Spark Energy, Inc. Announces Pricing of Series A Preferred Stock

HOUSTON, Jan. 23, 2018 (GLOBE NEWSWIRE) — Spark Energy, Inc. (“Spark” or the “Company”) (NASDAQ:SPKE), an independent retail energy services company, announced the pricing of a public offering of 2,000,000 shares of its 8.75% Series A Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Stock (“Series A Preferred Stock”) at a public offering price of $25.25.

The underwriters have been granted a 30-day option to purchase up to 250,000 additional shares of Series A Preferred Stock from Spark, exercisable in whole or in part, at the public offering price less the underwriting discount. The offering is scheduled to close on January 26, 2018.

Spark intends to use the net proceeds of approximately $48.7 million (or approximately $54.8 million if the underwriters exercise in full their option to purchase an additional 250,000 shares of Series A Preferred Stock), after deducting underwriting discounts and an advisory fee, but before estimated offering expenses, for merger and acquisition opportunities, international expansion and general corporate purposes, including to repay a portion of borrowings outstanding under Spark’s senior secured borrowing base credit facility.

B. Riley FBR, Inc., Janney Montgomery Scott LLC, BB&T Capital Markets, a division of BB&T Securities, LLC, and Ladenburg Thalmann & Co. Inc. acted as joint book-running managers of the offering. Boenning & Scattergood, Inc., Incapital LLC, National Securities Corporation, a wholly owned subsidiary of National Holdings, Inc. (NASDAQ:NHLD), and USCA Securities LLC acted as co-managers.

The offering may be made only by means of a prospectus and related prospectus supplement meeting the requirements of Section 10 of the Securities Act of 1933, as amended. A copy of the prospectus supplement and accompanying base prospectus meeting such requirements relating to this offering may be obtained from any of the underwriters, including the offices of:

B. Riley FBR, Inc.
Attn: Syndicate Prospectus Department
1300 17th Street N., Suite 1400
Arlington, VA 22209
Phone: (800) 846-5050
Email: prospectuses@brileyfbr.com
Janney Montgomery Scott LLC
Attn: Taxable Fixed Income Department
1717 Arch Street, 19th Floor
Philadelphia, Pennsylvania 19103
Phone: (215) 665-6130
Email: TFI@janney.com
BB&T Capital Markets
Attn: Prospectus Department
901 East Byrd Street, Suite 300
Richmond, VA 23219
Email: prospectusrequests@bbandtcm.com
 Ladenburg Thalmann & Co.
Attn: Syndicate Department
277 Park Avenue, 26th Floor
New York, NY 10172
Email: prospectus@ladenburg.com

You may also obtain these documents for free when they are available by visiting the Securities and Exchange Commission’s (“SEC”) Web site at www.sec.gov.

The shelf registration statement relating to these securities has previously been filed with the SEC and declared effective. This press release shall not constitute an offer to sell or the solicitation of an offer to buy the securities described herein, nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

About Spark Energy, Inc.

Spark Energy, Inc. is an established and growing independent retail energy services company founded in 1999 that provides residential and commercial customers in competitive markets across the United States with an alternative choice for their natural gas and electricity. Headquartered in Houston, Texas, Spark currently operates in 19 states and serves 94 utility territories. Spark offers its customers a variety of product and service choices, including stable and predictable energy costs and green product alternatives.

Cautionary Note Concerning Forward Looking Statements

This press release includes forward-looking statements regarding future events. These forward-looking statements rely on a number of assumptions concerning future events and are subject to a number of uncertainties and factors, many of which are outside the control of Spark, and a variety of risks that could cause results to differ materially from those expected by the management of Spark. Spark undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time.

Contact: Spark Energy, Inc.

Investors:

Christian Hettick, 832-200-3727

Media:

Eric Melchor, 281-833-4151

 

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Source: Spark Energy, Inc.

Spark Energy, Inc. Announces Public Offering of Series A Preferred Stock

HOUSTON, Jan. 23, 2018 (GLOBE NEWSWIRE) — Spark Energy, Inc. (“Spark” or the “Company”) (NASDAQ:SPKE), an independent retail energy services company, announced today that it has commenced a public offering of its 8.75% Series A Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Stock (“Series A Preferred Stock”) pursuant to an effective shelf registration statement on Form S-3 previously filed with the Securities and Exchange Commission (the “SEC”). Spark will grant the underwriters a 30-day option to purchase additional shares of Series A Preferred Stock.

