SPKE - Earnings call transcript Q2 2019

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Operator

Greetings, and welcome to Spark Energy's Second Quarter 2019 Earnings Conference Call. [Operator Instructions].

As a reminder, this conference is being recorded.

I'd now like to turn the conference over to Christian Hettick with Spark Energy Inc. Thank you. ahead. go Please

Christian Hettick

at Energy's this CFO, is believe Spark required which be the XXXX Call. our today's on as Nathan contain our results be result yesterday's Earnings to date. assumptions in obligation management may today future of urge Welcome our discussion Jones. review is being Second Actual based Please factors broadcast SEC are call except differ CEO, as to website earnings of section law. we no a also Investor undertake and cautionary of events, to can We statements, With via materially. This us in by the that We the from our to Kroeker; Relations Quarter risk sparkenergy.com. Jim webcast. well may these reasonable update forward-looking located as in that It as filings. release everyone as statement statements note

refer will and we non-GAAP addition, to In measures. financial GAAP both

information yesterday's and comparable refer our please to measures, GAAP the most to directly For financial release. reconciliations non-GAAP earnings measures regarding

With to turn call Kroeker, our the that, Nathan I'll CEO. over

Nathan Kroeker

I organic increased Christian. call. will of focus growth. welcome in with in strategic the financials. million the market by investment customer million everyone want to second acquisitions I second of $XX.X Jones, summary reported last we compared of of year, EBITDA mass our today's our more quarter, providing reflecting earning $XX.X adjusted as on a CFO, quarter our customer part then on details to begin results, Jim you, provide Thank will In the

segments. quarter year decreased gas our which a temperatures by natural by was decrease driven commodity both margin These $XX.X to the across gross million decreases were much from offset the and increased in led mostly our margins. quarter, electricity second unit last of Retail of volumes footprint, milder-than-normal for

that for our want annual on to returning an unit and to unit normal continuing basis. We to $XX margins rate hour investors see highlight are pleased megawatt to improve, of are we margins to per $XX

Our G&A cost settlement Settling majority and of down increased due the primarily exposure. a us to resolves litigation Absent we quarterly reduce go-forward associated litigation year's litigation. our last quarter believe these is from basis, of our from has G&A a cases to with on charge quarter nonrecurring second enables the nonrecurring significant X% second of these potential items, XXXX. the

brand acquired another Most a XXXX. We are customer all of by quarter the billing nearing billing our to systems to of we needed project. consolidating the And first one recently, our of we system. retire two of down and the completed consolidation end path have the systems migrations clear

down $XX are last the over end we of on trending to this calls, see year. a talked normalized We run our savings few pleased on we've the as in million about costs And achieve to expect rate basis. G&A by

Our pricing we more to smaller customer residential across RCE acquiring customer on being count all segments. our is as and customers mix, focusing and disciplined continue optimize commercial on down

seasonal the that retail from from our second quarter and is year is low in accomplished commercial remind both year's in Our as adjusted lowest the throughput customers. EBITDA we've quarter attrition second investors back our large as quarter commodities reduction the of this first points. want majority to quarter with margin the improved line from planned of typically We both XX% last perspective, the gross at and is

customer with this our the weather increased Given with experienced acquisitions and outstanding and we cases, we quarter. extremely May milder June, the pleased normal legal resolution coupled of seasonality and are in the

over for call Jim? will turn And the remarks. his financial prepared now my concludes I That that, review. to Jim with

James Jones

were quarter of quarter electricity Retail EBITDA adjusted gross to million We to lower the lower-margin In our due customer compared Nathan. last Volumes ago for $XX.X morning. a the achieved pivot year's the we our In Good year last of XXX,XXX compared as second the a retail base. $XX.X compared commercial from a in primarily quarter, year. XXX,XXX second $XX.X with year. million million reduction gross in in $XX.X million segment, ended quarter second was RCEs million. quarter was compared you, $XX.X margin our of with RCEs result larger, customers. with to margin second away million Thank last $XX.X

price as key improvements a $XX.X than million XXXX Milder natural by These unit markets to second weather volumes. customer from over were impacts result second soft up our $X.X our were last XX% was quarter In offset impacted compared our our XXXX retail unit XX% segment, our of gas in partially in which X%. margin lower were across million the by Volumes several environment. more of commodity margin second quarter year. offset and a increase electricity quarter the gross of margins, mix

customer in of in as million our nonrecurring RCE our gas to [indiscernible] charges attributable portfolio the to last due markets. as are expenses several G&A by [indiscernible] second weather volumes natural XXX,XXX milder key legal $XX.X quarter. were gas quarter compared RCE driven year's well Lower to of higher as to million our year-over-year commercial XXX,XXX $XX.X of

to believe As us these [indiscernible]. charges enabled we Nathan mentioned,

that to and customer focus portfolios we back sales more [indiscernible] our and rather be related on matters G&A than historical regulatory increased recent levels in acquisitions our our will XXXX. to Given our expect quality, to platform legal

reflecting in RCE low-margin was RCEs, the commercial continued large shift quarter count Total customers. from XXX,XXX away second our

flat with $X.X million. a benefit back this year for Our last XXXX. attrition the quarter is X.X% the in quarter of was XX% million year an to expense compared $X.X $X.X improved of compared million second Income tax Interest as quarter from year first to was expense expense the line of of for to ago. X.X% a of and

The the $X.XX in million net fully was $XX.X by X loss net income share driven quarter net $X.XX factors. $XX.X was share million XXXX. fully or Our per for diluted the for income or of quarter to compared decrease diluted of per second

was charge. nonrecurring First a legal

million Second this year loss quarter accounting have had we of a mark-to-market noncash ago. a associated mark-to-market mark-to-market of was with compared million $XX.X made gain a to $XX.X We changes [indiscernible].

reminded we've investors of towards June on receive to noncash we our preferred mark-to-market on market on our affect July quarter in EBITDA. per As actual On is on past, net why X. fix-priced not net be to investors do continue performance share cash a away good our for September income don't stock, business This contracts. XX, adjusted XX XX per our June common cash we Series dividend July and expect A as paid October income On common movements the paid XX, $X.XXXXX quarterly to paid and and is share the and stock the to stock we be from our respectively. announced second -- believe guide dividend A we Class preferred on $X.XXXXX we indicator

As continue we expect in we've go-forward dividends basis. stated the these to past, pay to on a

have. to Back That's Nathan. all you, I

Nathan Kroeker

half continuing Jim. they We settled behind stable the receivable last Thanks, a that cost pieces to savings expect couple done effects the story. show the to earnings work steps the to and second this the up have months. taken year, unit through us indicated would of of we've legacy to taken the agreement. expand trend clean begin have tax of of we as believe margins G&A see over continuing initiative. to our litigation and to due We growth, our the we've initiatives normalized Midway and to all that We down the year our we produce put several we've full we XX necessary

marketing activities further Finally, mass will we are solidify and base. that sales laser-focused we in grow future market and on our investing customer believe our

for connecting thank I we customers work want a about and future for to thank you to to us excited their provider. next and their producing We're quarter, I our good the want our call. on and choosing as look our with hard forward very employees energy suppliers Spark's

Operator

Thank today's participation. your Thank you. for This concludes teleconference. you

Christian Hettick	IR Professional
Nathan Kroeker	President, CEO & Director
James Jones	CFO & Principal Accounting Officer

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