Press Releases – Page 12

Spark Energy, Inc. Reports Fourth Quarter and Full Year 2018 Financial Results

Posted on March 4, 2019October 18, 2021 by Yanira Hernandez

HOUSTON, March 04, 2019 (GLOBE NEWSWIRE) — 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, 2018.

Key Business Highlights

Recorded $20.1 million in Adjusted EBITDA, $50.2 million in Retail Gross Margin, and $15.3 million in Net Loss for the fourth quarter 2018
Recorded $70.7 million in Adjusted EBITDA, $185.1 million in Retail Gross Margin, and $14.4 million in Net Loss for the year ended 2018
Total RCE count of 908,000 as of December 31, 2018
Average monthly attrition of 4.7% for the year ended December 31, 2018
Closed three acquisitions in 2018
Brand consolidation and other synergies on track for $22 million in run-rate G&A savings
Increased commitments on the senior credit facility to $217.5 million

“We have significantly improved the health and stability of the business in 2018, strengthened our balance sheet, and positioned Spark to grow in 2019 and beyond,” said Nathan Kroeker, Spark Energy’s President and Chief Executive Officer. “Despite a challenging first quarter, we achieved our key objectives for the year, which included reducing our exposure to extreme weather risk, simplifying our brands and operating footprint, refocusing on growing our mass market business, and delivering on significant G&A savings across the organization. We also executed three tuck-in acquisitions that required minimal integration and had an immediate positive impact to our Adjusted EBITDA.

“Looking ahead, 2019 is already off to a good start. Our hedging strategy performed very well through the first half of the winter. We continue to shed larger, lower margin C&I customers, while the last of the full year hedges we put on during 2018’s Bomb Cyclone rolled off in December. As a result, we expect our electricity unit margins to increase steadily over the next couple of years. We continue to focus on our mass market book while realizing the remaining cost savings we first targeted in 2017.

“We recently upsized our credit facility to $217.5 million, which gives us the flexibility to continue to be opportunistic on the M&A front. When you combine this with our disciplined approach to unit margin improvement and anticipated cost savings, we have a lot to look forward to.”

Summary Fourth Quarter 2018 Financial Results

For the quarter ended December 31, 2018, Spark reported Adjusted EBITDA of $20.1 million compared to Adjusted EBITDA of $28.9 million for the quarter ended December 31, 2017. The decrease was primarily due to lower Retail Gross Margin partially offset by decreased spending on G&A and Customer Acquisition Costs.

For the quarter ended December 31, 2018, Spark reported Retail Gross Margin of $50.2 million compared to Retail Gross Margin of $66.2 million for the quarter ended December 31, 2017. The decrease was due to lower electricity unit margins and lower natural gas volumes.

Net loss for the quarter ended December 31, 2018, was $15.3 million compared to net income of $46.3 million for the quarter ended December 31, 2017, primarily due to a decrease in the non-cash mark-to-market position of our hedging book, the decrease in Retail Gross Margin detailed above, and the inclusion in 2017 of a reduction in our Tax Receivable Agreement (TRA) liability, offset by lower income tax expense in 2018 due to the Tax Law change.

Summary Full Year 2018 Financial Results

For the year ended December 31, 2018, Spark reported Adjusted EBITDA of $70.7 million compared to Adjusted EBITDA of $102.9 million for the year ended December 31, 2017. The decrease was primarily due to lower Retail Gross Margin due to full year financial impacts of the extreme weather events of the first quarter of 2018, as well as increased G&A, partially offset by a reduction in Customer Acquisition Costs.

For the year ended December 31, 2018, Spark reported Retail Gross Margin of $185.1 million compared to Retail Gross Margin of $224.5 million for the year ended December 31, 2017. The decrease was primarily due to lower electricity unit margins caused by the increase in retail costs of goods sold from full year impacts of the extreme weather experienced in the first quarter of 2018 and other factors, along with a reduction in natural gas volumes, partially offset by an increase in electric volumes.

Net loss for the year ended December 31, 2018, was $14.4 million compared to net income of $75.0 million for the year ended December 31, 2017, primarily due to a decrease in a non-cash mark-to-market position of our hedging book, the decrease in Retail Gross Margin detailed above, and the inclusion in 2017 of a reduction in our TRA liability, offset by lower income tax expense in 2018 due to the Tax Law change.

Liquidity and Capital Resources

($ in thousands)	December 31, 2018
Cash and cash equivalents	$	41,002
Senior Credit Facility Availability	4,360
Subordinated Debt Availability ⁽¹⁾	$	15,000
Total Liquidity	$	60,362

(1) The availability of the Subordinated Debt Facility is dependent on our Founder’s financial position and ability to lend.

On January 28, 2019 the Company and Co-Borrowers exercised the accordion feature of the Company’s Senior Credit Facility, bringing total commitments under the Senior Credit Facility to $217.5 million.

Dividend

Spark’s Board of Directors declared quarterly dividends of $0.18125 per share of Class A common stock payable on March 15, 2019, and $0.546875 per share of Series A Preferred Stock payable on April 15, 2019.

Conference Call and Webcast

Spark will host a conference call to discuss fourth quarter and full year 2018 results on Monday, March 4, 2019, at 9:00 AM Central Time (10:00 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 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,” “projects,” 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 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:

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 and actual attrition rates;
accuracy of billing systems;
ability to successfully identify, complete, and efficiently integrate acquisitions into our operations;
significant changes in, or new changes by, the ISOs in the regions we operate;
competition; and
the “Risk Factors” in our latest Annual Report on Form 10-K, and in our quarterly reports, other public filings and press releases.

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.

further discussion.

SPARK ENERGY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 2018 AND DECEMBER 31, 2017
(in thousands)
(unaudited)

	December 31, 2018			December 31, 2017
Assets
Current assets:
Cash and cash equivalents	$	41,002		$	29,419
Restricted cash	8,636			—
Accounts receivable, net of allowance for doubtful accounts of $3,353 and $4,023 as of December 31, 2018 and 2017, respectively	150,866			158,814
Accounts receivable—affiliates	2,558			3,661
Inventory	3,878			4,470
Fair value of derivative assets	7,289			31,191
Customer acquisition costs, net	14,431			22,123
Customer relationships, net	16,630			18,653
Deposits	9,226			7,701
Renewable energy credit asset	25,717			12,839
Other current assets	11,747			20,706
Total current assets	291,980			296,738
Property and equipment, net	4,366			8,275
Fair value of derivative assets	3,276			3,309
Customer acquisition costs, net	3,893			6,949
Customer relationships, net	26,429			34,839
Deferred tax assets⁽¹⁾	27,321			21,977
Goodwill	120,343			120,154
Other assets	11,130			11,500
Total Assets⁽¹⁾	$	488,738		$	503,741
Liabilities, Series A Preferred Stock and Stockholders’ Equity
Current liabilities:
Accounts payable	$	69,631		$	77,510
Accounts payable—affiliates	2,464			4,622
Accrued liabilities	10,004			33,679
Renewable energy credit liability	42,805			23,477
Fair value of derivative liabilities	6,478			1,637
Current portion of Senior Credit Facility	—			7,500
Current payable pursuant to tax receivable agreement—affiliates	1,658			5,937
Current contingent consideration for acquisitions	1,328			4,024
Current portion of note payable	6,936			13,443
Other current liabilities	647			2,675
Total current liabilities	141,951			151,027
Long-term liabilities:
Fair value of derivative liabilities	106			492
Payable pursuant to tax receivable agreement—affiliates	25,917			26,355
Long-term portion of Senior Credit Facility	129,500			117,750
Subordinated debt—affiliate	10,000			—
Note payable	—			7,051
Contingent consideration for acquisitions	—			626
Other long-term liabilities	212			172
Total liabilities	307,686			303,473
Commitments and contingencies
Series A Preferred Stock, par value $0.01 per share, 20,000,000 shares authorized, 3,707,256 shares issued and outstanding at December 31, 2018 and 1,704,339 shares issued and outstanding at December 31, 2017	90,758			41,173
Stockholders’ equity:
Common Stock :
Class A common stock, par value $0.01 per share, 120,000,000 shares authorized, 14,178,284 issued and 14,078,838 outstanding at December 31, 2018 and 13,235,082 issued and 13,135,636 outstanding at December 31, 2017	142			132
Class B common stock, par value $0.01 per share, 60,000,000 shares authorized, 20,800,000 issued and outstanding at December 31, 2018 and 21,485,126 issued and outstanding at December 31, 2017	209			216
Additional paid-in capital ⁽¹⁾	46,157			47,811
Accumulated other comprehensive (loss)/income	2			(11		)
Retained (deficit) earnings ⁽¹⁾	1,307			11,399
Treasury stock, at cost, 99,446 shares at December 31, 2018 and December 31, 2017	(2,011		)	(2,011		)
Total stockholders’ equity ⁽¹⁾	45,806			57,536
Non-controlling interest in Spark HoldCo, LLC ⁽¹⁾	44,488			101,559
Total equity	90,294			159,095
Total Liabilities, Series A Preferred Stock and stockholders’ equity	$	488,738		$	503,741

2017 amounts have been adjusted to reflect certain immaterial prior period adjustments related to the allocation of income and recorded book equity balances between non-controlling interests and Spark Energy, Inc. stockholders. Please see our Form 10-K for our audited financial statements and Notes thereto which include a discussion of these immaterial adjustments.

