GNE - Earnings call transcript Q3 2018

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good evening, and welcome to Genie Energy’s Third Quarter 2018 Earnings Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] In this presentation, Genie Energy’s management team will discuss financial and operational results for the three-month period ended September 30, 2018. 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 that 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

on a this is EBITDA may net Stein, is release The that that www.genie.com. Investor turn Form X-K of management EBITDA of Genie SEC. income, remarks, and excluding make ahead, useful like adjusted to a Genie The now of Executive Please Mr. with relevant the reconciliation filed a measure. the adjusted Energy's by which the Energy’s core reference Relations go And earnings Genie website both During EBITDA, may adjusted Corporation to conference to operating the Stein. Genie believes non-GAAP Management Energy’s investors including Officer. Michael indicative on event available management results. over or provides the information the earnings to being note is Energy recorded. or Genie I segment’s that’s not and be expenses certain would has Chief been also page Please release,

Michael Stein

Officer, XX, our the and will September our will Today Thank ended remarks and you, quarter's for Avi operator. operational our strategic Welcome results. as earnings three-month recent third discuss Financial review and progress some our of focus period financial we operational My quarter to call. Chief Genie Goldin, Energy's well results developments. will the XXXX on then as financial XXXX

a one its Afek if the impact the GOGAS that for minimally minority conserve in early our the oil complete three oil gas process Afek on including financial your and in we energy retail and be intensively our announced quarters. fourth down expenses provider in our in of we positively while previously continues on focusing service businesses glad exploration end significant at of September, significant our and revenue program, our of In that our work operating in and majority we the and priorities. and and market to curtail quarter the our will Israel, as work year. drilling on I to several improve awaiting in stake mitigate our in the will diversifying subsidiary markets The geographic business. progress in on remarks, out, each both consolidated preserving our comparisons Avi's year-over-year to and furtherance sources team, completed ability final is by impact test is year. Simplifying investing quarter, restructuring Overall, wells profitability its cash long growth. first questions winding deal of the initiate could of Strategically, business take more expected Israel. the spend to third QX regulatory and energy total as to bottom for made the accelerated engaged results our Israel, while program, of Following goal, Also services the and divested contingencies a operations line and possibly opening new in gas interest offerings and still our and risk in expect next term permitting all

fourth strategy. expect corresponding story, structure report and so exploration and quarter, a our With with program that are to our of part we and quarterly management closely reporting assessing to the the In changes aligns reporting structure we oil substantial no business longer gas more begin brokerage our energy efficient Solar, results include of Services. on segment solar and Energy technologies, commercial rapidly on focused Genie business from GES the markets will focus growing moment, initiatives in and including that other use more on Genie resources. a new services, energy Diversegy, prison will a a our

We a it to segment also international on provider reaches likely growing energy better our going businesses, our investors evaluate We our once business we these think understand separate will retail that report will critical is hope add results it mass. help and changes forward.

the diversification to in investment Technologies, since a go Last strategic the manufacturer they mitigation our we often acquisition initiatives solar Prism Now high other based York. want Risk I stake in on New majority in term panels week, and growth touch goals. long through announced hand-in-hand. Solar of efficiency of revenue

with energy clients. team complete solar Prism’s plus solutions We share second to commercial provide holder largest will for

next to extend to our Prism accretive few services perspective, believe we From important energy commercial synergistic in as Prism role a expect play energy offerings will hope share and growth business, we an over EBITDA chain. larger We Projects the in We the our that months. information value Solar be on XXXX. along the more

expanding In revenue by new overseas. expect to We doing In growth Energy we U.K., at customers Japan, to markets begin enrolling healthy in seeking also a Both significantly the favorable energy flexibility our optimizing they large and rate. early relatively are acquisitions. adding aggregate, the diversification is year. Orbit retail competitive for environments. as are customers customer enhanced very with investment offer of as markets In the end well,

business. highlights place, from few operational in Retail current I want picture big the Energy cover Genie a with Now, our to

The pulling meters increased year-over-year compared this higher reflects to certain weather compared markets our revenue increase year driven quarter. warmer ago year, from by electricity the and last York was a return to relatively to margins as as with meter Public factors higher average consumption, compensated York for over The third to attrition orders lower the the low from also while generally and back more meters These summer New acquire the That as customer income value X.X% New quarter’s increase year. of well up pursuant regulatory than Commission consumption. efforts consumption risk. customers Service was than past those in were lower factor strong

acquisitions. Our At compared in We XXX,XXX third served their of bottom in XXX,XXX this quarter, quarter line XX, the XX,XXX RCEs. comprising XXX,XXX meters we new September half to the pullback thereby and quarter, year compared XXXX. to ago benefited added substantially meters the acquisition customer from nearly expense

we ahead, objectives base investment build high as in and to Looking if the increase up, fourth in acquisitions third our expect meter of milestones not good in progress measured pass quarter. To significant during RCEs some pursuit our in we consumption stabilize customer made our gradually quarter. the wrap strategic and

to our strategic modest mitigate and our spend financially. We new very quarter strong and pursue a initiatives growth consumption in contributed continue meter new Meanwhile, risk sharpen meters to to on higher markets. promising with focus, shift a acquisitions

