Press Releases – Page 13

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

Posted on July 19, 2018October 19, 2021 by Kira Jordan

HOUSTON, July 19, 2018 (GLOBE NEWSWIRE) — Spark Energy, Inc. (NASDAQ:SPKE), an independent retail energy services company (“Spark” or the “Company”), announced today that its Board of Directors has declared a quarterly cash dividend for the second 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 second quarter dividend will be paid on September 13, 2018 to holders of record of Spark’s Class A Common Stock on August 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 October 15, 2018 to holders of record of Spark’s Series A Preferred Stock on October 1, 2018.

Conference Call and Webcast

The company has also announced today that it plans to present its second quarter 2018 financial results in a conference call and webcast on Friday, August 3, 2018 at 10:00 AM Central (11:00 AM Eastern).

A live webcast of the conference call can be accessed from the Events & Presentations page of the Spark Energy Investor Relations website at ir.sparkenergy.com/events-and-presentations. An archived replay of the webcast will be available for twelve months following the live presentation.

About Spark Energy, Inc.

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

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

Contact: Spark Energy, Inc.

Investors:
Christian Hettick, 832-200-3727

Media:
Kira Jordan, 832-255-7302

Source: Spark Energy, Inc.

Spark Energy, Inc. Reports First Quarter 2018 Financial Results

Posted on May 9, 2018October 19, 2021 by Kira Jordan

HOUSTON, May 09, 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 March 31, 2018.

Key Highlights

Achieved $15.9 million in Adjusted EBITDA, $45.7 million in Retail Gross Margin, and a $(41.8) million Net Loss for the first quarter
Total RCE count increased 1% to a record 1,055,000 as of March 31, 2018
Average monthly attrition of 4.2% for the first quarter
Closed on two acquisitions, adding approximately 80,000 RCEs
Continue to simplify, streamline, and optimize the organization
Expanded the senior credit facility to $200.0 million in commitments
Issued two million shares of Series A Preferred Stock for net proceeds of approximately $48.9 million

“Since the start of the year, we closed on two acquisitions, completed the integration of Verde Energy, implemented additional integration and cost-reduction initiatives, and further increased our liquidity,” said Nathan Kroeker, Spark Energy’s President and Chief Executive Officer. “That said, first quarter results were tempered by an unexpected burst of cold weather in early January that adversely affected Spark and our entire industry. This prolonged cold weather negatively impacted our financial results, especially compared to last year, when warmer-than-normal weather resulted in very strong unit margins for the winter months.

“Looking forward to the remainder of the year, we will continue to execute on our synergy projects to achieve further economies of scale. We intend to remain cost-effective with our organic acquisitions, and we will continue to evaluate additional acquisition opportunities while maintaining discipline with respect to purchase prices and valuation. On balance, we still anticipate that full-year Adjusted EBITDA for 2018 should be similar to that of 2017.”

Summary First Quarter 2018 Financial Results

For the quarter ended March 31, 2018, Spark reported Adjusted EBITDA of $15.9 million compared to Adjusted EBITDA of $34.4 million for the quarter ended March 31, 2017. The Company attributes this decrease of $18.5 million primarily to unexpected extreme cold weather patterns that raised short-term commodity prices in January.

For the quarter ended March 31, 2018, Spark reported Retail Gross Margin of $45.7 million compared to Retail Gross Margin of $64.6 million for the quarter ended March 31, 2017. Spark attributes this decrease of $18.9 million primarily to unexpected extreme cold weather patterns that raised short-term commodity prices in January.

Net loss for the quarter ended March 31, 2018, was $(41.8) million compared to net income of $11.1 million for the quarter ended March 31, 2017, driven by higher non-cash mark-to-market losses.

Strategic Update

As previously announced, the termination of the Verde earnout agreement on January 15, 2018 has allowed Spark to integrate Verde’s operations on an accelerated basis. In addition, the Company expects the reintegration of Retailco Services into its operations, effective April 1, 2018, will allow it to realize synergies and cost reductions as early as the second quarter. Finally, Spark’s internal brand consolidation and cost-cutting measures should also begin impacting 2018 results in the second quarter.

During the quarter, Spark increased the commitments on its credit facility to $200.0 million and issued an additional $48.9 million of its Series A Preferred Stock.

Liquidity and Capital Resources

($ in thousands)	March 31, 2018
Cash and cash equivalents	$	21,065
Senior Credit Facility Availability ⁽¹⁾	43,811
Subordinated Debt Availability ⁽²⁾	25,000
Total Liquidity	$	89,876

(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 June 14, 2018, and $0.546875 per share of Series A Preferred Stock payable on July 16, 2018.

Conference Call and Webcast

Spark will host a conference call to discuss first quarter 2018 results on Thursday, May 10, 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

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 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 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 MARCH 31, 2018 AND DECEMBER 31, 2017
(in thousands)
(unaudited)

