Selling, general and administrative expenses | 2,374 | 2,048 | 326 | 15.9 | 7,232 | 6,813 | 419 | 6.2 | ||||||||||||||||||||||||
(Loss) income from operations | $ | (2,374 | ) | $ | (2,048 | ) | $ | (326 | ) | 15.9 | % | $ | (7,232 | ) | $ | (8,837 | ) | $ | (2,443 | ) | (27.6 | )% |
In January 2021, weather volatility and the lack of adequate gas reserves drove the prices on the Japan Electric Power Exchange to $2,390 per megawatt hour for an extended period of time. Although our supply commitment for our customers in Japan was hedged reasonably for expected winter weather conditions, the extreme price spike exposed us to further unexpected cost increases. The impact on our 2021 consolidated result of operations was approximately $2.5 million.
On April 26, 2021, we entered into an Equity Purchase Agreement ("Purchase Agreement") with Hanhwa Q Cells Japan Co., Ltd. ("Hanhwa"), pursuant to which, we agreed to sell our interest in Genie Japan for ¥570.0 million (equivalent to approximately $5.3 million at April 26, 2021) subject to certain terms and conditions set forth in the Purchase Agreement. On May 11, 2021, upon the terms and subject to the conditions of Purchase Agreement, we completed the divestiture of Genie Japan for an aggregate cash consideration of ¥570.0 million (equivalent to approximately $5.2 million at May 11, 2021). Hanhwa also assumed the outstanding loans payable of Genie Japan. We paid $0.6 million of commission to certain former employees of Genie Japan and recognized a pre-tax gain of $4.2 million from the divestiture. For the period from January 1, 2021 to May 11, 2021, Genie Japan had revenues and cost of revenues of $3.9 million and $5.9 million, respectively.
Three Months Ended September 30, | Change | Nine Months Ended September 30, | Change | |||||||||||||||||||||||||||||
(amounts in thousands) | 2023 | 2022 | $ | % | 2023 | 2022 | $ | % | ||||||||||||||||||||||||
General and administrative expenses and loss from operations | $ | (2,061 | ) | $ | (2,374 | ) | $ | 313 | (13.2 | )% | $ | (8,189 | ) | $ | (7,232 | ) | $ | (957 | ) | (13.2 | ) |
Corporate general and administrative expenses increaseddecreased in the three and nine months ended September 30, 20222023 compared to the same period in 20212022, primarily because of increasesa decrease in employee related cost and in stock-based compensation expense.cost. As a percentage of our consolidated revenues, Corporate general and administrative expense increaseddecreased to 1.6% in the three months ended September 30, 2023 from 2.9% in the three months ended September 30, 2022 from 2.3%and decreased to 2.5% in the threenine months ended September 30, 2021 and decreased to2023 from 3.1% in the nine months ended September 30, 2022 from 2.7% in the nine months ended September 30, 2021. 2023.
Consolidated
Selling, general and administrative expenses. Stock-based compensation expense included in consolidated selling, general and administrative expenseexpenses was $0.7$0.6 million and $0.5$0.7 million in the three months ended September 30, 2023 and 2022, respectively and 2021, respectively$2.3 million and $2.2 million and $1.6 million infor the nine months ended September 30, 2023 and 2022, and 2021, respectively. At September 30, 2022,2023, the aggregate unrecognized compensation cost related to non-vested stock-based compensation was $4.1$1.7 million. The unrecognized compensation cost is recognized over the expected service period.
