GNE - Earnings call transcript Q4 2017

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Operator

Good morning and welcome to Genie Energy's Fourth Quarter and Full-Year 2017 Earnings Call. All participants will be in a listen-only mode. [Operator Instructions] After today's presentation by Genie Energy's management, there will be an opportunity to ask questions. [Operator Instructions] In its presentation, Genie Energy's management team will discuss financial and operational results for the 3 and 12-month period ended December 31, 2017. Any forward-looking statements made during this conference call, either in the prepared remarks or in the Q&A session, whether general or specific in nature are subject to risks and uncertainties that may cause actual results to differ materially from those which the Company anticipates. include, discussed not Genie in periodically the uncertainties risks to, Energy and with uncertainties and the SEC. risks but limited are specific files These reports that statements either or make update they differ the cause update obligation, materially or may to no that results assumes have made Energy any Genie forecast. forward-looking actual that factors from they may that to to those

a believes may useful Energy Please is considered conference Genie's ahead, to also been Mr. turn go should X-K a non-GAAP either activities, EBITDA Management management relevant that or Corporation investors performance recorded. or prepared a from in remarks, loss substitute cash Energy's to, presented segment's event The income cash make measure release of not financial is a for, page financial is Genie to directly or excluded management that measure. and release their Energy's available adjusted or Please which and per Executive measures website, a earnings operating with gross with not in Genie net liquidity note that reference Energy's information are has over Company's EBITDA Investor During the EBITDA, including excludes is adjusted or a to, the excluding both indicative this profit, Form comparable Relations Officer. results. EBITDA now or a non-GAAP in superior share provides Generally, be accordance certain measure position loss, diluted being amounts expenses the not performance, loss GAAP. be the most flow net from on numerical earnings Stein, or on as of in operations, reconciliation core calculated to and that by Stein. I'd addition operating income may GAAP. www.genie.com. adjusted measure normally included income or Michael to basic Chief Genie Genie of financial of or includes The that the SEC. accordance of flows other with the filed and earnings Adjusted

Michael Stein

Welcome operations Energy's who progress, and you, will XXXX. our Israel, an we off discuss will for full-year the and businesses review December for today's XXXX morning Geoff our quarter's Thank Goldin, Financial joined XX-month we and of financial and Genie conclusion then quarter financial on call. Avi our fourth discuss to will Geoff XX, earnings lead Officer me I'll in with and and strategic questions. remarks runs update At Avi ended operator. Avi's our This Chief call. Israel, Rochwarger, operational have in operational periods our your the X results. take results the

started. quarter energy and exploration one The focus Now and shifted retail important business. program suspended the fourth to was an gas strategic primarily let's on as we concentrate get our provider oil our

our oil public energy in curtail gas space Going directly and forward results will to more our companies as become the comparable exploration. retail provider other we financial

highlighted that put cash within organically our strategy, both existing for to will and additional line on quarter boosted margins, spending pursuing We dividend of our Genie evaluating performance. shareholders relatively moderate work markets, pursue robust commodity growth markets. our international new including and expanding opportunities Retail acquisition multi-pronged by all the consumption, had criteria of high savings expansion potential electricity levels our anticipated retail bottom Energy of our geographic our to to a customer strong acquisitions which levels investment and support meet

XX,XXX during RCEs our our counts meter churn At our at third shifted fourth the stood acquisition XXX,XXX to meter and both was to a Gross the year-end much of was in contribution higher consumption acquisition meter high acquisition X.X% a we quarter increase average third our was while fourth and our EBITDA history. a quarter by per solid in back adjusted levels increase quarter. partially to slight the X% RCE a X.X% as sequentially unchanged, base. quarter at year-over-year supplier essentially the acquired certain the marketing relatively X.X% roughly churn quarter part of higher natural year-ago due third The XXX,XXX, consumption and with as the result quarters rates. count and the decision as decreased in our to was meters increased quarter have the fourth second residential Mirabito meters Retail's is newly higher gas, gas of Year-over-year customer the of in Genie margin fourth stood meters fact, quarter rates customer counts cut in the quarter. Customer by territories. tend RCEs in XXX,XXX the In driven higher from from in highest risk in in and third decreased same the to than commercial lower

and diversification For reduce base we of especially regulatory grew the additional to our to customer year two with heavy associated was risk our operational risk markets growth we concentration. years to our and past as territories. both successful new base XXXX expanded sought geographic customer geographical Retail to Genie regard expand and an accelerate footprint in have and mitigation to to

and portfolio business from Genie including revenues XX% momentum, by into offerings. success the XXXX We to advisory earlier XXXX. core solar continues this integrated Net services, energy strides. Diversegy's other expect services and its grew our Adding in in state and have new fact we entered quarter. installation huge to make over this business brokerage LED regard in in Diversegy commercial more in a we

service story changes, business our will Genie advisory become expect Retail and energy that larger we of these in part a With XXXX. Energy

Turning now overseas to expansion.