SPARK ENERGY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2018, 2017 and 2016
(in thousands)
(unaudited)

	Year Ended December 31,
	2018			2017			2016
Revenues:
Retail revenues	$	1,001,417		$	798,772		$	547,283
Net asset optimization revenues (expense)	4,511			(717		)	(586		)
Total revenues	1,005,928			798,055			546,697
Operating expenses:
Retail cost of revenues	845,493			552,167			344,944
General and administrative	111,431			101,127			84,964
Depreciation and amortization	52,658			42,341			32,788
Total operating expenses	1,009,582			695,635			462,696
Operating (loss) income	(3,654		)	102,420			84,001
Other (expense)/income:
Interest expense	(9,410		)	(11,134		)	(8,859		)
Change in tax receivable agreement liability	—			22,267			—
Interest and other income	749			256			957
Total other expenses	(8,661		)	11,389			(7,902		)
(Loss) income before income tax expense	(12,315		)	113,809			76,099
Income tax expense ⁽¹⁾	2,077			38,765			10,426
Net (loss) income⁽¹⁾	(14,392		)	75,044			65,673
Less: Net (loss) income attributable to non-controlling interest ⁽¹⁾	(13,206		)	55,799			51,229
Net (loss) income attributable to Spark Energy, Inc. stockholders ⁽¹⁾	$	(1,186	)	$	19,245		$	14,444
Less: Dividend on Series A preferred stock	8,109			3,038			—
Net (loss) income attributable to stockholders of Class A common stock	(9,295		)	16,207			14,444
Other comprehensive (loss) income, net of tax:
Currency translation (loss) gain	31			(59		)	41
Other comprehensive (loss) income	31			(59		)	41
Comprehensive (loss) income	(14,361		)	74,985			65,714
Less: Comprehensive (loss) income attributable to non-controlling interest ⁽¹⁾	(13,188		)	55,762			51,259
Comprehensive (loss) income attributable to Spark Energy, Inc. stockholders ⁽¹⁾	(1,173		)	19,223			14,455

2017 amounts have been adjusted to reflect certain immaterial prior period adjustments related to the allocation of income and recorded book equity balances between non-controlling interests and Spark Energy, Inc. stockholders. Please see our Form 10-K for our audited financial statements and Notes thereto which include a discussion of these immaterial adjustments.

SPARK ENERGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2018, 2017 AND 2016

(in thousands)
(unaudited)

	Year Ended December 31,
	2018			2017			2016
Cash flows from operating activities:
Net (loss) income ⁽¹⁾	$	(14,392	)	$	75,044		$	65,673
Adjustments to reconcile net (loss) income to net cash flows provided by operating activities:
Depreciation and amortization expense	51,436			42,666			48,526
Deferred income taxes ⁽¹⁾	(3,970		)	29,821			3,382
Change in TRA liability	1,433			(22,267		)	—
Stock based compensation	5,879			5,058			5,242
Amortization of deferred financing costs	1,291			1,035			668
Change in fair value of Earnout liabilities	(1,715		)	(7,898		)	(140		)
Accretion on fair value of Earnout liabilities	—			4,108			5,060
Excess tax benefit related to restricted stock vesting	(101		)	179			—
Bad debt expense	10,135			6,550			1,261
Loss (gain) on derivatives, net	18,170			(5,008		)	(22,407		)
Current period cash settlements on derivatives, net	11,038			(19,598		)	(24,427		)
Accretion of discount to convertible subordinated notes to affiliate	—			1,004			150
Earnout Payments	—			(1,781		)	(843		)
Other	(673		)	(5		)	(715		)
Changes in assets and liabilities:
Decrease (increase) in accounts receivable	2,692			(32,361		)	(12,088		)
Decrease (increase) in accounts receivable—affiliates	859			(1,459		)	(118		)
Decrease (increase) in inventory	674			(718		)	542
Increase in customer acquisition costs	(13,673		)	(25,874		)	(21,907		)
(Increase) decrease in prepaid and other current assets	(14,033		)	1,915			71
(Increase) decrease in other assets	(335		)	(465		)	1,321
Increase in accounts payable and accrued liabilities	10,301			14,831			14,831
(Decrease) increase in accounts payable—affiliates	(2,158		)	51			458
(Decrease) increase in other current liabilities	(3,050		)	(1,210		)	2,364
Increase (decrease) in other non-current liabilities	42			(1,487		)	46
Decrease in intangible assets—customer acquisitions	(2,161		)	—			—
Net cash provided by operating activities	57,689			62,131			66,950
Cash flows from investing activities:
Purchases of property and equipment	(1,429		)	(1,704		)	(2,258		)
Cash paid for acquisitions	(22,607		)	(75,854		)	(30,129		)
Contribution to equity method investment	—			—			(1,102		)
Net cash used in investing activities	(24,036		)	(77,558		)	(33,489		)
Cash flows from financing activities:
Proceeds from issuance of Series A Preferred Stock, net of issuance costs paid	48,490			40,241			—
Payment to affiliates for acquisition of customer book	(7,129		)	—			—
Borrowings on notes payable	432,300			206,400			79,048
Payments on notes payable	(418,050		)	(152,939		)	(66,652		)
Earnout Payments	(1,607		)	(18,418		)	(2,012		)
Payments on the Verde promissory note	(13,422		)	—			—
Restricted stock vesting	(2,893		)	(3,091		)	(1,183		)
Proceeds from issuance of Class B common stock	—			—			13,995
Proceeds from disgorgement of stockholders short-swing profits	244			1,129			941
Excess tax benefit related to restricted stock vesting	—			—			185
Payment of Tax Receivable Agreement Liability	(6,219		)	—			—
Payment of dividends to Class A common shareholders	(9,784		)	(9,519		)	(8,367		)
Payment of distributions to non-controlling unitholders	(35,479		)	(33,800		)	(34,930		)
Payment of dividends to Preferred Stock	(7,014		)	(2,106		)	��
Purchase of Treasury Stock	—			(2,011		)	—
Net cash (used in) provided by financing activities	(13,434		)	25,886			(18,975		)
Increase in Cash and cash equivalents and Restricted Cash	20,219			10,459			14,486
Cash and cash equivalents and Restricted cash—beginning of period	29,419			18,960			4,474
Cash and cash equivalents and Restricted cash—end of period	$	49,638		$	29,419		$	18,960

2017 amounts have been adjusted to reflect certain immaterial prior period adjustments related to the allocation of income and recorded book equity balances between non-controlling interests and Spark Energy, Inc. stockholders. Please see our Form 10-K for our audited financial statements and Notes thereto which include a discussion of these immaterial adjustments.

SPARK ENERGY, INC.
OPERATING SEGMENT RESULTS
FOR THE YEARS ENDED December 31, 2018, 2017 and 2016
(in thousands, except per unit operating data)
(unaudited)

	Year Ended December 31,
	2018			2017		2016
	(in thousands, except volume and per unit operating data)
Retail Electricity Segment
Total Revenues	$	863,451		$	657,566	$	417,229
Retail Cost of Revenues	762,771			477,012		286,795
Less: Net (Losses) Gains on non-trading derivatives, net of cash settlements	(23,988		)	22,086		12,298
Retail Gross Margin —Electricity	$	124,668		$	158,468	$	118,136
Volumes—Electricity (MWhs)	8,630,653			6,755,663		4,170,593
Retail Gross Margin —Electricity per MWh	$	14.44		$	23.46	$	28.33

Retail Natural Gas Segment
Total Revenues	$	137,966		$	141,206	$	130,054
Retail Cost of Revenues	82,722			75,155		58,149
Less: Net (Losses) Gains on non-trading derivatives, net of cash settlements	(5,197		)	10		7,672
Retail Gross Margin —Gas	$	60,441		$	66,041	$	64,233
Volumes—Gas (MMBtus)	16,778,393			18,203,684		16,819,713
Retail Gross Margin —Gas per MMBtu	$	3.60		$	3.63	$	3.82

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.

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,
(in thousands)	2018			2017			2018			2017
Reconciliation of Adjusted EBITDA to Net (Loss) Income:
Net (loss) income⁽¹⁾	$	(14,392	)	$	75,044		$	(15,315	)	$	46,299
Depreciation and amortization	52,658			42,341			12,861			11,906
Interest expense	9,410			11,134			2,087			2,374
Income tax expense⁽¹⁾	2,077			38,765			1,475			33,500
EBITDA	49,753			167,284			1,108			94,079
Less:
Net, (Losses) gains on derivative instruments	(18,170		)	5,008			(16,799		)	39,233
Net, Cash settlements on derivative instruments	(10,587		)	16,309			(4,764		)	(2,499		)
Customer acquisition costs	13,673			25,874			4,724			7,232
Plus:
Non-cash compensation expense	5,879			5,058			2,172			1,035
Change in Tax Receivable Agreement liability ⁽²⁾	—			(22,267		)	—			(22,267		)
Adjusted EBITDA	$	70,716		$	102,884		$	20,119		$	28,881

2017 amounts have been adjusted to reflect certain immaterial prior period adjustments related to the allocation of income and recorded book equity balances between non-controlling interests and Spark Energy, Inc. stockholders. Please see our Form 10-K for our audited financial statements and Notes thereto which include a discussion of these immaterial adjustments.
Represents the change in the value of the Tax Receivable Agreement liability due to U.S. Tax Reform.

	Year Ended December 31,						Quarter Ended December 31,
(in thousands)	2018			2017			2018			2017
Reconciliation of Adjusted EBITDA to net cash provided by operating activities:
Net cash provided by operating activities	$	57,689		$	62,131		$	15,836		$	1,869
Amortization of deferred financing costs	(1,291		)	(1,035		)	(48		)	(285		)
Bad debt expense	(10,135		)	(6,550		)	(1,655		)	(3,114		)
Interest expense	9,410			11,134			2,087			2,374
Income tax expense ⁽¹⁾	2,077			38,765			1,475			33,500
Change in Tax Receivable Agreement liability ⁽²⁾	—			(22,267		)	—			(22,267		)
Accounts receivable, prepaids, current assets	10,482			31,905			20,122			48,989
Inventory	(674		)	718			(199		)	(1,218		)
Accounts payable and accrued liabilities	(5,093		)	(13,672		)	(23,081		)	(21,786		)
Other	8,251			1,755			5,582			(9,181		)
Adjusted EBITDA	$	70,716		$	102,884		$	20,119		$	28,881
Cash Flow Data:
Cash flows provided by operating activities	$	57,689		$	62,131		$	15,836		$	1,869
Cash flows used in investing activities	$	(24,036	)	$	(77,558	)	$	(343	)	$	(19,070	)
Cash flows (used in) provided by financing activities	$	(13,434	)	$	25,886		$	(8,651	)	$	35,371

2017 amounts have been adjusted to reflect certain immaterial prior period adjustments related to the allocation of income and recorded book equity balances between non-controlling interests and Spark Energy, Inc. stockholders. Please see our Form 10-K for our audited financial statements and Notes thereto which include a discussion of these immaterial adjustments.
Represents the change in the value of the Tax Receivable Agreement liability due to U.S. Tax Reform.

