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Genie Energy Ltd. Reports First Quarter 2013 Results



  Genie Energy Ltd. Reports First Quarter 2013 Results

Business Wire

NEWARK, N.J. -- May 7, 2013

Genie Energy Ltd. (NYSE: GNE, GNEPRA) reported revenues of $85.3 million,
income from operations of $2.6 million and a net loss attributable to common
stockholders of $1.8 million for the first quarter, the three months ended
March 31, 2013.

Genie Energy will pay a quarterly dividend of $0.1594 per share of Series
2012-A Preferred Stock (NYSE: GNEPRA) for the first quarter on May 15, 2013 to
preferred shareholders of record as of the close of business on May 8, 2013.
The ex-dividend date was May 6, 2013. The distribution will be treated as a
return of capital and not as a dividend for tax purposes.

1Q13 AND RECENT HIGHLIGHTS

  * Consolidated revenues of $85.3 million (+$27.8 million) and gross profit
    of $19.0 million (+$1.0 million) increased year over year, while EBITDA of
    $2.7 million and income from operations of $2.6 million (-$0.1 million)
    declined slightly.
  * IDT Energy generated EBITDA of $8.9 million, up from $7.4 million in 1Q12.
    EBITDA for the trailing twelve months ended March 31, 2013 totaled $26.5
    million.
  * Fully diluted net loss per share attributable to Genie Energy’s common
    stockholders was $0.09 compared to diluted net income per share of $0.03
    in 1Q12.
  * Net cash used in operating activities of $0.8 million during 1Q13, as
    compared to net cash provided by operating activities of $2.1 million in
    1Q12.
  * In early March 2013, AMSO, LLC started heating at its pilot test site in
    Colorado. After approximately two weeks of operations, the electric heater
    failed before generating sufficient data to evaluate the viability of
    AMSO’s approach. AMSO is currently examining various alternative solutions
    to deliver reliable sustained down-hole heat for an extended period of
    time.
  * In April 2013, the government of Israel finalized the award to a Genie
    Energy subsidiary of an exclusive petroleum exploration license covering
    396.5 square kilometers in the Southern portion of the Golan Heights. The
    license area may contain significant quantities of conventional oil and
    gas in relatively tight formations.
  * In April 2013, IEI received the governmental directives required for
    preparation and submission of an environmental impact statement, a
    necessary component of the permit application for construction and
    operation of an oil shale pilot test facility. IEI intends to submit its
    application during the second quarter of 2013.
  * Also in April 2013, a Genie subsidiary entered into a five year, exclusive
    oil shale development agreement with the Petroleum Authority of Mongolia
    to explore and evaluate the commercial potential of oil shale resources on
    34,470 square kilometers in Central Mongolia.

MANAGEMENT COMMENTS

Claude Pupkin, Genie Energy’s CEO, said, “Genie continues to perform very
well. IDT Energy generated another quarter of year over year increases in
revenues and EBITDA. At Genie Oil and Gas, we recently added two exciting
projects to further diversify our resource portfolio and more effectively
utilize and leverage our technical teams and intellectual property. In
Colorado, equipment difficulties prevented AMSO, LLC from achieving steady
state pilot test operations. We are now pursuing alternate heating processes
that more closely reflect our plans for heating during commercial operations,
and look forward to re-starting the pilot test.”

Geoff Rochwarger, Genie Energy’s Vice Chairman and IDT Energy’s CEO, said,
“IDT Energy continued to benefit from the net meter and RCE increases achieved
in 2012. Looking ahead, we expect that our significant investments in
geographic expansion and the deployment of new offerings and services will
help drive long term growth."

                                                                  
GENIE ENERGY 1Q13
CONSOLIDATED RESULTS
                                                                    
$ in millions, except       1Q13          4Q12         1Q12        YoY Change
EPS                                                                (%/$)
Revenues                    $85.3         $65.4        $57.5       +48.4%
Gross profit                $19.0         $18.5        $18.0       +5.5%
Gross margin                22.3%         28.2%        31.4%       (910) basis
percentage                                                         points
SG&A expense                $12.8         $13.4        $12.4       +2.9%
Research and                $2.5          $2.2         $2.1        +18.9%
development expense
Equity in the net           $1.1          $0.9         $0.8        +34.7%
loss of AMSO, LLC
EBITDA*                     $2.7          $1.9         $2.7        (2.4)%
Income from                 $2.6          $1.9         $2.7        (2.3)%
operations
Net (loss) income
attributable to Genie       $(1.8)        $1.8         $0.6        $(2.4)
Energy’s common
stockholders
Diluted (loss) income
per share
attributable to Genie       $(0.09)       $0.08        $0.03       $(0.12)
Energy’s common
stockholders
Net cash (used in)
provided by operating       $(0.8)        $(2.2)       $2.1        $(2.9)
activities
                                                                    