The following is a discussion of our consolidated income and expense line items below income from operations:
Three Months ended September 30, | Change | Nine Months ended September 30, | Change | Three Months Ended September 30, | Change | Nine Months Ended September 30, | Change | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(amounts in thousands) | 2022 | 2021 | $ | % | 2022 | 2021 | $ | % | 2023 | 2022 | $ | % | 2023 | 2022 | $ | % | ||||||||||||||||||||||||||||||||||||||||||||||||
Income from operations | $ | 23,538 | $ | 17,463 | $ | 6,075 | (34.8 | )% | $ | 62,272 | $ | 18,280 | $ | 43,992 | 240.7 | $ | 17,886 | $ | 23,538 | $ | (5,652 | ) | (24.0 | )% | $ | 44,196 | $ | 62,272 | $ | (18,076 | ) | (29.0 | )% | |||||||||||||||||||||||||||||||
Interest income | 194 | 8 | 186 | nm | 259 | 28 | 231 | nm | 1,331 | 194 | 1,137 | nm | 3,313 | 259 | 3,054 | nm | ||||||||||||||||||||||||||||||||||||||||||||||||
Interest expense | (33 | ) | (99 | ) | (66 | ) | (66.7 | ) | (135 | ) | (311 | ) | (176 | ) | (56.6 | ) | (27 | ) | (33 | ) | 6 | 18.2 | (75 | ) | (135 | ) | 60 | 44.4 | ||||||||||||||||||||||||||||||||||||
Other income (loss), net | 156 | 35 | 121 | nm | (742 | ) | 1,710 | (2,452 | ) | (143.4 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Unrealized gain on marketable equity securities and investments | 57 | (5,312 | ) | 5,369 | nm | (712 | ) | 482 | (1,194 | ) | (247.7 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Gain from sale of subsidiary | — | — | — | nm | — | 4,226 | (4,226 | ) | nm | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other (loss) income, net | (4 | ) | 156 | (160 | ) | 102.6 | 3,137 | (712 | ) | 3,849 | (540.6 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Gain (loss) on marketable equity securities and investments | 334 | 57 | 277 | (486.0 | ) | 385 | (742 | ) | 1,127 | (151.9 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Provision for benefit from income taxes | (6,482 | ) | (3,498 | ) | 2,984 | 85.3 | (16,791 | ) | (7,149 | ) | (9,642 | ) | (134.9 | ) | (5,018 | ) | (6,482 | ) | 1,464 | 22.6 | (12,951 | ) | (16,791 | ) | 3,840 | 22.9 | ||||||||||||||||||||||||||||||||||||||
Net income from continuing operations | 17,430 | 8,597 | 14,669 | 170.6 | 44,151 | 17,266 | 26,533 | 153.7 | 14,502 | 17,430 | (2,928 | ) | (16.8 | ) | 38,005 | 44,151 | (6,146 | ) | (13.9 | ) | ||||||||||||||||||||||||||||||||||||||||||||
(Loss) income from discontinued operations, net of tax | (1,459 | ) | (10,914 | ) | (9,455 | ) | (86.6 | ) | 25,929 | (16,991 | ) | 42,920 | 252.6 | (304 | ) | (1,459 | ) | 1,155 | (79.2 | ) | 5,923 | 25,929 | (20,006 | ) | (77.2 | ) | ||||||||||||||||||||||||||||||||||||||
Net income (loss) | 15,971 | (2,317 | ) | 5,214 | 225.0 | 70,080 | 275 | 69,453 | nm | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income (loss) attributable to noncontrolling interests | (2,797 | ) | (31 | ) | (2,766 | ) | nm | (1,056 | ) | (821 | ) | 235 | 28.6 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Net income (loss) attributable to Genie Energy Ltd. | $ | 18,768 | $ | (2,286 | ) | $ | 21,054 | 921.0 | % | $ | 71,136 | $ | 1,096 | $ | 69,218 | nm | ||||||||||||||||||||||||||||||||||||||||||||||||
Net income | 14,198 | 15,971 | (1,773 | ) | (11.1 | ) | 43,928 | 70,080 | (26,152 | ) | 37.3 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss attributable to noncontrolling interests | (261 | ) | (2,797 | ) | 2,536 | (90.7 | ) | (118 | ) | (1,056 | ) | 938 | (88.8 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Net income attributable to Genie Energy Ltd. | $ | 14,459 | $ | 18,768 | $ | (4,309 | ) | (23.0) | % | $ | 44,046 | $ | 71,136 | $ | (27,090 | ) | 38.1 |
nm—not meaningful
Other Income (loss), netInterest income. OtherInterest income (loss), netincreased in thethree and ninemonths ended September 30, 2023, compared to the same period in 2022 primarily due to increases in average cash and cash equivalents during the period and significant increases in average effective interest rates on those balances.
