GNE - Genie Energy Announces Fourth Quarter and Full Year 2023 Results

March, 11 2024 07:30 AM Genie Energy Ltd. Class B Stock

Record Fourth Quarter and Full Year Revenue

Full-year 2023 Adjusted EBITDA ¹ exceeded upper range of prior guidance

Cash and cash equivalents, short and long-term restricted cash, and marketable equity securities increased 55% year-over-year to $163.4 million with no debt outstanding

Newark, NJ , March 11, 2024 (GLOBE NEWSWIRE) -- Genie Energy, Ltd. (NYSE: GNE), a leading retail energy and renewable energy solutions provider, today announced results for the fourth quarter and full year ended December 31, 2023.

Michael Stein, chief executive officer of Genie Energy, commented:

"Genie finished a strong year with record fourth quarter and full-year revenue. After reducing our retail customer exposure in 2022, which led to incredible but unsustainable profitability, we returned to customer acquisition mode in 2023, growing both RCEs and meters by over 30%. Through our portfolio management moves we made in 2022 and the customer growth in 2023, we increased our baseline Adjusted EBITDA from the $25 to $30 million level we generated just a few years ago to the $40 to $50 million level.

“We also continued to make progress at our Genie Renewables, or GREW, division. During the quarter, our Sunlight Energy subsidiary acquired a 9.4MW portfolio of operating assets while we continued to advance our development portfolio. Our third-party energy and renewables services businesses also performed well led by Diversegy, which generated strong levels of growth in its customer book.”

Fourth Quarter 2023 Highlights
(Compared to 4Q22 unless otherwise noted. Unless otherwise noted, results of Genie Retail Energy International (GREI) are included in discontinued operations for all periods.)

Revenue increased 28.9% to $104.9 million from $81.4 million;

Gross profit decreased 3.1% to $33.6 million and gross margin decreased to 32.1% from 42.7%;

Loss from operations of $34.2 million compared to income from operations of $15.5 million;

The loss in 4Q23 reflects a one-time $45.1 million non-cash charge for a loss reserve at Genie’s newly established captive insurance operations;

Adjusted EBITDA ¹ decreased 38.0% to $11.4 million from $18.5 million;

The decrease reflects both the strong gross margin achieved at Genie Retail in 4Q22 and increased investment in customer acquisitions in 4Q23;

Net loss attributable to Genie common stockholders and loss per diluted share (EPS) attributable to Genie common stockholders of $24.5 million and $(0.90) compared to net income of $16.2 million and diluted earnings per share of $0.59, respectively;

Non-GAAP ¹ net income and non-GAAP EPS ¹ attributable to Genie common stockholders, which excluded the impact of the insurance loss reserve, of $10.0 million and $0.37 compared to $16.2 million and $0.59, respectively;

Cash and cash equivalents, short and long-term restricted cash, and marketable equity securities increased to $163.4 million at December 31, 2023, from $105.1 million at December 31, 2022;

Genie Energy paid a $0.075 per share quarterly dividend to Class A and Class B common stockholders on February 28, 2024, with a record date of February 20, 2024.

Adjusted EBITDA, Non-GAAP net income (loss) attributable to Genie Energy Ltd. common stockholders, and Non-GAAP EPS for all periods presented are non-GAAP measures intended to provide useful information that supplements the core operating results in accordance with GAAP for Genie Energy or the relevant segment. Please refer to the Reconciliation of Non-GAAP Financial Measures at the end of this release for an explanation of these non-GAAP metrics, as well as reconciliations to its most directly comparable GAAP measures.