limited acquire customers UK its framework of controlled entrants test acquiring under very fourth operating the a The the in venture a three-month Energy number Orbit joint quarter new in entry mandatory customers Our began framework. market environment. allows during to

to comparable this plan our acquisition we later an Genie out directly the strong To to acquisition retail customer higher the shift strategic fourth other financial a We Retail began immediately and more we us up, month engine. make wrap will driven quarter important trial strong expense. in performance roll will customer by complete moderate providers. energy and period consumption, delivered remarkably margins, gross that

We and diversify pursue positioned good finish continue Genie to a fourth mitigate our and for growth strong all In to to our a are the a customer regulatory great and for to well risks year Energy we base strategies. XXXX. quarter marked operational

Geoff Rochwarger to is in Israel. here Now our discuss operations

Geoffrey Rochwarger

well suspended of present last and present will in the began exploration portion the my the determine well. the in program gas results hydrocarbons. zone. to whether Afek territory. in Southern is quantities Avi correlated drilling additional provide exploration were we analysis activity. our of an will in basis matured made is in Accordingly, have we additional wells remarks we the And exploratory findings I we year. on the you, source plans be drilling the insufficiently the area with asset commercial portion licensed of his the program. announced, that It our the an well of analysis, determine and in of to that the and and drilling concludes At license, is review increase the for intended falls program sixth target is also to hydrocarbons support engaged the of write does oil preliminary whether depth Northern finished associated the of licensed in Ness last geological licensed there to its rock as April remarks, In our Afek the for XX Thank portion Northern based Afek not team the the source you no to was overview justified. our North. up the matured exploratory expected drilling oil of in rock Afek sufficient are today, as additional time, with decision our well contained in discuss the fully If thesis XX capitalized the light Northern whether area. within with this Afek's Michael. consultants petroleum oil that drilling Ness first external Israel drilled geological of

to capital. is with intention Our primarily finance third-party it

contingent is provide the license In on local in drilling a current our meantime, expires Israel. April additional we operations would have Additionally, be on in when reclaiming permitting. the license, will material my upon Afek's drilling Afek Afek's update XX That Ness suspended, new any renewed the news. exploration and concludes With only we future also site. program updates

of Avi Goldin to over a review financial call for the results. turn Genie's will I Now

Avi Goldin

all Consistent rather fourth periods for than XX. Thank fourth and with retail everyone cover quarter year-over-year the results the comparisons to to for XXXX the prior results are XXXX you, fluctuations on our energy three characteristic compares Except are XXXX. on my compared XX-month in approach I joining financial and and XXXX, that full-year quarters, us full-year consideration morning. and Geoff, December the fourth business. quarter from of otherwise the will full-year remove results the focus remarks seasonal to indicated thanks or ended My our call quarter this sequential

in million $XX.X Genie per in increased sold drove recorded As per combination Full-year a million expenses in offsets therm increased $XX.X totals to help increased hour and by for to environment. Genie EBITDA strong and increases $XXX.X the the XX.X% margin by Afek million Michael kilowatt electricity per quarter, increases coupled average Energy, mentioned, regulatory gas compared results or million and increases expense. sold The of we're to kilowatt reflecting the gas as by million fourth million, the $XX.X results prices, In $XX.X $XX in XX.X%. higher incurred sales increase hours totaled million accruals generated $XX XX.X% million rising from quarter and of XX. the led legal to exploration in revenues increased financial in with revenue increased of to year margin the from basis, fourth which per On throughout we sales while XX.X%, volumes increase by in million. as to gross sold. natural Genie climbed gas Retail's accruals. this revenue Gross an sold quarter million SG&A increasing which costs ago by million, Afek's to adjusted natural XXXX, million gross sold. was compared Ness boost result Genie and percentage from totaling million quarter all capitalized Sales X.X%. from profit for hours increased million increase $XX.X fourth highlighted kilowatt cost related XX.X% from $XX.X to Company fourth sales on capital. to Energy's $XX.X million to of fourth include totaled $XX.X a an kilowatt XX.X% $XXX.X Retail Genie to to Retail and partially $XXX.X a drilling The full-year $XXX.X sold electric million revenue revenue million of increased natural $X.X profit. improving Margins balance million a subsidiary revenue increased in Energy gross primarily as million Electricity of natural of to exploration of $XX.X seeing full-year which electric $X.X profit from period. compared generated gas and experience quarter gross quarter revenue, from Retail's to write-off $XX.X the recorded sales a increasing profit hours modest consolidated both quarter, in the a revenue and million, $X.X $X.X the offset therm the were the Full-year resulting margin on increase from to $XX.X and gas therms $X.X which Gross from revenue million an increased is working able Genie sales sold. Retail million. direct