Other (Loss) Income, net. Other (loss) income, net in the three months ended September 30, 2023 and 2021 2022 and in the nine months ended September 30, 2023 consisted primarily of foreign currency transactions and equity in net loss in equity method investees. investees. Other (loss) income, net in the nine months ended September 30, 2023 consisted primarily of on-time tax credit related to payroll taxes incurred in prior years.
Provision for Income Taxes. The change in the reported tax rate for the three and nine months ended September 30, 20222023 compared to the same periods in 2021, are2022, is the result of favorable results of operations in the U.S. and GRE International and changes in the mix of jurisdictionjurisdictions in which taxable income was earned which was not offset by income tax benefit in some jurisdictions that had losses due to valuation allowances in those jurisdictions.earned.
Net Income (Loss)Loss Attributable to Noncontrolling Interests. The increasedecreases in net incomeloss attributable to noncontrolling interests in the three and nine months ended September 30, 20222023 compared to the same periods in 20212022 was primarily due to an increasea decrease in the share of noncontrolling interest in the net income of Lumo Sweden and Lumo Finland. Finland as well as a decrease in losses incurred by Citizens Choice Energy.
UnrealizedGain (loss) gain on Marketable Equity Securities and Investments. The unrealized (loss) gain on marketable equity securities and investment for the three and nine months ended September 30, 20222023 pertains to the change in fair value of the Company's investments in common stock of Rafael Holdings, Inc. ("Rafael") which the Company acquired in December 2020. As discussed above, we sold a large portion of our holdings in the common stock of Rafael in the first quarter of 2023.
(Loss) Incomeincome from Discontinued Operations, net of tax. (Loss) incomeLoss from discontinued operations, net of tax in the three months ended September 30, 2023 is mainly related to foreign exchange differences in Lumo Sweden during the period. Gain from discontinued operations, net of tax in nine months ended September 30, 2023 is mainly from an increase in the estimated value of our investments in Orbit and foreign exchange differences in Lumo Sweden. Income from discontinued operations, net of tax in the three and nine months ended September 30, 2022 isis mainly due to resultsresult of operations of Lumo Finland and Lumo Sweden. Income (loss) from discontinued operations, net of tax in the three and Lumonine months ended September 30, 2021 is mainly due to results of operations of Lumo Finland and Lumo Sweden as well Orbit which we discontinued in fourth quarter of 2021. Sweden.
Liquidity and Capital Resources
General
We currently expect that our cash flow from operations and the $81.7$139.8 million balance of unrestricted cash and cash equivalents that we held at September 30, 20222023 will be sufficient to meet our currently anticipated cash requirements for at least the period to November 9, 2023.8, 2024.
At September 30, 2022,2023, we had working capital (current assets less current liabilities) of $128.5$164.5 million.
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Cash flows provided by (used in): |
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Operating activities |
| $ | 44,948 |
| $ | (928 | ) |
| $ | 32,561 |
| $ | 44,948 | |||
Investing activities |
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| (3,844 | ) |
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| 2,656 |
| (749 | ) |
| (3,844 | ) | |||
Financing activities |
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| (14,717 | ) |
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| (5,194 | ) |
| (12,515 | ) |
| (14,717 | ) | ||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (15 | ) | (221 | ) | 61 | (15 | ) | |||||||||
Increase in cash, cash equivalents and restricted cash of continuing operations | 26,372 | (3,687 | ) | 19,358 | 26,372 | |||||||||||
Cash flows used in discontinued operations | (35,791 | ) | 1,014 | |||||||||||||
Net decrease in cash, cash equivalents and restricted cash |
| $ | (9,419 | ) |
| $ | (2,673 | ) | ||||||||
Cash flows provided by (used in) discontinued operations | 22,039 | (35,791 | ) | |||||||||||||
Net increase (decrease) in cash, cash equivalents and restricted cash |
| $ | 41,397 |
| $ | (9,419 | ) |
Operating Activities
Cash, cash equivalents and restricted cash provided by operating activities of continuing operations was $32.6 million in the nine months ended September 30, 2023 compared to $44.9 million in the nine months ended September 30, 2022 compared to net cash used in operating activities of continuing operations of $0.9 million in the nine months ended September 30, 2021.2022. The increasedecrease is primarily the result of favorablefluctuation in the results of operations in the nine months ended September 30, 20222023 compared to the same period in 2021.2022.
