Via Renewables Reports RCE Count, 4Q And Annual Earnings -- EnergyChoiceMatters.com

Via Renewables Reports RCE Count, 4Q And Annual Earnings

March 29, 2023

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Via Renewables, Inc. ("Via Renewables" or the "Company") today reported financial results for the year ended December 31, 2022

As previously reported, Via had earlier announced preliminary 4Q and full year earnings. The amounts for key previously reported metrics are unchanged from the expected amounts listed in the preliminary announcement (specifics listed further below)

Via Renewables was serving 331,000 RCEs as of December 31, 2022, versus 336,000 as of September 30, 2022 and 408,000 a year ago

Via reported, "During the year ended December 31, 2022, we added approximately 67,000 RCEs through our various organic sales channels. This amount was significantly lower than historical periods primarily due to the slower ramp up of the door-to-door and telemarketing activities after the COVID-19 restrictions were lifted, a reduction in targeted organic customer acquisitions as we focused our efforts to improve our organic sales channels, including vendor selection and sales quality, and the extreme price volatility we experienced throughout the year. As these orders have expired, and consumers adjust to price volatility we experienced throughout the year, we expect our customer growth to return to historical levels."

While annual attrition for 2022 was 3.8%, fourth quarter 2022 attrition was 4.2%

"Customer attrition for the year ended December 31, 2022 was higher than the prior year due to the sharp increase in commodity prices across the industry," Via said

Via noted in its 10-K that, on December 12, 2022 the Company entered into a settlement agreement with the New York Attorney General that included a one-time settlement payment to the New York Attorney General's Office of $1.5 million. Via noted that the suit from the NYAG resolved by the settlement addressed actions allegedly undertaken by Major Energy prior to Via's acquisition of Major. See background on the allegations here

Via also disclosed in the 10-K that, "On February 9, 2023, Maine Commission Advocacy Staff filed a Request for Formal Investigation requesting that the Maine Commission open a formal, enforcement investigation to review whether Company's subsidiary, Electricity Maine, LLC (EME), is in compliance with the Maine Commission's Rules. During a special deliberative session, the same day, the Maine Commission announced it would proceed with a formal investigation of EME which was noticed in a Notice of Enforcement Investigation issued February 10, 2023. The Company is voluntarily working with the Commission and believes this matter will not have a material impact on the Company."

Concerning the previously reported identification of a material weakness in the design and operation of the controls over its calculation of deferred tax assets and liabilities, and income tax expense, and immaterial corrections for the years ended December 31, 2021 and 2020, Via said in a 10-K that, "In connection with the audit of our financial statements for the year ended December 31, 2022, we identified a material weakness in the design and operation of the controls over our calculation of income tax expense, deferred tax assets and liabilities."

The reporting of the material weakness included, "immaterial corrections for the years ended December 31, 2021 and 2020."

"A material weakness is defined as a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. Although this material weakness did not result in a material misstatement to our consolidated financial statements for the year ended December 31, 2022 or any prior period, it did result in immaterial corrections for the years ended December 31, 2021 and 2020," Via said in the 10-K

"We are committed to remediating the control deficiency that gave rise to the material weakness described above," Via said in the 10-K

"With oversight from the Audit Committee of the Board of Directors, we intend to take the necessary steps to remediate the material weakness by enhancing our internal controls to ensure proper review by and communication between our internal and external tax advisors and internal accounting personnel. Our efforts will consist primarily of strengthening our tax organization through continuing education and designing controls related to the components of our tax process to enhance our management review controls over taxes," Via said in the 10-K

As part of the key remediation actions, Via said that it will:

• Review its tax accounting processes and controls and enhance the overall design and procedures performed to ensure changes in the Company's interest in HoldCo are appropriately identified and recorded;
• Re-design its management review controls and enhance the precision of review of attributes of the Company's deferred tax assets and liabilities, income tax expense; and
• Evaluate the sufficiency of its tax resources and personnel to determine whether additional resources, including tax advisors, are needed.

Via reported $12.6 million in Adjusted EBITDA for the fourth quarter of 2022, versus $11.6 million a year ago.

Via reported $31.9 million in Retail Gross Margin for the fourth quarter of 2022, versus $25.2 million a year ago

Via reported $51.8 million in Adjusted EBITDA for the year ended 2022, versus $80.7 million a year ago

Via reported $114.8 million in Retail Gross Margin for the year ended 2022, versus $132.5 million a year ago

Via reported total liquidity of $76.9 million as of December 31, 2022

"Looking forward to 2023, we're positioned very well to attract new customers. Numerous utilities have raised their rates and we're able to be more competitive with our offerings as commodity prices retreat off record highs. We've made it past a volatile high price environment and see opportunities for growth. As always, we will remain open to any potential tuck in acquisitions as well, while growing our organic sales channels " said Keith Maxwell, Via Renewables' Chief Executive Officer.

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