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 31,
(in thousands)	2018			2017			2018			2017
Reconciliation of Retail Gross Margin to Operating Income:
Operating income	$	(3,654	)	$	102,420		$	(11,795	)	$	59,752
Depreciation and amortization	52,658			42,341			12,861			11,906
General and administrative	111,431			101,127			27,909			31,722
Less:
Net asset optimization (expenses) revenues	4,511			(717		)	713			(36		)
Net, Losses (gains) on non-trading derivative instruments	(19,571		)	5,588			(17,348		)	39,734
Net, Cash settlements on non-trading derivative instruments	(9,614		)	16,508			(4,560		)	(2,508		)
Retail Gross Margin	$	185,109		$	224,509		$	50,170		$	66,190
Retail Gross Margin – Retail Electricity Segment	$	124,668		$	158,468		$	32,055		$	42,339
Retail Gross Margin – Retail Natural Gas Segment	$	60,441		66,041			$	18,115		$	23,851

Contact: Spark Energy, Inc.

Investors:

Christian Hettick, 832-200-3727

Media:

Kira Jordan, 832-255-7302

Source: Spark Energy, Inc.

Spark Energy, Inc. Announces Time Change for Upcoming Earnings Conference Call

Posted on February 22, 2019October 18, 2021 by Yanira Hernandez

HOUSTON, Feb. 22, 2019 (GLOBE NEWSWIRE) — Spark Energy, Inc. (“Spark” or the “Company”) (NASDAQ: SPKE), an independent retail energy services company, today announced that its fourth quarter and full year earnings call will take place at 9:00 AM Central (10:00 AM Eastern) on Monday, March 4, 2019. The call originally had been scheduled for 10:00 AM Central on the same date.

Conference Call and Webcast Details

A live webcast of the conference call can be accessed from the Events and 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 12 months following the live presentation. Spark’s earnings release and supplemental materials will be available on the Investor Relations website prior to the call.

About Spark Energy, Inc.

Contact: Spark Energy, Inc.

Investors:
Christian Hettick, 832-200-3727
Media:
Kira Jordan, 832-255-7302

Source: Spark Energy, Inc.

Spark Energy, Inc. Announces Increase in Credit Commitments

Posted on January 28, 2019October 18, 2021 by Yanira Hernandez

HOUSTON, Jan. 28, 2019 (GLOBE NEWSWIRE) — Spark Energy, Inc. (“Spark” or the “Company”) (NASDAQ: SPKE), an independent retail energy services company, today announced the increase of its senior secured borrowing base credit facility (the “Facility”) to $217.5 million in commitments.

“We are proud of the strong liquidity position we have established over the last several quarters,” said Nathan Kroeker, Spark’s President and Chief Executive Officer. “We have continued to reduce our collateral exposure and improve our balance sheet as we discussed following last year’s Bomb Cyclone. Our balance sheet is in much better shape this winter, and with these added commitments, we are further improving on that position. So far this year, we have been able to take advantage of the colder weather and believe that 2019 is off to a great start.”

“Since we started the Facility in May 2017, our banks have continued to support us through acquisitions, weather events, and our current brand and platform consolidation efforts,” said Robert Lane, Spark’s Vice President and Chief Financial Officer. “We look forward to continuing to deliver strong financial performance both for our banks and our shareholders in 2019 and beyond.”

About Spark Energy, Inc.

Cautionary Note Regarding Forward Looking Statements

This press 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 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 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 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:

changes in commodity prices and the sufficiency of risk management and hedging policies;
extreme and unpredictable weather conditions, and the impact of 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 the New York Public Service Commission;
our ability to borrow funds and access credit markets and restrictions in our debt agreements and collateral requirements;
credit risk with respect to suppliers and customers;
changes in costs to acquire customers and actual customer attrition rates;
accuracy of billing systems;
whether our majority stockholder or its affiliates offer us acquisition opportunities on terms that are commercially acceptable to us;
ability to successfully identify and complete, and efficiently integrate acquisitions into our operations;
competition; and
the “Risk Factors” in our latest Annual Report on Form 10-K, and in our quarterly reports, other public filings and press releases.

You should review the risk factors and other factors noted throughout or incorporated by reference in 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:
Christian Hettick, 832-200-3727
Media:
Kira Jordan, 832-255-7302

Source: Spark Energy, Inc.

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

Posted on January 17, 2019October 18, 2021 by Yanira Hernandez

HOUSTON, Jan. 17, 2019 (GLOBE NEWSWIRE) — 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 fourth quarter of 2018 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, 2019 to holders of record of Spark’s Class A Common Stock on March 1, 2019.

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, 2019 to holders of record of Spark’s Series A Preferred Stock on April 1, 2019.

Conference Call and Webcast

The Company has also announced today that it plans to present its fourth quarter and full year 2018 financial results in a conference call and webcast on Monday, March 4, 2019 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.

Contact: Spark Energy, Inc.

Investors:

Christian Hettick, 832-200-3727

Media:

Kira Jordan, 832-255-7302

Source: Spark Energy, Inc

Spark Energy, Inc. Announces Management Changes

Posted on December 14, 2018October 19, 2021 by Yanira Hernandez

HOUSTON, Dec. 14, 2018 (GLOBE NEWSWIRE) — Spark Energy, Inc. (“Spark” or the “Company”) (NASDAQ: SPKE), an independent retail energy services company, today announced the resignation of Gil Melman, Spark’s Vice President, General Counsel, and Corporate Secretary. Mr. Melman is resigning to pursue other opportunities, effective December 31, 2018.

“It is with mixed feelings that we have accepted Gil’s resignation,” said Nathan Kroeker, Spark’s President and Chief Executive Officer. “He has been an important member of Spark’s management team for the past five years, and has been instrumental in our growth, our acquisitions, and our initial public offering. We wish him the best of luck in his future endeavors.”

C. Alexis Keene, currently Spark’s Deputy General Counsel, will be Spark’s Interim General Counsel and Corporate Secretary. Spark has begun a process to appoint a permanent successor for Mr. Melman.

“We are very fortunate to have Alexis here at Spark,” continued Kroeker. “With nearly three decades of experience, a deep knowledge of our business, and the trust and respect of her colleagues within the organization and throughout the industry, we expect a very smooth transition.”

About Spark Energy, Inc.

Cautionary Note Regarding Forward Looking Statements

changes in commodity prices and the sufficiency of risk management and hedging policies;
extreme and unpredictable weather conditions, and the impact of 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 the New York Public Service Commission;
our ability to borrow funds and access credit markets and restrictions in our debt agreements and collateral requirements;
credit risk with respect to suppliers and customers;
changes in costs to acquire customers and actual customer attrition rates;
accuracy of billing systems;
whether our majority stockholder or its affiliates offer us acquisition opportunities on terms that are commercially acceptable to us;
ability to successfully identify and complete, and efficiently integrate acquisitions into our operations;
competition; and
the “Risk Factors” in our latest Annual Report on Form 10-K, and in our quarterly reports, other public filings and press releases.

Contact: Spark Energy, Inc.

Investors:
Christian Hettick, 832-200-3727
Media:
Kira Jordan, 832-255-7302

Source: Spark Energy, Inc.

Spark Energy, Inc. Reports Third Quarter 2018 Financial Results

Posted on November 1, 2018October 19, 2021 by Yanira Hernandez

Acquired 60,000 residential RCEs; on track to exceed high end of cost reduction guidance

HOUSTON, Nov. 01, 2018 (GLOBE NEWSWIRE) — Spark Energy, Inc. (“Spark” or the “Company”) (NASDAQ: SPKE), an independent retail energy services company, today reported financial results for the quarter ended September 30, 2018.

Key Highlights

Achieved $18.6 million in Adjusted EBITDA, $45.8 million in Retail Gross Margin, and a $18.8 million in Net Income for the third quarter
Expects to exceed upper end of cost reduction guidance range by 10 to 20 percent
Total RCE count of 979,000 as of September 30, 2018
Acquired 60,000 residential RCEs subsequent to the close of fiscal third quarter 2018

“Our third quarter was highlighted by continued improvement in organic customer acquisitions as well as significant strides in realizing the brand and platform consolidations that we expect to lead to stronger margins,” said Nathan Kroeker, Spark Energy’s President and Chief Executive Officer. “Efforts to improve customer mix and migrate customers to more cost-effective billing platforms are more than halfway complete and our cost saving actions are tracking ahead of our expectations.”

Kroeker continued, “Since the closing of our third quarter, we announced our acquisition of up to 60,000 residential RCEs in the Midwest and Mid-Atlantic regions. This acquisition will be immediately accretive to 2018 earnings and will require minimal integration activity.”

Summary Third Quarter 2018 Financial Results

For the quarter ended September 30, 2018, Spark reported Adjusted EBITDA of $18.6 million compared to Adjusted EBITDA of $19.6 million for the quarter ended September 30, 2017. This decrease of $1.0 million was driven by a lower Retail Gross Margin.

For the quarter ended September 30, 2018, Spark reported Retail Gross Margin of $45.8 million compared to Retail Gross Margin of $50.6 million for the quarter ended September 30, 2017. This decrease of $4.8 million is primarily attributable to lower natural gas volumes and electricity unit margins.

Net income for the quarter ended September 30, 2018, was $18.8 million compared to net income of $12.9 million for the quarter ended September 30, 2017. The increase in performance compared to the prior year was primarily the result of non-cash gains on our derivative instruments.

Liquidity and Capital Resources

($ in thousands)	September 30, 2018
Cash and cash equivalents	$	42,796
Senior Credit Facility Availability ⁽¹⁾	19,281
Subordinated Debt Availability ⁽²⁾	15,000
Total Liquidity	$	77,077

(1) Subject to Senior Credit Facility borrowing base and covenant restrictions.
(2) The availability of the Subordinated Facility is dependent on our Founder’s financial position and liquidity.

Dividend

Spark’s Board of Directors declared quarterly dividends of $0.18125 per share of Class A common stock payable on December 14th, 2018, and $0.546875 per share of Series A Preferred Stock payable on January 15, 2019.