*EBITDA for all periods presented is a non-GAAP measure intended to provide
useful information that may be more indicative of Genie Energy’s or the
relevant segment’s core operating results than the nearest GAAP measures.
Please refer to the Reconciliation of Non-GAAP Financial Measure at the end of
this release for an explanation of EBITDA and reconciliation to the most
directly comparable GAAP measure.

Genie Energy’s revenues, direct costs of revenues, and gross profit are
generated entirely by its retail energy provider business. For the discussion
of those metrics, please see the results of the retail energy provider
segment, IDT Energy, below.

SG&A expense increased 2.9% to $12.8 million in 1Q13 from $12.4 million in
1Q12. The increase primarily reflects increased corporate overhead and
business development costs within GOGAS partially offset by a decrease in SG&A
at IDT Energy as a result of lower customer acquisition costs. See the segment
discussions below for additional details. Corporate G&A, inclusive of non-cash
compensation expense, increased to $2.3 million in 1Q13 from $1.6 million in
1Q12.

Research and development expense, all of which was incurred by the GOGAS
segment, increased 18.9% to $2.5 million in 1Q13 from $2.1 million in 1Q12.

Equity in the net loss of AMSO, LLC increased to $1.1 million in 1Q13 from
$0.8 million in 1Q12. The increase reflected higher operating costs, such as
utilities and fuel costs, as well as equipment engineering and redesign
expenses. The GOGAS segment description below provides additional details.

EBITDA declined 2.4% to $2.7 million. The increase in EBITDA generated by IDT
Energy was offset by increased G&A expense incurred by GOGAS and Genie
corporate, as well as by the increases in research and development expense and
equity in the net loss of AMSO, LLC.

Income from operations declined 2.3% to $2.6 million in 1Q13 from $2.7 million
in 1Q12.

On March 5, 2013, Genie’s offer to exchange shares of its Class B Common Stock
for shares of its Series 2012-A Preferred Stock on a one-for-one basis
expired. Approximately 0.3 million shares were tendered and exchanged during
the renewed exchange period. Since Genie first offered the Series 2012-A
Preferred Stock in 2012, a total of approximately 1.9 million shares of Series
2012-A Preferred Stock have been issued in exchange for an equal number of
shares of Class B Common Stock. The first quarter’s announced dividend to
preferred stockholders reduced net income available to common stockholders by
$0.3 million.

The net loss attributable to Genie Energy’s common stockholders was $1.8
million ($0.9 per diluted share) in 1Q13, compared to net income attributable
to Genie Energy’s common stockholders of $0.6 million ($0.03 per diluted
share) in the year ago period.

BALANCE SHEET AND CASH FLOW HIGHLIGHTS

As of March 31, 2013, Genie Energy had $150.5 million in total assets
including $91.1 million in cash, cash equivalents, restricted cash,
certificates of deposit and marketable securities. Genie Energy’s liabilities
totaled $31.8 million, with no long term debt outstanding.

Net cash used in operating activities was $0.8 million during 1Q13, compared
to  net cash provided by operating activities of $2.1 million during 1Q12.

RESULTS BY SEGMENT

IDT Energy

                                                                  
    $ in millions              1Q13        4Q12        1Q12        YoY Change
                                                                   (%/$)
    Total revenues             $85.3       $65.4       $57.5       +48.4%
    Electric revenues          $54.6       $48.2       $31.7       +72.2%
    Natural gas revenues       $30.7       $17.2       $25.8       +19.1%
    Gross profit               $19.0       $18.5       $18.0       +5.5%
    Gross margin               22.3%       28.2%       31.4%       (910) basis
    percentage                                                     points
    SG&A expense               $10.2       $10.6       $10.7       (4.7)%
    EBITDA                     $8.9        $7.9        $7.4        +20.1%
    Income from                $8.9        $7.9        $7.4        +20.2%
    operations
                                                                    

During 1Q13, IDT Energy continued to work towards expanding its geographic
footprint. IDT Energy is awaiting regulatory approvals to enter into
additional territories, primarily gas only, in Pennsylvania and Maryland.
Management is closely evaluating additional, deregulation-driven opportunities
in Illinois (COMED), the District of Colombia, Massachusetts, and Connecticut.