Our cash flow from operations varies significantly from quarter to quarter and from year to year, depending on our operating results and the timing of operating cash receipts and payments, specifically trade accounts receivable and trade accounts payable. Changes in assets and liabilities increaseddecreased cash flows by $15.0$5.5 million for the nine months ended September 30, 2022,2023, compared to the same period in 2021.2022.
Certain of GRE's REPs are party to an Amended and Restated Preferred Supplier Agreement with BP Energy Company, or BP, which is to be in effect through November 30, 2023. Under the agreement, the REPs purchase electricity and natural gas at market rate plus a fee. The obligations to BP are secured by a first security interest in deposits or receivables from utilities in connection with their purchase of the REP’s customer’s receivables, and in any cash deposits or letters of credit posted in connection with any collateral accounts with BP. The ability to purchase electricity and natural gas under this agreement is subject to satisfaction of certain conditions including the maintenance of certain covenants. At September 30, 2022,2023, we were in compliance with such covenants. At September 30, 2022,2023, restricted cash—short-term of $0.4$0.3 million and trade accounts receivable of $46.8$65.6 million were pledged to BP as collateral for the payment of trade accounts payable to BP of $12.5$19.8 million at September 30, 2022.2023.
We had purchase commitments of $133.9170.4 million at September 30, 20222023, of which $103.7148.1 million was for purchases of electricity.
From time to time, we receive inquiries or requests for information or materials from public utility commissions or other governmental regulatory or law enforcement agencies related to investigations under statutory or regulatory schemes, and we respond to those inquiries or requests. We cannot predict whether any of those matters will lead to claims or enforcement actions.
Investing Activities
Our capital expenditures were minimal indecreased by $0.2 million to $0.9 million for the threenine months ended September 30, 2022 and 2021.2023 compared to the same period in 2022. The capital expenditures are mainly for the construction of solar projects at Genie Solar. In the third quarter of 2023, we transferred $4.3 million worth of solar panels that are intended to be used in Genie Solar projects from inventories to construction in progress related to solar panels expected to be used in the solar project by Genie Solar. We currently anticipate that our total capital expenditures in the twelve months ending December 31, 20222023 will be between $1.5between $6.0 to $3.0 million.$10.00 million mostly related to the solar projects of Genie Renewables.
In December 2020 and 2021, we invested $5.0an aggregate of $6.0 million infor 261,984 shares of Class B common stock of Rafael.Rafael Holdings, Inc. ("Rafael"). Rafael, a publicly-traded company is alsoand a related party. In connection with the purchase, Rafael issued to us warrants to purchase an additional 43,649nine months ended September 30, 2023, we sold 195,501 shares of Rafael'sour Class B common stock with an exercise price of $22.91 per share. The warrants had a term expiring on June 6, 2022. We exercisedRafael for $0.3 million. In the warrants in full on March 31, 2021nine months ended September 30, 2023, we acquired 150,001 shares of our Class B common stock of Rafael for a total exercise price of $1.0 $0.3million. We do not exercise significant influence over the operating or financial policies of Rafael.At September 30, 2023, the carrying value of the remaining investments in the Class B common stock of Rafael was $0.4 million.
In the nine months ended September 30, 2023, we invested $4.6 million to purchase the common stock of a publicly traded company which we sold for $3.9 million during the same period.
In the nine months ended September 30, 2023, we invested $4.4 million to purchase investments in total return swap which we sold for $5.5 million during the same period.
InMarch 2023, the Company received $0.1million fromAtid613 Drilling Ltd. ("Atid 613") for the full settlement of its investment inAtid 613. The Company recognized a minimal gain from settlement of investment included in other income (loss), net in its consolidated statements of operations for thenine months ended September 30, 2023.
In the nine months ended September 30, 2022, we acquired minimal interests in various ventures for an aggregate amount of investments of $1.3$0.6 million.