Full Year 2023 Highlights
(versus 2022; excludes discontinued operations of GRE International for all periods)

Revenue increased 35.9% to $428.7 million from $315.5 million;

Gross profit decreased 5.5% to $146.2 million from $154.8 million; gross margin decreased to 34.1% from 49.1%;

Income from operations decreased to $10.0 million from $77.8 million. The reduction reflects, in part, the $45.1 million non-cash charge for a reserve at Genie’s captive insurance operations;

Adjusted EBITDA decreased to $58.2 million from $83.2 million;

GRE generated income from operations and Adjusted EBITDA of $71.9 million and $73.3 million, compared to $92.6 million and $93.8 million, respectively;

Net income attributable to Genie common stockholders and diluted EPS attributable to Genie common stockholders of $20.3 million and $0.74, respectively;

Non-GAAP net income and non-GAAP EPS attributable to Genie common stockholders, which excluded the impact of the insurance loss reserve, of $53.7 million and $2.06, respectively;

Redeemed and retired the remaining $8.4 million of outstanding preferred stock;

Select Financial Metrics*

(in except for EPS)**

4Q23


4Q22


Change


2023


2022


Change

Total Revenue

$
104.9



$
81.4



28.9

%

$
428.7


$
315.5



35.9

%
Genie Retail Energy

$
98.4



$
77.0



27.8

%

$
409.9


$
304.0



34.8

%
Electricity

$
82.1



$
55.6



47.6

%

$
350.8


$
241.8



45.1

%
Natural Gas

$
15.1



$
21.4



(29.4
)
%

$
56.0


$
62.1



(9.9
)
%
Genie Renewables

$
6.5



$
4.4



48.4

%

$
18.8


$
11.6



62.8

%
Gross Margin


32.1

%


42.7
%


(1,060
)
bps


34.1
%


49.1
%


(1,495
)
%
Genie Retail Energy


33.0

%


44.4
%


(1,136
)
bps


35.0
%


50.3
%


(1,535
)
bps
Genie Renewables


17.2

%


1.2
%


1,595

bps


15.1
%


15.6
%


(45
)
bps
(Loss) Income from Operations

$
(34.2
)


$
15.5



(320.8
)
%

$
10.0


$
77.8



(87.1
)
%
Operating Margin


(32.6
)
%


19.0
%


(5,161
)
bps


2.3
%


24.6
%


(2,231
)
bps
*Net (Loss) Income from Continuing Operations*

$
(24.1
)


$
12.3



na


$
13.9


$
56.5



(75.4
)
%
Net (Loss) Income Attributable to Genie Common Stockholders

$
(24.5
)


$
16.2



na


$
20.3


$
86.9



(76.7
)
%
Diluted (Loss) Earnings Per Share

$
(0.90
)


$
0.59



na


$
0.74


$
3.26



(77.4
)
%
Non-GAAP Net Income Attributable to Genie Common Stockholders

$
10.0



$
16.2



(38.0
)
%

$
53.7


$
85.9



(37.4
)
%
Non-GAAP Diluted Earnings Per Share

$
0.37



$
0.59



(38.1
)
%

$
2.06


$
3.26



(36.7
)
%
Adjusted EBITDA

$
11.4



$
18.5



(38.0
)
%

$
58.2


$
83.2



(30.0
)
%
Cash Flow from Continuing Operating Activities

$
18.4



$
21.3



(13.7
)
%

$
50.9


$
66.0



(22.8
)
%

Operations of Genie Retail International (GREI) were classified as a discontinued operations in 2022 and its results are excluded from current and historical results

Numbers may not add due to rounding

Segment Highlights

Genie Retail Energy (GRE)

Select Performance Metrics

RCEs and Meters in 1000s ^*

4Q23

4Q22

Change

Total RCEs

350

262

33.4

Electricity

272

181

50.0

Natural Gas

(3.8

)

Total Meters

361

275

31.3

Electricity

279

196

42.3

Natural Gas

3.9

Gross Adds

10.7

Churn ^**

5.4

5.5

(10

)

bps

Numbers may not add due to rounding

^**

Excludes expirations of aggregation deals

GRE's fourth quarter and full-year revenue increased 27.8% to $98.4 million and 34.8% to $409.9 million, from $77.0 million and $304.0 million, respectively. Both increases were driven by growth in the customer base during the year. Fourth quarter income from operations decreased 26.8% to $15.0 million from $20.6 million, and Adjusted EBITDA decreased 26.4% to $15.4 million from $20.9 million. Full-year income from operations decreased 22.3% to $71.9 million, and Adjusted EBITDA decreased 21.9% to $73.3 million, reflecting GRE's elevated gross margins in the year-ago quarter and the increased pace of customer acquisitions in 2023 compared to 2022.