	March 31, 2018			December 31, 2017
Assets
Current assets:
Cash and cash equivalents	$	21,065		$	29,419
Accounts receivable, net of allowance for doubtful accounts of $4.4 million and $4.0 million as of March 31, 2018 and December 31, 2017, respectively		152,454			158,814
Accounts receivable—affiliates		3,063			3,661
Inventory		400			4,470
Fair value of derivative assets		7,965			31,191
Customer acquisition costs, net		20,181			22,123
Customer relationships, net		20,878			18,653
Prepaid assets		3,809			1,028
Deposits		28,763			7,701
Other current assets		22,001			19,678
Total current assets		280,579			296,738
Property and equipment, net		7,699			8,275
Fair value of derivative assets		262			3,309
Customer acquisition costs, net		6,698			6,949
Customer relationships, net		35,074			34,839
Deferred tax assets		30,734			24,185
Goodwill		120,154			120,154
Other assets		11,452			11,500
Total assets	$	492,652		$	505,949
Liabilities, Series A Preferred Stock and Stockholders’ Equity
Current liabilities:
Accounts payable	$	61,687		$	77,510
Accounts payable—affiliates		4,050			4,622
Accrued liabilities		40,259			33,679
Fair value of derivative liabilities		12,347			1,637
Current portion of Senior Credit Facility		—			7,500
Current payable pursuant to tax receivable agreement—affiliates		5,937			5,937
Current contingent consideration for acquisitions		3,043			4,024
Other current liabilities		2,484			2,675
Current portion of note payable		11,332			13,443
Total current liabilities		141,139			151,027
Long-term liabilities:
Fair value of derivative liabilities		11,038			492
Payable pursuant to tax receivable agreement—affiliates		26,355			26,355
Long-term portion of Senior Credit Facility		106,500			117,750
Contingent consideration for acquisitions		—			626
Other long-term liabilities		—			172
Long-term portion of note payable		5,900			7,051
Total liabilities	$	290,932		$	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 March 31, 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, 13,237,981 issued, and 13,138,535 outstanding at March 31, 2018 and 13,235,082 issued and 13,135,636 outstanding at December 31, 2017		132			132
Class B common stock, par value $0.01 per share, 60,000,000 shares authorized, 21,485,126 issued and outstanding at March 31, 2018 and December 31, 2017		216			216
Additional paid-in capital		27,717			26,914
Accumulated other comprehensive loss		(43	)		(11	)
Retained earnings		(5,726	)		11,008
Treasury stock, at cost, 99,446 shares at March 31, 2018 and December 31, 2017		(2,011	)		(2,011	)
Total stockholders’ equity		20,285			36,248
Non-controlling interest in Spark HoldCo, LLC		90,677			125,055
Total equity		110,962			161,303
Total liabilities, Series A Preferred Stock and stockholders’ equity	$	492,652		$	505,949

(1) Outstanding shares of common stock reflect the two-for-one stock split, which took effect on June 16, 2017. See Note 5 “Equity” for further discussion.
(2) See Note 5 “Equity” 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 MONTHS ENDED MARCH 31, 2018 AND 2017
(in thousands)
(unaudited)

	Three Months Ended March 31,
		2018			2017 ⁽¹⁾
Revenues:
Retail revenues	$	284,001			$	196,500
Net asset optimization revenues/(expense) ⁽²⁾		2,687				(193	)
Total Revenues		286,688				196,307
Operating Expenses:
Retail cost of revenues		289,876				145,761
General and administrative ⁽³⁾		30,047				24,493
Depreciation and amortization		13,019				9,270
Total Operating Expenses		332,942				179,524
Operating (loss) income		(46,254		)		16,783
Other (expense)/income:
Interest expense		(2,245		)		(3,445	)
Interest and other income		201				199
Total other expenses		(2,044		)		(3,246	)
(Loss) Income before income tax (benefit) expense		(48,298		)		13,537
Income tax (benefit)/expense		(6,467		)		2,405
Net (loss) income		(41,831		)	$	11,132
Less: Net (loss) income attributable to non-controlling interests		(29,505		)		8,862
Net (loss) income attributable to Spark Energy, Inc. stockholders	$		(12,326	)	$	2,270
Less: Dividend on Series A preferred stock		2,027				183
Net (loss) income attributable to stockholders of Class A common stock	$		(14,353	)	$	2,087
Other comprehensive loss, net of tax:
Currency translation loss	$	(83		)	$	(49	)
Other comprehensive loss		(83		)		(49	)
Comprehensive (loss) income	$	(41,914		)	$	11,083
Less: Comprehensive (loss) income attributable to non-controlling interests		(29,556		)		8,831
Comprehensive (loss) income attributable to Spark Energy, Inc. stockholders	$	(12,358		)	$	2,252

(1)   Financial information has been recast to include results attributable to the acquisition of Perigee Energy, LLC by an affiliate on February 3, 2017. See Notes 2 and 4, “Basis of Presentation and Summary of Significant Accounting Policies” and “Acquisitions,” respectively, for further discussion.
(2)   Net asset optimization revenues (expenses) includes asset optimization revenues—affiliates of $648 and $0 for the three months ended March 31, 2018 and 2017, respectively, and asset optimization revenues—affiliates cost of revenues of $12 and $0 for the three months ended March 31, 2018 and 2017, respectively.
(3)   General and administrative expense includes general and administrative expense—affiliates of $6,400 and $7,300 for the three months ended March 31, 2018 and 2017, respectively.

SPARK ENERGY, INC.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE THREE MONTHS ENDED MARCH 31, 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	—	—	—			—		—	—			—				817			—				817			—			817
Restricted stock unit vesting	3	—	—			—		—	—			—				(14	)		—				(14	)		—			(14	)
Consolidated net loss	—	—	—			—		—	—			—				—			(12,326		)		(12,326	)		(29,505	)		(41,831	)
Foreign currency translation adjustment for equity method investee	—	—	—			—		—	—			(32		)		—			—				(32	)		(51	)		(83	)
Distributions paid to non-controlling unit holders	—	—	—			—		—	—			—				—			—				—			(4,822	)		(4,822	)
Dividends paid to Class A common stockholders	—	—	—			—		—	—			—				—			(2,381		)		(2,381	)		—			(2,381	)
Dividends to Preferred Stock	—	—	—			—		—	—			—				—			(2,027		)		(2,027	)		—			(2,027	)
Balance at March 31, 2018	13,238	21,485	(99	)	$	132	$	216	$	(2,011	)	$	(43	)	$	27,717		$		(5,726	)	$	20,285		$	90,677		$	110,962

SPARK ENERGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2018 AND 2017
(in thousands)
(unaudited)