IDT Energy increased residential customer equivalents (RCE’s) 28% year over
year and 5% sequentially to 329,000 at March 31, 2013.

                                                                        
RCEs at end
of Quarter         March       December       September       June       March
                   31,         31, 2012       30, 2012        30,        31,
(in                2013                                       2012       2012
thousands)
Electricity        243         238            235             204        176
RCEs
Natural gas        86          74             87              88         82
RCEs
Total              329         312            322             292        258
                                                                          

Electricity RCEs increased 38% to 243,000 at March 31, 2013 compared to the
year ago level, reflecting the growing share of relatively higher consumption
meters in Pennsylvania and Maryland compared to New York. In addition, because
RCE’s are calculated utilizing the trailing twelve month consumption history
of each meter, the unusually mild winter of 2011-2012 is becoming less
impactful in calculating the RCE benchmark.

Natural gas RCEs increased 5% year over year and 16% sequentially to 86,000 at
March 31, 2013. The increase reflects the more normalized winter heating
season’s impact partly offset by a decline in gas meters served.

At March 31, 2013, IDT Energy had approximately 485,000 meters enrolled, an
increase of 2% year over year and a 3% decrease sequentially. The net year
over year meter increase reflects a 10% increase in electric meters enrolled
to 319,000 partially offset by an 11% decline in gas meters enrolled to
166,000. The year over year changes predominantly reflect the impact of
intensive customer acquisition efforts focused on electric-only utility
territories.

                                                                        
Meters at
end of             March                                      June       March
Quarter            31,         December       September       30,        31,
                   2013        31, 2012       30, 2012        2012       2012
(in
thousands)
Electricity        319         331            343             313        289
meters
Natural gas        166         171            180             182        186
meters
Total              485         502            523             495        475
                                                                          

Gross meter acquisitions were 66,000 in 1Q13 compared to 79,000 in 4Q12 and
108,000 in 1Q12. The year over year decline in gross meter acquisitions
primarily reflects a reduced rate of expansion into new territories in recent
quarters.

Average monthly churn was 6.3% in 1Q13, a decrease from the 6.8% rate in 4Q12
and a slight decrease from the 6.4% rate in 1Q12. The decreases primarily
reflect the lower rates of gross meter additions in the second half of 2012 as
newly acquired customers have higher churn rates than longer term customers.

IDT Energy’s revenues during 1Q13 increased 48.4% to $85.3 million from $57.5
million in the year ago quarter.

Electric revenues increased 72.2% year over year to $54.6 million, reflecting
a 65.4% year over year increase in kWh sold as a result of the rapid expansion
of IDT Energy’s electric meter base during 2012, and a 4.1% increase in the
average revenue per kWh of electricity sold.

Natural gas revenues in 1Q13 increased 19.1% year over year to $30.7 million,
reflecting a 10.7% increase in therms sold and a 7.6% increase in average
revenue per therm sold. The increase in therms sold was driven by a return to
seasonably cold winter weather. Heating degree days in New York State and
Pennsylvania, which are a measure of outside air temperature designed to
reflect the energy required for home heating, were 25% colder in the three
months ended March 31, 2013 than in the year ago quarter. The weather related
increase in consumption was partially offset by the year over year decline in
gas meters served.

Gross profit increased to $19.0 million in 1Q13 from $18.0 million in 1Q12,
driven primarily by the increases in kWh sold and therms sold partially offset
by a decline in margin per kWh sold.

Gross margin during 1Q13 was 22.3%, a 910 basis point decrease year over year.
Electric margin per kWh sold decreased year over year primarily as a result of
the continued shift in IDT Energy’s customer base portfolio from New York and
toward Pennsylvania and Maryland. Meters in these latter two states tend to
generate lower per unit margins than in New York. In addition, electric
commodity prices spiked in New York during the first half of 1Q13,
significantly decreasing IDT Energy’s per unit electric margins.