Genie Renewables (GREW)

GREW increased fourth-quarter revenue by 48.4% year-over-year to $6.5 million, driven by growth at Diversegy and CityCom Solar. The same two businesses drove an increase in full-year 2023 revenue of 62.8% to $18.8 million.

Genie Solar continued to advance its project development pipeline during the fourth quarter. In addition to the movement of projects through its development pipeline, the Company acquired a portfolio of 12 operating assets totaling 9.4-MW. At December 31, 2023, Genie Solar's operating portfolio and development pipeline comprised:

Pipeline

Total

Operational

Site Control

Permitting

Construction
MW

98

9

72

6

10
Project Count

14

1

10

1

2

Balance Sheet and Cash Flow Highlights

As of December 31, 2023, Genie Energy reported cash and cash equivalents, short and long-term restricted cash, and marketable equity securities of $163.4 million, an increase from $105.1 million at December 31, 2022 and from $143.8 million at September 30, 2023.

Total assets as of December 31, 2023 were $330.6 million. Liabilities totaled $146.0 million, and working capital (current assets less current liabilities) totaled $131.6 million. Non-current liabilities were $47.8 million.

Cash provided by operating activities was $62.5 million in 2023 compared to $80.7 million in 2022.

Trended Financial Information: ^*

(in except for EPS, RCEs and Meters) ^^

1Q22


2Q22


3Q22


4Q22


1Q23


2Q23


3Q23



4Q23


2021


2022




2023

Total Revenue

$
85.9


$
67.0


$
81.3



$
81.4


$
105.3


$
93.5


$
125.0


$
104.9



$

323.3


$

315.5


$

428.7

Genie Retail Energy

$
83.9


$
63.2


$
79.9



$
77.0


$
101.4


$
89.7


$
120.3


$
98.4



$

311.8


$

304.0


$

409.9

Electricity

$
59.4


$
53.1


$
73.8



$
55.6


$
74.5


$
80.2


$
114.0


$
82.1



$

273.0


$

241.8


$

350.8

Natural Gas

$
24.5


$
10.1


$
6.2



$
21.4


$
26.9


$
9.0


$
5.0


$
15.1



$

38.8


$

62.1


$

56.0

Others

$
0.0


$
0.0


$
0.0



$
0.00


$
0.0


$
0.6


$
1.3


$
1.2



$

0.0


$

0.0


$

3.1

Genie Renewables

$
2.0


$
3.8


$
1.4



$
4.4


$
3.9


$
3.7


$
4.7


$
6.5



$

7.5


$

11.6


$

18.8

Gross Margin


54.8
%


44.6
%


53.1

%


42.7
%


31.6
%


40.9
%


32.9
%


32.1

%



28.3
%



49.1
%



34.1
%
Genie Retail Energy


55.5
%


46.0
%


54.1

%


44.4
%


32.1
%


41.8
%


33.9
%


33.0

%



29.1
%



50.3
%



35.0
%
Genie Renewables


24.1
%


22.1
%


(6.3
)
%


12.4
%


19.3
%


19.6
%


5.3
%


17.2

%



37.1
%



15.6
%



15.1
%
Income (Loss) from Operations

$
26.9


$
11.8


$
23.5



$
15.5


$
11.3


$
15.0


$
17.9


$
(34.2
)


$

24.1


$

77.7


$

10.0

Operating Margin


31.4
%


17.7
%


29.0

%


19.0
%


10.7
%


16.1
%


14.3
%


(32.6
)
%



7.5
%



24.6
%



2.3
%
Net Income (Loss) Attributable to Genie Common Stockholders

$
17.5


$
33.9


$
18.3



$
16.2


$
14.3


$
15.0


$
14.5


$
(24.5
)