	Three Months Ended March 31,
	2018			2017 ⁽¹⁾
Cash flows from operating activities:
Net (loss) income	$	(41,831	)	$	11,132
Adjustments to reconcile net income to net cash flows provided by operating activities:
Depreciation and amortization expense	11,632			8,204
Deferred income taxes	(6,549		)	(87		)
Stock based compensation	1,131			1,367
Amortization of deferred financing costs	295			248
Change in Fair Value of Earnout liabilities	—			711
Accretion on fair value of Earnout liabilities	��			1,226
Bad debt expense	2,423			356
Loss on derivatives, net	36,542			21,796
Current period cash settlements on derivatives, net	16,442			(6,178		)
Accretion of discount to convertible subordinated notes to affiliate	—			1,004
Payment of the Major Energy Companies Earnout	—			(1,104		)
Other	(248		)	6
Changes in assets and liabilities:
Decrease in accounts receivable	9,737			3,738
Decrease (Increase) in accounts receivable—affiliates	354			(55		)
Decrease in inventory	4,070			3,322
Increase in customer acquisition costs	(4,274		)	(7,690		)
Increase in prepaid and other current assets	(21,465		)	(1,302		)
Increase in other assets	(58		)	—
Decrease in accounts payable and accrued liabilities	(10,345		)	(8,979		)
Decrease in accounts payable—affiliates	(572		)	(1,684		)
Decrease in other current liabilities	(6,653		)	(2,413		)
Decrease in other non-current liabilities	(171		)	(324		)
Net cash (used in) provided by operating activities	(9,540		)	23,294
Cash flows from investing activities:
Purchases of property and equipment	(754		)	(112		)
Acquisition of HIKO Energy	(15,041		)	—
Net cash used in investing activities	(15,795		)	(112		)
Cash flows from financing activities:
Proceeds from issuance of Series A Preferred Stock, net of issuance costs paid	48,490			38,607
Borrowings on notes payable	83,800			5,625
Payments on notes payable	(102,550		)	(46,993		)
Payment of the Major Energy Companies Earnout	(1,607		)	(6,299		)
Payment of the Provider Companies Earnout and installment consideration	—			(2,097		)
Payments on the Verde promissory note	(3,261		)	—
Proceeds from disgorgement of stockholders short-swing profits	244			666
Payment of dividends to Class A common stockholders	(2,381		)	(2,355		)
Payment of distributions to non-controlling unitholders	(4,822		)	(4,347		)
Payment of Dividends to Preferred Stock	(932		)	—
Net cash provided by (used in) financing activities	16,981			(17,193		)
(Decrease) increase in Cash and cash equivalents	(8,354		)	5,989
Cash and cash equivalents—beginning of period	29,419			18,960
Cash and cash equivalents—end of period	$	21,065		$	24,949
Supplemental Disclosure of Cash Flow Information:
Non-cash items:
Property and equipment purchase accrual	$	180		$	76
Cash paid during the period for:
Interest	$	1,854		$	888
Taxes	$	1,268		$	118

(1) Financial information has been recast to include results attributable to the acquisition of Perigee Energy, LLC by an affiliate on February 3, 2017.

SPARK ENERGY, INC.
OPERATING SEGMENT RESULTS
FOR THE THREE MONTHS ENDED March 31, 2018 AND 2017
(in thousands, except per unit operating data)
(unaudited)

	Three Months Ended March 31,
	2018			2017 ⁽¹⁾
	(in thousands, except volume and per unit operating data)
Retail Electricity Segment
Total Revenues	220,899			133,694
Retail Cost of Revenues	249,547			108,844
Less: Net Losses on non-trading derivatives, net of cash settlements	(48,367		)	(11,921		)
Retail Gross Margin — Electricity	19,719			36,771
Volumes — Electricity (MWhs)	2,252,024			1,385,114
Retail Gross Margin — Electricity per MWh	8.76			26.55

Retail Natural Gas Segment
Total Revenues	$	65,789		$	62,613
Retail Cost of Revenues	40,329			36,917
Less: Net Asset Optimization Revenues (Expenses)	2,687			(193		)
Less: Net Losses on non-trading derivatives, net of cash settlements	(3,227		)	(1,940		)
Retail Gross Margin — Gas	$	26,000		$	27,829
Volumes — Gas (MMBtus)	7,677,082			8,219,279
Retail Gross Margin — Gas per MMBtu	$	3.39		$	3.39

(1) Financial information has been recast to include results attributable to the acquisition of Perigee Energy, LLC by an affiliate on February 3, 2017.

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)

	Three Months Ended March 31,
(in thousands)		2018			2017⁽¹⁾
Reconciliation of Adjusted EBITDA to Net Income:
Net (loss) income	$		(41,831	)	$		11,132
Depreciation and amortization		13,019				9,270
Interest expense		2,245				3,445
Income tax (benefit) expense		(6,467		)		2,405
EBITDA		(33,034		)		26,252
Less:
Net, losses on derivative instruments		(36,542		)		(21,796		)
Net, Cash settlements on derivative instruments		(15,537		)		7,355
Customer acquisition costs		4,274				7,690
Plus:
Non-cash compensation expense		1,131				1,367
Adjusted EBITDA	$	15,902			$	34,370

(1) Financial information has been recast to include results attributable to the acquisition of Perigee Energy, LLC by an affiliate on February 3, 2017.

	Three Months Ended March 31,
(in thousands)	2018			2017⁽¹⁾
Reconciliation of Adjusted EBITDA to net cash provided by operating activities:
Net cash (used in) provided by operating activities	$	(9,540	)	$	23,294
Amortization of deferred financing costs	(295		)	(248		)
Allowance for doubtful accounts and bad debt expense	(2,423		)	(356		)
Interest expense	2,245			3,445
Income tax (benefit) expense	(6,467		)	2,405
Changes in operating working capital
Accounts receivable, prepaids, current assets	11,374			(2,381		)
Inventory	(4,070		)	(3,322		)
Accounts payable and accrued liabilities	17,570			13,076
Other	7,508			(1,543		)
Adjusted EBITDA	$	15,902		$	34,370
Cash Flow Data:
Cash flows (used in) provided by operating activities	$	(9,540	)	$	23,294
Cash flows used in investing activities	(15,795		)	(112		)
Cash flows provided by (used in) financing activities	16,981			(17,193		)

(1) Financial information has been recast to include results attributable to the acquisition of Perigee Energy, LLC by an affiliate on February 3, 2017.