On February 21, 2022, we entered into a Loan and Security Agreement to extend up to 5.5 million New Israel Shekel, or NIS (equivalent to $1.5$1.5 million as at September 30, 2022)2023) with Natan Ohayon (the "Ohayon Loan"). Natan Ohayon holds a minority interest in Petrocycle Ltd ("Petrocycle"), a subsidiary of the Company. Petrocycle is a preoperating entity engaged in the development of a process to recycle used engine oil into usable gasoline. TheOhayonLoan, which is secured by all assets that Mr. Ohayon acquired using the proceeds of the loan bears a minimum interest as set by the Income Tax Regulations of Israel (3.23%(3.23% in 2022)2022) and is due, together with the principal amount on or before December 31, 2023. As of September 30,In December 2022, the outstanding balance, including accruedCompany suspended the development of business operations of Petrocycle after it was determined that the current operations will not meet the expected results. Petrocycle fully impaired its property and equipment and notes and other receivables from its minority interest partner for an aggregate amount of the Ohayon Loan was NIS5.5 million (equivalent to $1.5 million), included in other assets in the consolidated balance sheets. $2.1 million.
In the fourth quarter of 2021, Orbit transferred to GEIC a net amount of $49.7 million from the proceeds of the settlement of the contactcontract with Shell which is included in cash and cash equivalents in the consolidated balance sheet as of December 31, 2021. In January 2022, we transferred $21.5 million to the Administrators of Orbit Energy to fund the settlement of the expected remaining liabilities of Orbit of $30.8 million, which were included in the current liabilities of discontinued operations in the consolidated balance sheet as of December 31, 2021. In February 2022, we deposited $28.3 million into an attorney trust account to hold, preserve, and dispense funds to the extent needed in connection with the administration process. On February 24, 2022, the Administrators filed a petition under Chapter 15 of the U.S. Bankruptcy Code with the Bankruptcy Court of the Southern District of New York seeking (i) recognition of the U.K. administration proceeding as a foreign main proceeding and the U.K. Administrators as its foreign representatives, and (ii) entrusting distribution of the funds the Company deposited into its attorney’s trust fund to the U.K. Administrators. In the second quarter of 2022, the Administrators filed an application to transfer the funds back to the Administrators’ control in the U.K.United Kingdom. Subject to certain representations and expectations regarding use and application of the funds to efficiently and expeditiously pay off creditors and bring a timely close to the insolvency administration, we decided not to oppose the application, and the Court transferred the $28.3 million to the Administrator. In Augustthe nine months ended September 30, 2023 and 2022, the Administrator paid the Company a partial return of its interest in Orbit of £4.62.0 million (equivalent to $5.4$2.6 million on the dates of the transfer) and £4.6 million (equivalent to $5.4 million the dates of the transfer), respectively. million). We believe that the funds are more than sufficient to pay any remaining creditors of Orbit (with any surplus, which we expect to be significant, to be returned to us).
Financing Activities
In each of the nine months ended September 30, 2022 and 2021, we paid aggregate quarterly Base Dividends of $0.3188 per share, $0.8 million in the aggregate, on our Series 2012-A Preferred Stock, or Preferred Stock. On October 13, 2022, our Board of Directors declared a quarterly Base Dividend of $0.4782 per share of our Preferred Stock. The dividend will be paid on or about November 15, 2022 to stockholders of record as of the close of business on November 8, 2022.
In March 2021, in light of the losses incurred from the effects of the events in Texas and Japan discussed above, the Company suspended the payment of quarterly dividends on its common stock to rebuild cash position.
On February 7, 2022, the Board of Directors reversed its earlier suspension of quarterly dividends and declared a quarterly dividend of $0.075 per share on our Class a common stock and Class B Common Stock. In the nine months ended September 30, 2023 and 2022, we paid an aggregate quarterly dividends of $0.075$0.225 per share to stockholders of our Class A common stock and Class B common stock. The Company paid $3.9 million in aggregate dividends on our common stock fordividends in an aggregate amount of $6.0 million and $5.8 million in the nine months ended September 30, 2022. 2023 and 2022, respectively. On November 2, 2022,1, 2023 our Board of Directors declared a quarterly dividend of $0.075 per share ofon our Class A common stock and Class B Common Stock.common stock. The dividend will be paid on or about November 21, 20222023 to stockholders of record as of the close of business on November 14, 2022. 13, 2023.