Business Outlook

Kroeker concluded, “As we look to fiscal 2019, we expect to see the benefits of improved customer mix and normalized RCE counts. We expect our Adjusted EBITDA to positively reflect the success of our synergy and cost reduction initiatives. Year-to-date we have implemented significant general and administrative cost savings, and we will continue to evaluate opportunities to improve long-term profitability.”

Conference Call and Webcast

Spark will host a conference call to discuss third quarter 2018 results on Friday, November 2, 2018, 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.

Cautionary Note Regarding Forward Looking Statements

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:

changes in commodity prices and the sufficiency of risk management and hedging policies;
extreme and unpredictable weather conditions, and the impact of 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 the New York Public Service Commission;
our ability to borrow funds and access credit markets and restrictions in our debt agreements and collateral requirements;
credit risk with respect to suppliers and customers;
changes in costs to acquire customers and actual customer attrition rates;
accuracy of billing systems;
whether our majority stockholder or its affiliates offer us acquisition opportunities on terms that are commercially acceptable to us;
ability to successfully identify and 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, and in our quarterly reports, other public filings and press releases.

You should review the risk factors and other factors noted throughout or incorporated by reference in 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.

SPARK ENERGY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF SEPTEMBER 30, 2018 AND DECEMBER 31, 2017
(in thousands, except share counts)
(unaudited)

	September 30, 2018			December 31, 2017
Assets
Current assets:
Cash and cash equivalents	$	42,796		$	29,419
Accounts receivable, net of allowance for doubtful accounts of $4,324 at September 30 and $4,023 at December 31	134,183			158,814
Accounts receivable—affiliates	3,807			3,661
Inventory	4,077			4,470
Fair value of derivative assets	23,427			31,191
Customer acquisition costs, net	15,600			22,123
Customer relationships, net	18,360			18,653
Deposits	12,631			7,701
Other current assets	31,074			20,706
Total current assets	285,955			296,738
Property and equipment, net	5,383			8,275
Fair value of derivative assets	1,873			3,309
Customer acquisition costs, net	3,466			6,949
Customer relationships, net	28,247			34,839
Deferred tax assets	24,935			24,185
Goodwill	120,343			120,154
Other assets	11,075			11,500
Total assets	$	481,277		$	505,949

Liabilities, Series A Preferred Stock and Stockholders’ Equity
Current liabilities:
Accounts payable	$	55,496		$	77,510
Accounts payable—affiliates	2,836			4,622
Accrued liabilities	45,518			33,679
Fair value of derivative liabilities	269			1,637
Current portion of Senior Credit Facility	—			7,500
Current payable pursuant to tax receivable agreement—affiliates	2,508			5,937
Current contingent consideration for acquisitions	2,980			4,024
Other current liabilities	856			2,675
Current portion of note payable	10,535			13,443
Total current liabilities	120,998			151,027
Long-term liabilities:
Fair value of derivative liabilities	489			492
Payable pursuant to tax receivable agreement—affiliates	26,067			26,355
Long-term portion of Senior Credit Facility	112,000			117,750
Subordinated debt—affiliate	10,000			—
Long-term portion of note payable	—			7,051
Contingent consideration for acquisitions	—			626
Other long-term liabilities	—			172
Total liabilities	269,554			303,473
Commitments and contingencies (Note 13)

Series A Preferred Stock, par value $0.01 per share, 20,000,000 shares authorized, 3,707,256 shares issued and outstanding at September 30 and 1,704,339 shares issued and outstanding at December 31	90,758			41,173

Stockholders’ equity:
Common Stock:

Class A common stock, par value $0.01 per share, 120,000,000 shares authorized, 13,493,158 issued, and 13,393,712 outstanding at September 30 and 13,235,082 issued and 13,135,636 outstanding at December 31	135			132
Class B common stock, par value $0.01 per share, 60,000,000 shares authorized, 21,485,126 issued and outstanding at September 30 and December 31	216			216


Additional paid-in capital	25,387			26,914
Accumulated other comprehensive loss	(15		)	(11		)
Retained earnings	2,885			11,008
Treasury stock, at cost, 99,446 shares at September 30 and December 31	(2,011		)	(2,011		)
Total stockholders’ equity	26,597			36,248
Non-controlling interest in Spark HoldCo, LLC	94,368			125,055
Total equity	120,965			161,303
Total liabilities, Series A Preferred Stock and stockholders’ equity	$	481,277		$	505,949

SPARK ENERGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2018 AND 2017
(in thousands)
(unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2018			2017			2018			2017
Revenues:
Retail revenues	$	258,127		$	215,856		$	773,616		$	563,960
Net asset optimization revenues/(expense)	348			(320		)	3,798			(681		)
Total Revenues	258,475			215,536			777,414			563,279
Operating Expenses:
Retail cost of revenues	193,409			160,373			645,954			420,771
General and administrative	25,695			25,566			83,522			69,405
Depreciation and amortization	13,917			11,509			39,797			30,435
Total Operating Expenses	233,021			197,448			769,273			520,611
Operating income	25,454			18,088			8,141			42,668
Other (expense)/income:
Interest expense	(2,762		)	(2,863		)	(7,323		)	(8,760		)
Interest and other income (loss)	(47		)	168			707			102
Total other expenses	(2,809		)	(2,695		)	(6,616		)	(8,658		)
Income before income tax expense	22,645			15,393			1,525			34,010
Income tax expense	3,818			2,451			602			5,265
Net income	$	18,827		$	12,942		$	923		$	28,745
Less: Net income attributable to non-controlling interests	13,218			10,595			140			23,049
Net income attributable to Spark Energy, Inc. stockholders	$	5,609		$	2,347		$	783		$	5,696
Less: Dividend on Series A preferred stock	2,027			932			6,081			2,106
Net income (loss) attributable to stockholders of Class A common stock	$	3,582		$	1,415		$	(5,298	)	$	3,590
Other comprehensive income, net of tax:
Currency translation gain (loss)	$	47		$	(13	)	$	(11	)	$	(88	)
Other comprehensive income (loss)	47			(13		)	(11		)	(88		)
Comprehensive income	$	18,874		$	12,929		$	912		$	28,657
Less: Comprehensive income attributable to non-controlling interests	13,247			10,587			133			22,994
Comprehensive income attributable to Spark Energy, Inc. stockholders	$	5,627		$	2,342		$	779		$	5,663

SPARK ENERGY, INC.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2018
(in thousands)
(unaudited)

	Issued Shares of Class A Common Stock	Issued Shares of Class B Common Stock	Treasury Stock		Class A Common Stock		Class B Common Stock		Treasury Stock			Accumulated Other Comprehensive Loss			Additional Paid-in Capital			Retained Earnings (Deficit)			Total Stockholders’ Equity			Non-controlling Interest			Total Equity
Balance at December 31, 2017	13,235	21,485	(99	)	$	132	$	216	$	(2,011	)	$	(11	)	$	26,914		$	11,008		$	36,248		$	125,055		$	161,303
Stock based compensation	—	—	—		—		—		—			—			3,596			—			3,596			—			3,596
Restricted stock unit vesting	258	—	—		3		—		—			—			(715		)	—			(712		)	—			(712		)
Consolidated net income	—	—	—		—		—		—			—			—			783			783			140			923
Foreign currency translation adjustment for equity method investee	—	—	—		—		—		—			(4		)	—			—			(4		)	(7		)	(11		)
Distributions paid to non-controlling unit holders	—	—	—		—		—		—			—			—			—			—			(23,701		)	(23,701		)
Dividends paid to Class A common stockholders	—	—	—		—		—		—			—			(2,381		)	(4,852		)	(7,233		)	—			(7,233		)
Dividends to Preferred Stock	—	—	—		—		—		—			—			(2,027		)	(4,054		)	(6,081		)	—			(6,081		)
Acquisition of Customers from Affiliate	—	—	—		—		—		—			—			—						—			(7,119		)	(7,119		)
Balance at September 30, 2018	13,493	21,485	(99	)	$	135	$	216	$	(2,011	)	$	(15	)	$	25,387		$	2,885		$	26,597		$	94,368		$	120,965

SPARK ENERGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2018 AND 2017
(in thousands)
(unaudited)

	Nine Months Ended September 30,
	2018			2017
Cash flows from operating activities:
Net income	$	923		$	28,745
Adjustments to reconcile net income to net cash flows provided by operating activities:
Depreciation and amortization expense	38,538			30,584
Deferred income taxes	(749		)	681
Change in TRA liability	79			—
Stock based compensation	3,707			4,023
Amortization of deferred financing costs	1,243			750
Excess tax benefit related to restricted stock vesting	(101		)	179
Change in Fair Value of Earnout liabilities	(63		)	(9,423		)
Accretion on fair value of Earnout liabilities	—			3,787
Bad debt expense	8,480			3,436
Loss on derivatives, net	1,371			34,225
Current period cash settlements on derivatives, net	6,189			(20,816		)
Accretion of discount to convertible subordinated notes to affiliate	—			1,004
Payment of the Major Energy Companies Earnout	—			(1,104		)
Payment of the Provider Companies Earnout	—			(677		)
Other	(489		)	123
Changes in assets and liabilities:
Decrease in accounts receivable	21,029			18,056
Increase in accounts receivable—affiliates	(390		)	(2,508		)
Decrease (increase) in inventory	475			(1,936		)
Increase in customer acquisition costs	(8,949		)	(18,642		)
(Increase) decrease in prepaid and other current assets	(10,999		)	1,536
Increase in intangible assets—customer acquisitions	(86		)	(32		)
Decrease (increase) in other assets	92			(664		)
Decrease in accounts payable and accrued liabilities	(11,062		)	(9,301		)
(Decrease) increase in accounts payable—affiliates	(1,786		)	1,165
(Decrease) increase in other current liabilities	(5,140		)	22
Decrease in other non-current liabilities	(459		)	(1,170		)
Net cash provided by operating activities	41,853			62,043
Cash flows from investing activities:
Purchases of property and equipment	(1,097		)	(1,438		)
Acquisitions of Perigee and other customers	—			(11,464		)
Acquisition of the Verde Companies	—			(65,785		)
Verde working capital settlement	470			—
Acquisition of HIKO	(14,290		)	—
Acquisition of Customers from Affiliate	(8,776		)	—
Net cash used in investing activities	(23,693		)	(78,687		)
Cash flows from financing activities:
Proceeds from issuance of Series A Preferred Stock, net of issuance costs paid	48,490			40,312
Borrowings on notes payable	277,800			139,400
Payments on notes payable	(281,050		)	(119,664		)
Payment of the Major Energy Companies Earnout	(1,607		)	(6,299		)
Payment of the Provider Companies Earnout and installment consideration	—			(7,061		)
Payments on the Verde promissory note	(6,573		)	(2,149		)
Proceeds from disgorgement of stockholders short-swing profits	244			872
Restricted stock vesting	(2,589		)	(2,009		)
Payment of Tax Receivable Agreement liability	(3,577		)	—
Payment of dividends to Class A common stockholders	(7,233		)	(7,137		)
Payment of distributions to non-controlling unitholders	(23,701		)	(24,270		)
Payment of Dividends to Preferred Stock	(4,987		)	(1,174		)
Purchase of Treasury Stock	—			(1,888		)
Net cash (used in) provided by financing activities	(4,783		)	8,933
Increase (decrease) in Cash and cash equivalents	13,377			(7,711		)
Cash and cash equivalents—beginning of period	29,419			18,960
Cash and cash equivalents—end of period	$	42,796		$	11,249
Supplemental Disclosure of Cash Flow Information:
Non-cash items:
Contingent consideration—earnout obligations incurred in connection with the Verde Companies acquisition	$	—		$	5,400
Net contribution by NG&E in excess of cash	$	—		$	1,019
Installment consideration incurred in connection with the Verde Companies acquisition	$	—		$	17,851
Property and equipment purchase accrual	$	(123	)	$	41
Cash paid during the period for:
Interest	$	5,955		$	4,113
Taxes	$	7,461		$	7,769