IDT Energy’s SG&A expense in 1Q13 decreased 4.7 percent year over year to
$10.2 million compared to $10.7 million in the year ago period. The decrease
primarily reflected lower customer acquisition costs related to the decrease
in gross meter adds compared to the year ago quarter partially offset by an
increase in billing and purchase of receivable fees and stock-based
compensation expense.

IDT Energy generated $8.9 million in EBITDA and income from operations during
1Q13, compared to $7.4 million in EBITDA and income from operations in 1Q12.
The increase was substantially the result of the increase in gross profit
compared to the year ago quarter, augmented by the decrease in SG&A expense.

Financing fees charged by BP Energy, IDT Energy’s preferred commodity
supplier, were $1.0 million in 1Q13 compared to $0.7 million in 1Q12 as a
result of higher consumption by IDT Energy’s customer base.

Genie Oil and Gas (GOGAS)

GOGAS currently generates no revenues. GOGAS’ operating expenses consist
primarily of research and development expense and expenses of its intellectual
property development and other business development efforts. GOGAS accounts
for its investment in AMSO, LLC using the equity method.

GOGAS reported $2.8 million of combined R&D and G&A expense in 1Q13, compared
to $2.3 million in the year ago quarter and $2.9 million in 4Q12. The year
over year increase primarily reflects increased G&A expense incurred by GOGAS’
business development efforts in Mongolia and Israel. Equity in the net loss of
AMSO, LLC increased to $1.1 million in 1Q13 from $0.8 million in the year ago
quarter, reflecting the operating costs of the pilot project and the cost of
equipment modifications and other preparations for the re-start of the pilot
test plant. GOGAS’ loss from operations was $(3.9) million for both 1Q13 and
4Q12, compared to $(3.1) million in 1Q12.

AMSO, LLC is a joint venture oil shale exploration and production initiative
with Total, S.A. operating pursuant to a federal Research, Development and
Demonstration lease on federal lands in Colorado.

AMSO, LLC has constructed a pilot facility designed to validate key
assumptions of its in-situ oil shale recovery process and has received all
permits required for pilot test operations. In early March, 2013, AMSO, LLC
initiated its oil shale pilot test in Colorado by turning on the electric
heater. After approximately two weeks of operation, before the pilot could
attain steady-state operations, the down-hole electric heater failed. While
pilot operations were too short to allow conclusions to be drawn about the
ultimate viability of our approach, the operating team did learn valuable
information that will help to optimize operating conditions for future pilot
operations.

AMSO is currently evaluating additional modifications to the electric heater
to improve its reliability while simultaneously developing engineering plans
for a hot fluid circulating (HFC) heater. In this approach, the heat is
generated above ground and transferred to the retort zone via piped fluids.
Although development and testing of these units could delay the pilot test
re-start by approximately a year, the HFC approach is more readily applicable
to the approach expected to be used in AMSO’s eventual commercial operations.
During the current quarter, AMSO expects to make a decision whether to proceed
with another electric heater test or to move directly to HFC heater
development and testing.

IEI holds an exclusive Oil Shale Exploration and Production license covering
238 square kilometers in the Shfela basin region in Israel. In mid-April, IEI
received the governmental directives required for preparation and submission
of an environmental impact statement. The environmental impact statement is a
necessary component of IEI’s pilot permit application, and a permit is needed
to construct and operate an oil shale pilot test facility. IEI intends to
submit its pilot application during the second quarter of 2013.

In April 2013, the government of Israel finalized the award to a Genie Energy
subsidiary of an exclusive, 36 month petroleum exploration license covering
396.5 square kilometers in the Southern portion of the Golan Heights. Afek Oil
and Gas, Ltd., (formerly Genie Israel Oil and Gas, Ltd.), a Genie subsidiary,
is carrying out the work pursuant to this license. Afek has added seasoned oil
and gas exploration professionals to its team and has begun initial
geophysical tests to characterize the site and is currently making
preparations for additional geophysical, seismic, and drilling operations.

On April 19, 2013, Genie Oil Shale Mongolia, LLC (Genie Mongolia), and the
Petroleum Authority of Mongolia entered into an exclusive oil shale
development agreement to explore and evaluate the commercial potential of oil
shale resources on a 34,470 square kilometer area in Central Mongolia.

The five year agreement calls for Genie Mongolia to explore, identify and
characterize the oil shale resource in the survey area and to conduct a pilot
test using in-situ technology on appropriate oil shale deposits. Genie may
seek to proceed to commercial development via a production sharing agreement
in accordance with Mongolian law.

