Genie Retail Energy Reports Increase In Adjusted EBITDA, Customer Count Grows

Newly Entering The Texas Marketing, Genie Serving A "Few Thousand" RCEs In ERCOT

November 8, 2019

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Reporting by Paul Ring • ring@energychoicematters.com

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Genie Energy Ltd. reported results for the third quarter ending September 30, 2019

On a global basis, Genie Energy was serving 492,000 meters as of Sept. 30, 2019, up from 448,000 as of June 30, 2019 and 342,000 a year ago

The gain of 44,000 meters globally from June 30, 2019 to Sept. 30, 2019 compares to global growth in meters of 49,000 from March 31, 2019 to June 30, 2019.

At Sept. 30, 2019, Genie Energy was serving 392,000 electricity meters and 100,000 natural gas meters, on a global basis.

On an RCE basis, Genie Energy was serving, on a global basis, 384,000 RCEs as of Sept. 30, 2019, versus 357,000 as of June 30, 2019 and 275,000 a year ago.

Information for Genie Energy's segments follows

Genie Retail Energy

Genie Retail Energy is Genie's segment for its U.S. retail energy supplier businesses

Genie Retail Energy reported Adjusted EBITDA of $11.2 million for the third quarter of 2019, marginally higher than the $11.0 million recorded in 3Q18.

"The increases resulted primarily from increases in kilowatt hours sold and margin per kilowatt hour sold, significantly offset by the increases in customer acquisition expense and the impact of the reversal of an accrual in 3Q18," the company said

Genie Retail Energy income from operations in 3Q19 increased to $10.9 million from $10.5 million in 3Q18.

Genie Retail Energy gross profit for the third quarter of 2019 was $25.7 million, up from $20.9 million a year ago

Genie Retail Energy's gross margin percentage was 31.5% for the third quarter of 2019, up from 29.5% a year ago

Genie Retail Energy revenue was $81.7 million for the third quarter of 2019, up from $71.0 million a year ago. Electricity revenue increased to $78.5 million for the third quarter of 2019, up from $67.3 million in 3Q18, reflecting increased meters and RCEs served and "modest" increases in both consumption per meter and revenue per kilowatt-hour sold

Genie Retail Energy SG&A expense increased to $14.8 million in the third quarter of 2019, from $10.4 million a year ago, primarily on increased customer acquisition expense in the quarter and the reversal of a $1.5 million accrual of legal expenses in 3Q18

Genie Retail Energy was serving 389,000 meters as of Sept. 30, 2019, up from 378,000 meters as of June 30, 2019 and 342,000 meters as of a year ago

Genie Retail Energy's gross meter adds during the third quarter of 2019 totaled 76,000 compared to 45,000 in 3Q18

On an RCE basis, Genie Retail Energy was serving 329,000 RCEs as of Sept. 30, 2019, up from 318,000 RCEs as of June 30, 2019 and 275,000 RCEs as of a year ago

Genie Retail Energy average monthly churn increased to 5.3% for the third quarter of 2019, up from 4.4% in 2Q19 and decreased from 5.7% in 3Q18

Genie Energy has begun selling retail electricity in Texas, and, as of today, has a "few thousand" RCEs in Texas

Genie Energy Services (GES)

Genie Energy Services includes Genie's broker-consultant business and Genie Solar Energy

GES' loss from operations was $0.8 million for the third quarter of 2019, compared to a loss from operations of $0.2 million in 3Q18. GES 's Negative Adjusted EBITDA for the third quarter of 2019 was $0.6 million, compared to $0.2 million in 3Q18.

GES' revenue increased to $1.0 million for the third quarter of 2019, from $0.7 million in 3Q18 reflecting the impact of the Prism Solar acquisition in 4Q18

Genie Retail Energy International (GRE International)

GRE International customers served at September 30th increased to 53 thousand RCEs and 103 thousand meters compared to 37 thousand RCEs and 69 thousand meters at June 30th, 2019

GRE International's loss from operations increased to $1.6 million for the third quarter of 2019, from a loss from operations of $328 thousand in 3Q18. The increased loss reflects the investment in Genie Japan and, to a lesser degree, the continued investment in Lumo Energia. GRE International's Negative Adjusted EBITDA was $1.0 million for the third quarter of 2019, compared to negative Adjusted EBITDA of $1.1 million in 3Q18.

GRE International's revenue increased to $3.0 million for the third quarter of 2019, compared to nil in 3Q18 reflecting the impact of the Lumo Energia acquisition in 1Q19 and early activity in Japan;

Equity in the net loss of Orbit Energy was nil for the quarter, compared to $0.8 million in 3Q18

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