In the nine months ended September 30, 2023, we paid Base Dividends of $0.1594 per share of our 2012-A Preferred Stock or Preferred Stock. In the year ended December 31, 2022, the Company accrued Additional Dividends on its Preferred Stock of $0.5301 per share on its Preferred Stock in respect of GRE's results of operations through December 31, 2022, which the Company paid on May 15, 2023 for stockholders of record as of May 5, 2023. In thenine months ended September 30, 2022, we paid Base Dividends of $0.3188 per share of our2012-A Preferred Stock or Preferred Stock. We paid $0.9 million and $0.8 million in the nine months ended September 30, 2023 and 2022, respectively.
On March 11, 2013, our Board of Directors approved a program for the repurchase of up to an aggregate of 7.0 million shares of our Class B common stock. There were no repurchases under this program in the three and nine months ended September 30, 2023 In the nine months ended September 30, 2022,, the Company we acquired 639,393 Class B common stock under the stock purchase program for an aggregate amount of $1.1$4.4 million.In the nine months ended September 30, 2021, the Company acquired 623,000 Class B common stock under the stock purchase program for an aggregate amount of $3.8 million.At September 30, 2022,2023, 4.7 million shares of Class B common stock remained available for repurchase under the stock repurchase program.
On February 7, 2022, our Board of Directors authorized a program to redeem up to $1.0 million per quarter of our Preferred Stock at the liquidation preference of $8.50 per share beginning in the second quarter of 2022. On May 3, 2022, our Board of Directors authorized to redeem $2.0 million of our Preferred Stock during the second quarter of 2022. In the nine months ended September 30, 20222023, the Company redeemed 253,294 shares of 352,941Preferred Stock under the stock purchase program for an aggregate amount of $3.02.0 million.
In October 2022,On May 16, 2023, our Board of Directors approved the Company elected to exercise its rights to redeem sharesredemption of theall outstanding Preferred Stock on November 15, 2022June 16, 2023 (the "Redemption Date") at a price,the liquidation preference of $8.50 per share, (an aggregate of $8.4 million), together with an amount equal to all dividends accrued and unpaid up to, but not including, the Redemption Date. On the Redemption Date, we completed the redemption of 748,064 shares of Preferred Stock for an aggregate amount of $6.5 million and the related accrued dividends of $0.1349 per share equivalent to $0.1 million. Following the redemption, there are no shares of Preferred Stock outstanding, all rights of Preferred Stockholders have terminated, and the Preferred Stock’s ticker symbol, "GNEPRA", has been retired.
On May 3, 2022, our Board of Directors authorized the redemption of $2.0 million of our Preferred Stock during the second quarter of 2022, and on June 13, 2022, redeemed 235, 294 Preferred Stock for an aggregate amount of $2.0 million.
In June 2023, several holders of warrants exercised warrants to purchase 1,048,218 shares of Class B common stock warrants for $5.0 million.
On May 13, 2020, Genie Japan entered into a Loan Agreement with Tokyo Star Bank for a ¥150.0 million (equivalent to $1.4 million) short-term credit facility ("May 2020 Loan") with maturity date of November 13, 2020. On November 13, 2020, Genie Japan and Tokyo Star Bank amended the May 2020 Loan to extend the maturity date to May 13, 2021. Genie Japan provided a letter of credit issued by JPMorgan Chase in the amount of ¥150.0 million (equivalent to $1.4 million) as collateral. The outstanding principal amount incurred interest at 3.0% per annum and was payable monthly.
In May 2021, the Company completed the divestiture of Genie Japan including balance of the May 2020 Loan.nine months ended September 30, 2023, wepaid $2.3
On April 4, 2017, GRE, IDT Energy, and other GRE subsidiaries entered into a Credit Agreement with Vantage Commodities Financial Services II, LLC ("Vantage"), for a $20 million revolving loan facility. The borrowers consistmillionto repurchase our Class B common stock of our subsidiaries that operate REP businesses,Class B common stock tendered by our employees and those subsidiaries’an officer to satisfy tax withholding obligations are guaranteedin connection with the lapsing of restrictions on awards of restricted stock and exercise of stock options. Such shares were repurchased by GRE. The borrowers have provided as collateral a security interest inus based on their receivables, bank accounts, customer agreements, certain other material agreements and related commercial and intangible rights. The outstanding principal amount incurred interest at LIBOR plus 4.5% per annum. Interest is payable monthly, and all outstanding principal and any accrued and unpaid interest maturedfair market value on April 3, 2020. In April 2020, the revolving line of credit expired and we paid outstanding balance of $trading day immediately prior to the vesting date.3.5 million.
