SPKE - Earnings call transcript Q3 2019

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Mike Barajas

Good morning and welcome to Spark Energy's Third Quarter 2019 Earnings Call. This call is also being broadcast via webcast, which can be located in the Investor Relations section of our website at sparkenergy.com. With us today from management is our CEO, Nathan Kroeker; and our CFO, Jim Jones.

Please note that today's discussion may contain forward-looking statements, which are based on assumptions that we believe to be reasonable as of this date. Actual results may differ materially. review well harbor in as filings. to earnings and our everyone as release the urge the statement safe yesterday's SEC We risk factors undertake as these events, We as to of except law. result future statements by required obligation no a update

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

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

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

Nathan Kroeker

call. welcome the by the Thank improved residential begin and the will well I then adjusted an of third you, earning value want of million, hedging as to we of will from our details to higher customers. financials. commercial $XX.X EBITDA providing results everyone our Mike. third reported summary a on strategic focus unit strategies increased Jones, provide margins, year, more by as on XX% quarter, today's I driven In and CFO, our Jim small increase over last quarter

was margin the year increase the million. $XX.X for gross Retail XX% last was $XX.X third which quarter, from quarter a million

very highest performed volatility ever strategy seen contracts. we've hour on this on protecting, an some our pleased unit to to run our annual we want past megawatt basis. per rates the I margins hedging highlight to $XX we improve that quarters unit discussed want price returning for We price are seeing of in to the margins have highlight several even investors that for $XX to to margins the and see fixed despite summer, enhancing are our continuing ERCOT as well of normal

attributable back and last third being year's line quarter attrition healthier. customer improved customer by Our overall our with first from the in to much book of year this it's XX% quarter

combined Our mix. to as RCE on and for resulted segments customer small our being has continued customer customers count optimize disciplined quarter we in residential continue our acquiring across with pricing down all commercial focus the

the brand of the in large accomplished our customers are majority now and system our reduction and commercial We have of approaching we consolidations. steps planned final

million by rate savings We still end expecting over $XX are XXXX. in run year

our over it XXXX We end which than improve all this the million of time comfortable very the our was book residential higher of is balance customers two heading in strategy that the XXXX for this quarter. quarter, percentage contributed customer we past at level and the to increased sheet XX% at respectively. This the feel XXX% our summer years we've with combined in summary, have overall over third of work in and credit hard In winter to into done reflects the an this $XXX ERCOT hedging support and liquidity business. with successful

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

Jim Jones

$XX.X million of Good was quarter a These customers. the with of Nathan. were Retail you, electricity commodity improvements quarter for and margin margin lower quarter in offset retail which gross our Thank $XX.X by mix impacts larger segment, customer third compared price achieved were quarter, In base, a primarily than our lower our as our million reduction away gross million XXXX up to a from to adjusted to in morning. we million. soft year. are the Volumes $XX.X EBITDA last last due due million electricity commercial million over in the XX% compared to environment. In was in $XX.X $XX.X year. more third compared quarter last $XX.X margin pivot year’s customer margins, result third

which implementation last last by than G&A in one-time was due margins. year. compared lower was severance, of want are highlight quarter year million and were RCE our offset to unit increased which the quarter retail up margin as to driven SOX In gross prior segment, to XX% slightly offset margins higher count, third lower margins attributable gas I was by year. our million natural decrease unit legal $X increase This was by $X.X the to the the some more G&A $XX.X from costs. expenses million compared to increased that

commercial count third RCEs in shift the RCE XXX,XXX from as quarter a low-margin of strategic away the Total was result down continued large customers.

is back Our the from X% in year year is attrition of this XX% and down a line of first with quarter X% ago.

fully the non-cash million, or mark-to-market The $XX.X put third was with million, share XXXX. of quarter on the place associated in in accounting diluted increase net income share to hedges for per our lock retail of contracts. income in per net driven is quarter margins for to compared diluted or we net $XX.X Our $X.XX $X.XX income the fully by

We quarter had gain of $XX.X compared mark-to-market a a a million year mark-to-market to this million $XX.X of ago. gain

On announced the A common to share and third to the preferred be on paid and past, be XX XXth stock September stock investors As dividends and XXth. stock of dividends price non-cash the our mark-to-market expect we the not our common we we preferred On respectively. October cash actual paid on December on in $X.XXXXX October our our we on were paid quarterly receive contract. cash stock XX, the share per quarter reminded per affect January on do Series the fixed A to the XX, $X.XXXXX Class movements

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

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

Nathan Kroeker

Thanks, Jim.

we continue see comes to a margins. to XXXX As strong unit close,

the as to the and full a to suppliers us choosing we last for produce quarter close to our stable done good Spark’s market liquidity, XXXX energy hard of our customers We mass want portfolio and expect we've show we employees and have to work And $XX increased on provider. focus our be that taken Our expected their work to two strong improve savings growth. combined rate with to all thank of earnings growth continues necessary their effects want run million. the the years. I thank for G&A over actions customer believe I over are and producing

are and connecting our to We next we future call. the about look with excited on forward you

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