Spark Energy, Inc. to Present First Quarter 2021 Financial Results on Thursday, May 6, 2021

HOUSTON, TX / ACCESSWIRE / April 8, 2021 / Spark Energy, Inc. (“Spark” or the “Company”) (NASDAQ:SPKE), an independent retail energy services company, announced today that it plans to present its first-quarter 2021 financial results in a conference call and webcast on Thursday, May 6, 2021 at 10:00 AM Central (11:00 AM Eastern).

A live webcast of the conference call can be accessed from the Events & Presentations page of the Spark Energy Investor Relations website at ir.sparkenergy.com/events-and-presentations. 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 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 100 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:
Mike Barajas, 832-200-3727

Media:
Kira Jordan, 832-255-7302

SOURCE: Spark Energy, Inc.

View source version on accesswire.com:
https://www.accesswire.com/639204/Spark-Energy-Inc-to-Present-First-Quarter-2021-Financial-Results-on-Thursday-May-6-2021

Spark Energy, Inc. Reports Fourth Quarter and Full Year 2020 Financial Results

HOUSTON, TX / ACCESSWIRE / March 3, 2021 / Spark Energy, Inc. (“Spark” or the “Company”) (NASDAQ:SPKE), an independent retail energy services company, today reported financial results for the year ended December 31, 2020.

Key Business Highlights

  • Recorded $24.7 million in Adjusted EBITDA, $49.0 million in Retail Gross Margin, and $8.8 million in Net Income for the fourth quarter 2020
  • Recorded $106.6 million in Adjusted EBITDA, $196.5 million in Retail Gross Margin, and $68.2 million in Net Income for the year ended 2020
  • Total liquidity of $168.2 million

“2020 was the strongest year yet for Spark and we have continued to improve the quality of our customer book. We have pivoted away from high usage, lower margin C&I contracts which has led to stronger average unit margins, partially offsetting the decrease in volumes compared to 2019. Our overall customer book is much healthier. Despite the winter storm that happened in Texas in the middle of February, we believe Spark Energy will be successful in 2021,” said Keith Maxwell, Spark’s Chief Executive Officer and Chairman of the Board.

In February 2021, the U.S. experienced winter storm Uri, an unprecedented storm bringing extreme cold temperatures to the central U.S., including Texas. As a result of increased power demand for customers across the state of Texas and power generation disruptions during the weather event, power and ancillary costs in the Electric Reliability Council of Texas (“ERCOT”) service area reached or exceeded maximum allowed clearing prices. At the time of filing these consolidated financial statements, we expect the impact of winter storm Uri will result in a significant loss that will be reflected in our first quarter 2021 results of operations. However, uncertainty exists with respect to the financial impact of the weather event due in part to outstanding pricing and volume settlement data from ERCOT; the results of formal disputes regarding pricing and volume settlement data received to date, for which we are exploring all legal options; and any corrective action by the State of Texas, ERCOT, the Railroad Commission of Texas, or the Public Utility Commission of Texas. Possible action may include resettling pricing across the supply chain (i.e. fuel supply, wholesale pricing of generation, or allocating the financial impacts of market-wide load shed ratably across all retail market participants). During the winter storm Uri event, we were required to post a significant amount of collateral with ERCOT. Despite these posting requirements, we consistently maintained, and continue to maintain, sufficient liquidity to conduct our operations in the ordinary course.

Summary Fourth Quarter 2020 Financial Results

Net income for the quarter ended December 31, 2020, was $8.8 million, heavily impacted by G&A savings quarter over quarter. This compares to a net loss of $0.7 million for the quarter ended December 31, 2019.

For the quarter ended December 31, 2020, Spark reported Adjusted EBITDA of $24.7 million compared to Adjusted EBITDA of $25.7 million for the quarter ended December 31, 2019. The slight decrease in Adjusted EBITDA was due to lower gross margin quarter over quarter, partially offset by decreases in G&A expenses and Customer Acquisition Cost.

For the quarter ended December 31, 2020, Spark reported Retail Gross Margin of $49.0 million compared to Retail Gross Margin of $64.3 million for the quarter ended December 31, 2019. This decrease is attributable to fewer customers in our overall portfolio.

Summary Full Year 2020 Financial Results

Net income for the year ended December 31, 2020, was $68.2 million compared to net income of $14.2 million for the year ended December 31, 2019. The increase compared to the prior year was primarily the result of the non-cash mark-to-market accounting associated with the hedges we put in place to lock in margins on our retail contracts, along with a decrease in G&A. We had a mark-to-market gain this year of $14.3 million, compared to a mark-to-market loss of $24.9 million a year ago.

For the year ended December 31, 2020, Spark reported Adjusted EBITDA of $106.6 million compared to Adjusted EBITDA of $92.4 million for the year ended December 31, 2019. The increase was primarily due to decreases in expenses year over year. 2020 saw reductions across the board pertaining to cost to serve, operations, legal, bad debt and Customer Acquisitions Costs.

For the year ended December 31, 2020, Spark reported Retail Gross Margin of $196.5 million compared to Retail Gross Margin of $220.7 million for the year ended December 31, 2019. The decrease was primarily attributable to lower volume due to the shift away from large C&I contracts. However, the shift in the customer mix towards more residential contracts not only reduces the risk in the portfolio, but also has a positive impact on our G&A and balance sheet.

Liquidity and Capital Resources

December 31,
($ in thousands)
2020
Cash and cash equivalents
$
71,684
Senior Credit Facility Availability (1) (2)
71,467
Subordinated Debt Facility Availability (3)
25,000
Total Liquidity
$
168,151

(1) Reflects amount of Letters of Credit that could be issued based on existing covenants as of December 31, 2020.
(2) On January 19, 2021, we increased the total commitments under our Senior Credit Facility from $202.5 million to $227.5 million, which will positively affect liquidity in future quarters.
(3) The availability of the Subordinated Facility is dependent on our Founder’s willingness and ability to lend.

Dividend

Spark’s Board of Directors declared quarterly dividends of $0.18125 per share of Class A common stock payable on March 15, 2021, and $0.546875 per share of Series A Preferred Stock payable on April 15, 2021.

Conference Call and Webcast

Spark will host a conference call to discuss fourth quarter and full year 2020 results on Thursday, March 4, 2021, at 10:00 AM Central Time (11:00 AM Eastern).

A live webcast of the conference call can be accessed from the Events & Presentations page of the Spark Energy Investor Relations website at https://ir.sparkenergy.com/events-and-presentations. 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 100 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 earnings release contains forward-looking statements that are subject to a number of risks and uncertainties, many of which are beyond our control. These forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) can be identified by the use of forward-looking terminology including “may,” “should,” “likely,” “will,” “believe,” “expect,” “anticipate,” “estimate,” “continue,” “plan,” “intend,” “projects,” or other similar words. All statements, other than statements of historical fact included in this earnings release, regarding the impacts of COVID-19 and the 2021 severe weather event, strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects, plans, objectives and beliefs of management are forward-looking statements. Forward-looking statements appear in a number of places in this earnings release and may include statements about business strategy and prospects for growth, customer acquisition costs, ability to pay cash dividends, cash flow generation and liquidity, availability of terms of capital, competition and government regulation and general economic conditions. 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.