$

27.5


$

85.9


$

19.2

Diluted Earnings (Loss) Per Share

$
0.67


$
1.30


$
0.70



$
0.59


$
0.54


$
0.57


$
0.53


$
(0.90
)


$

1.05


$

3.26


$

0.74

Adjusted EBITDA

$
28.0


$
12.2


$
24.5



$
18.5


$
12.4


$
15.8


$
18.5


$
11.4



$

27.8


$

83.2


$

58.2

Genie Retail Energy Performance Metrics












































RCEs


260



263



251




262



352



380



375



350





260




262




350

Electricity


182



185



174




181



276



304



298



272





189




181




272

Natural Gas


78



77



77




81



77



76



77



78





71




81




78

Meters


286



280



271




275



349



381



385



361





285




276




361

Electricity


209



203



193




196



271



302



304



279





210




197




279

Natural Gas


77



77



77




79



78



80



81



82





75




79




82

*Gross Adds*


44



34



33




47



129



75



60



52





177




159




316

*Churn* ^***


4.5
%


4.4
%


4.7

%


5.5
%


4.4
%


4.3
%


4.4
%


5.4

%



4.5
%



4.8
%



4.9
%

GREI operations have been classified as a discontinued operation and its results excluded from current and historical results

Numbers may not add due to rounding

***

Excludes expirations of aggregation deals

2024 Commentary

Stein continued: “The Company's strong 2023 performance resulted from the measures we took in 2022 and 2023 to re-position the Company, and we expect that 2023's key trends will help us to deliver outstanding results in 2024. Our initial expectation is for Adjusted EBITDA to be within our new baseline range of $40 to $50 million, providing sufficient cash generation to continue building our cash reserves while investing judiciously in growth opportunities and continuing to pay a dividend.

"For GRE, we are likely to continue to grow our customer base and generate Adjusted EBITDA above historical norms. For GREW, we expect to initially fund the construction of our two current construction-stage solar projects with cash on hand, but eventually, we expect to take on project-level debt as our development-stage projects come closer to operational status. Additionally, we expect to benefit from the recent changes we implemented to upgrade our solar organization and improve overall efficiency and execution throughout the Company. We expect these organizational enhancements will also help improve our development pipeline moving forward. Finally, at Diversegy, we expect to see significant growth in recurring revenue.”

Earnings Announcement and Supplemental Information

At 8:30 AM Eastern this morning, Genie Energy’s management will host a conference call to discuss the Company's financial and operational results, business outlook, and strategy. The call will begin with management’s remarks, followed by Q&A with investors.

To participate in the conference call, dial 1-877-545-0523 (toll-free from the US) or 1-973-528-0016 (international) and provide the following participant access code: 259418.

Approximately three hours after the call, a call replay will be accessible by dialing 1-877-481-4010 (toll-free from the US) or 1-919-882-2331 (international) and providing the replay passcode: 49772. The replay will remain available through Monday, March 25, 2024. In addition, a recording of the call will be available for playback on the “Investors” section of the Genie Energy website.

About Genie Energy Ltd.

Genie Energy Ltd., (NYSE: GNE) is a retail energy and renewable energy solutions provider. The Genie Retail Energy division supplies electricity, including electricity from renewable resources, and natural gas to residential and small business customers in the United States. The Genie Renewables division is a vertically-integrated provider of commercial, community, and utility-scale solar energy solutions. For more information, visit Genie.com .

In this press release, all statements that are not purely about historical facts, including, but not limited to, those in which we use the words "believe," "anticipate," "expect," "plan," "intend," "estimate, "target" and similar expressions, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. While these forward-looking statements represent our current judgment of what may happen in the future, actual results may differ materially from the results expressed or implied by these statements due to numerous important factors, including, but not limited to, those described in our most recent report on SEC Form 10-K (under the headings "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations"), which may be revised or supplemented in subsequent reports on SEC Forms 10-Q and 8-K. We are under no obligation, and expressly disclaim any obligation, to update the forward-looking statements in this press release, whether as a result of new information, future events or otherwise.