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 March 31,
(in thousands)	2018			2017 ⁽¹⁾
Reconciliation of Retail Gross Margin to Operating Income:
Operating (loss) income	$	(46,254	)	$	16,783
Depreciation and amortization	13,019			9,270
General and administrative	30,047			24,493
Less:
Net asset optimization revenues (expenses)	2,687			(193		)
Net, Losses on non-trading derivative instruments	(36,712		)	(21,376		)
Net, Cash settlements on non-trading derivative instruments	(14,882		)	7,515
Retail Gross Margin	$	45,719		$	64,600
Retail Gross Margin – Retail Electricity Segment	$	19,719		$	36,771
Retail Gross Margin – Retail Natural Gas Segment	$	26,000		$	27,829

(1) Financial information has been recast to include results attributable to the acquisition of Perigee Energy, LLC by an affiliate on February 3, 2017.

Contact: Spark Energy, Inc.

Investors:

Christian Hettick, 832-200-3727

Media:

Kira Jordan, 832-255-7302

Source: Spark Energy, Inc.

Spark Energy, Inc. to Present First Quarter 2018 Financial Results on Thursday, May 10, 2018

Posted on April 23, 2018October 19, 2021 by Kira Jordan

HOUSTON, April 23, 2018 (GLOBE NEWSWIRE) — Spark Energy, Inc. (NASDAQ:SPKE), an independent retail energy services company, (“Spark” or the “Company”), announced today that it plans to present its First Quarter 2018 financial results in a conference call and webcast on Thursday, May 10, 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. Announces Dividends on Common and Preferred Stock

Posted on April 19, 2018October 19, 2021 by Kira Jordan

HOUSTON, April 19, 2018 (GLOBE NEWSWIRE) — Spark Energy, Inc. (NASDAQ:SPKE), an independent retail energy services company (“Spark” or the “Company”), announced today that its Board of Directors has declared a quarterly cash dividend for the first 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 first quarter dividend will be paid on June 14, 2018 to holders of record of Spark’s Class A Common Stock on May 31, 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 July 16, 2018 to holders of record of Spark’s Series A Preferred Stock on July 2, 2018.

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 Two Acquisitions, Engagement of Financial Advisor, and Reports Full Year and Fourth Quarter 2017 Financial Results

Posted on March 8, 2018October 19, 2021 by Kira Jordan

HOUSTON, March 08, 2018 (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, 2017.

Key Business Highlights

Achieved record Net Income, Retail Gross Margin and Adjusted EBITDA for full year 2017
Recorded $102.9 million in Adjusted EBITDA, $224.5 million in Retail Gross Margin, and $76.3 million in Net Income for the year ended 2017, representing year-over-year increases of 26%, 23%, and 16%, respectively
Recorded $28.9 million in Adjusted EBITDA, $66.2 million in Retail Gross Margin, and $47.5 million in Net Income for the fourth quarter, representing year-over-year increases of 17%, 13%, and 97%, respectively
Total RCE count increased 35% year-over-year to a record 1,042,000 as of December 31, 2017
Overall attrition of 4.3% for the year ended December 31, 2017
Closed three acquisitions in 2017
Two new acquisitions announced thus far in 2018 with a total of approximately 80,000 RCEs
Expanded the senior credit facility to $200.0 million in commitments
Continue to simplify, streamline, and optimize the organization
Engaged Morgan Stanley as financial advisor to evaluate strategic alternatives

“We are extremely proud to have delivered another year of record financial results despite unfavorable weather throughout the year,” said Nathan Kroeker, Spark Energy’s President and Chief Executive Officer. “We saw a mild summer and several severe weather events, including a devastating hurricane, but Spark was able to increase RCE count and improve both top and bottom line financial performance.

“During 2017, we completed three acquisitions, highlighted by the acquisition of Verde in July. We put a new credit facility in place and have added six new banks and a total of $185.0 million in commitments, which has since grown to $200.0 million in early 2018. In addition, we recently completed a $50.0 million follow-on offering of our Series A Preferred Stock. We launched a company-wide initiative to further integrate acquisitions and realize significant cost-to-serve synergies, including the early termination of the Verde earnout.

“As we move through 2018, we continue to strategically add customers and pursue additional opportunities to further streamline our business model. In March 2018, we agreed to acquire a small competitor in the Northeast as well as a book of customers from an affiliate of our sponsor. We expect both to be immediately accretive to Adjusted EBITDA. Our sponsor also agreed to reintegrate Retailco Services back into Spark, which will simplify our structure and result in immediate and substantial cash savings to the Company.”

“Finally, our Board of Directors has engaged Morgan Stanley as a financial advisor to explore strategic alternatives. We believe that our stock price has not reflected the strong growth in financial performance we have shown over the past three and a half years as a public company, and look forward to examining additional opportunities to unlock shareholder value.”

Summary Fourth Quarter 2017 Financial Results

For the quarter ended December 31, 2017, Spark reported Adjusted EBITDA of $28.9 million compared to Adjusted EBITDA of $24.8 million for the quarter ended December 31, 2016. This increase of $4.1 million is primarily attributable to additional volumes from the Verde and Perigee acquisitions.

For the quarter ended December 31, 2017, Spark reported Retail Gross Margin of $66.2 million compared to Retail Gross Margin of $58.8 million for the quarter ended December 31, 2016. This increase of $7.4 million is primarily attributable to the increased volumes of retail electricity following the Verde and Perigee acquisitions.

Net income for the quarter ended December 31, 2017, was $47.5 million compared to net income of $24.1 million for the quarter ended December 31, 2016, primarily due to higher retail gross margin and the revaluation of the Tax Receivable Agreement as a result of the new tax legislation.

Summary Full Year 2017 Financial Results

For the year ended December 31, 2017, Spark reported Adjusted EBITDA of $102.9 million compared to Adjusted EBITDA of $81.9 million for the year ended December 31, 2016. This increase of $21.0 million is primarily attributable to additional volumes from the Verde and Perigee acquisitions and a full year of the Provider and Major acquisitions, partially offset by milder-than-normal weather.

For the year ended December 31, 2017, Spark reported Retail Gross Margin of $224.5 million compared to Retail Gross Margin of $182.4 million for the year ended December 31, 2016. This increase of $42.1 million is primarily attributable to additional volumes from the Verde and Perigee acquisitions and a full year of the Provider and Major acquisitions, partially offset by milder-than-normal weather.