The forward-looking statements in this earnings release and the related earnings call are subject to risks and uncertainties. Important factors that could cause actual results to materially differ from those projected in the forward-looking statements include, but are not limited to:

  • evolving risks, uncertainties and impacts relating to COVID-19, including the geographic spread, the severity of the disease, the scope and duration of the COVID-19 outbreak, actions that may be taken by governmental authorities to contain the COVID-19 outbreak or to treat its impact, and the potential for continuing negative impacts of COVID-19 on economies and financial markets;
  • changes in commodity prices;
  • the sufficiency of risk management and hedging policies and practices;
  • the impact of extreme and unpredictable weather conditions, including hurricanes and other natural disasters;
  • federal, state and local regulations, including the industry’s ability to address or adapt to potentially restrictive new regulations that may be enacted by public utility commissions;
  • our ability to borrow funds and access credit markets;
  • restrictions in our debt agreements and collateral requirements;
  • credit risk with respect to suppliers and customers;
  • changes in costs to acquire customers as well as actual attrition rates;
  • accuracy of billing systems;
  • our ability to successfully identify, complete, and efficiently integrate acquisitions into our operations;
  • significant changes in, or new changes by, the independent system operators (“ISOs”) in the regions we operate;
  • competition; and
  • the “risk factors” described in “Item 1A- Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2020.

All forward-looking statements speak only as of the date of this earnings release. Unless required by law, we disclaim any obligation to publicly update or revise these statements whether as a result of new information, future events or otherwise. It is not possible for us to predict all risks, nor can we assess the impact of all factors on the business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

SPARK ENERGY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 2020 AND DECEMBER 31, 2019
(in thousands, except share counts)

December 31, 2020
December 31, 2019
Assets
Current assets:
Cash and cash equivalents
$
71,684
$
56,664
Restricted cash
1,004
Accounts receivable, net of allowance for doubtful accounts of $3,942 and $4,797 as of December 31, 2020 and 2019, respectively
70,350
113,635
Accounts receivable-affiliates
5,053
2,032
Inventory
1,496
2,954
Fair value of derivative assets
311
464
Customer acquisition costs, net
5,764
8,649
Customer relationships, net
12,077
13,607
Deposits
5,655
6,806
Renewable energy credit asset
20,666
24,204
Other current assets
11,818
6,109
Total current assets
204,874
236,128
Property and equipment, net
3,354
3,267
Fair value of derivative assets
106
Customer acquisition costs, net
306
9,845
Customer relationships, net
5,691
17,767
Deferred tax assets
27,960
29,865
Goodwill
120,343
120,343
Other assets
4,139
5,647
Total Assets
$
366,667
$
422,968
Liabilities, Series A Preferred Stock and Stockholders’ Equity
Current liabilities:
Accounts payable
$
27,322
$
48,245
Accounts payable-affiliates
826
1,009
Accrued liabilities
34,164
37,941
Renewable energy credit liability
19,549
33,120
Fair value of derivative liabilities
7,505
19,943
Other current liabilities
1,295
1,697
Total current liabilities
90,661
141,955
Long-term liabilities:
Fair value of derivative liabilities
227
495
Long-term portion of Senior Credit Facility
100,000
123,000
Other long-term liabilities
30
217
Total liabilities
190,918
265,667
Commitments and contingencies (Note 14)
Series A Preferred Stock, par value $0.01 per share, 20,000,000 shares authorized, 3,707,256 shares issued and 3,567,543 shares outstanding at December 31, 2020 and 3,707,256 shares issued and 3,677,318 outstanding at December 31, 2019
87,288
90,015
Stockholders’ equity:
Common Stock :
Class A common stock, par value $0.01 per share, 120,000,000 shares authorized, 14,771,878 shares issued and 14,627,284 shares outstanding at December 31, 2020 and 14,478,999 shares issued and 14,379,553 shares outstanding at December 31, 2019
148
145
Class B common stock, par value $0.01 per share, 60,000,000 shares authorized, 20,800,000 issued and outstanding at December 31, 2020 and 20,800,000 issued and outstanding at December 31, 2019
209
209
Additional paid-in capital
55,222
51,842
Accumulated other comprehensive (loss)/income
(40
)
(40
)
Retained earnings
11,721
1,074
Treasury stock, at cost, 144,594 at December 31, 2020 and 99,446 shares at December 31, 2019
(2,406
)
(2,011
)
Total stockholders’ equity
64,854
51,219
Non-controlling interest in Spark HoldCo, LLC
23,607
16,067
Total equity
88,461
67,286
Total Liabilities, Series A Preferred Stock and stockholders’ equity
$
366,667
$
422,968

SPARK ENERGY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) FOR THE YEARS ENDED DECEMBER 31, 2020, 2019 and 2018
(in thousands, except per share data)

Year Ended December 31,
2020 2019 2018
Revenues:
Retail revenues
$ 555,547 $ 810,954 $ 1,001,417
Net asset optimization (expense) revenues
(657 ) 2,771 4,511
Total revenues
554,890 813,725 1,005,928
Operating expenses:
Retail cost of revenues
344,592 615,225 845,493
General and administrative
90,734 133,534 111,431
Depreciation and amortization
30,767 40,987 52,658
Total operating expenses
466,093 789,746 1,009,582
Operating income (loss)
88,797 23,979 (3,654 )
Other (expense)/income:
Interest expense
(5,266 ) (8,621 ) (9,410 )
Gain on disposal of eRex
4,862
Interest and other income
423 1,250 749
Total other (expense)/income
(4,843 ) (2,509 ) (8,661 )
Income (loss) before income tax expense
83,954 21,470 (12,315 )
Income tax expense
15,736 7,257 2,077
Net income (loss)
$ 68,218 $ 14,213 $ (14,392 )
Less: Net income (loss) attributable to non-controlling interest
38,928 5,763 (13,206 )
Net income (loss) attributable to Spark Energy, Inc. stockholders
$ 29,290 $ 8,450 $ (1,186 )
Less: Dividend on Series A preferred stock
7,441 8,091 8,109
Net income (loss) attributable to stockholders of Class A common stock
$ 21,849 $ 359 $ (9,295 )
Other comprehensive (loss) income, net of tax:
Currency translation (loss) gain
(102 ) 31
Other comprehensive (loss) income
(102 ) 31
Comprehensive income (loss)
$ 68,218 $ 14,111 $ (14,361 )
Less: Comprehensive income (loss) attributable to non-controlling interest
38,928 5,703 (13,188 )
Comprehensive income (loss) attributable to Spark Energy, Inc. stockholders
$ 29,290 $ 8,408 $ (1,173 )
Net income (loss) attributable to Spark Energy, Inc. per share of Class A common stock
Basic
$ 1.50 $ 0.03 $ (0.69 )
Diluted
$ 1.48 $ 0.02 $ (0.69 )
Weighted average shares of Class A common stock outstanding
Basic
14,555 14,286 13,390
Diluted
14,715 14,568 13,390

SPARK ENERGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2020
2019 AND 2018
(in thousands)