Spark intends to use the net proceeds of this offering for merger and acquisition opportunities, international expansion and general corporate purposes, including to repay a portion of borrowings outstanding under Spark’s senior secured borrowing base credit facility. B. Riley FBR, Inc., Janney Montgomery Scott LLC, BB&T Capital Markets, a division of BB&T Securities, LLC, and Ladenburg Thalmann & Co. Inc. will act as joint book-running managers of the offering. Boenning & Scattergood, Inc., Incapital LLC, National Securities Corporation, a wholly owned subsidiary of National Holdings, Inc. (NASDAQ:NHLD), and USCA Securities LLC will act as co-managers.

The offering may be made only by means of a prospectus and related prospectus supplement meeting the requirements of Section 10 of the Securities Act of 1933, as amended. A copy of the preliminary prospectus supplement and accompanying base prospectus meeting such requirements relating to this offering may be obtained from any of the underwriters, including the offices of:

B. Riley FBR, Inc.
Attn: Syndicate Prospectus Department
1300 17th Street N., Suite 1400
Arlington, VA 22209
Phone: (800) 846-5050
Email: prospectuses@brileyfbr.com
Janney Montgomery Scott LLC
Attn: Taxable Fixed Income Department
1717 Arch Street, 19th Floor
Philadelphia, Pennsylvania 19103
Phone: 215-665-6130
Email: TFI@janney.com

BB&T Capital Markets
Attn: Prospectus Department
901 East Byrd Street, Suite 300
Richmond, VA 23219
Email: prospectusrequests@bbandtcm.com

Ladenburg Thalmann & Co.
Syndicate Department
277 Park Avenue, 26th Floor
New York, NY 10172
prospectus@ladenburg.com

You may also obtain these documents for free when they are available by visiting the Securities and Exchange Commission’s Web site at www.sec.gov.

The shelf registration statement relating to these securities has previously been filed with the SEC and declared effective. This press release shall not constitute an offer to sell or the solicitation of an offer to buy the securities described herein, nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

About Spark Energy, Inc.

Spark Energy, Inc. is an established and growing independent retail energy services company founded in 1999 that provides residential and commercial customers in competitive markets across the United States with an alternative choice for their natural gas and electricity. Headquartered in Houston, Texas, Spark currently operates in 19 states and serves 94 utility territories. Spark offers its customers a variety of product and service choices, including stable and predictable energy costs and green product alternatives.

Cautionary Note Concerning Forward Looking Statements

This press release includes forward-looking statements regarding future events. These forward-looking statements rely on a number of assumptions concerning future events and are subject to a number of uncertainties and factors, many of which are outside the control of Spark, and a variety of risks that could cause results to differ materially from those expected by the management of Spark. Spark undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time.

Contact: Spark Energy, Inc.

Investors:

Christian Hettick, 832-200-3727

Media:

Eric Melchor, 281-833-4151

 

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Source: Spark Energy, Inc.

Spark Energy, Inc. Announces Updated Guidance on Select 2017 Financial Results

HOUSTON, Jan. 22, 2018 (GLOBE NEWSWIRE) — Spark Energy, Inc. (“Spark” or the “Company”) (NASDAQ:SPKE), an independent retail energy services company, announced today that is has updated its guidance on 2017 Adjusted EBITDA.

While still finalizing results for the year ended December 31, 2017, Spark is providing revised Adjusted EBITDA guidance of between $100.0 and $105.0 million for fiscal year 2017, which is consistent with the Company’s guidance update provided on its third quarter earnings call. The Company also expects residential customer equivalents (RCEs) in excess of 1,000,000 as of December 31, 2017.

“2017 was a strong year for us,” said Nathan Kroeker, Spark’s President and Chief Executive Officer. “In our three fiscal years as a public company, we increased our RCE count by over three times as well as brought our Adjusted EBITDA from just over $11 million to over $100 million. Those are remarkable accomplishments.”

These estimates and related matters in the reconciliation table below may change materially as Spark finalizes its results for 2017, including income tax expense actually recognized after taking into account effects related to the recent tax reform. Spark is also announcing today that it plans to present its Full Year and Fourth Quarter 2017 financial results in a conference call and webcast on Friday, March 9, 2018 at 10:00 AM Central (11:00 AM Eastern).