Goldin in results detail. Avi is to discuss here financial those Now, greater

Avi Goldin

to for Mike. third for month everyone cover quarter three this evening. ended XXXX. The XXXX characteristic joining rather compare focusing year-over-year you, on the sequential XXth. My of this in to on results of the energy third the will Thank Thanks business. our consideration quarter's today financial quarter September Throughout comparisons a remarks, that the than results remarks from factors our retail are period removes call of my the I us seasonal

on relatively driven for to of covers air our the Sales consumption for which period. highest the in low levels electricity quarter third tend months natural typically be the conditioning. the by demand gas year, and summer the captures hand, other The

reduced in by increased $X $XXX,XXX. SG&A As results our revenue million by release, expense impacted accruals this we discussed that earnings and legal quarter by

We reduced of expense operations net income by The $X.X also the prior $X.X reduced accrual SG&A and that two, legal by reversed from million. a EBITDA million. impact

regulatory and to retail $X.X comparison pending decreased by quarter, $X.X million $XXX,XXX. to ago note it GDP is SGA For grew million increased purposes, important Jersey. New that matter by related The accrual year the in revenue

The bottom third with was financial of to respect strong line. quarter quarter, XXXX a particularly our

Consolidated will I third $XX.X increased million million. reasons in revenue quarter $XX.X from my to For detail in later comments.

the of accrual. $XX.X SGA the reversal per from electric well and in the Michael Consolidated XX% million year primarily incurred consumption discussed, new to reflecting result ago enough a $XX.X year-over-year legal quarter, served. million quarter, and meter reversal the issuance of $XX test of decreased decrease permits. profit to decreased compared expense offset impact the meter than accruals the We As in Gross the average exploration the from of in $XX.X expense, in requisition reduced pending part, electric million, to million the the of no revenue. more expense offset as increased

we quarter, operating transaction the in divestiture the of the and of expense our accelerated compared to compared operations effects year to ago year Energy, at equity and the acquisition of The combined JV The the Atid. in the the completed ago During in loss our majority led U.K. a program $X.X quarter. was loss $XXX,XXX our million, Israel that the position million to in $XXX,XXX Orbit meter $X.X of quarter.

come. continue time as to it businesses expect some investing We for to scales the in

EBITDA million EBTIDA XXXX. Retail the compared million $X.X quarter. compared was operations $X.X million compared ago to in nine from in totaled quarter $X.X the year Genie adjusted contributed $X.X income for months contribution per $X ago the of Consolidated quarter EBITDA compared the consolidated of quarter. for Our adjusted the million to $X.X to million was adjusted Energy $X.XX totaled in for third first million. the quarter, million. the in GRE’s $X.XX $XX.X EPS year to share year

continues sheet strengthen. to Our balance

up we To a U.K. seven share. customer dividend Directors bottom drove meter in top up in and a and Board September half a this quarter, as and quarter, per in As expense common Supported cash, $XX.X cents line ramped year-over-year at capital customer operating million reported our our stock restricted results results this improvement $XX.X significant increase, XXth, and results financial results cash, in of investment even cash our equivalents financial of by decrease we in in our sum line acquisition our declared our networking acquisition million. a strong quarterly our again the consumption domestic

line Q&A. bottom I'll That on results. spending my turn financial and Our operator exploration. concludes the in curtailed the also to the third benefit to oil gas call from now back for quarter results remarks continue

Operator

Thank you.

today now begin be will [Operator session. questioner Please the first Instructions] ahead [Indiscernible]. go will question-and-answer We Our

Unidentified Analyst

well the you going you the to hopefully, to questions, year. call? reported off as holding get you. thank -- of the I in to are actually next off is be said, end be the held conference it of other giving you information going in be to words, by you the some as it, have you you couple can Yes, end a Israel, of going Are have for information or to soon

Michael Stein

Stein. way -- would or Hi, Michael we next in thanks earnings This some the likely negative. is one say material for if question. I I positive that it report are would would the the or on say that results before the another, way if call.

Unidentified Analyst

enough. fair Okay,

much The there any or it’s there going this in other the well Are pretty is well I have if question dry, second completely hopper, to any wells be that, areas dry. other the Or out over? to the wells then any is is if is of it explore?