SPARK ENERGY, INC.
OPERATING SEGMENT RESULTS
FOR THE THREE AND NINE MONTHS ENDED September 30, 2018 AND 2017
(in thousands, except volume and per unit operating data)
(unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2018			2017			2018			2017
	(in thousands, except volume and per unit operating data)
Retail Electricity Segment
Total Revenues	$	246,182		$	202,259		676,528			$	467,861
Retail Cost of Revenues	186,449			153,594			587,949			364,518
Less: Net gains (losses) on non-trading derivatives, net of cash settlements	19,481			4,170			(4,034		)	(12,786		)
Retail Gross Margin⁽¹⁾— Electricity	$	40,252		$	44,495		$	92,613		$	116,129
Volumes — Electricity (MWhs)	2,432,314			2,063,894			6,784,345			4,828,629
Retail Gross Margin⁽²⁾— Electricity per MWh	$	16.55		$	21.56		$	13.65		$	24.05

Retail Natural Gas Segment
Total Revenues	$	12,293		$	13,277		$	100,886		$	95,418
Retail Cost of Revenues	6,960			6,779			58,005			56,253
Less: Net Asset Optimization Revenues (Expenses)	348			(320		)	3,798			(681		)
Less: Net gains (losses) on non-trading derivatives, net of cash settlements	(558		)	743			(3,243		)	(2,344		)
Retail Gross Margin ⁽¹⁾ — Gas	$	5,543		$	6,075		$	42,326		$	42,190
Volumes — Gas (MMBtus)	1,395,377			1,706,132			11,913,180			12,554,497
Retail Gross Margin ⁽²⁾— Gas per MMBtu	$	3.97		$	3.56		$	3.55		$	3.36

(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 “Other Performance Measures” in our Form 10-Q 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

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.

Retail Gross Margin

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

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)

	Three Months Ended September 30,					Nine Months Ended September 30,
(in thousands)	2018		2017			2018			2017
Reconciliation of Adjusted EBITDA to Net Income:
Net income	$	18,827	$	12,942		$	923		$	28,745
Depreciation and amortization	13,917		11,509			39,797			30,435
Interest expense	2,762		2,863			7,323			8,760
Income tax expense	3,818		2,451			602			5,265
EBITDA	39,324		29,765			48,645			73,205
Less:
Net, Gain (losses) on derivative instruments	18,117		(2,752		)	(1,371		)	(34,225		)
Net, Cash settlements on derivative instruments	922		7,457			(5,823		)	18,808
Customer acquisition costs	2,695		6,568			8,949			18,642
Plus:
Non-cash compensation expense	1,021		1,118			3,707			4,023
Adjusted EBITDA	$	18,611	$	19,610		$	50,597		$	74,003

	Three Months Ended September 30,						Nine Months Ended September 30,
(in thousands)	2018			2017			2018			2017
Reconciliation of Adjusted EBITDA to net cash provided by operating activities:
Net cash provided by operating activities	$	5,443		$	16,418		$	41,853		$	62,043
Amortization of deferred financing costs	(631		)	(219		)	(1,243		)	(750		)
Allowance for doubtful accounts and bad debt expense	(2,755		)	(2,517		)	(8,480		)	(3,436		)
Interest expense	2,762			2,863			7,323			8,760
Income tax expense	3,818			2,451			602			5,265
Changes in operating working capital
Accounts receivable, prepaids, current assets	16,248			4,457			(9,640		)	(17,084		)
Inventory	2,218			2,246			(475		)	1,936
Accounts payable and accrued liabilities	(5,946		)	(12,857		)	17,988			8,114
Other	(2,546		)	6,768			2,669			9,155
Adjusted EBITDA	$	18,611		$	19,610		$	50,597		$	74,003
Cash Flow Data:
Cash flows provided by operating activities	$	5,443		$	16,418		$	41,853		$	62,043
Cash flows provided by (used in) investing activities	$	307		$	(3,178	)	$	(23,693	)	$	(78,687	)
Cash flows provided by (used in) financing activities	$	1,344		$	(16,036	)	$	(4,783	)	$	8,933

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)

	Three Months Ended September 30,					Nine Months Ended September 30,
(in thousands)	2018		2017			2018			2017
Reconciliation of Retail Gross Margin to Operating Income:
Operating income	$	25,454	$	18,088		$	8,141		$	42,668
Depreciation and amortization	13,917		11,509			39,797			30,435
General and administrative	25,695		25,566			83,522			69,405
Less:
Net asset optimization revenues (expenses)	348		(320		)	3,798			(681		)
Net, gains (losses) on non-trading derivative instruments	17,888		(2,568		)	(2,223		)	(34,146		)
Net, Cash settlements on non-trading derivative instruments	1,035		7,481			(5,054		)	19,016
Retail Gross Margin	$	45,795	$	50,570		$	134,939		$	158,319
Retail Gross Margin – Retail Electricity Segment	$	40,252	$	44,495		$	92,613		$	116,129
Retail Gross Margin – Retail Natural Gas Segment	$	5,543	$	6,075		$	42,326		$	42,190

Contact: Spark Energy, Inc.

Investors:

Christian Hettick, 832-200-3727

Media:

Kira Jordan, 832-255-7302

Source: Spark Energy, Inc.

Market Trends Toward New Normal in Chesapeake Utilities, Schlumberger, American Eagle Outfitters, Spark Energy, Maximus, and Novartis AG — Emerging Consolidated Expectations, Analyst Ratings

Posted on October 26, 2018October 19, 2021 by Yanira Hernandez

NEW YORK, Oct. 26, 2018 (GLOBE NEWSWIRE) — In new independent research reports released early this morning, Market Source Research released its latest key findings for all current investors, traders, and shareholders of Chesapeake Utilities Corporation (NYSE:CPK), Schlumberger Limited (NYSE:SLB), American Eagle Outfitters, Inc. (NYSE:AEO), Spark Energy, Inc. (NASDAQ:SPKE), Maximus, Inc. (NYSE:MMS), and Novartis AG (NYSE:NVS), including updated fundamental summaries, consolidated fiscal reporting, and fully-qualified certified analyst research.

Complimentary Access: Research Reports

Full copies of recently published reports are available to readers at the links below.

CPK DOWNLOAD: http://MarketSourceResearch.com/register/?so=CPK
SLB DOWNLOAD: http://MarketSourceResearch.com/register/?so=SLB
AEO DOWNLOAD: http://MarketSourceResearch.com/register/?so=AEO
SPKE DOWNLOAD: http://MarketSourceResearch.com/register/?so=SPKE
MMS DOWNLOAD: http://MarketSourceResearch.com/register/?so=MMS
NVS DOWNLOAD: http://MarketSourceResearch.com/register/?so=NVS

(You may have to copy and paste the link into your browser and hit the [ENTER] key)

The new research reports from Market Source Research, available for free download at the links above, examine Chesapeake Utilities Corporation (NYSE:CPK), Schlumberger Limited (NYSE:SLB), American Eagle Outfitters, Inc. (NYSE:AEO), Spark Energy, Inc. (NASDAQ:SPKE), Maximus, Inc. (NYSE:MMS), and Novartis AG (NYSE:NVS) on a fundamental level and outlines the overall demand for their products and services in addition to an in-depth review of the business strategy, management discussion, and overall direction going forward. Several excerpts from the recently released reports are available to today’s readers below.

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Important Notice: the following excerpts are not designed to be standalone summaries and as such, important information may be missing from these samples. Please download the entire research report, free of charge, to ensure you are reading all relevant material information. All information in this release was accessed October 24th, 2018. Percentage calculations are performed after rounding. All amounts in millions (MM), except per share amounts.

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CHESAPEAKE UTILITIES CORPORATION (CPK) REPORT OVERVIEW

Chesapeake Utilities’ Recent Financial Performance

For the three months ended June 30th, 2018 vs June 30th, 2017, Chesapeake Utilities reported revenue of $136.66MM vs $125.08MM (up 9.26%) and analysts estimated basic earnings per share $0.39 vs $0.37 (up 5.41%). For the twelve months ended December 31st, 2017 vs December 31st, 2016, Chesapeake Utilities reported revenue of $617.58MM vs $498.86MM (up 23.80%) and analysts estimated basic earnings per share $3.56 vs $2.87 (up 24.04%). Analysts expect earnings to be released on November 8th, 2018. The report will be for the fiscal period ending September 30th, 2018. The reported EPS for the same quarter last year was $0.42. The estimated EPS forecast for the next fiscal year is $3.67 and is expected to report on February 27th, 2019.