Year Ended December 31,
2020 2019 2018
Cash flows from operating activities:
Net income (loss)$
68,218 $ 14,213 $ (14,392 )
Adjustments to reconcile net income (loss) to net cash flows provided by operating activities:
Depreciation and amortization expense
30,767 41,002 51,436
Deferred income taxes
1,905 (6,929 ) (2,328 )
Stock based compensation
2,503 5,487 5,879
Amortization of deferred financing costs
1,210 1,275 1,291
Change in fair value of earnout liabilities
(1,328 ) (1,715 )
Excess tax expense (benefit) related to restricted stock vesting
50 (101 )
Bad debt expense
4,692 13,532 10,135
Loss on derivatives, net
23,386 67,749 18,170
Current period cash settlements on derivatives, net
(37,414 ) (41,919 ) 11,038
Gain on disposal of eRex
(4,862 )
Other
(776 ) (882 )
Changes in assets and liabilities:
Decrease in accounts receivable
37,960 23,699 2,692
(Increase) decrease in accounts receivable-affiliates
(3,020 ) 526 859
Decrease in inventory
1,458 924 674
Increase in customer acquisition costs
(1,513 ) (18,685 ) (13,673 )
(Increase) decrease in prepaid and other current assets
(2,120 ) 9,250 (14,033 )
Decrease (increase) in other assets
288 55 (335 )
(Decrease) increase in accounts payable and accrued liabilities
(37,297 ) (8,620 ) 10,301
Decrease in accounts payable-affiliates
(184 ) (1,455 ) (2,158 )
Increase (decrease) in other current liabilities
1,180 (1,459 ) (3,050 )
(Decrease) increase in other non-current liabilities
(188 ) 6 41
Decrease in intangible assets-customer acquisitions
(86 )
Net cash provided by operating activities
91,831 91,735 59,763
Cash flows from investing activities:
Purchases of property and equipment
(2,154 ) (1,120 ) (1,429 )
Cash paid for acquisitions
(17,552 )
Acquisition of Starion Customers
(5,913 )
Disposal of eRex investment
8,431
Net cash (used in) provided by investing activities
(2,154 ) 1,398 (18,981 )
Cash flows from financing activities:
Proceeds from (buyback) issuance of Series A Preferred Stock, net of issuance costs paid
(2,282 ) (743 ) 48,490
Payment to affiliates for acquisition of customer book
(10 ) (7,129 )
Borrowings on notes payable
612,000 356,000 417,300
Payments on notes payable
(635,000 ) (362,500 ) (403,050 )
Earnout Payments
(1,607 )
Net paydown on subordinated debt facility
(10,000 )
Payments on the Verde promissory note
(2,036 ) (13,422 )
Payment for acquired customers
(972 )
Payment of employee tax related to restricted stock vesting
(1,107 ) (1,348 ) (2,895 )
Proceeds from disgorgement of stockholders short-swing profits
55 244
Payment of Tax Receivable Agreement Liability
(11,239 ) (6,219 )
Payment of dividends to Class A common stockholders
(10,569 ) (10,382 ) (9,783 )
Payment of distributions to non-controlling unitholders
(29,450 ) (34,794 ) (35,478 )
Payment of Preferred Stock dividends
(7,886 ) (8,106 ) (7,014 )
Purchase of Treasury Stock
(395 )
Net cash used in financing activities
(75,661 ) (85,103 ) (20,563 )
Increase in Cash and cash equivalents and Restricted Cash
14,016 8,030 20,219
Cash and cash equivalents and Restricted cash-beginning of period
57,668 49,638 29,419
Cash and cash equivalents and Restricted cash-end of period
$ 71,684 $ 57,668 $ 49,638
Supplemental Disclosure of Cash Flow Information:
Non-cash items:
Property and equipment purchase accrual
$ 46 $ 92 $ (123 )
Holdback for Verde NoteIndemnified Matters
$ $ 4,900 $
Write-off of tax benefit related to tax receivable agreement liabilityaffiliates
$ $ 4,384 $
Gain on settlement of tax receivable agreement liabilityaffiliates
$ $ 16,336 $
Tax benefit from tax receivable agreement
$ $ $ (1,508 )
Liability due to tax receivable agreement
$ $ $ 1,642
Cash paid during the period for:
Interest
$ 3,859 $ 6,634 $ 7,883
Taxes
$ 23,890 $ 7,516 $ 8,561

SPARK ENERGY, INC.
OPERATING SEGMENT RESULTS
FOR THE YEARS ENDED December 31, 2020, 2019 and 2018
(in thousands, except per unit operating data)
(unaudited)

Year Ended December 31,
(in thousands, except volume and per unit operating data)
2020 2019 2018
Retail Electricity Segment
Total Revenues
$ 461,393 $ 688,451 $ 863,451
Retail Cost of Revenues
306,012 552,250 762,771
Less: Net Gains (Losses) on non-trading derivatives, net of cash settlements
12,148 (24,339 ) (23,988 )
Retail Gross Margin (1) -Electricity
$ 143,233 $ 160,540 $ 124,668
Volumes-Electricity (MWhs)
4,049,543 6,416,568 8,630,653
Retail Gross Margin (2) -Electricity per MWh
$ 35.37 $ 25.02 $ 14.44
Retail Natural Gas Segment
Total Revenues
$ 94,154 $ 122,503 $ 137,966
Retail Cost of Revenues
38,580 62,975 82,722
Less: Net Gains (Losses) on non-trading derivatives, net of cash settlements
2,334 (672 ) (5,197 )
Retail Gross Margin (1) -Gas
$ 53,240 $ 60,200 $ 60,441
Volumes-Gas (MMBtus)
11,100,446 14,543,563 16,778,393
Retail Gross Margin (2) -Gas per MMBtu
$ 4.80 $ 4.14 $ 3.60

(1) Reflects the Retail Gross Margin attributable to our Retail Electricity Segment or Retail Natural Gas Segment, as applicable. Retail Gross Margin is a non-GAAP financial measure. See “-Non-GAAP Performance Measures” for a reconciliation of Retail Gross Margin to most directly comparable financial measures presented in accordance with GAAP.
(2) Reflects the Retail Gross Margin for the Retail Electricity Segment or Retail Natural Gas Segment, as applicable, divided by the total volumes in MWh or MMBtu, respectively.

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, plus or minus (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 the 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 and amortize such costs over two years. We do not deduct the cost of customer acquisitions through acquisitions of businesses or portfolios of customers in calculating 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 these instruments. We also deduct non-cash compensation expense that results from the issuance of restricted stock units under our long-term incentive plan due to the non-cash nature of the expense. Finally, we also adjust from time to time other non-cash or unusual and/or infrequent charges due to either their non-cash nature or their infrequency.

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 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;
  • our ability to fund capital expenditures (including customer acquisition costs) and incur and service debt; and
  • our compliance with financial debt covenants

Retail Gross Margin

We define retail gross margin as operating income (loss) plus (i) depreciation and amortization expenses and (ii) general and administrative expenses, less (i) net asset optimization revenues, (ii) net gains (losses) on non-trading derivative instruments, and (iii) net current period cash settlements on non-trading derivative instruments. Retail gross margin is included as a supplemental disclosure because it is a primary performance measure used by our management to determine the performance of our retail natural gas and electricity business by removing the impacts of our asset optimization activities and net non-cash income (loss) impact of our economic hedging activities. As an indicator of our retail energy business’ operating performance, retail gross margin should not be considered an alternative to, or more meaningful than, operating income (loss), its most directly comparable financial measure calculated and presented in accordance with GAAP.

We believe retail gross margin provides information useful to investors as an indicator of our retail energy business’s operating performance.