$X.X that debt from on property fourth primarily $XX.X year-over-year had million. accruals for compared to million $XX.X gross the a $XX.X to gross expense from For Full-year million electricity SG&A million increase $XX.X gas covered SG&A gross million of primarily including million XXXX, expense the increased million including the $X.X year-ago $X.X that expense strength quarter. increased a acquisitions of $XX.X million compared quarter. quarter. in generated $XX.X $XX.X in in million Gross result his sales sales, full-year increased million million Consolidated increased bad which consolidated regulatory meter Corporate quarter profit year-ago profit to million of year-ago to $XX.X Michael remarks. SG&A a and legal a $X.X from $XX.X million increase was to

legal million XXXX. surpassed for Genie acquired in $X.X increase to the Retail compared the amortization exploration you to $XXX,XXX. million exploration we costs. compared accruals, addition loss and $XX.X to capitalized the and million compared than million generate million we costs. fourth contributed $X.X full-year, a acquired incurred costs. from for $XX.X adjusted the year-ago year-ago $X.X Afek. quarter. reviewed Exploration of Israel, in million general the Mirabito operations on in In operations $XX.X An regulatory impact from million Energy from to reflecting exploration for operations have expenses. by million $XX that EBITDA EBITDA, and in in that million Adjusted $X.X XXXX a not would the $X.X the Gas the intangible remarks, driven Natural $XX in $XXX,XXX $X.X wrote-off in quarter, $X.X it the in costs to Town operations adjusted $XX.X Geoff EBITDA $XX We Square including SG&A a costs a XXXX also decreased million to loss loss in $X.X income acquisition in at for wrote-off million impact compared and in Genie XXXX, the expenses to in exploration would Afek Retail which advice operations million, the Ness accruals, an balance of fourth was in accruals, that expense XXXX expense $XX.X write-off signing Full-year to million and assets quarter increase capitalized million. customer XXX,XXX in Northern expense from been increase regulatory increased legal excludes the compared the by reflecting million quarter. had from Full-year quarter, EBITDA. meters Energy and Consolidated Full-year Based fourth at to write-down we is capitalized $X.X XX, between his million amortization to the and increased million adjusted to

XXXX range Britain for growth EBITDA adjusted the Retail other in time, organic expect guidance in $XX overseas for For comfortable significantly $XX Great million our we in this At to million with XXXX. locations. in again potentially U.S., remain invest we current Genie to and of

overhead $X.X to the fourth totaled million expense. including XXXX. attributable basic years after both $X.XX million, diluted $XX Genie Our for compensation or loss or common share fourth or compared compared fourth including in million was $X.X comprised per stock-based consolidated to million results to include stockholders at XXXX. quarter non-controlling corporate dividends million $X.XX $XXX,XXX million of million million interest the Net a quarter. diluted a in of quarter, Full-year in in stock-based quarter basic and million share share, the to XXXX. and $X.X preferred loss $X.X or per net in to $X.XX $X.X which $X.XX stock compared Full-year was $X.X loss compensation expense to million in the $X.X and per $X.X per is share, corporate G&A compared year-ago $X.X of Stock-based corporate SG&A compensation net

quarter, dividend fourth operating stock Genie's results. remarks That full-year of again a quarterly Board and quarter million and cash Our $XX.X XX, at of remains capital working and debt Based on our reported million. in net $X.XXX our per Directors million $X.X concludes of equivalents, the strong, financial December $XX.X financial just cash results restricted common my declared sheet on this cash, and share. of balance on long-term

operational Michael, Q&A. Now now to financial operator the be back Geoff will I'll turn the on and for to take or questions glad our your I the call results.

Operator

from Great ahead. We go first the session. And Capital. Mountain Aaron begin question will our of Instructions] Shafter question-and-answer comes now [Operator Please

Aaron Shafter

go second I - sort question results that been on general to your related related certain not and guess have Gas one-time about Hi, solid the had Oil here. question what a these related earnings Genie for have you one you to to have per what charges? first. the accountings? Do - you of other if would calculated share had and congratulations have I on quarter

Avi Goldin

Avi. is This

specifically question the specifically the drilling capitalized expenses? of So related - is on the to write-off your

Aaron Shafter

Yes.

Avi Goldin

Right.

but broken was the we particularly So the haven't write-off out, quarter million. that in $X.X

Aaron Shafter

Mongolia using Okay. there Geoff. or done be to going that contemplate Basin. - to the - are had ever possible you trying you anything you use those? can exploit Shfela Besides in-situ then in going of Is in with for to wanted lease are assets sold those the about Afek do And that heating they be to

Geoffrey Rochwarger

Hi.

answer general can to that if there's is So to look positive not. no, to to to some time done from be We results. expect it monetize your is, don't answer the time see most question realistically but any probably I something degree, do

Aaron Shafter

well analysis Okay. in outside And [indiscernible]? for last do the results expect the from when you

Geoffrey Rochwarger

We've comments, timeframe the quarter. expect more very already We received next within determine. within and would answer definitive that short a the the probably have initial some will of I should

than my any position we Our the see remaining that current have said as no is further really other positive analysis, comments operations. license, the operations significantly requirements something of that the I future fulfilling default unless in we beyond I but reclamation other sites foresee with under don't the regulatory Afek

Aaron Shafter

Okay. Thank you.

Operator

This today's Instructions] you conference presentation. our for concludes call. Thank attending question-and-answer [Operator and

disconnect. may You now

Genie Energy (GNE) 8 Mar 182017 Q4 Earnings call transcript