To read the full Chesapeake Utilities Corporation (CPK) report, download it here: http://MarketSourceResearch.com/register/?so=CPK

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SCHLUMBERGER LIMITED (SLB) REPORT OVERVIEW

Schlumberger’s Recent Financial Performance

For the three months ended June 30th, 2018 vs June 30th, 2017, Schlumberger reported revenue of $8,303.00MM vs $7,462.00MM (up 11.27%) and analysts estimated basic earnings per share $0.31 vs -$0.05. For the twelve months ended December 31st, 2017 vs December 31st, 2016, Schlumberger reported revenue of $30,440.00MM vs $27,810.00MM (up 9.46%) and analysts estimated basic earnings per share -$1.08 vs -$1.24. Analysts expect earnings to be released on January 18th, 2019. The report will be for the fiscal period ending December 31st, 2018. Reported EPS for the same quarter last year was $0.48. The estimated EPS forecast for the next fiscal year is $2.25 and is expected to report on January 18th, 2019.

To read the full Schlumberger Limited (SLB) report, download it here: http://MarketSourceResearch.com/register/?so=SLB

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AMERICAN EAGLE OUTFITTERS, INC. (AEO) REPORT OVERVIEW

American Eagle Outfitters’ Recent Financial Performance

For the three months ended July 31st, 2018 vs July 31st, 2017, American Eagle Outfitters reported revenue of $964.85MM vs $844.56MM (up 14.24%) and analysts estimated basic earnings per share $0.34 vs $0.12 (up 183.33%). For the twelve months ended January 31st, 2018 vs January 31st, 2017, American Eagle Outfitters reported revenue of $3,795.55MM vs $3,609.87MM (up 5.14%) and analysts estimated basic earnings per share $1.15 vs $1.17 (down 1.71%). Analysts expect earnings to be released on December 5th, 2018. The report will be for the fiscal period ending October 31st, 2018. Reported EPS for the same quarter last year was $0.37. The estimated EPS forecast for the next fiscal year is $1.65 and is expected to report on March 14th, 2019.

To read the full American Eagle Outfitters, Inc. (AEO) report, download it here: http://MarketSourceResearch.com/register/?so=AEO

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SPARK ENERGY, INC. (SPKE) REPORT OVERVIEW

Spark Energy’s Recent Financial Performance

For the three months ended June 30th, 2018 vs June 30th, 2017, Spark Energy reported revenue of $232.25MM vs $151.44MM (up 53.37%) and basic earnings per share $0.41 vs $0.01 (up 4,000.00%). For the twelve months ended December 31st, 2017 vs December 31st, 2016, Spark Energy reported revenue of $798.06MM vs $546.70MM (up 45.98%) and analysts estimated basic earnings per share $1.20 vs $1.27 (down 5.51%). Analysts expect earnings to be released on November 2nd, 2018. The report will be for the fiscal period ending September 30th, 2018. The reported EPS for the same quarter last year was $0.11. The estimated EPS forecast for the next fiscal year is $0.29 and is expected to report on March 8th, 2019.

To read the full Spark Energy, Inc. (SPKE) report, download it here: http://MarketSourceResearch.com/register/?so=SPKE

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MAXIMUS, INC. (MMS) REPORT OVERVIEW

Maximus’ Recent Financial Performance

For the three months ended June 30th, 2018 vs June 30th, 2017, Maximus reported revenue of $597.86MM vs $600.45MM (down 0.43%) and analysts estimated basic earnings per share $0.91 vs $0.87 (up 4.60%). For the twelve months ended September 30th, 2017 vs September 30th, 2016, Maximus reported revenue of $2,450.96MM vs $2,403.36MM (up 1.98%) and analysts estimated basic earnings per share $3.19 vs $2.71 (up 17.71%). Analysts expect earnings to be released on November 8th, 2018. The report will be for the fiscal period ending September 30th, 2018. The reported EPS for the same quarter last year was $0.81. The estimated EPS forecast for the next fiscal year is $3.41 and is expected to report on November 8th, 2018.

To read the full Maximus, Inc. (MMS) report, download it here: http://MarketSourceResearch.com/register/?so=MMS

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NOVARTIS AG (NVS) REPORT OVERVIEW

Novartis AG’s Recent Financial Performance

For the three months ended September 30th, 2018 vs September 30th, 2017, Novartis AG reported revenue of $13,121.00MM vs $12,692.00MM (up 3.38%) and analysts estimated basic earnings per share $0.70 vs $0.89 (down 21.35%). For the twelve months ended December 31st, 2017 vs December 31st, 2016, Novartis AG reported revenue of $50,135.00MM vs $49,436.00MM (up 1.41%) and analysts estimated basic earnings per share $3.28 vs $2.82 (up 16.31%). Analysts expect earnings to be released on January 23rd, 2019. The report will be for the fiscal period ending December 31st, 2018. The reported EPS for the same quarter last year was $1.20. The estimated EPS forecast for the next fiscal year is $5.50 and is expected to report on January 23rd, 2019.

To read the full Novartis AG (NVS) report, download it here: http://MarketSourceResearch.com/register/?so=NVS

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ABOUT MARKET SOURCE RESEARCH

Market Source Research delivers the key research reports that helps serious investors, registered brokers, professional traders, and personal investment advisers find reliable information in today’s markets. Market Source Research’s team is comprised of financial professionals, many of which hold Chartered Financial Analyst® (CFA®) designations and FINRA® BrokerCheck® certifications. Whether identifying emerging trends, or discovering new opportunity, the team at Market Source Research is dedicated to providing accurate, informative, and objective content that’s ahead of the curve. With insights on individual companies as well as sectors, readers get the industry’s best available combination of big-picture perspective as well as granular detail.

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Information contained herein is not an offer or solicitation to buy, hold, or sell any security. Market Source Research, Market Source Research members, and/or Market Source Research affiliates are not responsible for any gains or losses that result from the opinions expressed. Market Source Research makes no representations as to the completeness, accuracy, or timeliness of the material provided and all materials are subject to change without notice. Market Source Research has not been compensated for the publication of this press release by any of the above mentioned companies. Market Source Research is not a financial advisory firm, investment adviser, or broker-dealer, and does not undertake any activities that would require such registration. For our full disclaimer, disclosure, and terms of service please visit our website.

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Source: Market Source Research

Spark Energy, Inc. Announces Acquisition of Mass Market Customer Book

Posted on October 22, 2018October 19, 2021 by Yanira Hernandez

HOUSTON, Oct. 22, 2018 (GLOBE NEWSWIRE) — Spark Energy, Inc. (“Spark” or the “Company”) (NASDAQ: SPKE), an independent retail energy services company, today announced that the Company has signed a definitive agreement to acquire approximately 60,000 residential RCEs from a retail energy provider in the Mid-Atlantic and Midwest regions.

“This tuck-in acquisition is a perfect example of the types of transactions we continue to pursue,” said Nathan Kroeker, Spark’s President and Chief Executive Officer. “The transaction represents excellent value and we expect it to be accretive to Adjusted EBITDA in the fourth quarter of this fiscal year. We believe this acquisition, along with our recent organic sales activity and the consolidation of our brands onto more efficient, cost-effective platforms will drive long-term, sustainable growth and value for shareholders.”

About Spark Energy, Inc.

Cautionary Note Regarding Forward Looking Statements

changes in commodity prices and the sufficiency of risk management and hedging policies;
extreme and unpredictable weather conditions, and the impact of 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 the New York Public Service Commission;
our ability to borrow funds and access credit markets and restrictions in our debt agreements and collateral requirements;
credit risk with respect to suppliers and customers;
changes in costs to acquire customers and actual customer attrition rates;
accuracy of billing systems;
whether our majority stockholder or its affiliates offer us acquisition opportunities on terms that are commercially acceptable to us;
ability to successfully identify and complete, and efficiently integrate acquisitions into our operations;
competition; and
the “Risk Factors” in our latest Annual Report on Form 10-K, and in our quarterly reports, other public filings and press releases.

Contact: Spark Energy, Inc.

Investors:

Christian Hettick, 832-200-3727

Media:

Kira Jordan, 832-255-7302

Source: Spark Energy, Inc.

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

Posted on October 18, 2018October 19, 2021 by Yanira Hernandez

Third Quarter 2018 Financial Results to be presented on Friday, November 2, 2018

HOUSTON, Oct. 18, 2018 (GLOBE NEWSWIRE) — Spark Energy, Inc. (“Spark” or the “Company”) (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 third quarter of 2018 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 third quarter dividend will be paid on December 14, 2018 to holders of record of Spark’s Class A Common Stock on November 30, 2018.

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 January 15, 2019 to holders of record of Spark’s Series A Preferred Stock on January 1, 2019.

Conference Call and Webcast

The company has also announced today that it plans to present its third quarter 2018 financial results in a conference call and webcast on Friday, November 2, 2018 at 10:00 AM Central (11:00 AM Eastern).

About Spark Energy, Inc.

Contact: Spark Energy, Inc.

Investors:

Christian Hettick, 832-200-3727

Media:

Kira Jordan, 832-255-7302

Source: Spark Energy, Inc.

Spark Energy, Inc. Reports Second Quarter 2018 Financial Results

Posted on August 2, 2018October 19, 2021 by Yanira Hernandez

HOUSTON, Aug. 02, 2018 (GLOBE NEWSWIRE) — 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, 2018.

Key Highlights

Achieved $16.1 million in Adjusted EBITDA, $43.4 million in Retail Gross Margin, and a $23.9 million in Net Income for the second quarter
Total RCE count increased 26.9% year-over-year to 1,049,000 as of June 30, 2018
Overall monthly attrition of 3.7% for the second quarter
Continuing to simplify, streamline, and optimize the organization to improve long-term margin profile

“We made considerable progress in our synergy and brand consolidation efforts during the second quarter, achieving our target of annualized general and administrative cost savings of $15 million through facility and headcount reductions,” said Nathan Kroeker, Spark Energy’s President and Chief Executive Officer. “We successfully migrated a total of 110,000 customers to more cost-effective billing platforms and notified another 62,000 customers of planned platform switches that should be complete by end of the third quarter.