The GAAP measures most directly comparable to Adjusted EBITDA are net income (loss) and net cash provided by operating activities. The GAAP measure most directly comparable to Retail Gross Margin is operating income (loss). Our non-GAAP financial measures of Adjusted EBITDA and Retail Gross Margin should not be considered as alternatives to net income (loss), net cash provided by operating activities, or operating income (loss). Adjusted EBITDA and Retail Gross Margin are not presentations made in accordance with GAAP and have important limitations as analytical tools. You should not consider Adjusted EBITDA or Retail Gross Margin in isolation or as a substitute for analysis of our results as reported under GAAP. Because Adjusted EBITDA and Retail Gross Margin exclude some, but not all, items that affect net income (loss) and net cash provided by operating activities, and are defined differently by different companies in our industry, our definition of Adjusted EBITDA and Retail Gross Margin may not be comparable to similarly titled measures of other companies.

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

The following tables present a reconciliation of Adjusted EBITDA to net income (loss) and net cash provided by operating activities for each of the periods indicated.

APPENDIX TABLES A-1 AND A-2
ADJUSTED EBITDA RECONCILIATIONS
(in thousands)
(unaudited)

Year Ended December 31, Quarter Ended December 31,
2020 2019 2020 2019
(in thousands)
Reconciliation of Adjusted EBITDA to Net Income (Loss):
Net income (loss)
$ 68,218 $ 14,213 $ 8,767 $ (724 )
Depreciation and amortization
30,767 40,987 6,683 9,024
Interest expense
5,266 8,621 1,033 2,229
Income tax expense
15,736 7,257 2,997 4,235
EBITDA
119,987 71,078 19,480 14,764
Less:
Net, losses on derivative instruments
(23,386 ) (67,749 ) (9,371 ) (25,059 )
Net, cash settlements on derivative instruments
37,729 42,820 4,732 9,305
Customer acquisition costs
1,513 18,685 (249 ) 5,077
Plus:
Non-cash compensation expense
2,503 5,487 369 1,433
Non-recurring legal and regulatory settlements
14,457 3,650
Gain on disposal of eRex
(4,862 ) (4,862 )
Adjusted EBITDA
$ 106,634 $ 92,404 $ 24,737 $ 25,662
Year Ended December 31, Quarter Ended December 31,
2020 2019 2020 2019
(in thousands)
Reconciliation of Adjusted EBITDA to net cash provided by operating activities:
Net cash provided by operating activities
$ 91,831 $ 91,735 $ 7,883 $ 14,650
Amortization of deferred financing costs
(1,210 ) (1,275 ) (244 ) (273 )
Bad debt expense
(4,692 ) (13,532 ) (79 ) (4,347 )
Interest expense
5,266 8,621 1,033 2,229
Income tax expense
15,736 7,257 2,997 4,235
Changes in operating working capital
Accounts receivable, prepaids, current assets
(32,820 ) (33,475 ) 15,481 16,883
Inventory
(1,458 ) (924 ) (300 ) (626 )
Accounts payable and accrued liabilities
36,301 11,534 (2,912 ) (18,675 )
Other
(2,320 ) 22,463 878 11,586
Adjusted EBITDA
$ 106,634 $ 92,404 $ 24,737 $ 25,662
Cash Flow Data:
Cash flows provided by operating activities
$ 91,831 $ 91,735 $ 7,883 $ 14,650
Cash flows (used in) provided by investing activities
$ (2,154 ) $ 1,398 $ (935 ) $ 7,888
Cash flows used in financing activities
$ (75,661 ) $ (85,103 ) $ (10,644 ) $ (8,452 )

The following table presents a reconciliation of Retail Gross Margin to operating income (loss) for each of the periods indicated.

APPENDIX TABLE A-3
RETAIL GROSS MARGIN RECONCILIATION
(in thousands)
(unaudited)

Year Ended December 31, Quarter Ended December 31,
2020 2019 2020 2019
(in thousands)
Reconciliation of Retail Gross Margin to Operating Income:
Operating income
$ 88,797 $ 23,979 $ 12,667 $ 633
Plus:
Depreciation and amortization
30,767 40,987 6,683 9,024
General and administrative expense
90,734 133,534 24,647 39,182
Less:
Net asset optimization (expense) revenue
(657 ) 2,771 (338 ) 529
Losses on non-trading derivative instruments
(23,439 ) (67,955 ) (9,420 ) (25,214 )
Cash settlements on non-trading derivative instruments
37,921 42,944 4,768 9,267
Retail Gross Margin
$ 196,473 $ 220,740 $ 48,987 $ 64,257
Retail Gross Margin – Retail Electricity Segment
$ 143,233 $ 160,540 $ 34,092 $ 43,810
Retail Gross Margin – Retail Natural Gas Segment
$ 53,240 $ 60,200 $ 14,895 $ 20,447

Contact: Spark Energy, Inc.

Investors:
Mike Barajas, 832-200-3727

Media:
Kira Jordan, 832-255-7302

SOURCE: Spark Energy, Inc.

View source version on accesswire.com:
https://www.accesswire.com/633379/Spark-Energy-Inc-Reports-Fourth-Quarter-and-Full-Year-2020-Financial-Results

Spark Energy Provides Update to Customers and Stakeholders on the Texas Winter Storm

HOUSTON, TX / ACCESSWIRE / February 22, 2021 / Spark Energy, Inc. (“Spark” or the “Company”) (NASDAQ:SPKE), an independent retail energy services company, wants to assure its customers that it is committed to serving and supporting its Texas customer base through this highly tumultuous time.

“The winter storm has affected all Texans and we are here to help” said Keith Maxwell, Spark’s Chairman and Chief Executive Officer. “Given the events of last week, Spark has weathered the storm and will continue to serve its customers in Texas and nationwide. Our thoughts and prayers go out to everyone as the recovery starts.”

The Company’s Texas market represents a small part of its diverse customer book. Spark has ample liquidity on hand to get through events such as this winter storm. The Company still plans on releasing its 2020 earnings on its previously announced date of March 4, 2021.

If you are a Spark customer and need assistance managing your bill, please reach out to customer service at 1-877-54-SPARK (1-877-547-7275).

About Spark Energy, Inc.

Spark Energy, Inc. is an 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 100 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 release contains forward-looking statements that are subject to a number of risks and uncertainties, many of which are beyond our control. These forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) 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. All statements, other than statements of historical fact included in this press release, regarding strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects, plans, objectives and beliefs of management are forward-looking statements. Forward-looking statements appear in a number of places in this press release and include statements about the timing and amount of future purchases under the repurchase program, sources of funds under the repurchase program, and the impacts of the repurchase program. 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.

The forward-looking statements in this press release are subject to risks and uncertainties. Important factors that could cause actual results to materially differ from those projected in the forward-looking statements include, but are not limited to:

  • potential risks and uncertainties relating to COVID-19, including the geographic spread, the severity of the disease, the scope and duration of the COVID-19 outbreak, actions that may be taken by governmental authorities to contain the COVID-19 outbreak or to treat its impact, and the potential negative impacts of COVID-19 on economies and financial markets;
  • changes in commodity prices;
  • the sufficiency of risk management and hedging policies and practices;
  • the impact of extreme and unpredictable weather conditions, including hurricanes and other natural disasters;
  • federal, state and local regulation, including the industry’s ability to address or adapt to potentially restrictive new regulations that may be enacted by public utility commissions;
  • our ability to borrow funds and access credit markets;
  • restrictions in our debt agreements and collateral requirements;
  • credit risk with respect to suppliers and customers;
  • changes in costs to acquire customers as well as actual attrition rates;
  • accuracy of billing systems;
  • our ability to successfully identify, complete, and efficiently integrate acquisitions into our operations;
  • significant changes in, or new charges by, the ISOs in the regions in which we operate;
  • competition; and
  • the “Risk Factors” in our latest Annual Report on Form 10-K for the year ended December 31, 2019, in our Quarterly Reports on Form 10-Q, and other public filings and press releases.