GENIE ENERGY EARNINGS CONFERENCE CALL

Genie Energy’s management will host a conference call at 8:00 AM Eastern
today, May 7th, to discuss financial and operational results, business outlook
and strategy. The call will begin with management’s remarks followed by Q&A
with analysts and investors.

To listen to the call and/or to participate in the Q&A, dial 1-877-317-6789
(US toll free) or 1-412-317-6789 (international) and request the Genie Energy
call.

Approximately one hour after the call concludes, an audio file with a replay
of the call in MP3 format will be available on the “Investors” section of the
Genie Energy website http://www.genie.com/investors/investor-relations. In
addition, a teleconference replay will be available through May 14, 2013 at
1-877-344-7529 (US toll free) or at 1-412-317-0088 (international). Callers
should ask for conference call # 10028194.

ABOUT GENIE ENERGY LTD.

Genie Energy Ltd. (NYSE: GNE, GNEPRA) is comprised of IDT Energy and Genie Oil
and Gas (GOGAS). IDT Energy is a retail energy provider supplying electricity
and natural gas to residential and small business customers in the
Northeastern United States. GOGAS is pioneering technologies to produce clean
and affordable transportation fuels from the world's abundant oil shales and
other fuel resources. GOGAS resource development projects include a
conventional oil exploration program in Israel and in-situ oil shale projects
in Colorado, Israel and Mongolia. For more information, visit www.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-K, 10-Q and 8-K. These factors include, but
are not limited to, the following: potential declines in prices for our
products and services; our ability to return to profitability and improve our
cash flow; impact of government regulation; effectiveness of our marketing and
distribution efforts; and general economic conditions. 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.

                                                                 
GENIE ENERGY LTD.

CONSOLIDATED BALANCE SHEETS
                                                                   
                                                  March 31,       December 31,
                                                  2013            2012
                                                  (Unaudited)
                                                  (in thousands)
Assets
Current assets:
Cash and cash equivalents                         $ 71,648        $   69,409
Restricted cash                                     10,824            10,841
Certificate of deposit                              2,205             2,205
Marketable securities                               6,468             10,485
Trade accounts receivable, net of allowance
for doubtful accounts of $130 at March 31,          47,420            40,932
2013 and December 31, 2012
Inventory                                           269               2,644
Prepaid expenses                                    1,566             3,315
Deferred income tax assets—current portion          599               599
Other current assets                                638               771
Total current assets                                141,637           141,201
Property and equipment, net                         354               409
Goodwill                                            3,663             3,663
Other assets                                        4,806             5,033
Total assets                                      $ 150,460       $   150,306
                                                                   
Liabilities and equity
Current liabilities:
Trade accounts payable                            $ 21,154        $   20,641
Accrued expenses                                    7,377             7,832
Advances from customers                             157               1,472
Income taxes payable                                2,082             1,244
Dividends payable                                   306               211
Due to IDT Corporation                              446               600
Other current liabilities                           276               209
Total current liabilities                           31,798            32,209
Commitments and contingencies
Equity:
Genie Energy Ltd. stockholders’ equity:
Preferred stock, $.01 par value; authorized
shares—10,000:
Series 2012-A, designated shares—8,750; at
liquidation preference, consisting of 1,917         16,303            13,639
and 1,605 shares issued and outstanding at
March 31, 2013 and December 31, 2012
Class A common stock, $.01 par value;
authorized shares—35,000; 1,574 shares issued       16                16
and outstanding at March 31, 2013 and
December 31, 2012
Class B common stock, $.01 par value;
authorized shares—200,000; 19,551 and 19,827
shares issued and 19,506 and 19,800 shares          195               198
outstanding at March 31, 2013 and December
31, 2012, respectively
Additional paid-in capital                          78,541            80,196
Treasury stock, at cost, consisting of 45 and
27 shares of Class B common stock at March          (330)             (204)
31, 2013 and December 31, 2012, respectively
Accumulated other comprehensive income              358               270
Retained earnings                                   26,559            28,375
Total Genie Energy Ltd. stockholders’ equity        121,642           122,490
Noncontrolling interests:
Noncontrolling interests                            (1,980)           (3,393)
Receivable for issuance of equity                   (1,000)           (1,000)
Total noncontrolling interests                      (2,980)           (4,393)
Total equity                                        118,662           118,097
Total liabilities and equity                      $ 150,460       $   150,306
                                                                       