Contact:

Brian Siegel IRC, MBA
Senior Managing Director
Hayden IR
(346) 396-8696
brian@haydenir.com

GENIE ENERGY LTD.
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share amounts)

December 31,
2023

December 31,
2022

Assets

Current assets:

Cash and cash equivalents

107,609

98,571

Restricted cash—short-term

10,442

6,007

Marketable equity securities

396

490

Trade accounts receivable, net of allowance for doubtful accounts of $6,574 and $4,826 at December 31, 2023 and December 31, 2022, respectively

61,909

55,134

Inventory

14,598

15,714

Prepaid expenses

16,222

6,822

Other current assets

5,475

6,207

Current assets of discontinued operations

13,182

38,688

Total current assets

229,833

227,633

Restricted cash—long-term

44,945

—

Property and equipment, net

15,192

891

Goodwill

9,998

9,998

Other intangibles, net

2,735

3,133

Deferred income tax assets, net

5,200

5,799

Other assets

15,247

13,856

Noncurrent assets of discontinued operations

7,405

16,305

Total assets

330,555

277,615

Liabilities and equity

Current liabilities:

Trade accounts payable

27,881

25,313

Accrued expenses

49,389

35,659

Income taxes payable

6,699

22,576

Due to IDT Corporation, net

145

165

Other current liabilities

9,280

4,549

Current liabilities of discontinued operations

4,858

10,936

Total current liabilities

98,252

99,198

Noncurrent captive insurance liability

44,945

—

Other liabilities

2,212

4,087

Noncurrent liabilities of discontinued operations

638

686

Total liabilities

146,047

103,971

Commitments and contingencies

—

Equity:

Genie Energy Ltd. stockholders’ equity:

Preferred stock, $0.01 par value; authorized shares - 10,000:

Series 2012-A, designated shares - 8,750; at liquidation preference, consisting of 0 and 983 shares issued and outstanding at December 31, 2023 and December 31, 2022

—

8,359

Class A common stock, $0.01 par value; authorized shares - 35,000; 1,574 shares issued and outstanding at December 31, 2023 and December 31, 2022

Class B common stock, $0.01 par value; authorized shares - 200,000; 28,765 and 27,126 shares issued and 25,841 and 24,421 shares outstanding at December 31, 2023 and December 31, 2022, respectively

288

271

Additional paid-in capital

156,101

146,546

Treasury stock, at cost, consisting of 2,924 and 2,705 shares of Class B common stock at December 31, 2023 and December 31, 2022

(22,661

)

(19,010

)

Accumulated other comprehensive income

3,299

1,926

Retained earnings

60,196

49,010

Total Genie Energy Ltd. stockholders’ equity

197,239

187,118

Noncontrolling interests

(12,731

)

(13,474

)

Total equity

184,508

173,644

Total liabilities and equity

330,555

277,615

GENIE ENERGY LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)



Year Ended December 31,



2023


2022



(in thousands, except per share data)

Revenues:






Electricity

$
350,779


$
241,828

Natural gas


55,988



62,144

Other


21,941



11,567

Total revenues


428,708



315,539

Cost of revenues


282,502



160,757

Gross profit


146,206



154,782

Operating expenses:








Selling, general and administrative


91,109



74,962

Provision for captive insurance liability


45,088



—

Impairment of assets


—



2,066

Income from operations


10,009



77,754

Interest income


5,076



835

Interest expense


(99
)


(129
)
Gain (loss) on marketable equity securities and investments


478



(417
)
Other income (loss), net


2,644



(520
)
Income before income taxes


18,108



77,523

Provision for income taxes


(4,239
)


(21,037
)
Net income from continuing operations


13,869



56,486

Income from discontinued operations, net of taxes


6,409



30,445

Net income


20,278



86,931

Net (income) loss attributable to noncontrolling interests, net


(740
)


874

Net income attributable to Genie Energy Ltd.