“Despite strong operating cost controls, our second-quarter results were negatively impacted by lower electricity unit margins. This was a result of the hedges we had to purchase during the first few weeks of the year, additional hedges we used to insure against adverse weather in ERCOT this summer, and increases in capacity costs in New England. While we are disappointed with our first half performance, we are implementing the appropriate strategies that we expect will improve profitability and Adjusted EBITDA performance.

“As we enter the second half of the year, we expect to drive an additional $5 million in annualized cost savings through a series of targeted projects. We’re also focusing on organic growth through recently integrated Verde sales channels, as well as new retail sales channels that we believe will help us increase our mass-market concentration and improve margins as we pivot away from larger, lower-margin C&I customers.”

Summary Second Quarter 2018 Financial Results

For the quarter ended June 30, 2018, Spark reported Adjusted EBITDA of $16.1 million compared to Adjusted EBITDA of $20.0 million for the quarter ended June 30, 2017. This decrease of $3.9 million is primarily attributable to lower electricity unit margins as well as higher G&A due to a larger customer portfolio.

For the quarter ended June 30, 2018, Spark reported Retail Gross Margin of $43.4 million compared to Retail Gross Margin of $43.1 million for the quarter ended June 30, 2017. Spark attributes this increase of $0.3 million primarily to higher electricity volumes, primarily as a result of acquisitions completed over the prior twelve months, largely offset by lower electricity margins.

Net income for the quarter ended June 30, 2018, was $23.9 million compared to net income of $4.7 million for the quarter ended June 30, 2017. The increase in performance compared to the prior year was primarily the result of unrealized mark to market hedge gain in the second quarter.

Liquidity and Capital Resources

($ in thousands)		June 30, 2018
Cash and cash equivalents	$	35,702
Senior Credit Facility Availability ⁽¹⁾		36,281
Subordinated Debt Availability ⁽²⁾		15,000
Total Liquidity	$	86,983

(1)	Subject to Senior Credit Facility borrowing base and covenant restrictions.
(2)	The availability of the Subordinated Facility is dependent on our Founder’s financial position and liquidity.

Dividend

Spark’s Board of Directors declared quarterly dividends of $0.18125 per share of Class A common stock payable on September 13th, 2018, and $0.546875 per share of Series A Preferred Stock payable on October 15, 2018.

Conference Call and Webcast

Spark will host a conference call to discuss second quarter 2018 results on Friday, August 3, 2018, at 10:00 AM Central Time (11:00 AM Eastern).

About Spark Energy, Inc.

Cautionary Note Regarding Forward Looking Statements

changes in commodity prices and the sufficiency of risk management and hedging policies;
extreme and unpredictable weather conditions, and the impact of 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 the New York Public Service Commission;
our ability to borrow funds and access credit markets and restrictions in our debt agreements and collateral requirements;
credit risk with respect to suppliers and customers;
changes in costs to acquire customers and actual customer attrition rates;
accuracy of billing systems;
whether our majority stockholder or its affiliates offer us acquisition opportunities on terms that are commercially acceptable to us;
ability to successfully identify and 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, and in our quarterly reports, other public filings and press releases.

SPARK ENERGY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF JUNE 30, 2018 AND DECEMBER 31, 2017
(in thousands)
(unaudited)

	June 30, 2018			December 31, 2017
Assets
Current assets:
Cash and cash equivalents	$	35,702		$	29,419
Accounts receivable, net of allowance for doubtful accounts of $3.6 million and $4.0 million as of June 30, 2018 and December 31, 2017, respectively	132,011			158,814
Accounts receivable—affiliates	3,427			3,661
Inventory	1,860			4,470
Fair value of derivative assets	11,526			31,191
Customer acquisition costs, net	17,123			22,123
Customer relationships, net	20,669			18,653
Prepaid assets	3,575			1,028
Deposits	12,109			7,701
Other current assets	18,863			19,678
Total current assets	256,865			296,738
Property and equipment, net	7,190			8,275
Fair value of derivative assets	595			3,309
Customer acquisition costs, net	5,315			6,949
Customer relationships, net	31,600			34,839
Deferred tax assets	27,581			24,185
Goodwill	120,343			120,154
Other assets	11,360			11,500
Total assets	$	460,849		$	505,949
Liabilities, Series A Preferred Stock and Stockholders’ Equity
Current liabilities:
Accounts payable	$	59,393		$	77,510
Accounts payable—affiliates	2,373			4,622
Accrued liabilities	32,330			33,679
Fair value of derivative liabilities	2,079			1,637
Current portion of Senior Credit Facility	—			7,500
Current payable pursuant to tax receivable agreement—affiliates	2,508			5,937
Current contingent consideration for acquisitions	2,980			4,024
Other current liabilities	1,282			2,675
Current portion of note payable	13,921			13,443
Total current liabilities	116,866			151,027
Long-term liabilities:
Fair value of derivative liabilities	4,380			492
Payable pursuant to tax receivable agreement—affiliates	26,067			26,355
Long-term portion of Senior Credit Facility	102,000			117,750
Subordinated debt—affiliate	10,000			—
Contingent consideration for acquisitions	—			626
Other long-term liabilities	1			172
Long-term portion of note payable	—			7,051
Total liabilities	259,314			303,473
Commitments and contingencies (Note 13)
Series A Preferred Stock, par value $0.01 per share, 20,000,000 shares authorized, 3,707,256 shares issued and outstanding at June 30, 2018 and 1,704,339 shares issued and outstanding at December 31, 2017	90,758			41,173
Stockholders’ equity:
Common Stock ⁽¹⁾ :
Class A common stock, par value $0.01 per share, 120,000,000 shares authorized, 13,493,158 issued, and 13,393,712 outstanding at June 30, 2018 and 13,235,082 issued and 13,135,636 outstanding at December 31, 2017	135			132
Class B common stock, par value $0.01 per share, 60,000,000 shares authorized, 21,485,126 issued and outstanding at June 30, 2018 and December 31, 2017	216			216
Additional paid-in capital	28,846			26,914
Accumulated other comprehensive loss	(33		)	(11		)
Retained earnings	(2,678		)	11,008
Treasury stock, at cost, 99,446 shares at June 30, 2018 and December 31, 2017	(2,011		)	(2,011		)
Total stockholders’ equity	24,475			36,248
Non-controlling interest in Spark HoldCo, LLC	86,302			125,055
Total equity	110,777			161,303
Total liabilities, Series A Preferred Stock and stockholders’ equity	$	460,849		$	505,949

(1)	Outstanding shares of common stock reflect the two-for-one stock split, which took effect on June 16, 2017. See 5 “Equity” in our 10-Q for further discussion.
(2)	See Note 5 “Equity” in our 10-Q for disclosure of our variable interest entity in Spark HoldCo, LLC.

SPARK ENERGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2018 AND 2017
(in thousands)
(unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
Revenues:
Retail revenues	$	231,488		$	151,604		$	515,489		$	348,104
Net asset optimization revenues/(expense)⁽¹⁾	763			(168		)	3,450			(361		)
Total Revenues	232,251			151,436			518,939			347,743
Operating Expenses:
Retail cost of revenues	162,669			114,637			452,545			260,398
General and administrative ⁽²⁾	27,780			19,346			57,827			43,839
Depreciation and amortization	12,861			9,656			25,880			18,926
Total Operating Expenses	203,310			143,639			536,252			323,163
Operating income (loss)	28,941			7,797			(17,313		)	24,580
Other (expense)/income:
Interest expense	(2,316		)	(2,452		)	(4,561		)	(5,897		)
Interest and other income	553			(265		)	755			(66		)
Total other expenses	(1,763		)	(2,717		)	(3,807		)	(5,963		)
Income (loss) before income tax expense (benefit)	27,178			5,080			(21,120		)	18,617
Income tax expense (benefit)	3,251			409			(3,216		)	2,814
Net income (loss)	$	23,927		$	4,671		$	(17,904	)	$	15,803
Less: Net income (loss) attributable to non-controlling interests	16,427			3,592			(13,078		)	12,454
Net income (loss) attributable to Spark Energy, Inc. stockholders	$	7,500		$	1,079		$	(4,826	)	$	3,349
Less: Dividend on Series A preferred stock	2,027			991			4,054			1,174
Net income (loss) attributable to stockholders of Class A common stock	$	5,473		$	88		$	(8,880	)	$	2,175
Other comprehensive income (loss), net of tax:
Currency translation gain (loss)	$	25		$	(26	)	$	(58	)	$	(75	)
Other comprehensive income (loss)	25			(26		)	(58		)	(75		)
Comprehensive income (loss)	$	23,952		$	4,645		$	(17,962	)	$	15,728
Less: Comprehensive income (loss) attributable to non-controlling interests	16,442			3,576			(13,114		)	12,407
Comprehensive income (loss) attributable to Spark Energy, Inc. stockholders	$	7,510		$	1,069		$	(4,848	)	$	3,321

(1)

Net asset optimization revenues (expenses) includes asset optimization revenues—affiliates of $340 and $0 for the three months ended June 30, 2018 and 2017, respectively, and asset optimization revenues—affiliates cost of revenues of $24 and $0 for the three months ended June 30, 2018 and 2017, respectively, and asset optimization revenues—affiliates of $988 and $0 for the six months ended June 30, 2018 and 2017, respectively, and asset optimization revenue—affiliates cost of revenues of $36 and $0 for the six months ended June 30, 2018 and 2017, respectively.

(2)

General and administrative expense includes general and administrative expense—affiliates of $1,600 and $6,100 for the three months ended June 30, 2018 and 2017, respectively, and $8,000 and $13,400 for the six months ended June 30, 2018 and 2017, respectively.

