Genie Energy Reports Higher Adjusted EBITDA, Customer Count For U.S. Retail Business; Global Customer Base Increases To Record Level

November 6, 2020

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Reporting by Paul Ring • ring@energychoicematters.com

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Genie Energy Ltd. reported that its U.S. retail supplier business segment, Genie Retail Energy (GRE), reported higher Adjusted EBITDA of $12.6 million for the quarter ending September 30, 2020 (3Q20), up from $11.2 million a year ago

Genie Retail Energy's year-over-year increase Adjusted EBITDA was driven by increased per meter electricity consumption and decreased customer acquisition expense, offset by a mild decrease in gross margin, Genie said

Residential electricity demand in the U.S. has increased in the COVID-19 era while churn and the pace of meter acquisition have slowed, Genie said

Genie Retail Energy's gross profit was $25.9 million for 3Q20, versus $25.7 million a year ago

Genie Retail Energy's revenue was $89.5 million for 3Q20, versus $81.7 million a year ago

Genie Retail Energy meters served at September 30, 2020 were 375,000, a slight increase versus 374,000 as of June 30, 2020, but down versus the 389,000 meters served as of September 30, 2019

Gross meters added during 3Q20 totaled 44,000 compared to 40,000 in 2Q20 and 76,000 in 3Q19. The year over year decrease is due to COVID-19 related curtailment of certain customer acquisition activities.

Genie Retail Energy RCEs served at September 30, 2020 were 350,000, up from 343,000 as of June 30, 2020 and 329,000 a year earlier

Genie Retail Energy average monthly customer churn decreased to 3.7% from 3.9% in 2Q20 and 5.3% in 3Q19, reflecting decreased sales activity by competitors and lower rates of gross meter ads in recent quarters -- both as a result of COVID-19-related restrictions on customer acquisition in certain channels -- as well as the continuing increase in the ratio of fixed rate to variable rate customers, where fixed rate customers generally have lower rates of churn.

Genie Retail Energy said that it expects to soon enter the Georgia and Michigan markets

The Genie Energy Services (GES) segment, which is comprised of Diversegy, Genie's interest in Prism Solar, and Genie Solar Energy, reported a loss from operations of $0.7 million for the third quarter of 2020, compared to a loss from operations of $0.8 million in 3Q19. GES's revenue of $1.0 million for the third quarter of 2020 was unchanged from 3Q19.

On a consolidated basis (including various international businesses), Genie Energy Ltd. had expanded its global customer base to the highest level in company history by the end of the third quarter of 2020

On a consolidated basis, Genie Energy Ltd. was serving 558,000 meters as of September 30, 2020, versus 536,000 as of June 30, 2020 and 492,000 a year ago.

On a consolidated basis, Genie Energy Ltd. was serving 442,000 RCEs as of September 30, 2020, versus 421,000 as of June 30, 2020 and 384,000 a year ago.

On a consolidated basis, Genie Energy Ltd. reported Adjusted EBITDA of $9.5 million for the third quarter of 2020, an increase of 18.6% versus the year-ago total of $8.0 million

At September 30, 2020, Genie Energy had $148.9 million in total assets. Cash, cash equivalents and restricted cash increased to $49.2 million from $41.8 million at June 30, 2020. Liabilities totaled $62.4 million and working capital (current assets less current liabilities) totaled $54.9 million compared to $49.1 million at June 30, 2020.

Cash provided by operating activities in 3Q20 was $10.4 million compared to $12.1 million in 3Q19.

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