On December 13, 2018, we entered into a Credit Agreement with JPMorgan Chase Bank (“Credit Agreement”). On December 23, 2021,27, 2022, the Company entered into the third amendment of its existing Credit Agreement to extend the maturity date of December 31, 2022.2023. The Company continues to have an aggregate principal amount of $5.0was reduced to $3.0 million credit line facility (“Credit Line”). The Company pays a commitment fee of 0.1% per annum on the unused portion of the Credit Line as specified in the Credit Agreement. The borrowed amounts will be in the form of letters of credit which will bear interest of 1.0% per annum. The Company will also pay a fee for each letter of credit that is issued equal to the greater of $500 or 1.0% of the original maximum available amount of the letter of credit. We agreed to deposit cash in a money market account at JPMorgan Chase Bank as collateral for the line of credit equal to $5.1$3.1 million. As of September 30, 2022,2023, there is no issued letter of credit from the Credit Line. At September 30, 2022,2023, the cash collateral of $5.2$3.2 million was included in restricted cash—short-termshort-term in the consolidated balance sheet.
In the nine months ended September 30, 2022, we paid $0.4 million to repurchase 45,436 shares of our Class B common stock of our Class B common stock tendered by our employees and an officer to satisfy tax withholding obligations in connection with the lapsing of restrictions on awards of restricted stock. In the nine months ended September 30, 2021, we paid $0.2 million to repurchased 39,523 shares of our Class B common stock of our Class B common stock tendered by our employees and an officer to satisfy tax withholding obligations in connection with the lapsing of restrictions on awards of restricted stock. Such shares were repurchased by us based on their fair market value on the trading day immediately prior to the vesting date.
Off-Balance Sheet Arrangements
We do not have any “off-balance sheet arrangements,” as defined in relevant SEC regulations that are reasonably likely to have a current or future effect on our financial condition, results of operations, liquidity, capital expenditures or capital resources, other than the following. GRE has performance bonds issued through a third party for the benefit of certain utility companies and for various states in order to comply with the states’ financial requirements for retail energy providers. At September 30, 2022,2023, the Company had outstanding aggregate performance bonds of $15.2$19.4 million and a minimal amount of unused letters of credit.
Our primary market risk exposure is the price applicable to our natural gas and electricity purchases and sales. The sales price of our natural gas and electricity is primarily driven by the prevailing market price. Hypothetically, for our GRE segment, if our gross profit per unit in the three months ended September 30, 20222023 had remained the same as in the three months ended September 30, 2021,2022, our gross profit from electricity sales would have decreased by $20.1million and our gross profit from natural gas sales would have increased by $1.1 $29.8million in the three months ended September 30, 2022.and $1.9 million, respectively. Hypothetically, for our GRE segment, if our gross profit per unit in the nine months ended September 30, 20222023 had remained the same as in the nine months ended September 30, 2022, our gross profit from electricity sales would have decreased by $68.0million and our gross profit from natural gas sales would have decreasedincreased by $9.7 $43.5million in the nine months ended September 30, 2022.and $7.9 million, respectively.
The energy markets have historically been very volatile, and we can reasonably expect that electricity and natural gas prices will be subject to fluctuations in the future. In an effort to reduce the effects of the volatility of the price of electricity and natural gas on our operations, we have adopted a policy of hedging electricity and natural gas prices from time to time, at relatively lower volumes, primarily through the use of put and call options and swaps. While the use of these hedging arrangements limits the downside risk of adverse price movements, it also limits future gains from favorable movements. We do not apply hedge accounting to these options or swaps, therefore the mark-to-market change in fair value is recognized in cost of revenue in our consolidated statements of operations. We recognized gainslosses from derivative instruments of $4.5 million and $21.6 million for the three and nine months ended September 30, 2023, respectively, and gains of $35.0 million and $102.1 million in the three and nine months ended September 30, 2022 respectively, and $13.8 million and $32.8 million in the three and nine months ended September 30, 2021, respectively.from our derivative instruments. Refer to Note 7 – Derivative Instruments, for details of the hedging activities.