19,538



87,805

Dividends on preferred stock


(333
)


(1,939
)
Net income attributable to Genie Energy Ltd. common stockholders

$
19,205


$
85,866










Amounts attributable to Genie Energy Ltd. common stockholders








Continuing operations

$
12,795


$
59,956

Discontinued operations


6,410



25,910

Net income attributable to Genie Energy Ltd. common stockholders

$
19,205


$
85,866










Earnings per share attributable to Genie Energy Ltd. common stockholders:








Basic:








Continuing operations

$
0.50


$
2.34

Discontinued operations


0.25



1.01

Earnings per share attributable to Genie Energy Ltd. common stockholders

$
0.75


$
3.35

Diluted








Continuing operations

$
0.49


$
2.28

Discontinued operations


0.25



0.98

Earnings per share attributable to Genie Energy Ltd. common stockholders

$
0.74


$
3.26










Weighted-average number of shares used in calculation of earnings per share:








Basic


25,553



25,629

Diluted


26,062



26,366










Dividends declared per common share

$
0.30


$
0.30

(i) Stock-based compensation included in selling, general and administrative expenses

$
2,783


$
2,968

GENIE ENERGY LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)



Year Ended December 31,



2023


2022



(in thousands)

Operating activities






Net income

$
20,278


$
86,931

Net income from discontinued operations, net of tax


6,409



30,445

Net income from continuing operations


13,869



56,486

Adjustments to reconcile net income to net cash provided by operating activities:








Provision for captive insurance liability


45,088



—

Depreciation and amortization


463



385

Deferred income taxes


599



(595
)
Provision for doubtful accounts receivable


2,362



2,515

Stock-based compensation


2,783



2,968

Inventory valuation allowance


1,148



—

Charitable donation of Class B common stock


1,006



—

Unrealized (gain) loss on marketable equity securities and investments and others


(23
)


434

Impairment of assets


—



2,066

Change in assets and liabilities:








Trade accounts receivable


(9,137
)


(16,339
)
Inventory


(8,714
)


2,005

Prepaid expenses


(6,089
)


(2,658
)
Other current assets and other assets


494



(5,595
)
Trade accounts payable, accrued expenses and other liabilities


22,986



11,635

Due to IDT Corporation, net


(20
)


(367
)
Income taxes payable


(15,877
)


13,064

Net cash provided by operating activities of continuing operations


50,938



66,004

Net cash provided by operating activities of discontinued operations


11,540



14,680

Net cash provided by operating activities


62,478



80,684

Investing activities








Capital expenditures


(1,363
)


(1,019
)
Purchase of solar system facilities


(7,665
)


—

Purchase of short-term equity investments


(11,019
)


(2,729
)
Proceeds from the sale of marketable equity securities and other investments


10,023



—

Investment in notes receivables with related party


—



(1,505
)
Repayment of notes receivable


19



19

Net cash used in investing activities of continuing operations


(10,005
)


(5,234
)
Net cash provided by (used in) investing activities of discontinued operations


23,645



(44,088
)
Net cash provided by (used in) investing activities


13,640



(49,322
)
Financing activities








Dividends paid


(8,873
)


(9,158
)
Repurchases of Class B common stock from employees


(2,888
)


(567
)
Proceeds from the exercise of warrants


5,000



—

Repurchase of Class B common stock


(37
)


(4,414
)
Redemption of preferred stock


(8,359
)


(11,384
)
Net cash used in financing activities


(15,157
)


(25,523
)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash


(60
)


17

Net increase (decrease) in cash, cash equivalents, and restricted cash


60,901



5,856

Cash, cash equivalents, and restricted cash (excluding cash held at discontinued operations) at beginning of period


104,578



100,225

Cash, cash equivalents and restricted cash (including cash held at discontinued operations) at end of the period


165,479



106,081

Less: Cash held at of discontinued operations at end of period


(2,483
)