Net income for the year ended December 31, 2017, was $76.3 million compared to net income of $65.7 million for the year ended December 31, 2016, primarily due to higher volumes from the acquisitions and the revaluation of the Tax Receivable Agreement as a result of the new tax legislation.

Strategic Update

On March 1, 2018, Spark acquired a retail electric provider with approximately 29,000 RCEs serving electricity and natural gas customers in the Northeast and Midwest. The transaction is immediately accretive to 2018 earnings and requires minimal integration.

On March 7, 2018, Spark entered into an agreement with National Gas & Electric, LLC, (“NG&E”), an affiliate of Retailco, LLC, the Company’s majority owner, for the acquisition of approximately 50,000 RCEs for approximately $12.5 million in cash. The transaction, which was reviewed and approved by a special committee made up of independent members of the Company’s board of directors, is scheduled to close in April of this year.

On March 7, 2018, Spark agreed to reintegrate the employees and operations of Retailco Services, LLC (“Retailco”), which is wholly owned by W. Keith Maxwell III. Retailco was formed in 2015 to provide a variety of back office functions, including customer operations and information technology services, at a lower cost than Spark was realizing at the time. Retailco has been able to reduce the cost per customer over the past two years, and Spark expects to realize additional savings by reintegrating the two companies. This reintegration, which was reviewed and approved by a special committee of independent directors of the Company’s board of directors, is scheduled to occur on April 1, 2018, and is expected to be accretive to 2018 earnings. Mr. Maxwell will receive no consideration for this transaction.

As previously announced, Spark terminated the Verde Energy earnout agreement on January 12, 2018. This transaction allowed Spark to begin integration of Verde’s operations sooner than originally anticipated, which the Company believes should result in significant operational costs savings.

As mentioned above, the Board of Directors of Spark has retained Morgan Stanley as a financial advisor to explore strategic alternatives.

Outlook

Spark expects full year 2018 Adjusted EBITDA to be similar to that of 2017. The Company will continue to pursue accretive acquisitions, integrate recent acquisitions, drive operational performance improvements, and look to expand its geographic footprint.

Liquidity and Capital Resources

($ in thousands)	December 31, 2017
Cash and cash equivalents	$	29,419
Senior Credit Facility Availability ⁽¹⁾	12,501
Subordinated Debt Availability ⁽²⁾	$	25,000
Total Liquidity	$	66,920

(1) Subject to Senior Credit Facility borrowing base and covenant restrictions.
(2) The availability of the Subordinated Debt Facility provided by Spark’s founder is dependent on his financial position and liquidity. The Company may use the Subordinated Facility from time to time to enhance short-term liquidity but does not view the Subordinated Debt Facility as a material source of liquidity.

Since the beginning of 2018, Spark has increased the commitments on its credit facility by $15.0 million to $200.0 million. As previously mentioned, Spark also raised an additional $48.9 million in net proceeds in an offering of Series A Preferred Stock in January 2018.

Dividend

Spark’s Board of Directors declared quarterly dividends of $0.18125 per share of Class A common stock payable on March 16, 2018, and $0.546875 per share of Series A Preferred Stock payable on April 16, 2018. Investors are reminded that on June 16, 2017, Spark completed a two-for-one stock split by means of a stock dividend.

Conference Call and Webcast

Spark will host a conference call to discuss year end and fourth quarter 2017 results on Friday, March 9, 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;
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 DECEMBER 31, 2017 AND DECEMBER 31, 2016 (in thousands) (unaudited)

	December 31, 2017			December 31, 2016
Assets
Current assets:
Cash and cash equivalents	$	29,419		$	18,960
Accounts receivable, net of allowance for doubtful accounts of $4.0 million and $2.3 million as of December 31, 2017 and 2016, respectively		158,814			112,491
Accounts receivable—affiliates		3,661			2,624
Inventory		4,470			3,752
Fair value of derivative assets		31,191			8,344
Customer acquisition costs, net		22,123			18,834
Customer relationships, net		18,653			12,113
Prepaid assets		1,028			1,361
Deposits		7,701			7,329
Other current assets		19,678			12,175
Total current assets		296,738			197,983
Property and equipment, net		8,275			4,706
Fair value of derivative assets		3,309			3,083
Customer acquisition costs, net		6,949			6,134
Customer relationships, net		34,839			21,410
Deferred tax assets		24,185			54,109
Goodwill		120,154			79,147
Other assets		11,500			8,658
Total Assets		505,949			375,230

Liabilities, Series A Preferred Stock and Stockholders’ Equity
Current liabilities:
Accounts payable	$	77,510		$	52,309
Accounts payable—affiliates		4,622			3,775
Accrued liabilities		33,679			36,619
Fair value of derivative liabilities		1,637			680
Current portion of Senior Credit Facility		7,500			51,287
Current payable pursuant to tax receivable agreement—affiliates		5,937			—
Current contingent consideration for acquisitions		4,024			11,827
Current portion of note payable		13,443			15,501
Convertible subordinated notes to affiliates		—			6,582
Other current liabilities		2,675			5,476
Total current liabilities		151,027			184,056
Long-term liabilities:
Fair value of derivative liabilities		492			68
Payable pursuant to tax receivable agreement—affiliates		26,355			49,886
Long-term portion of Senior Credit Facility		117,750			—
Subordinated debt—affiliate		—			5,000
Contingent consideration for acquisitions		626			10,826
Other long-term liabilities		172			1,658
Long-term portion of note payable		7,051			—
Total liabilities	$	303,473		$	251,494
Commitments and contingencies (Note 13)
Series A Preferred Stock, par value $0.01 per share, 20,000,000 shares authorized, 1,704,339 shares issued and outstanding at December 31, 2017 and zero shares issued and outstanding at December 31, 2016		41,173			—
Stockholders’ equity:
Common Stock ⁽¹⁾ :
Class A common stock, par value $0.01 per share, 120,000,000 shares authorized, 13,235,082 issued and 13,135,636 outstanding at December 31, 2017 and 12,993,118 issued and outstanding at December 31, 2016		132			130
Class B common stock, par value $0.01 per share, 60,000,000 shares authorized, 21,485,126 issued and outstanding at December 31, 2017 and 20,449,484 issued and outstanding at December 31, 2016		216			206
Additional paid-in capital ⁽¹⁾		26,914			25,272
Accumulated other comprehensive (loss)/income		(11	)		11
Retained earnings		11,008			4,711
Treasury stock, at cost, 99,446 shares at December 31, 2017 and zero shares at December 31, 2016		(2,011	)		—
Total stockholders’ equity		36,248			30,330
Non-controlling interest in Spark HoldCo, LLC		125,055			93,406
Total equity		161,303			123,736
Total liabilities, Series A Preferred Stock and stockholders’ equity	$	505,949		$	375,230