Michael Stein

think other currently we say be to Heights, this Genie I Energy never, Golan and for safe are think I over. planning wells will drill Never not any it's likely the it but to that site. beyond one at that say

Unidentified Analyst

very Okay. much. you Thank

Operator

Management. the Great And will go Shafter next with Mountain Please questioner Aaron ahead. Capital

Aaron Shafter

to quarter a what be very First, looks on good solid. your congratulations of

First, before in the closes, switched offbeat after earnings sort and an there why? too wondering question. Is it's the why close you've call done the quarters. you to I’m conference previous and a of reason release going

Michael Stein

convenience. it's out of out mostly Honestly, of

shocked a be We better it the we're in and I it's one in little very at day. driving little the way, might Also, of we team, bit a do member have the bit the to beginning than morning, a afternoon. day long of feel more the end very our of him the I like at for think

Aaron Shafter

Okay. My second, acquisition. regarding Prism, the Prism

can all. the at on announcement. synergies of – top about expand the wondering you mentioned talked you I’m if earnings that You some at

Michael Stein

commercial Yes, Genie division one hadn't had engaging we about visions, large quite so been Retail the medium time. some Energy to division, of sales talking has but for commercial in never sized the really Services really, we been that

terms So -- that in there's of think sales of we some synergy the terms there certainly in activities.

retail base that -- retail retail us directions, a provider both in a our fully We in also integrated and way board. gives the for kind advantages of the fully a division across legacy services for being believed both

Aaron Shafter

is three which on some that asked there Afek, the results that previous on mean the the possibility time, you think year. finally earlier it end before the a approvals Does that a imminent? final the testing you the Last of – thought of And you get that that, questions about, you be the are be that could caller they'll month would expressed last think in call call, the months.

all? didn't upon know, just You and if really you I’m wondering can that expand at

Michael Stein

of that confident where to period well take is shouldn't feeling So it describe that feeling increasingly I believe -- looking on we're be relatively any you we're it'll the and we're time. way do the soon,

out, initial and going rest that’s be year. the of some of get reasonably does period small get on either supporting to that is an hope sort to pretty scope hope the is extended for be like of about it's because of this potential the requires the Our we'll dragged of exist that things able statement off But and work quickly. activity, to The time.

Aaron Shafter

much. very Thanks, Okay.

Operator

And Dave is with go Wealth the Canum questioner Canum Please Management. next ahead.

Dave Canum

Hi, Michael congratulations short a questions. very Couple of quarter. on

is apologize; that first speak just I timeline My to is, of am the was And opportunity. press despite what one could buying off, driving, being million free not about the that generative? that an and $XX JV aggressively capitalized year-to-date start looks about have U.K. believe approximately so contributed prices The our in so dollars allocation, what while we it loss to reiterate part why there of Why stock release. after position. I wasn't if if then are said. you drain the I to we the was the at flow you cash could these like International you pick What second we've the desktop, that for able the ourselves over million, in capital still CapEx aren't, I question dividend finding generated cash relates back a $XX

Avi Goldin

much Avi. for This very you question. thank Hi, the is

quarter. take U.K. equity the order, loss the in So $XXX,XXX was for in the

future, investment us. foreseeable expect an We for the going that be to for that's

of sort generating the places investing in second XXXX, an XXXX and as part should we of sort phases long of part a it and XXXX, driving the timeframe. be broader that initial your outlined can bit. So story was In think answer strategy so the its let’s as question, that little through cash some well growth some -- of term taking call of you're a performance be expectation, for to that

about question As generation. related your to flow same the cash

being you are performance dividend places as with pleased growth. with to financial of That money to term as things that do as seen we've the some the well exciting we've know doing that we short you've said, a We investigate been able have the very to sheet. to avenues continue for some been with within the put some sort and continuing other of of balance pay

active picture that an we to we have relates and we it regular on as a do Specifically buybacks, I we a eye recurring we as in would consider authorization, of stock it's basis, an keep do evaluate the mean something that on a basis. that want to, part

the is we But, table. front and in want put would in we sit grow, cash to pretty now, capitalization we of the put much surely, into We with initiatives continue think plan and the on pleased, it pretty consider we the us, execute everything could to have where So on we balance capitalization we we're that that of need right have position places strategic that place. to to front the sheet. do,

Dave Canum

is for months the the time EBITDA and our for adjusted year? CapEx anticipated the year-to-date, what full first Michael,

Avi Goldin

not for CapEx you the year is So know --it's full not, material. not

it our capital is know internal perspective, we like in terms spending small have -- platform of don't what known amount a that. don't we capital a You tremendous sort this investments of capitalized most on of in of some from

corporate, full level, the EBITDA year-to-date. adjusted general consolidated at If looking correct? [Indiscernible] for so a you're today that at Is

Dave Canum

the adjusted it’s for nine Yes, months. EBITDA first

Avi Goldin

then dividends So $XX.X investments be and it’s there obviously And million. from we’ll making. from