Evaluation of Disclosure Controls and Procedures. Our Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of our disclosure controls and procedures (as defined in RulesRules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended), as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were not effective as of September 30, 2022, due to the material weakness in internal control over financial reporting that was disclosed in our Annual Report on Form 10-K for the year ended December 31, 2021.2023.
Remediation. As previously described in Part II, Item 9A of our Annual Report on Form 10-K for the year ended December 31, 2021, we began implementing a remediation plan to address the material weakness mentioned above. The weakness will not be considered remediated, until the applicable controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively. We expect that the remediation of this material weakness will be completed in 2022.
Changes in Internal Control over Financial Reporting. There were no changes in our internal control over financial reporting during the quarter ended September 30, 20222023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Legal proceedings in which we are involved are more fully described in Note 18 to the Consolidated Financial Statements included in Item1 to Part I of this Quarterly Report on Form 10-Q.
There are no material changes from the risk factors included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021.2022.
The following table provides information with respect to purchases by us of shares of our Class B common stock during the third quarter of 2022:2023:
|
| Total |
|
| Average |
|
| Total Number |
|
| Maximum |
| ||||
July 1–31, 2022 |
|
| — |
|
| $ | — |
|
|
| — |
|
|
| 4,668,973 | |
August 1–31, 2022 |
|
| 32,944 | (2) |
|
| 10.26 |
|
|
| — |
|
|
| 4,668,973 |
|
September 1–30, 2022 |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 4,668,973 | |
Total |
|
| 32,944 |
|
| $ | 10.26 |
|
|
| — |
|
|
|
|
|
|
| Total |
|
| Average |
|
| Total Number |
|
| Maximum |
| ||||
July 1–31, 2023 |
|
| — |
|
| $ | — |
|
|
| — |
|
|
| 4,668,973 | |
August 1–31, 2023 |
|
| 64,872 | (2) |
|
| 13.30 |
|
|
| — |
|
|
| 4,668,973 |
|
September 1–30, 2023 |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 4,668,973 | |
Total |
|
| 64,872 |
|
| $ | 13.30 |
|
|
| — |
|
|
|
|
|
(1) | Under our existing stock repurchase program, approved by our Board of Directors on March 11, 2013, we were authorized to repurchase up to an aggregate of 7.0 million shares of our Class B common stock. |
(2) | Consists of Class B Common stock that |
The following table provides information with respect to redemption by us of shares of our Preferred stock during the third quarter of 2022:
|
| Total |
|
| Average |
|
| Total Number |
|
| Maximum |
| ||||
(in thousands) | ||||||||||||||||
April 1–30, 2022 |
|
| — |
|
| $ | — |
|
|
| — |
|
| $ | 2,087,405 | |
May 1–31, 2022 |
|
| 117,317 |
|
| 8.50 |
|
|
| 117,317 |
|
|
| 1,970,088 |
| |
June 1–30, 2022 |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 1,970,088 | |
Total |
|
| 117,317 |
|
| $ | 8.50 |
|
|
| 117,317 |
|
|
|
|
|
None
Not applicable
None
Exhibit |
| Description |
|
|
|
31.1* |
| |
|
|
|
31.2* |
| |
| ||
32.1* |
| |
|
|
|
32.2* |
| |
|
|
|
101.INS* |
| XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |
101.SCH* | XBRL Taxonomy Extension Schema Document | |
101.CAL* | XBRL Taxonomy Extension Calculation Linkbase Document | |
101.DEF* | XBRL Taxonomy Extension Definition Linkbase Document | |
101.LAB* | XBRL Taxonomy Extension Label Linkbase Document | |
101.PRE* | XBRL Taxonomy Extension Presentation Linkbase Document | |
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
* | Filed or furnished herewith. |
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| Genie Energy Ltd. | |
|
|
|
November | By: | /s/ Michael M. Stein |
|
| Michael M. Stein
|
|
|
|
November | By: | /s/ Avi Goldin |
|
| Avi Goldin
|