Genie Energy Reports Highest Level Of Gross Profit In Company's History, On "Strong Margins", Global Customer Growth

Company Increases Quarterly Dividend

May 7, 2020

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Genie Energy Ltd. said in reporting earnings that, on a consolidated basis, the company generated the highest levels of quarterly revenue and gross profit in the company's history during the first quarter of 2020

Genie Energy cited, "robust growth in our global customer base and strong margins," for the record results

On a consolidated basis, Genie Energy Ltd. gross profit was $28.9 million for the first quarter of 2020, versus $25.6 million a year ago

On a consolidated basis, Genie Energy Ltd. revenue was $104.1 million for the first quarter of 2020, versus $86.6 million a year ago

On a consolidated basis, Genie Energy Ltd. Adjusted EBITDA was $10.3 million for the first quarter of 2020, versus $10.4 million a year ago

Genie Retail Energy

At Genie Retail Energy (GRE), the company's retail supply business in the United States, income from operations decreased to $13.0 million in the first quarter of 2020, from $13.5 million a year ago. GRE Adjusted EBITDA decreased to $13.3 in the first quarter of 2020, from $13.8 million a year ago

At Genie Retail Energy (GRE), meters served increased to 384,000 as of March 31, 2020, from 370,000 as of December 31, 2019, and 344,000 a year earlier.

At Genie Retail Energy (GRE), RCEs served at March 31, 2020 increased to 330,000 RCEs as of March 31, 2020, from 309,000 RCEs as of December 31, 2019, and 300,000 RCEs a year earlier

"The robust increases reflect sustained investment in new customer acquisitions," the company said

At GRE, gross meters added during 1Q20 totaled 69,000, compared to 56,000 in 4Q19, and 85,000 in 1Q19 (including approximately 34,000 meters added through a municipal aggregation deal).

"COVID-19 related public health restrictions did not significantly slow meter acquisition during 1Q20 but are expected to impact 2Q20 meter acquisition," the company said

At GRE, average monthly churn decreased to 4.7% for the first quarter of 2020, from 6.1% in 4Q19, and 5.3% in 1Q19

At GRE, gross profit was $27.6 million for the first quarter of 2020, versus $24.7 million a year ago

At GRE, total revenue was $79.1 million for the first quarter of 2020, versus $76.5 million a year ago

At GRE, electricity revenue increased to $63.1 million in the first quarter of 2020, from $57.8 million in 1Q19. The increase was driven by the growth of GRE's customer base partially offset by lower revenue per kWh sold.

At GRE, natural gas revenue decreased to $16.1 million in the first quarter of 2020, from $18.7 million in 1Q19. The decrease was driven by lower consumption per customer and lower revenue per therm sold partially offset by an increase in customers served

Genie Energy Services

At Genie Energy Services (GES), which is comprised of Diversegy, as well Genie's interest in Prism Solar, and Genie Solar Energy, the income from operations was $0.3 million for the first quarter of 2020, compared to a loss from operations of $0.2 million in 1Q19.

At Genie Energy Services (GES), revenue increased to $18.0 million in the first quarter of 2020, from $5.3 million a year ago, reflecting Prism Solar's delivery of a large number of orders.

"Genie Energy is currently exploring options to reduce overhead at Prism Solar due to changes in market conditions," the company said

Genie Retail Energy International

At Genie Retail Energy International (GRE International), the loss from operations increased to $2.5 million for the first quarter of 2020, from $1.7 million in 1Q19, reflecting increased investment in new meter acquisitions and the impact of the decline in global power markets on certain hedge positions.

At Genie Retail Energy International, customers served at March 31, 2020 increased to 72,000 RCEs for the first quarter of 2020, from 33,000 RCEs a year ago. At Genie Retail Energy International, meters served increased to 148,000 meters for the first quarter of 2020, from 55,000 meters a year earlier, led by growth of Orbit Energy's customer base in the U.K.

Consolidated Customer Data

On a consolidated basis, Genie Energy Ltd. was serving 532,000 meters as of March 31, 2020, versus 497,000 meters as of December 31, 2019, and 399,000 a year ago.

As of March 31, 2020, electricity meters were 421,000 and natural gas meters were 111,000, on a consolidated basis across Genie Energy Ltd.

On a consolidated basis, Genie Energy Ltd. was serving 401,000 RCEs as of March 31, 2020, versus 374,000 RCEs as of December 31, 2019, and 333,000 a year ago

Outlook, Dividend Increased

Michael Stein, CEO of Genie Energy Ltd. stated, "Looking ahead, we anticipate that COVID-19 will have a mixed impact on our business operations and financial results. In the short run, with our predominantly residential book, we expect a positive impact from increased per-meter electricity consumption as our customers spend more time at home. In addition, meter acquisition expense and customer churn are decreasing as the result of the industry-wide suspension of door-to- door meter acquisition. On the other hand, restrictions on in-person sales and marketing will likely slow customer acquisition for the duration of the pandemic and may result in net meter attrition."

"We are working hard to calibrate our operations to address the challenges of the pandemic and have achieved success in the early stages. Our outlook remains positive. With our diversified markets, liquid balance sheet and very low level of long-term debt, we are positioned to build on the first quarter's terrific momentum. In light of the resilience of our business and these underlying strengths, Genie's Board of Directors has increased our quarterly dividend 13% to $0.085 per share," Stein said

Specifically, Genie's Board of Directors has approved an increase in the quarterly dividend per share of common stock to $0.085 from $0.075, an increase of 13%. The indicated annual dividend rate is now $0.34.

Balance Sheet & Cash Flow

At March 31, 2020, Genie Energy had $157.2 million in total assets, including $36.4 million in cash, cash equivalents and restricted cash. Liabilities totaled $72.0 million and working capital (current assets less current liabilities) totaled $51.1 million an increase of $10.3 million from December 31, 2019.

Cash used in operating activities in 1Q20 was $2.7 million compared to cash provided by operating activities of $7.0 million in 1Q19. Operating cash flow in the quarter was negatively impacted by the deliveries of solar panels at Prism Solar (with cash payment having been made in 2019) and the posting of cash collateral in support of certain hedge positions at GRE.

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