                                        
GENIE ENERGY LTD.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)
                                          
                                         Three Months Ended
                                         March 31,
                                         2013                    2012
                                         (in thousands, except per share data)
Revenues                                 $   85,331              $  57,505
Direct cost of revenues                      66,312                 39,473   
Gross profit                                 19,019                 18,032
Operating expenses and losses:
Selling, general and administrative          12,769                 12,407
(i)
Research and development                     2,488                  2,093
Equity in the net loss of AMSO, LLC          1,129                  839      
Income from operations                       2,633                  2,693
Interest income                              166                    46
Financing fees                               (1,006  )              (731    )
Other expense, net                           (168    )              (14     )
Income before income taxes                   1,625                  1,994
Provision for income taxes                   (1,722  )              (791    )
Net (loss) income                            (97     )              1,203
Net income attributable to                   (1,413  )              (599    )
noncontrolling interests
Net (loss) income attributable to            (1,510  )              604
Genie Energy Ltd.
Dividends on preferred stock                 (306    )              —        
Net (loss) income attributable to        $   (1,816  )           $  604      
Genie Energy Ltd. common stockholders.
                                                                  
(Loss) earnings per share attributable
to Genie Energy Ltd. common
stockholders:
Basic                                    $   (0.09   )           $  0.03     
Diluted                                  $   (0.09   )           $  0.03     
Weighted-average number of shares used
in calculation of (loss) earnings per
share:
Basic                                        19,541                 21,000   
Diluted                                      19,541                 22,960   
Dividends declared per common share      $   —                   $  0.033    
(i) Stock-based compensation included
in selling, general and administrative   $   956                 $  683      
expense
                                                                     

                                                   
GENIE ENERGY LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)
                                                     
                                                    Three Months Ended
                                                    March 31,
                                                    2013           2012
                                                    (in thousands)
Operating activities
Net (loss) income                                   $ (97    )     $ 1,203
Adjustments to reconcile net (loss) income to net
cash (used in) provided by operating activities:
Depreciation                                          25             29
Deferred income taxes                                 —              90
Stock-based compensation                              956            683
Loss on disposal of property                          38             —
Equity in the net loss of AMSO, LLC                   1,129          839
Change in assets and liabilities:
Restricted cash                                       (6     )       551
Trade accounts receivable                             (6,488 )       (2,921  )
Inventory                                             2,375          3,087
Prepaid expenses                                      1,749          843
Other current assets and other assets                 124            (884    )
Trade accounts payable, accrued expenses and          (9     )       (1,326  )
other current liabilities
Advances from customers                               (1,315 )       (578    )
Due to IDT Corporation                                (154   )       (143    )
Income taxes payable                                  838            591      
Net cash (used in) provided by operating              (835   )       2,064
activities
Investing activities
Capital expenditures                                  (11    )       (12     )
Capital contributions to AMSO, LLC                    (762   )       (1,139  )
Proceeds from maturities of marketable securities     4,000          —        
Net cash provided by (used in) investing              3,227          (1,151  )
activities
Financing activities
Dividends paid                                        (211   )       (1,149  )
Proceeds from exercise of stock options               50             5
Repurchases of Class B common stock from              (126   )       (133    )
employees
Net cash used in financing activities                 (287   )       (1,277  )
Effect of exchange rate changes on cash and cash      134            8        
equivalents
Net increase (decrease) in cash and cash              2,239          (356    )
equivalents
Cash and cash equivalents at beginning of period      69,409         102,220  
Cash and cash equivalents at end of period          $ 71,648       $ 101,864  
                                                                      

Reconciliation of Non-GAAP Financial Measure for the First Quarter of 2013

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 also disclosed for the first quarter of 2013 EBITDA,
which is a non-GAAP measure. 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 Energy’s measure of EBITDA consists of gross profit less selling,
general and administrative expense, research and development expense, and
equity in net loss of AMSO, LLC, plus depreciation (which is included in
selling, general and administrative expense). Another way of calculating
EBITDA is to start with income (loss) from operations and add depreciation.