(1,503
)
Cash, cash equivalents, and restricted cash (excluding cash held at discontinued operations) at end of period

$
162,996


$
104,578

Supplemental disclosure of cash flow information








Cash payments made for interest


93



123

Cash payments made for income taxes


20,715



8,570

Reconciliation of Non-GAAP Financial Measure for the Fourth Quarter and Full Year 2023

In addition to disclosing financial results that are determined in accordance with generally accepted accounting principles in the United States of America (GAAP), Genie Energy disclosed Adjusted EBITDA on a consolidated basis and for GRE and disclosed Non-GAAP Net Income Attributable to Genie Energy Ltd. Common Stockholders (Non-GAAP Net Income and Non-GAAP earnings per share (Non-GAAP EPS). Adjusted EBITDA, Non-GAAP Net Income and Non-GAAP EPS are non-GAAP measures.

Generally, a non-GAAP financial measure is a numerical measure of a company’s performance, financial position, or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with GAAP.

Genie’s measure of consolidated Adjusted EBITDA starts with income from operations and adds back depreciation, amortization, and stock-based compensation and deducts impairment of assets and equity in the net loss of equity method investees, net

Genie's measure of Non-GAAP Net Income starts with net income attributable to Genie Energy Ltd. Common Stockholders in accordance with GAAP and adds captive insurance liability and the tax effect of this adjustment. These additions are non-cash and/or non-routine items in the relevant fiscal 2023 and fiscal 2022 periods.

Adjusted EBITDA, Non-GAAP Net Income and Non-GAAP EPS should be considered in addition to, not as a substitute for, or superior to, revenue, gross profit, income from operations, cash flow from operating activities, net income, basic and diluted earnings per share or other measures of liquidity and financial performance prepared in accordance with GAAP. In addition, Genie’s measurement of Adjusted EBITDA, Non-GAAP Net Income and Non-GAAP EPS may not be comparable to similarly titled measures reported by other companies.

Management believes that Genie’s measure of Adjusted EBITDA, Non-GAAP Net Income and Non-GAAP EPS provide useful information to both management and investors by excluding certain expenses that may not be indicative of Genie’s or GRE’s core operating results. Management uses Adjusted EBITDA, non-GAAP Net Income and Non-GAAP EPS, among other measures, as a relevant indicators of core operational strengths in its financial and operational decision-making.

Management also uses Adjusted EBITDA, Non-GAAP Net Income and Non-GAAP EPS to evaluate operating performance in relation to Genie’s competitors. Disclosure of these non-GAAP financial measure may be useful to investors in evaluating performance and allows for greater transparency to the underlying supplemental information used by management in its financial and operational decision-making. In addition, Genie Energy has historically reported Adjusted EBITDA and believes it is commonly used by readers of financial information in assessing performance. Therefore, the inclusion of comparative numbers provides consistency in financial reporting at this time.

Management refers to Adjusted EBITDA, Non-GAAP Net Income and Non-GAAP EPS as well as the GAAP measures revenue, gross profit, and income from operations, as well as net income, on a consolidated level to facilitate internal and external comparisons to Genie's historical operating results, in making operating decisions, for budget and planning purposes, and to form the basis upon which management is compensated.

Although depreciation and amortization are considered operating costs under GAAP, they primarily represent the non-cash current period allocation of costs associated with long-lived assets acquired or constructed in prior periods. Genie’s operating results exclusive of depreciation and amortization are therefore useful indicators of its current performance.

Stock-based compensation recognized by Genie Energy and other companies may not be comparable because of the various valuation methodologies, subjective assumptions and the variety of types of awards that are permitted under GAAP. Stock-based compensation is excluded from Genie’s calculation of Adjusted EBITDA because management believes this allows investors to make more meaningful comparisons of the operating results of Genie’s core business with the results of other companies. However, stock-based compensation will continue to be a significant expense for Genie Energy for the foreseeable future and an important part of employees’ compensation that impacts their performance.