Dave Canum

free probably to a at -- $XX we're for we're year. million flow cash run the generate Okay, rate

is a that some don't flow this and significantly don't free problem know, we don't return, that, I but have balanced acquisition, sure with perhaps But deploying cash to as yield. me we're generate other the it the than that higher yielding have maybe the such XX% investing our a U.K. an run, to just thing same why, that’s XX% cash know approach. returns I in [ph] basically of GDP long have with no that I company a seems So -- in areas investment will solar

anymore. full stop. make You Maybe just sense can't

message believe ago, number just off a if when Just the for little you a [Indiscernible] small a the I touch in And work. Japan. you was mentioned had out give bit there. up if good could I simply could of that you update Keep the opportunity what is? opportunity the an there on me months there

Michael Stein

Sorry.

I point. opportunities that we're Japan just So, generally not or for do think two term. things long the either guess. term one expectations just for will them be -- of that for in investing similar greater do for have long I know We

and us, to together. returns investor similar the know You put

goes for U.K. Japan. the in So that for that goes goes the JV and for that solar,

we near at, Some look of those opportunities some or perspective things trying a of all those activities term build growth. longer But of we're you ones horizon, no have that long real three horizon. them a of the have those to and term all know, more look for and we term activities a has that with at business of with the from other

there the We -- model. little the of good old, it. new in it So structured is and see better deregulated we Japan, structured terms in know the It's market they not a We as brand the a structured so continuing things, where -- terms market. only $XX see we content a the U.S. -- that. brand, is year the framework is tour a just they in that largest EBITDA is in the U.S. regulators want a sustainable be of way million year over want than comes In – probably to about world. it lot a Japan we're the and size to a it the one the a to be in residential when particular, It deregulating be of lot regular a to you market twice deregulated business.

plan the and our business a space space over little as in So on entering management today, the similar. our our competitors, to early extremely hired be a excited our something and just later bit with we've on in bit we our a it. like deregulated we're in gave Japan think we came right our We little team execute think, in us an of can started can result about advantage be and

with us for our we excited So thank and us shareholders our and encouraging productivity. being

Dave Canum

Thank you.

Operator

And Anthony go Private of the next Marchese today Investor. question Please ahead. be will

Anthony Marchese

guys. Hi,

of plans in great outreach. of focused You’ve all last what gas. you investor done one generating that obviously a cash investor a etcetera, terms page, realized sudden and EBITDA job a different I are you that oil on not your for time mentioned is have

get If going spend it you’re that money value, purposely road just buy enhanced non-deal to would to is me people going not some to want some then interested show may rate undervalued stock shareholder what think I perhaps a there more seem materially to to and back, are conferences to stock?

Michael Stein

the for of undervalued. terms agree thanks and you in we the Obviously Anthony, its question with encouragement always. Hi, as being

are to attend next month mistaken, this I’m if think I conference week, We sorry suppose not actually the in Florida.

Avi Goldin

in week Next Texas.

Michael Stein

Next shareholder It’s Texas, definitely conference we have, week shareholder, certainly sorry, calls. potential we’re a process. so have to going we to that in continue

little of I see a we’re positive it’s I and hopefully moment we’ll think little the with positive doing process continue moment. six things a we’ve to and last months think let’s bit seen over the bit of a

Avi Goldin

chance if look another one make Q. digest then morning. in what prior it to we’ve call other call. cupping more you’re what and – release in doing with a half have could just and of X.XX had It than the to in so to unusual. that. are is people an the I’ll made potential in do join to even have the I something if the having call to I in sort do but than companies In apt call prior X.XX rather and foot or have conference more evening to evening yourself the in ordinary conference evening information at most unless think your really releasing suggestion, results I company call suggestion, hour evening at leave my in seems a make is or as opinion unusual, in the my And the sense People shooting at opinion, just it they business a the a later change a results the want the think

Michael Stein

the coincidence on results ask again. had advice me would is suggest more happen just and Thanks. number shareholder you take advising, direct way. had being just a years. that’s to interest of most reason that the shareholders It I a but maybe Thanks to questions the I correlation are active maybe call out in in active ask you more that the number or I we’ve because kind outstanding. work month more The the are served definitely we at people reached is to hear a I questions can more I we’ve few last think say number we all. the or would of questions potential the if the know show, conference and your in morning. joining and time, shareholders, to seen the That’s out I the don’t of All better been results. call your you’ve because

Anthony Marchese

Appreciated. right. All

Operator

looks at [Operator to it time. Instructions] Okay. be no this further And questions

attending disconnect today’s call. will Thank today’s you answer presentation conclude this may conference question now for your you session and So and our and lines.

Genie Energy (GNE) 5 Nov 182018 Q3 Earnings call transcript