Management believes that Genie Energy’s EBITDA provides useful information to
both management and investors by excluding certain expenses that may not be
indicative of Genie Energy’s or the relevant segment’s core operating results.
Management uses EBITDA, among other measures, as a relevant indicator of core
operational strengths in its financial and operational decision making. In
addition, management uses EBITDA to evaluate operating performance in relation
to Genie Energy’s competitors. Disclosure of this 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. EBITDA may also be an indicator
of the strength and performance of Genie Energy’s and the segment’s ongoing
business operations, including the ability to fund capital expenditures, and
meet working capital needs from current operations (as opposed to cash
resources), and to incur debt. In addition, Genie Energy has historically
reported 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 EBITDA, as well as the GAAP measures gross profit, income
(loss) from operations and net income (loss), on a segment and/or consolidated
level to facilitate internal and external comparisons to the segments’ and
Genie Energy's historical operating results, in making operating decisions,
for budget and planning purposes, and to form the basis upon which management
is compensated.

While depreciation is considered an operating cost under GAAP, it primarily
represents the non-cash current period allocation of costs associated with
long-lived assets acquired or constructed in prior periods. While Genie
Energy’s business may be capital intensive in the future, Genie Energy expects
to incur nominal capital expenditures for the foreseeable future. Genie
Energy’s operating results exclusive of depreciation is therefore a useful
indicator of its current performance.

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

Following is the reconciliation of EBITDA to the most directly comparable GAAP
measure, which is income (loss) from operations for Genie Energy’s reportable
segments and for Genie Energy on a consolidated basis.

 
Genie Energy Ltd.

Reconciliation of EBITDA to Income (Loss) from Operations

(unaudited)

$ in thousands

                                                                   
                             Total        IDT Energy   GOGAS        Corporate
Three Months Ended March 31,
2013

(1Q13)
Revenues                     $ 85,331     $  85,331    $ -          $ -
Direct cost of revenues        66,312        66,312      -            -       
Gross profit                   19,019        19,019      -            -
Selling, general and
administrative excluding       12,744        10,158      283          2,303
depreciation
Research and development       2,488         -           2,488        -
Equity in net loss of AMSO,    1,129         -           1,129        -       
LLC
EBITDA                         2,658         8,861       (3,900 )     (2,303 )
Subtract:
Depreciation                   25            5           20           -       
Income (loss) from           $ 2,633      $  8,856     $ (3,920 )   $ (2,303 )
operations
                                                                     
                             Total        IDT Energy   GOGAS        Corporate
Three Months Ended December
31, 2012
(4Q12)
Revenues                     $ 65,403     $  65,403    $ -          $ -
Direct cost of revenues        46,936        46,936      -            -       
Gross profit                   18,467        18,467      -            -
Selling, general and
administrative excluding       13,397        10,593      701          2,103
depreciation
Research and development       2,224         -           2,224        -
Equity in net loss of AMSO,    922           -           922          -       
LLC
EBITDA                         1,924         7,874       (3,847 )     (2,103 )
Subtract:
Depreciation                   32            9           23           -       
Income (loss) from           $ 1,892      $  7,865     $ (3,870 )   $ (2,103 )
operations
                                                                     
                             Total        IDT Energy   GOGAS        Corporate
Three Months Ended March 31,
2012
(1Q12)
Revenues                     $ 57,505     $  57,505    $ -          $ -
Direct cost of revenues        39,473        39,473      -            -       
Gross profit                   18,032        18,032      -            -
Selling, general and
administrative excluding       12,378        10,656      143          1,579
depreciation
Research and development       2,093         -           2,091        2
Equity in net loss of AMSO,    839           -           839          -       
LLC
EBITDA                         2,722         7,376       (3,073 )     (1,581 )
Subtract:
Depreciation                   29            6           23           -       
Income (loss) from           $ 2,693      $  7,370     $ (3,096 )   $ (1,581 )
operations
                                                                              

 
Genie Energy Ltd.

IDT Energy

Reconciliation of EBITDA to Income (Loss) from Operations

For the trailing twelve months ended March 31, 2013

(unaudited)

$ in millions

                                                            
Revenues                                                     $ 257.3
Direct cost of revenues                                        186.7
Gross profit                                                   70.6
Selling, general and administrative excluding depreciation     44.1
EBITDA                                                         26.5
Subtract:
Depreciation                                                   -
Income from operations                                       $ 26.5   

Contact:

Genie Energy Investor Relations
Bill Ulrey, 973-438-3848
invest@genie.com
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