You should review the risk factors and other factors noted throughout this press release that could cause our actual results to differ materially from those contained in any forward-looking statement. All forward-looking statements speak only as of the date of this press release. Unless required by law, we disclaim any obligation to publicly update or revise these statements whether as a result of new information, future events or otherwise. It is not possible for us to predict all risks, nor can we assess the impact of all factors on the business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

Contact: Spark Energy, Inc.
Investors: Mike Barajas, 832-200-3727
Media: Kira Jordan, 832-255-7302

SOURCE: Spark Energy, Inc.

View source version on accesswire.com:
https://www.accesswire.com/631119/Spark-Energy-Provides-Update-to-Customers-and-Stakeholders-on-the-Texas-Winter-Storm

Spark Energy, Inc. to Present Full Year and Fourth Quarter 2020 Financial Results on Thursday, March 4, 2021

HOUSTON, TX / ACCESSWIRE / February 1, 2021 / Spark Energy, Inc. (“Spark” or the “Company”) (NASDAQ:SPKE)(FSE:SLE), an independent retail energy services company, announced today that it plans to present its full year and fourth quarter 2020 financial results in a conference call and webcast on Thursday, March 4, 2021 at 10:00 AM Central (11:00 AM Eastern).

A live webcast of the conference call can be accessed from the Events & Presentations page of the Spark Energy Investor Relations website at ir.sparkenergy.com/events-and-presentations. 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 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 100 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.

Spark Energy, Inc. Contacts:

Investors:
Mike Barajas
832-200-3727

Media:
Kira Jordan
832-255-7302

SOURCE: Spark Energy, Inc.

View source version on accesswire.com:
https://www.accesswire.com/627135/Spark-Energy-Inc-to-Present-Full-Year-and-Fourth-Quarter-2020-Financial-Results-on-Thursday-March-4-2021

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

HOUSTON, TX / ACCESSWIRE / January 21, 2021 / Spark Energy, Inc. (“Spark” or the “Company”) (NASDAQ:SPKE)(FSE:SLE), an independent retail energy services company, announced today that its Board of Directors has declared a quarterly cash dividend for the fourth quarter of 2020 in the amount of $0.18125 per share on its Class A Common Stock. This amount represents an annualized dividend of $0.725 per share. The fourth quarter dividend will be paid on March 15, 2021 to holders of record of Spark’s Class A Common Stock on March 1, 2021.

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 on the Series A Preferred Stock. This amount represents an annualized dividend of $2.1875 per share. The dividend will be paid on April 15, 2021 to holders of record of Spark’s Series A Preferred Stock on April 1, 2021.

About Spark Energy, Inc.

Spark Energy, Inc. is an 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 100 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: Mike Barajas, 832-200-3727

Media: Kira Jordan, 832-255-7302

SOURCE: Spark Energy, Inc.

View source version on accesswire.com:
https://www.accesswire.com/625375/Spark-Energy-Inc-Announces-Dividend-on-Common-and-Preferred-Stock

Spark Energy, Inc. Announces Increase in Credit Commitments

HOUSTON, TX / ACCESSWIRE / January 19, 2021 / Spark Energy, Inc. (“Spark” or the “Company”) (NASDAQ:SPKE)(FSE:SLE), an independent retail energy services company, today announced the increase of its senior secured borrowing base credit facility (the “Facility”) to $227.5 million in commitments.

“We are proud of the continued strengthening in our liquidity position over the last few quarters,” said Keith Maxwell, Spark’s Chairman and Chief Executive Officer. “By further expanding our facility, we will have the additional financial flexibility for future projects and opportunities. We want to thank our bank group for their continued support and look forward to delivering strong financial results in 2021.”

About Spark Energy, Inc.
Spark Energy, Inc. is an 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 100 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 release contains forward-looking statements that are subject to a number of risks and uncertainties, many of which are beyond our control. These forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) 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. All statements, other than statements of historical fact included in this press release, regarding strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects, plans, objectives and beliefs of management are forward-looking statements. Forward-looking statements appear in a number of places in this press release and include statements about the timing and amount of future purchases under the repurchase program, sources of funds under the repurchase program, and the impacts of the repurchase program. 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.

The forward-looking statements in this press release are subject to risks and uncertainties. Important factors that could cause actual results to materially differ from those projected in the forward-looking statements include, but are not limited to:

  • potential risks and uncertainties relating to COVID-19, including the geographic spread, the severity of the disease, the scope and duration of the COVID-19 outbreak, actions that may be taken by governmental authorities to contain the COVID-19 outbreak or to treat its impact, and the potential negative impacts of COVID-19 on economies and financial markets;
  • changes in commodity prices;
  • the sufficiency of risk management and hedging policies and practices;
  • the impact of extreme and unpredictable weather conditions, including hurricanes and other natural disasters;
  • federal, state and local regulation, including the industry’s ability to address or adapt to potentially restrictive new regulations that may be enacted by public utility commissions;
  • our ability to borrow funds and access credit markets;
  • restrictions in our debt agreements and collateral requirements;
  • credit risk with respect to suppliers and customers;
  • changes in costs to acquire customers as well as actual attrition rates;
  • accuracy of billing systems;
  • our ability to successfully identify, complete, and efficiently integrate acquisitions into our operations;
  • significant changes in, or new charges by, the ISOs in the regions in which we operate;
  • competition; and
  • the “Risk Factors” in our latest Annual Report on Form 10-K for the year ended December 31, 2019, in our Quarterly Reports on Form 10-Q, and other public filings and press releases.

You should review the risk factors and other factors noted throughout this press release that could cause our actual results to differ materially from those contained in any forward-looking statement. All forward-looking statements speak only as of the date of this press release. Unless required by law, we disclaim any obligation to publicly update or revise these statements whether as a result of new information, future events or otherwise. It is not possible for us to predict all risks, nor can we assess the impact of all factors on the business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

Contact: Spark Energy, Inc.
Investors: Mike Barajas, 832-200-3727
Media: Kira Jordan, 832-255-7302

SOURCE: Spark Energy, Inc.

View source version on accesswire.com:
https://www.accesswire.com/624975/Spark-Energy-Inc-Announces-Increase-in-Credit-Commitments

Spark Energy, Inc. to Present Third Quarter 2020 Financial Results on Wednesday, November 4, 2020

HOUSTON, TX / ACCESSWIRE / October 21, 2020 / Spark Energy, Inc. (“Spark” or the “Company”) (NASDAQ:SPKE), an independent retail energy services company, announced today that it plans to present its third quarter 2020 financial results in a conference call and webcast on Wednesday, November 4, 2020 at 10:00 AM Central (11:00 AM Eastern).

A live webcast of the conference call can be accessed from the Events & Presentations page of the Spark Energy Investor Relations website at ir.sparkenergy.com/events-and-presentations. 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 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 20 states and serves 101 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:
Mike Barajas, 832-200-3727
Media:
Kira Jordan, 832-255-7302

SOURCE: Spark Energy, Inc. via EQS Newswire

View source version on accesswire.com:
https://www.accesswire.com/611643/Spark-Energy-Inc-to-Present-Third-Quarter-2020-Financial-Results-on-Wednesday-November-4-2020

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

HOUSTON, TX, / ACCESSWIRE / October 19, 2020 / Spark Energy, Inc. (“Spark” or the “Company”) (NASDAQ:SPKE), an independent retail energy services company, announced today that its Board of Directors has declared a quarterly cash dividend for the third quarter of 2020 in the amount of $0.18125 per share on its Class A Common Stock. This amount represents an annualized dividend of $0.725 per share. The third quarter dividend will be paid on December 15, 2020 to holders of record of Spark’s Class A Common Stock on December 1, 2020.