A live webcast of the conference call can be accessed from the Spark Energy Investor Relations website at ir.sparkenergy.com. An archived replay of the webcast will be available for twelve months following the live presentation.

About Spark Energy, Inc.

Spark Energy, Inc. is an established and growing independent retail energy services company founded in 1999 that provides residential and commercial customers in competitive markets across the United States with an alternative choice for their natural gas and electricity. Headquartered in Houston, Texas, Spark currently operates in 19 states and serves 94 utility territories. Spark offers its customers a variety of product and service choices, including stable and predictable energy costs and green product alternatives.

We use our website as a means of disclosing material non-public information and for complying with our disclosure obligations under Regulation FD. Investors should note that new materials, including press releases, updated investor presentations, and financial and other filings with the Securities and Exchange Commission are posted on the Spark Energy Investor Relations website at ir.sparkenergy.com. Investors are urged to monitor our website regularly for information and updates about the Company.

Cautionary Note Regarding Forward-Looking Statements

This press release includes forward-looking statements and projections, made in reliance on the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements can be identified by the use of forward-looking terminology including “may,” “should,” “likely,” “will,” “believe,” “expect,” “anticipate,” “estimate,” “continue,” “plan,” “intend,” “project,” or other similar words. Although we believe that the expectations reflected in such forward-looking statements are reasonable, we cannot give any assurance that such expectations will prove correct. However, a variety of factors could cause actual results to differ materially from those projected in the forward-looking statements, including (i) restrictions in our debt agreements and collateral requirements, (ii) our ability to borrow funds and access credit markets, (iii) our level of indebtedness, (iv) our ability to successfully and efficiently integrate acquisitions into our operations, (iv) federal, state and local regulation, including the industry’s ability to address or adapt to the enactment of any new regulations by the New York Public Service Commission that may seek to impose significant new restrictions on retail energy providers operating in New York, (v) other business risks affecting our liquidity and results of operations. Additional important risk factors that could cause actual results to differ materially from expectations are disclosed in Item 1A of Spark’s Form 10-K for the year ended December 31, 2016 and subsequent Form 10-Qs and other reports filed with the SEC. While Spark makes these statements and projections in good faith, neither Spark nor its management or affiliates can guarantee that anticipated future results will be achieved. Spark assumes no obligation to publicly update or revise any forward-looking statements made herein or any other forward-looking statements made by Spark, whether as a result of new information, future events, or otherwise. The Company’s year-end estimates are preliminary and based on the most current information available to it at this time. These estimates are subject to completion of the Company’s financial statements and the audit thereof which the Company expects to report in March 2018. The Company’s actual results may differ materially from these estimates.

Reconciliation of GAAP to Non-GAAP Measures

Adjusted EBITDA

We define “Adjusted EBITDA” as EBITDA less (i) customer acquisition costs incurred in the current period, (ii) net gain (loss) on derivative instruments, and (iii) net current period cash settlements on derivative instruments, plus (iv) non-cash compensation expense, and (v) other non-cash and non-recurring operating items. EBITDA is defined as net income (loss) before provision for income taxes, interest expense and depreciation and amortization. We deduct all current period customer acquisition costs (representing spending for organic customer acquisitions) in the Adjusted EBITDA calculation because such costs reflect a cash outlay in the period in which they are incurred, even though we capitalize such costs and amortize them over two years in accordance with our accounting policies. The deduction of current period customer acquisition costs is consistent with how we manage our business, but the comparability of Adjusted EBITDA between periods may be affected by varying levels of customer acquisition costs. For example, our Adjusted EBITDA is lower in years of customer growth reflecting larger customer acquisition spending. We do not deduct the cost of customer acquisitions through acquisitions of business or portfolios of customers in calculated Adjusted EBITDA. We deduct our net gains (losses) on derivative instruments, excluding current period cash settlements, from the Adjusted EBITDA calculation in order to remove the non-cash impact of net gains and losses on derivative instruments. We also deduct non-cash compensation expense as a result of restricted stock units that are issued under our long-term incentive plan.