(1) Outstanding shares of common stock, additional paid-in capital and non-controlling interest reflect the two-for-one stock split, which took effect on June 16, 2017. See Note 4 “Equity” for further discussion.
(2) See Note 4 “Equity” for disclosure of our variable interest entity in Spark HoldCo, LLC.


SPARK ENERGY, INC. CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2017, 2016 and 2015 (in thousands) (unaudited)

	Year Ended December 31,
	2017 ⁽¹⁾				2016 ⁽²⁾				2015 ⁽³⁾
Revenues:
Retail revenues		798,772				547,283			356,659
Net asset optimization (expense)/revenues ⁽⁴⁾		(717		)		(586		)	1,494
Total Revenues		798,055				546,697			358,153
Operating Expenses:
Retail cost of revenues ⁽⁵⁾		552,167				344,944			241,188
General and administrative ⁽⁶⁾		101,127				84,964			61,682
Depreciation and amortization		42,341				32,788			25,378
Total Operating Expenses		695,635				462,696			328,248
Operating income		102,420				84,001			29,905
Other (expense)/income:
Interest expense		(11,134		)		(8,859		)	(2,280		)
Change in Tax Receivable Agreement liability		22,267				—			—
Interest and other income		256				957			324
Total other expenses		11,389				(7,902		)	(1,956		)
Income before income tax expense		113,809				76,099			27,949
Income tax expense		37,528				10,426			1,974
Net income	$	76,281			$	65,673			$	25,975
Less: Net income attributable to non-controlling interests		57,427				51,229			22,110
Net income attributable to Spark Energy, Inc. stockholders	$		18,854		$		14,444		$	3,865
Less: Dividend on Series A preferred stock		3,038				—			—
Net income attributable to stockholders of Class A common stock	$		15,816		$		14,444		$	3,865
Other comprehensive (loss) income, net of tax:
Currency translation (loss) gain	$		(59	)	$		41		$	—
Other comprehensive (loss) income		(59		)		41			—
Comprehensive income	$		76,222		$		65,714		$	25,975
Less: Comprehensive income attributable to non-controlling interests		57,390				51,259			22,110
Comprehensive income attributable to Spark Energy, Inc. stockholders	$		18,832		$		14,455		$	3,865

(1)   Financial information includes results attributable to the acquisition of Perigee Energy, LLC by an affiliate on February 3, 2017. See Notes 2 and 3 “Basis of Presentation and Summary of Significant Accounting Policies” and “Acquisitions,” respectively, for further discussion.
(2)   Financial information includes results attributable to the acquisition of Major Energy Companies from an affiliate on April 15, 2016. See Notes 2 and 3 “Basis of Presentation and Summary of Significant Accounting Policies” and “Acquisitions,” respectively, for further discussion.
(3)   Financial information includes results attributable to the acquisition of Oasis Power Holdings LLC from an affiliate on May 12, 2015. See Notes 2 and 3 “Basis of Presentation and Summary of Significant Accounting Policies” and “Acquisitions,” respectively, for further discussion.
(4)   Net asset optimization revenues includes asset optimization (expense)/revenues—affiliates of $1,334, $154 and $1,101 for the years ended December 31, 2017, 2016 and 2015, respectively, and asset optimization revenues—affiliates cost of revenues of $53, $1,633 and $11,285 for the years ended December 31, 2017, 2016 and 2015, respectively.
(5)   Retail cost of revenues includes retail cost of revenues—affiliates of $0, $9 and $17 for the years December 31, 2017, 2016 and 2015, respectively.
(6)   General and administrative includes general and administrative expense—affiliates of $24,700, $15,700 and $0 for the years ended December 31, 2017, 2016 and 2015, respectively.


SPARK ENERGY, INC. CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2017, 2016 and 2015 (in thousands) (unaudited)