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 on the Series A Preferred Stock. This amount represents an annualized dividend of $2.1875 per share. The dividend will be paid on January 15, 2021 to holders of record of Spark’s Series A Preferred Stock on January 1, 2021.

About Spark Energy, Inc.

Spark Energy, Inc. is an 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 20 states and serves 101 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:
Mike Barajas, 832-200-3727

Media:
Kira Jordan, 832-255-7302

SOURCE: Spark Energy, Inc. via EQS Newswire

View source version on accesswire.com:
https://www.accesswire.com/611140/Spark-Energy-Inc-Announces-Dividend-on-Common-and-Preferred-Stock

Spark Energy, Inc. Announces Class A Common Stock Share Buyback Program

HOUSTON, TX / ACCESSWIRE / August 18, 2020 / Spark Energy, Inc. (“Spark” or the “Company”) (NASDAQ:SPKE), an independent retail energy services company, announced today that its Board of Directors has authorized a share buyback program of up to $20 million of Spark’s Class A common stock, par value $0.01 per share (the “Class A common stock”) through August 18, 2021. The Company intends to fund the program through available cash balances and borrowings under its Senior Credit Facility, as well as future operating cash flows.

These shares may be repurchased from time to time in the open market at prevailing market prices or in privately negotiated transactions based on ongoing assessments of capital needs, the market price of the stock, and other factors, including general market conditions. The repurchase program does not obligate Spark to acquire any particular amount of common stock and it may be modified or suspended at any time, and could be terminated prior to completion.

About Spark Energy, Inc.

Spark Energy, Inc. is an 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 release contains forward-looking statements that are subject to a number of risks and uncertainties, many of which are beyond our control. These forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) 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. All statements, other than statements of historical fact included in this press release, regarding strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects, plans, objectives and beliefs of management are forward-looking statements. Forward-looking statements appear in a number of places in this press release and include statements about the timing and amount of future purchases under the repurchase program, sources of funds under the repurchase program, and the impacts of the repurchase program. 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.

The forward-looking statements in this press release are subject to risks and uncertainties. Important factors that could cause actual results to materially differ from those projected in the forward-looking statements include, but are not limited to:

  • potential risks and uncertainties relating to COVID-19, including the geographic spread, the severity of the disease, the scope and duration of the COVID-19 outbreak, actions that may be taken by governmental authorities to contain the COVID-19 outbreak or to treat its impact, and the potential negative impacts of COVID-19 on economies and financial markets;
  • changes in commodity prices;
  • the sufficiency of risk management and hedging policies and practices;
  • the impact of extreme and unpredictable weather conditions, including hurricanes and other natural disasters;
  • federal, state and local regulation, including the industry’s ability to address or adapt to potentially restrictive new regulations that may be enacted by public utility commissions;
  • our ability to borrow funds and access credit markets;
  • restrictions in our debt agreements and collateral requirements;
  • credit risk with respect to suppliers and customers;
  • changes in costs to acquire customers as well as actual attrition rates;
  • accuracy of billing systems;
  • our ability to successfully identify, complete, and efficiently integrate acquisitions into our operations;
  • significant changes in, or new charges by, the ISOs in the regions in which we operate;
  • competition; and
  • the “Risk Factors” in our latest Annual Report on Form 10-K for the year ended December 31, 2019, in our Quarterly Reports on Form 10-Q, and other public filings and press releases.

You should review the risk factors and other factors noted throughout this press release that could cause our actual results to differ materially from those contained in any forward-looking statement. All forward-looking statements speak only as of the date of this press release. Unless required by law, we disclaim any obligation to publicly update or revise these statements whether as a result of new information, future events or otherwise. It is not possible for us to predict all risks, nor can we assess the impact of all factors on the business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

Contact:

Spark Energy, Inc.

Investors:
Mike Barajas, 832-200-3727
Media:
Kira Jordan, 832-255-7302

SOURCE: Spark Energy, Inc. via EQS Newswire

View source version on accesswire.com:
https://www.accesswire.com/602279/Spark-Energy-Inc-Announces-Class-A-Common-Stock-Share-Buyback-Program

Spark Energy, Inc. Reports Second Quarter 2020 Financial Results

HOUSTON, TX / ACCESSWIRE / August 4, 2020 / Spark Energy, Inc. (“Spark” or the “Company”) (NASDAQ:SPKE), an independent retail energy services company, today reported financial results for the quarter ended June 30, 2020.

Key Highlights

  • Achieved $23.8 million in Adjusted EBITDA, $45.0 million in Retail Gross Margin, and $26.8 million in Net Income for the second quarter
  • Total RCE count of 534,000 as of June 30, 2020, compared to 818,000 as of June 30, 2019
  • Average monthly attrition of 3.5%
  • Amended and extended Senior Credit Facility with a Working Capital Commitment of $187.5 million

“Our second quarter results were an improvement compared to the second quarter of last year. Pivoting away from high usage, lower margin C&I contracts has led to stronger average unit margins, offsetting the decrease in volumes compared to the second quarter of 2019. Currently however, we continue to deal with the sales impact associated with the COVID-19 pandemic. Our overall customer book is much healthier, but we are currently unable to reinstate several of our marketing channels, which will likely cause our customer book to continue to shrink. We are also closely monitoring our bad debt exposure in the Non-POR markets in which we operate. We will continue to simplify our platform and look for ways to streamline the business during this pandemic,” said Keith Maxwell, Spark’s Interim President and Chief Executive Officer.

Summary Second Quarter 2020 Financial Results

Net income for the quarter ended June 30, 2020 was $26.8 million compared to net loss of $25.5 million for the quarter ended June 30, 2019. The increase in performance compared to the prior year was primarily the result of the decrease in G&A, depreciation and amortization, and the non-cash mark-to-market accounting associated with the hedges we put in place to lock in margins on our retail contracts. We had a mark-to-market gain this quarter of $18.0 million, compared to a mark-to-market loss of $22.7 million a year ago.

For the quarter ended June 30, 2020, Spark reported Adjusted EBITDA of $23.8 million compared to Adjusted EBITDA of $13.6 million for the quarter ended June 30, 2019. This increase of $10.2 million was driven by a decrease of operational expenses, along with decreased CAC spend while we re-evaluate our sales strategies as we move forward through the pandemic compared to the second quarter of 2019.

For the quarter ended June 30, 2020, Spark reported Retail Gross Margin of $45.0 million compared to Retail Gross Margin of $41.7 million for the quarter ended June 30, 2019. This increase of $3.3 million was primarily attributable to our portfolio mix shifting towards more mass market customers and fewer large commercial customers.