We believe that the presentation of Adjusted EBITDA provides information useful to investors in assessing our liquidity and financial condition and results of operations and that Adjusted EBITDA is also useful to investors as a financial indicator of our ability to incur and service debt, pay dividends and fund capital expenditures. Adjusted EBITDA is a supplemental financial measure that management and external users of our condensed consolidated financial statements, such as industry analysts, investors, commercial banks and rating agencies, use to assess the following:

  • our operating performance as compared to other publicly traded companies in the retail energy industry, without regard to financing methods, capital structure or historical cost basis;
  • the ability of our assets to generate earnings sufficient to support our proposed cash dividends; and
  • our ability to fund capital expenditures (including customer acquisition costs) and incur and service debt.

The GAAP measure most directly comparable to Adjusted EBITDA is net income (loss). Our non-GAAP financial measure of Adjusted EBITDA should not be considered as an alternative to net income (loss). Adjusted EBITDA is not a presentation made in accordance with GAAP and has important limitations as an analytical tool. You should not consider Adjusted EBITDA in isolation or as a substitute for analysis of our results as reported under GAAP. Because Adjusted EBITDA excludes some, but not all, items that affect net income (loss), and is defined differently by different companies in our industry, our definition of Adjusted EBITDA may not be comparable to similarly titled measures of other companies.

Management compensates for the limitations of Adjusted EBITDA as an analytical tool by reviewing the comparable GAAP measure, understanding the differences between the measures, and incorporating these data points into management’s decision-making process.

The following table presents a reconciliation of Adjusted EBITDA to net income (loss) for the period indicated.

APPENDIX TABLE A-1
ADJUSTED EBITDA RECONCILIATION
(in thousands)
(unaudited)
Year Ended December 31,
2017
Reconciliation of Adjusted EBITDA to Net Income:
Net income $ 67,000 – 82,000
Depreciation and amortization 42,000 – 43,000
Interest expense 11,000 – 13,000
Income tax expense 27,000 – 40,000
EBITDA 158,000 – 168,000
Less:
Net, Gains (losses) on derivative instruments 5,000 – 6,000
Net, Cash settlements on derivative instruments 16,000 – 17,000
Customer acquisition costs 26,000 – 27,000
One-time change in TRA liability due to tax reform 15,000 – 25,000
Plus:
Non-cash compensation expense 5,000 – 6,000
Adjusted EBITDA $ 100,000 – 105,000

Contact: Spark Energy, Inc.

Investors:

Christian Hettick, 832-200-3727

Media:

Eric Melchor, 281-833-4151

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Source: Spark Energy, Inc.

Spark Energy, Inc. Announces Dividends on Common and Preferred Stock

HOUSTON, Jan. 18, 2018 (GLOBE NEWSWIRE) — Spark Energy, Inc. (NASDAQ:SPKE), an independent retail energy services company  (“Spark” or the “Company”), announced today that its Board of Directors has declared a quarterly cash dividend for the fourth quarter of 2017 in the amount of $0.18125 per share of Class A Common Stock. This amount represents an annualized dividend of $0.725 per share. The fourth quarter dividend will be paid on March 16, 2018 to holders of record of Spark’s Class A Common Stock on March 2, 2018. Investors are reminded that on June 16, 2017, Spark completed a two-for-one stock split by means of a stock dividend.

Additionally, in accordance with the terms of the 8.75% Series A Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Stock (“Series A Preferred Stock”) of the Company, the Board of Directors has declared a quarterly cash dividend in the amount of $0.546875 per share of the Series A Preferred Stock. This amount represents an annualized dividend of $2.1875 per share. The dividend will be paid on April 16, 2018 to holders of record of Spark’s Series A Preferred Stock on April 2, 2018.

About Spark Energy, Inc.

Spark Energy, Inc. is an established and growing independent retail energy services company founded in 1999 that provides residential and commercial customers in competitive markets across the United States with an alternative choice for their natural gas and electricity. Headquartered in Houston, Texas, Spark currently operates in 19 states and serves 94 utility territories. Spark offers its customers a variety of product and service choices, including stable and predictable energy costs and green product alternatives.

We use our website as a means of disclosing material non-public information and for complying with our disclosure obligations under Regulation FD. Investors should note that new materials, including press releases, updated investor presentations, and financial and other filings with the Securities and Exchange Commission are posted on the Spark Energy Investor Relations website at ir.sparkenergy.com. Investors are urged to monitor our website regularly for information and updates about the Company.