	Issued Shares of Class A Common Stock ⁽¹⁾	Issued Shares of Class B Common Stock ⁽¹⁾		Treasury Stock		Class A Common Stock ⁽¹⁾		Class B Common Stock ⁽¹⁾			Treasury Stock			Accumulated Other Comprehensive Income (Loss)			Additional Paid-In Capital ⁽¹⁾			Retained Earnings (Deficit)			Total Stockholders’ Equity			Non-controlling Interest⁽¹⁾			Total Equity
Balance at 12/31/2014:	6,000	21,500		—		$	60	$	216		$	—		$	—		$	9,158		$	(775	)	$	8,659		$	15,458		$	24,117
Stock based compensation	—	—		—		—		—			—			—			2,165			—			2,165			—			2,165
Restricted stock unit vesting	238	—		—		2		—			—			—			185			—			187			—			187
Contribution from NuDevco	—	—		—		—		—			—			—			129			—			129			—			129
Consolidated net income ⁽²⁾	—	—		—		—		—			—			—			—			3,865			3,865			22,110			25,975
Beneficial conversion feature	—	—		—		—		—			—			—			789			—			789			—			789
Distributions paid to Class B non-controlling unit holders	—	—		—		—		—			—			—			—			—			—			(15,587		)	(15,587		)
Dividends paid to Class A common shareholders	—	—		—		—		—			—			—			—			(4,456		)	(4,456		)	—			(4,456		)
Balance at 12/31/2015:	6,238	21,500		—		$	62	$	216		$	—		$	—		$	12,426		$	(1,366	)	$	11,338		$	21,981		$	33,319
Stock based compensation	—	—		—		—		—			—						2,270			—			2,270			—			2,270
Restricted stock unit vesting	305	—		—		4		—			—			—			1,058			—			1,062			—			1,062
Excess tax benefit related to restricted stock vesting	—	—		—		—		—			—			—			186			—			186			—			186
Consolidated net income ⁽³⁾	—	—		—		—		—			—			—			—			14,444			14,444			51,229			65,673
Foreign currency translation adjustment for equity method investee	—	—		—		—		—			—			11			—			—			11			30			41
Beneficial conversion feature	—	—		—		—		—			—			—			243			—			243			—			243
Distributions paid to non-controlling unit holders	—	—		—		—		—			—			—			—			—			—			(34,931		)	(34,931		)
Net contribution of the Major Energy Companies	—	—		—		—		—			—			—			—			—			—			3,873			3,873
Dividends paid to Class A common stockholders	—	—		—		—		—			—			—			—			(8,367		)	(8,367		)	—			(8,367		)
Proceeds from disgorgement of stockholder short-swing profits	—	—		—		—		—			—			—			1,605			—			1,605			—			1,605
Tax impact from tax receivable agreement upon exchange of units of Spark HoldCo, LLC to shares of Class A Common Stock	—	—		—		—		—			—			—			4,768			—			4,768			—			4,768
Exchange of shares of Class B common stock to shares of Class A common stock	6,450	(6,450	)	—		64		(64		)	—			—			2,716			—			2,716			(2,716		)	—
Issuance of Class B Common Stock	—	5,400		—		—		54			—			—			—			—			54			53,940			53,994
Balance at 12/31/2016:	12,993	20,450		—		$	130	$	206		$	—		$	11		$	25,272		$	4,711		$	30,330		$	93,406		$	123,736
Stock based compensation	—	—		—		—		—			—			—			2,754			—			2,754			—			2,754
Restricted stock unit vesting	242	—		—		2		—			—			—			1,052			—			1,054			—			1,054
Consolidated net income ⁽⁴⁾	—	—		—		—		—			—			—			—			18,854			18,854			57,427			76,281
Foreign currency translation adjustment for equity method investee	—	—		—		—		—			—			(22		)	—			—			(22		)	(37		)	(59		)
Distributions paid to non-controlling unit holders	—	—		—		—		—			—			—			—			—			—			(33,800		)	(33,800		)
Net contribution by NG&E	—	—		—		—		—			—			—			—			—			—			274			274
Dividends paid to Class A common stockholders	—	—		—		—		—			—			—			—			(9,519		)	(9,519		)	—			(9,519		)
Dividends to Preferred Stock	—	—		—		—		—			—			—			—			(3,038		)	(3,038		)	—			(3,038		)
Proceeds from disgorgement of stockholder short-swing profits	—	—		—		—		—			—			—			708			—			708			—			708
Tax receivable agreement liability true-up	—	—		—		—		—			—			—			(2,872		)	—			(2,872		)	—			(2,872		)
Conversion of Convertible Subordinated Notes to Class B Common Stock	—	1,035		—		—		10			—			—			—			—			10			7,785			7,795
Treasury Stock	—	—		(99	)	—		—			(2,011		)	—			—			—			(2,011		)	—			(2,011		)
Balance at 12/31/2017:	13,235	21,485		(99	)	$	132	$	216		$	(2,011	)	$	(11	)	$	26,914		$	11,008		$	36,248		$	125,055		$	161,303

(1) Outstanding shares of common stock, additional paid-in capital and non-controlling interest have been retrospectively adjusted to reflect the two-for-one stock split, which took effect on June 16, 2017. See Note 4 “Equity” for further discussion.

(2) Financial information includes results attributable to the acquisition of Oasis Power Holdings LLC from an affiliate on May 12, 2015. See Notes 2 and 3 “Basis of Presentation and Summary of Significant Accounting Policies” and “Acquisitions,” respectively, for further discussion.

(3) Financial information includes results attributable to the acquisition of Major Energy Companies from an affiliate on April 15, 2016. See Notes 2 and 3 “Basis of Presentation and Summary of Significant Accounting Policies” and “Acquisitions,” respectively, for further discussion.

(4) Financial information has been recast to include results attributable to the acquisition of Perigee Energy, LLC by an affiliate on February 3, 2017. See Notes 2 and 3 “Basis of Presentation and Summary of Significant Accounting Policies” and “Acquisitions,” respectively, for further discussion.


SPARK ENERGY, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2017, 2016 AND 2015 (in thousands) (unaudited)