SPARK ENERGY, INC.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED JUNE 30, 2018
(in thousands)
(unaudited)

	Issued Shares of Class A Common Stock	Issued Shares of Class B Common Stock	Treasury Stock		Class A Common Stock		Class B Common Stock		Treasury Stock			Accumulated Other Comprehensive Loss			Additional Paid-in Capital			Retained Earnings (Deficit)			Total Stockholders’ Equity			Non- controlling Interest			Total Equity
Balance at December 31, 2017	13,235	21,485	(99	)	$	132	$	216	$	(2,011	)	$	(11	)	$	26,914		$	11,008		$	36,248		$	125,055		$	161,303
Stock based compensation	—	—	—		—		—		—			—			2,647			—			2,647			—			2,647
Restricted stock unit vesting	258	—	—		3		—		—			—			(715		)	—			(712		)	—			(712		)
Consolidated net loss	—	—	—		—		—		—			—			—			(4,826		)	(4,826		)	(13,078		)	(17,904		)
Foreign currency translation adjustment for equity method investee	—	—	—		—		—		—			(22		)	—			—			(22		)	(36		)	(58		)
Distributions paid to non-controlling unit holders	—	—	—		—		—		—			—			—			—			—			(19,501		)	(19,501		)
Dividends paid to Class A common stockholders	—	—	—		—		—		—			—			—			(4,805		)	(4,805		)	—			(4,805		)
Dividends to Preferred Stock	—	—	—		—		—		—			—			—			(4,055		)	(4,055		)	—			(4,055		)
Acquisition of NG&E Customers	—	—	—		—		—		—			—			—						—			(6,138		)	(6,138		)
Balance at June 30, 2018	13,493	21,485	(99	)	$	135	$	216	$	(2,011	)	$	(33	)	$	28,846		$	(2,678	)	$	24,475		$	86,302		$	110,777

SPARK ENERGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2018 AND 2017
(in thousands)
(unaudited)

	Six Months Ended June 30,
	2018			2017
Cash flows from operating activities:
Net (loss) income	$	(17,904	)	$	15,803
Adjustments to reconcile net income to net cash flows provided by operating activities:
Depreciation and amortization expense	24,639			18,411
Deferred income taxes	(3,396		)	3
Change in TRA liability	79			—
Stock based compensation	2,686			2,905
Amortization of deferred financing costs	614			531
Excess tax benefit related to restricted stock vesting	(101		)	179
Change in Fair Value of Earnout liabilities	(63		)	(2,568		)
Accretion on fair value of Earnout liabilities	—			2,660
Bad debt expense	5,725			919
Loss on derivatives, net	19,487			31,473
Current period cash settlements on derivatives, net	7,170			(11,828		)
Accretion of discount to convertible subordinated notes to affiliate	—			1,004
Payment of the Major Energy Companies Earnout	—			(1,104		)
Payment of the Provider Companies Earnout	—			(677		)
Other	(555		)	224
Changes in assets and liabilities:
Decrease in accounts receivable	25,957			18,072
Increase in accounts receivable—affiliates	(10		)	(1,925		)
Decrease in inventory	2,693			310
Increase in customer acquisition costs	(6,254		)	(12,074		)
(Increase) decrease in prepaid and other current assets	(59		)	5,394
Decrease (increase) in other assets	97			(788		)
Decrease in accounts payable and accrued liabilities	(20,140		)	(18,422		)
(Decrease) increase in accounts payable—affiliates	(2,249		)	313
Decrease in other current liabilities	(1,545		)	(2,862		)
Decrease in other non-current liabilities	(461		)	(328		)
Net cash provided by operating activities	36,410			45,625
Cash flows from investing activities:
Purchases of property and equipment	(1,163		)	(371		)
Acquisitions of Perigee and other customers	—			(9,353		)
Deposit for Verde Acquisition	—			(65,785		)
Acquisition of HIKO	(15,041		)	—
Acquisition of NG&E customers	(7,796		)	—
Net cash used in investing activities	(24,000		)	(75,509		)
Cash flows from financing activities:
Proceeds from issuance of Series A Preferred Stock, net of issuance costs paid	48,490			37,937
Borrowings on notes payable	146,800			121,000
Payments on notes payable	(160,050		)	(93,789		)
Payment of the Major Energy Companies Earnout	(1,607		)	(6,299		)
Payment of the Provider Companies Earnout and installment consideration	—			(6,676		)
Payments on the Verde promissory note	(6,573		)	—
Proceeds from disgorgement of stockholders short-swing profits	244			666
Restricted stock vesting	(2,589		)	(2,009		)
Payment of Tax Receivable Agreement liability	(3,577		)	—
Payment of dividends to Class A common stockholders	(4,805		)	(4,754		)
Payment of distributions to non-controlling unitholders	(19,501		)	(19,822		)
Payment of Dividends to Preferred Stock	(2,959		)	—
Purchase of Treasury Stock	—			(1,285		)
Net cash (used in) provided by financing activities	(6,127		)	24,969
Increase (decrease) in Cash and cash equivalents	6,283			(4,915		)
Cash and cash equivalents—beginning of period	29,419			18,960
Cash and cash equivalents—end of period	$	35,702		$	14,045
Supplemental Disclosure of Cash Flow Information:
Non-cash items:
Property and equipment purchase accrual	$	(123	)	$	50
Cash paid during the period for:
Interest	$	3,884		$	1,395
Taxes	$	5,399		$	7,232

SPARK ENERGY, INC.
OPERATING SEGMENT RESULTS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2018 AND 2017
(in thousands, except per unit operating data)
(unaudited)

	Three Months Ended June 30,					Six Months Ended June 30,
	2018		2017			2018			2017
	(in thousands, except volume and per unit operating data)
Retail Electricity Segment
Total Revenues	$	209,446	$	131,908		430,346			$	265,602
Retail Cost of Revenues	151,953		102,079			401,500			210,923
Less: Net gains (losses) on non-trading derivatives, net of cash settlements	24,852		(5,034		)	(23,515		)	(16,955		)
Retail Gross Margin⁽¹⁾— Electricity	$	32,642	$	34,863		$	52,361		$	71,634
Volumes — Electricity (MWhs)	2,100,007		1,379,051			4,352,031			2,764,165
Retail Gross Margin⁽²⁾— Electricity per MWh	$	15.54	$	25.28		$	12.03		$	25.92

Retail Natural Gas Segment
Total Revenues	$	22,804	$	19,528		$	88,593		$	82,141
Retail Cost of Revenues	10,716		12,558			51,045			49,475
Less: Net Asset Optimization Revenues (Expenses)	763		(168		)	3,450			(361		)
Less: Net gains (losses) on non-trading derivatives, net of cash settlements	542		(1,148		)	(2,685		)	(3,088		)
Retail Gross Margin ⁽¹⁾ — Gas	$	10,783	$	8,286		$	36,783		$	36,115
Volumes — Gas (MMBtus)	2,840,721		2,629,087			10,517,802			10,848,366
Retail Gross Margin ⁽²⁾— Gas per MMBtu	$	3.80	$	3.15		$	3.50		$	3.33

(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 “How We Evaluate Our Operations” 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

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.

Retail Gross Margin

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

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)

	Three Months Ended June 30,					Six Months Ended June 30,
(in thousands)	2018		2017			2018			2017
Reconciliation of Adjusted EBITDA to Net Income:
Net income (loss)	$	23,927	$	4,671		$	(17,904	)	$	15,803
Depreciation and amortization	12,861		9,656			25,880			18,926
Interest expense	2,316		2,452			4,561			5,897
Income tax expense (benefit)	3,251		409			(3,216		)	2,814
EBITDA	42,355		17,188			9,321			43,440
Less:
Net, Gain (losses) on derivative instruments	17,054		(9,677		)	(19,488		)	(31,473		)
Net, Cash settlements on derivative instruments	8,792		3,996			(6,745		)	11,351
Customer acquisition costs	1,980		4,384			6,254			12,074
Plus:
Non-cash compensation expense	1,555		1,538			2,686			2,905
Adjusted EBITDA	$	16,084	$	20,023		$	31,986		$	54,393

	Three Months Ended June 30,						Six Months Ended June 30,
(in thousands)	2018			2017			2018			2017
Reconciliation of Adjusted EBITDA to net cash provided by operating activities:
Net cash provided by operating activities	$	45,950		$	22,331		$	36,410		$	45,625
Amortization of deferred financing costs	(319		)	(283		)	(614		)	(531		)
Allowance for doubtful accounts and bad debt expense	(3,302		)	(563		)	(5,725		)	(919		)
Interest expense	2,316			2,452			4,561			5,897
Income tax expense (benefit)	3,251			409			(3,216		)	2,814
Changes in operating working capital
Accounts receivable, prepaids, current assets	(38,516		)	(19,159		)	(25,888		)	(21,541		)
Inventory	1,377			3,012			(2,693		)	(310		)
Accounts payable and accrued liabilities	7,618			7,895			23,934			20,971
Other	(2,291		)	3,929			5,217			2,387
Adjusted EBITDA	$	16,084		$	20,023		$	31,986		$	54,393
Cash Flow Data:
Cash flows provided by operating activities	$	45,950		$	22,331		$	36,410		$	45,625
Cash flows used in investing activities	$	(8,205	)	$	(75,397	)	$	(24,000	)	$	(75,509	)
Cash flows (used in) provided by financing activities	$	(23,108	)	$	42,162		$	(6,127	)	$	24,969

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)

	Three Months Ended June 30,					Six Months Ended June 30,
(in thousands)	2018		2017			2018			2017
Reconciliation of Retail Gross Margin to Operating Income (loss):
Operating income (loss)	$	28,941	$	7,797		$	(17,313	)	$	24,580
Depreciation and amortization	12,861		9,656			25,880			18,926
General and administrative	27,780		19,346			57,827			43,839
Less:
Net asset optimization revenues (expenses)	763		(168		)	3,450			(361		)
Net, gains (losses) on non-trading derivative instruments	16,601		(10,202		)	(20,111		)	(31,578		)
Net, Cash settlements on non-trading derivative instruments	8,793		4,020			(6,089		)	11,535
Retail Gross Margin	$	43,425	$	43,149		$	89,144		$	107,749
Retail Gross Margin – Retail Electricity Segment	$	32,642	$	34,863		$	52,361		$	71,634
Retail Gross Margin – Retail Natural Gas Segment	$	10,783	$	8,286		$	36,783		$	36,115

Contact: Spark Energy, Inc.

Investors:

Christian Hettick, 832-200-3727

Media:

Kira Jordan, 832-255-7302

Source: Spark Energy, Inc.