Liquidity and Capital Resources
($ in thousands)
June 30,
2020
Cash and cash equivalents
$ 78,618
Senior Credit Facility Availability (1) (2)
82,630
Subordinated Debt Facility Availability (3)
25,000
Total Liquidity
$ 186,248

(1) Reflects maximum cash availability or amount of Letters of Credit that could be issued based on existing covenants as of June 30, 2020.
(2) The amendment and extension of the Senior Credit Facility on July 31, 2020 to $187.5 million, down from $217.5 million, will affect liquidity in future quarters.
(3) The availability of the Subordinated Facility is dependent on our Founder’s willingness and ability to lend. See “-Sources of Liquidity- Subordinated Debt Facility” in our Quarterly Report on Form 10-Q.

Dividend

On July 17, 2020, Spark’s Board of Directors declared quarterly dividends of $0.18125 per share of Class A common stock payable on September 15, 2020, to holders of record on September 1, 2020, and $0.546875 per share of Series A Preferred Stock payable on October 15, 2020 to holders of record on October 1, 2020.

Business Outlook

Mr. Maxwell concluded, “As we stated last quarter, our employees and management are working hard to serve our customers in these unprecedented economic times. We will continue to manage and evaluate all facets of the business including additional cost savings initiatives, efficiencies with supply management, as well as the payment of future dividends to ensure Spark emerges from the COVID-19 pandemic with ample liquidity and a platform that will allow us to return to growth.”

Conference Call and Webcast

Spark will host a conference call to discuss second quarter 2020 results on Wednesday, August 5, 2020, at 10:00 AM Central Time (11:00 AM Eastern).

A live webcast of the conference call can be accessed from the Events & Presentations page of the Spark Energy Investor Relations website at http://ir.sparkenergy.com/events-and-presentations. 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 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 earnings release contains forward-looking statements that are subject to a number of risks and uncertainties, many of which are beyond our control. These forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) 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. All statements, other than statements of historical fact included in this earnings release, regarding strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects, plans, objectives and beliefs of management are forward-looking statements. Forward-looking statements appear in a number of places in this earnings release and may include statements about expected impacts of COVID-19, business strategy and prospects for growth, customer acquisition costs, ability to pay cash dividends, cash flow generation and liquidity, availability of terms of capital, competition and government regulation and general economic conditions. 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.

The forward-looking statements in this earnings release are subject to risks and uncertainties. Important factors that could cause actual results to materially differ from those projected in the forward-looking statements include, but are not limited to:

  • potential risks and uncertainties relating to COVID-19, including the geographic spread, the severity of the disease, the scope and duration of the COVID-19 outbreak, actions that may be taken by governmental authorities to contain the COVID-19 outbreak or to treat its impact, and the potential negative impacts of COVID-19 on economies and financial markets;
  • changes in commodity prices;
  • the sufficiency of risk management and hedging policies and practices;
  • the impact of extreme and unpredictable weather conditions, including hurricanes and other natural disasters;
  • federal, state and local regulation, including the industry’s ability to address or adapt to potentially restrictive new regulations that may be enacted by public utility commissions;
  • our ability to borrow funds and access credit markets;
  • restrictions in our debt agreements and collateral requirements;
  • credit risk with respect to suppliers and customers;
  • changes in costs to acquire customers as well as actual attrition rates;
  • accuracy of billing systems;
  • our ability to successfully identify, complete, and efficiently integrate acquisitions into our operations;
  • significant changes in, or new charges by, the ISOs in the regions in which we operate;
  • competition; and
  • the “Risk Factors” in our latest Annual Report on Form 10-K for the year ended December 31, 2019, in our Quarterly Reports on Form 10-Q, and other public filings and press releases.

You should review the risk factors and other factors noted throughout this earnings release that could cause our actual results to differ materially from those contained in any forward-looking statement. All forward-looking statements speak only as of the date of this earnings release. Unless required by law, we disclaim any obligation to publicly update or revise these statements whether as a result of new information, future events or otherwise. It is not possible for us to predict all risks, nor can we assess the impact of all factors on the business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

For further information, please contact:

Investor Relations:

Mike Barajas, 832-200-3727

Media Relations:

Kira Jordan, 832-255-7302

SPARK ENERGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(in thousands, except per share data)
(unaudited)

Three Months Ended
June 30,
Six Months Ended
June 30,
2020 2019 2020 2019
Revenues:
Retail revenues
$ 128,618 $ 177,805 $ 294,978 $ 417,959
Net asset optimization (expense) revenues
(82 ) (56 ) 239 2,496
Total Revenues
128,536 177,749 295,217 420,455
Operating Expenses:
Retail cost of revenues
65,605 158,759 184,428 354,014
General and administrative
21,331 37,247 47,007 66,723
Depreciation and amortization
8,010 10,312 16,806 22,467
Total Operating Expenses
94,946 206,318 248,241 443,204
Operating income
33,590 (28,569 ) 46,976 (22,749 )
Other (expense)/income:
Interest expense
(1,193 ) (1,995 ) (2,746 ) (4,218 )
Interest and other income
53 494 213 683
Total other expenses
(1,140 ) (1,501 ) (2,533 ) (3,535 )
Income before income tax expense
32,450 (30,070 ) 44,443 (26,284 )
Income tax expense (benefit)
5,673 (4,586 ) 7,598 (3,545 )
Net income (loss)
$ 26,777 $ (25,484 ) $ 36,845 $ (22,739 )
Less: Net income (loss) attributable to non-controlling interests
15,618 (18,369 ) 21,207 (16,406 )
Net income (loss) attributable to Spark Energy, Inc. stockholders
$ 11,159 $ (7,115 ) $ 15,638 $ (6,333 )
Less: Dividends on Series A Preferred Stock
2,039 2,027 3,539 4,054
Net income (loss) attributable to stockholders of Class A common stock
$ 9,120 $ (9,142 ) $ 12,099 $ (10,387 )
Other comprehensive income (loss), net of tax:
Currency translation loss
$ (63 ) $ $ (98 )
Other comprehensive loss
(63 ) (98 )
Comprehensive income (loss)
$ 26,777 $ (25,547 ) $ 36,845 $ (22,837 )
Less: Comprehensive income (loss) attributable to non-controlling interests
15,618 (18,407 ) 21,207 (16,464 )
Comprehensive income (loss) attributable to Spark Energy, Inc. stockholders
$ 11,159 $ (7,140 ) $ 15,638 $ (6,373 )
Net income (loss) attributable to Spark Energy, Inc. per share of Class A common stock
Basic
$ 0.63 $ (0.64 ) $ 0.84 $ (0.73 )
Diluted
$ 0.62 $ (0.73 ) $ 0.83 $ (0.73 )
Weighted average shares of Class A common stock outstanding
Basic
14,558 14,246 14,469 14,191
Diluted
14,763 35,046 14,569 34,991
Selected Balance Sheet Data
(in thousands)
June 30,
2020
December 31,
2019
Cash and cash equivalents
$ 78,618 $ 56,664
Working capital
99,100 94,173
Total assets
372,012 422,968
Total debt
100,000 123,000
Total liabilities
202,905 265,667
Total stockholders’ equity
58,990 51,219
Selected Cash Flow Data
Six Months Ended
June 30,
(in thousands)
2020 2019
Cash flows provided by operating activities
$ 71,783 $ 51,029
Cash flows used in investing activities
(579 ) (6,373 )
Cash flows used in financing activities
(49,248 ) (65,714 )
Operating Segment Results
Three Months Ended
June 30,
Six Months Ended
June 30,
(in thousands, except volume and per unit operating data)
2020 2019 2020 2019
Retail Electricity Segment
Total Revenues
$ 112,255 $ 160,776 $ 234,023 $ 342,868
Retail Cost of Revenues
59,268 148,187 159,651 314,074
Less: Net gain (loss) on non-trading derivatives, net of cash settlements
17,414 (21,025 ) 7,993 (34,794 )
Retail Gross Margin (1) – Electricity
$ 35,573 $ 33,614 $ 66,379 $ 63,588
Volumes – Electricity (MWhs)
978,297 1,516,139 2,069,722 3,244,222
Retail Gross Margin (2) – Electricity per MWh
$ 36.36 $ 22.17 $ 32.07 $ 19.60
Retail Natural Gas Segment
Total Revenues
$ 16,363 $ 17,029 $ 60,955 $ 75,091
Retail Cost of Revenues
6,337 10,572 24,777 39,940
Less: Net gain (loss) on non-trading derivatives, net of cash settlements
605 (1,653 ) 2,102 438
Retail Gross Margin (1) – Gas
$ 9,421 $ 8,110 $ 34,076 $ 34,713
Volumes – Gas (MMBtus)
1,967,439 2,057,121 7,249,738 9,008,731
Retail Gross Margin (2) – Gas per MMBtu
$ 4.79 $ 3.94 $ 4.70 $ 3.85