Contact:  Spark Energy, Inc.

Investors:
Christian Hettick, 832-200-3727

Media:
Eric Melchor, 281-833-4151

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Source: Spark Energy, Inc.

Spark Energy, Inc. Announces Buyout of Verde Earnout Obligations

HOUSTON, Jan. 15, 2018 (GLOBE NEWSWIRE) — Spark Energy, Inc. (“Spark” or the “Company”) (NASDAQ:SPKE), an independent retail energy services company, announced today that the Company and Verde Energy USA Holdings, LLC (“Verde”) have agreed to terminate the earnout provisions of the purchase and sale transaction in which Spark acquired Verde’s operating subsidiaries in July 2017.

Pursuant to the Membership Interest and Stock Purchase Agreement (“MIPA”) entered into between the Company, its subsidiary, and Verde on May 5, 2017, the Company was obligated to pay 100% of the Adjusted EBITDA earned by the Verde Companies for the 18 months following closing that exceeds certain thresholds, subject to the Verde Companies’ ability to achieve defined customer count criteria. In connection with such obligations, Verde’s existing management continued to operate the business as a separate entity during the earnout period. The buyout transaction provides for a lump sum payment of approximately $6.0 million in June 2019 in substitution of the existing earnout obligations. With the buyout of the earnout provision, Spark management will assume complete control over Verde’s operations, effective immediately.

“The early buyout of the Verde earnout gives us the opportunity to begin immediate improvement in our bottom line results,” said Nathan Kroeker, Spark Energy’s President and Chief Executive Officer. “As I mentioned on our last earnings call, one of our near-term strategic priorities is to maximize process efficiencies and synergies through the integration of recent acquisitions. By ending the Verde earnout almost a year early, we are able to accelerate and realize synergies of the acquisition that should increase our Adjusted EBITDA performance in future periods.”

About Spark Energy, Inc.

Spark Energy, Inc. is an established and growing independent retail energy services company founded in 1999 that provides residential and commercial customers in competitive markets across the United States with an alternative choice for their natural gas and electricity. Headquartered in Houston, Texas, Spark currently operates in 19 states and serves 94 utility territories. Spark offers its customers a variety of product and service choices, including stable and predictable energy costs and green product alternatives.

We use our website as a means of disclosing material non-public information and for complying with our disclosure obligations under Regulation FD. Investors should note that new materials, including press releases, updated investor presentations, and financial and other filings with the Securities and Exchange Commission are posted on the Spark Energy Investor Relations website at ir.sparkenergy.com. Investors are urged to monitor our website regularly for information and updates about the Company.

Cautionary Note Regarding Forward-Looking Statements

This press release includes forward-looking statements and projections, made in reliance on the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements can be identified by the use of forward-looking terminology including “may,” “should,” “likely,” “will,” “believe,” “expect,” “anticipate,” “estimate,” “continue,” “plan,” “intend,” “project,” or other similar words. Although we believe that the expectations reflected in such forward-looking statements are reasonable, we cannot give any assurance that such expectations will prove correct. However, a variety of factors could cause actual results to differ materially from those projected in the forward-looking statements, including (i) restrictions in our debt agreements and collateral requirements, (ii) our ability to borrow funds and access credit markets, (iii) our level of indebtedness, (iv) our ability to successfully and efficiently integrate acquisitions into our operations, (iv) federal, state and local regulation, including the industry’s ability to prevail on its challenge to the New York Public Service Commission’s orders enacting new regulations that seek to impose significant new restrictions on retail energy providers operating in New York, (v) other business risks affecting our liquidity and results of operations. Additional important risk factors that could cause actual results to differ materially from expectations are disclosed in Item 1A of Spark’s Form 10-K for the year ended December 31, 2016 and subsequent Form 10-Qs and other reports filed with the SEC. While Spark makes these statements and projections in good faith, neither Spark nor its management or affiliates can guarantee that anticipated future results will be achieved. Spark assumes no obligation to publicly update or revise any forward-looking statements made herein or any other forward-looking statements made by Spark, whether as a result of new information, future events, or otherwise.

Contact: Spark Energy, Inc.

Investors:

Christian Hettick, 832-200-3727

Media:

Eric Melchor, 281-833-4151

Source: Spark Energy, Inc.