Impairment of assets is a component of income (loss) from operations that is excluded from the calculation of Adjusted EBITDA. The impairment of assets is primarily dictated by events and circumstances outside the control of management that trigger an impairment analysis. While there may be similar charges in other periods, the nature and magnitude of these charges can fluctuate markedly and do not reflect the performance of Genie's continuing operations.

Captive insurance liability is a non-cash charge for a reserve at Genie's captive insurance operations. While there may be related charges in other periods, the magnitude of these changes can fluctuate markedly and do not reflect the performance of Genie's continuing operations. Captive insurance losses are excluded from Genie's calculation of Adjusted EBITDA, Non-GAAP Net Income and Non-GAAP EPS because management believes this allows investors to make more meaningful comparisons of the operating results of Genie’s core business with the results of other companies.

Following are the reconciliations of Adjusted EBITDA, Non-GAAP Net Income and Non-GAAP EPS on a consolidated basis to its most directly comparable GAAP measure. Adjusted EBITDA is reconciled to income from operations for Genie Energy on a consolidated basis as well as for GRE.

Non-GAAP Reconciliation - Consolidated Adjusted EBITDA

1Q22

2Q22

3Q22

4Q22

1Q23

2Q23

3Q23

4Q23

2021

2022

2023

Income (loss) from Operations

26.9

11.8

23.5

15.5

11.3

15.0

17.9

(34.2

)

24.1

77.7

10.0

Add back

Captive insurance liability

0.0

45.1

0.0

45.1

Depreciation and Amortization

0.1

0.2

0.4

Non-Cash Compensation

0.8

0.7

0.8

0.6

0.5

2.8

2.9

2.8

Impairment

0.0

2.1

0.0

2.1

0.0

Equity in net loss (income) of equity method investees

0.1

(0.4

)

0.2

0.1

0.2

(0.1

)

(0.1

)

(0.1

)

0.4

0.0

(0.1

)

Adjusted EBITDA

27.9

12.2

24.5

18.5

12.4

15.8

18.5

11.4

27.8

83.1

58.2

Non-GAAP Reconciliation - GRE Adjusted EBITDA

(in millions)

4Q23


4Q22


2023


2022

Income from Operations

$
15.0


$
20.6


$
71.9


$
92.6

Add back
















Depreciation and Amortization

$
0.1


$
0.1


$
0.3


$
0.3

Stock-based Compensation

$
0.2


$
0.2


$
1.0


$
1.0

Impairment

$
0.0


$
0.0


$
0.0


$
0.0

Equity in the income of equity method investee

$
0.0


$
0.0


$
0.0


$
0.0

Adjusted EBITDA

$
15.4


$
20.9


$
73.3


$
93.9

Non-GAAP Reconciliation - Consolidated Non-GAAP Net Income Attributable to Genie Energy Ltd. Common Stockholders and Non-GAAP Diluted Income Per Share

(in millions)

4Q23


4Q22


2023


2022

Net income attributable to Genie Energy Ltd. Common Stockholders

$
(24.5
)

$
16.2


$
19.2


$
85.9

Add back
















Captive insurance liability

$
45.1


$
0.0


$
45.1


$
0.0

Income tax effect of adjustment

$
(10.5
)


0.0


$
(10.5
)

$
0.0

Non-GAAP net income attributable to Genie Energy Ltd. Common Stockholders

$
10.0


$
16.2


$
53.7


$
85.9


















Diluted earnings per share

$
(0.90
)

$
0.59


$
0.74


$
3.26

Total adjustments

$
1.26


$
0.00


$
1.33


$
0.00

Non-GAAP diluted earnings per share

$
0.36


$
0.59


$
2.07


$
3.26


















Weighted average number of shares used in the calculation of diluted earnings per share


27.4



26.4



26.1



26.4

# # #

Company Name:	Genie Energy Ltd. Class B Stock
Stock Symbol:	GNE
Market:	NYSE
Website:	genie.com

Twitter