(1) Reflects the Retail Gross Margin attributable to our Retail Natural Gas Segment or Retail Electricity Segment, as applicable. Retail Gross Margin is a non-GAAP financial measure. See “Reconciliation of GAAP to Non-GAAP Measures” section below for a reconciliation of Adjusted EBITDA and Retail Gross Margin to their most directly comparable financial measures presented in accordance with GAAP.

(2) Reflects the Retail Gross Margin for the Retail Natural Gas Segment or Retail Electricity Segment, as applicable, divided by the total volumes in MMBtu or MWh, respectively.

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. 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. Finally, we also adjust from time to time other non-cash or unusual and/or infrequent charges due to either their non-cash nature or their infrequency.

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;
  • our ability to fund capital expenditures (including customer acquisition costs) and incur and service debt; and
  • our compliance with financial debt covenants.

Retail Gross Margin

We define retail gross margin as operating income (loss) plus (i) depreciation and amortization expenses and (ii) general and administrative expenses, less (iii) net asset optimization revenues (expenses), (iv) net gains (losses) on non-trading derivative instruments, and (v) net current period cash settlements on non-trading derivative instruments. Retail gross margin is included as a supplemental disclosure because it is a primary performance measure used by our management to determine the performance of our retail natural gas and electricity segments. As an indicator of our retail energy business’ operating performance, retail gross margin should not be considered an alternative to, or more meaningful than, operating income (loss), its most directly comparable financial measure calculated and presented in accordance with GAAP.

We believe retail gross margin provides information useful to investors as an indicator of our retail energy business’s operating performance.

The GAAP measures most directly comparable to Adjusted EBITDA are net income (loss) and net cash provided by operating activities. The GAAP measure most directly comparable to Retail Gross Margin is operating income (loss). Our non-GAAP financial measures of Adjusted EBITDA and Retail Gross Margin should not be considered as alternatives to net income (loss), net cash provided by operating activities, or operating income (loss). Adjusted EBITDA and Retail Gross Margin are not presentations made in accordance with GAAP and have important limitations as analytical tools. You should not consider Adjusted EBITDA or Retail Gross Margin in isolation or as a substitute for analysis of our results as reported under GAAP. Because Adjusted EBITDA and Retail Gross Margin exclude some, but not all, items that affect net income (loss) and net cash provided by operating activities, and are defined differently by different companies in our industry, our definition of Adjusted EBITDA and Retail Gross Margin may not be comparable to similarly titled measures of other companies.

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

The following tables present a reconciliation of Adjusted EBITDA to net income (loss) and net cash provided by operating activities for each of the periods indicated.

Reconciliation of Adjusted EBITDA to Net income:
Three Months Ended
June 30,
Six Months Ended
June 30,
(in thousands)
2020 2019 2020 2019
Net income (loss)
$ 26,777 $ (25,484 ) $ 36,845 $ (22,739 )
Depreciation and amortization
8,010 10,312 16,806 22,467
Interest expense
1,193 1,995 2,746 4,218
Income tax expense
5,673 (4,586 ) 7,598 (3,545 )
EBITDA
41,653 (17,763 ) 63,995 401
Less:
Net, gain (loss) on derivative instruments
8,121 (35,456 ) (16,466 ) (54,997 )
Net cash settlements on derivative instruments
9,964 12,769 26,572 20,794
Customer acquisition costs
210 3,396 1,555 9,185
Plus:
Non-cash compensation expense
490 1,260 1,814 2,432
Non-recurring legal and regulatory settlements
10,807 10,807
Adjusted EBITDA
$ 23,848 $ 13,595 54,148 38,658
Reconciliation of Adjusted EBITDA to net cash provided by operating activities:
Three Months Ended
June 30,
Six Months Ended
June 30,
(in thousands)
2020 2019 2020 2019
Net cash provided by operating activities
$ 32,394 $ 20,980 $ 71,783 $ 51,029
Amortization of deferred financing costs
(240 ) (237 ) (490 ) (505 )
Bad debt expense
(1,378 ) (2,166 ) (3,733 ) (6,015 )
Interest expense
1,193 1,995 2,746 4,218
Income tax expense
5,673 (4,586 ) 7,598 (3,545 )
Changes in operating working capital
Accounts receivable, prepaids, current assets
(32,035 ) (41,028 ) (50,010 ) (51,392 )
Inventory
709 1,785 (1,981 ) (1,858 )
Accounts payable and accrued liabilities
19,021 20,222 29,839 31,172
Other
(1,489 ) 16,630 (1,604 ) 15,554
Adjusted EBITDA
$ 23,848 $ 13,595 $ 54,148 $ 38,658
Cash Flow Data:
Cash flows provided by operating activities
$ 32,394 $ 20,980 $ 71,783 $ 51,029
Cash flows used in investing activities
$ (43 ) $ (250 ) $ (579 ) $ (6,373 )
Cash flows used in financing activities
$ (8,198 ) $ (27,353 ) $ (49,248 ) $ (65,714 )

The following table presents a reconciliation of Retail Gross Margin to operating income (loss) for each of the periods indicated.

Three Months Ended
June 30,
Six Months Ended
June 30,
(in thousands)
2020 2019 2020 2019
Reconciliation of Retail Gross Margin to Operating income (loss):
Operating income (loss)
$ 33,590 $ (28,569 ) $ 46,976 $ (22,749 )
Plus:
Depreciation and amortization
8,010 10,312 16,806 22,467
General and administrative expense
21,331 37,247 47,007 66,723
Less:
Net asset optimization (expense) revenues
(82 ) (56 ) 239 2,496
Gain (loss) on non-trading derivative instruments
7,964 (35,466 ) (16,569 ) (55,269 )
Cash settlements on non-trading derivative instruments
10,055 12,788 26,664 20,913
Retail Gross Margin
$ 44,994 $ 41,724 $ 100,455 $ 98,301
Retail Gross Margin – Retail Electricity Segment
$ 35,573 $ 33,614 $ 66,379 $ 63,588
Retail Gross Margin – Retail Natural Gas Segment
$ 9,421 $ 8,110 $ 34,076 $ 34,713

SOURCE: Spark Energy, Inc.

View source version on accesswire.com:
https://www.accesswire.com/600269/Spark-Energy-Inc-Reports-Second-Quarter-2020-Financial-Results