	Year Ended December 31,
	2017 ⁽¹⁾				2016 ⁽²⁾				2015⁽³⁾
Cash flows from operating activities:
Net income	$		76,281		$		65,673		$		25,975
Adjustments to reconcile net income to net cash flows provided by operating activities:
Depreciation and amortization expense		42,666				48,526				25,378
Deferred income taxes		28,584				3,382				1,340
Change in Tax Receivable Agreement liability		(22,267		)		—				—
Stock based compensation		5,058				5,242				3,181
Amortization of deferred financing costs		1,035				668				412
Change in fair value of Earnout liabilities		(7,898		)		(297		)		—
Accretion on fair value of Earnout liabilities		4,108				5,060				—
Excess tax benefit related to restricted stock vesting		179				—				—
Bad debt expense		6,550				1,261				7,908
(Gain) loss on derivatives, net		(5,008		)		(22,407		)		18,497
Current period cash settlements on derivatives, net		(19,598		)		(24,427		)		(23,948		)
Accretion of discount to convertible subordinated notes to affiliate		1,004				—				—
Other		(5		)		(407		)		(1,320		)
Changes in assets and liabilities:
Decrease in restricted cash		—				—				707
(Increase) decrease in accounts receivable		(32,361		)		(12,088		)		7,876
Increase in accounts receivable—affiliates		(1,459		)		(118		)		(608		)
(Increase) decrease in inventory		(718		)		542				4,544
Increase in customer acquisition costs		(25,874		)		(21,907		)		(19,869		)
Decrease in prepaid and other current assets		1,915				71				10,845
(Increase) decrease in other assets		(465		)		1,321				(1,101		)
Increase in customer relationships and trademarks		—				—				(2,776		)
Increase (decrease) in accounts payable and accrued liabilities		14,831				14,831				(13,307		)
Increase in accounts payable—affiliates		51				458				944
(Decrease) increase in other current liabilities		(1,210		)		2,364				(645		)
(Decrease) increase in other non-current liabilities		(1,487		)		45				1,898
Net cash provided by operating activities		63,912				67,793				45,931
Cash flows from investing activities:
Purchases of property and equipment		(1,704		)		(2,258		)		(1,766		)
Acquisitions of CenStar and Oasis		—				—				(39,847		)
Acquisition of Major Energy Companies and Provider Companies		(1,853		)		(31,641		)		—
Acquisitions of Perigee and other customers		(11,759		)		—				—
Acquisition of the Verde Companies		(69,538		)		—				—
Payment of CenStar Earnout		—				(1,343		)		—
Payment of the Major Energy Companies Earnout		(7,403		)		—				—
Payment of the Provider Companies Earnout		(5,500		)		—				—
Contribution to equity method investment		—				(1,102		)		(330		)
Net cash used in investing activities		(97,757		)		(36,344		)		(41,943		)
Cash flows from financing activities:
Proceeds from issuance of Series A Preferred Stock, net of issuance costs paid		40,241				—				—
Borrowings on notes payable		206,400				79,048				59,224
Payments on notes payable		(152,939		)		(66,652		)		(49,826		)
Issuance of convertible subordinated notes to affiliate		—				—				7,075
Restricted stock vesting		(3,091		)		(1,183		)		(432		)
Contributions from NuDevco		—				—				129
Proceeds from issuance of Class B common stock		—				13,995				—
Proceeds from disgorgement of stockholders short-swing profits		1,129				941				—
Excess tax benefit related to restricted stock vesting		—				185				—
Payment of dividends to Class A common shareholders		(9,519		)		(8,367		)		(4,456		)
Payment of distributions to non-controlling unitholders		(33,800		)		(34,930		)		(15,587		)
Payment of dividends to Preferred Stock		(2,106		)		—				—
Purchase of Treasury Stock		(2,011		)		—				—
Net cash provided by (used in) financing activities		44,304				(16,963		)		(3,873		)
Increase in Cash and cash equivalents and Restricted Cash		10,459				14,486				115
Cash and cash equivalents and Restricted cash—beginning of period		18,960				4,474				4,359
Cash and cash equivalents and Restricted cash—end of period		29,419				18,960				4,474
Supplemental Disclosure of Cash Flow Information:
Non-cash items:
Issuance of Class B common stock to affiliates for Major Energy Companies acquisition		—				40,000				—
Contingent consideration—earnout obligations incurred in connection with the Provider Companies and Major Energy Companies acquisitions		—				18,936				—
Assumption of legal liability in connection with the Major Energy Companies acquisition		—				5,000				—
Net contribution of the Major Energy Companies		—				3,873				—
Net contribution by NG&E in excess of cash		274				—				—
Installment consideration incurred in connection with the Provider Companies acquisition		—				1,890				—
Installment consideration incurred in connection with the Verde Companies acquisition and Verde Earnout Termination Note		19,994				—				—
Tax benefit from tax receivable agreement		(1,802		)		31,490				(64		)
Liability due to tax receivable agreement		4,674				(26,722		)		(55		)
Property and equipment purchase accrual		91				(32		)		45
CenStar Earnout accrual		—				—				500
Cash paid during the period for:
Interest	$	5,715			$	2,280			$	1,661
Taxes	$	11,205			$	7,326			$	216

(1) Financial information has been recast to include results attributable to the acquisition of Perigee Energy, LLC by an affiliate on February 3, 2017. See Notes 2 and 3 “Basis of Presentation and Summary of Significant Accounting Policies” and “Acquisitions,” respectively, for further discussion.
(2) Financial information has been recast to include results attributable to the acquisition of the Major Energy Companies from an affiliate on April 15, 2016. See Notes 2 and 3 “Basis of Presentation and Summary of Significant Accounting Policies” and “Acquisitions,” respectively, for further discussion.
(3) Financial information has been recast to include results attributable to the acquisition of Oasis Power Holdings LLC by an affiliate on May 12, 2015. See Note 2 “Basis of Presentation and Summary of Significant Accounting Policies” for further discussion.


SPARK ENERGY, INC. OPERATING SEGMENT RESULTS FOR THE YEARS ENDED December 31, 2017, 2016 and 2014 (in thousands, except per unit operating data) (unaudited)

	Year Ended December 31,
	2017			2016				2015
	(in thousands, except volume and per unit operating data)
Retail Electricity Segment
Total Revenues	$	657,561		$	417,229		$	229,490
Retail Cost of Revenues	477,012			286,795				170,684
Less: Net Asset Optimization Revenues	(5		)	—				—
Less: Net Gains (Losses) on non-trading derivatives, net of cash settlements	22,086			12,298				(1,449		)
Retail Gross Margin —Electricity	$	158,468		$	118,136		$	60,255
Volumes—Electricity (MWhs)	6,755,663			4,170,593				2,075,479
Retail Gross Margin —Electricity per MWh	$	23.46		$	28.33		$	29.03
Retail Natural Gas Segment
Total Revenues	$	140,494		$	129,468			128,663
Retail Cost of Revenues	75,155			58,149				70,504
Less: Net Asset Optimization Revenues	(712		)	(586		)		1,494
Less: Net Gains (Losses) on non-trading derivatives, net of cash settlements	10			7,672				3,305
Retail Gross Margin —Gas	$	66,041		$	64,233		$		53,360
Volumes—Gas (MMBtus)	18,203,684			16,819,713				14,786,681
Retail Gross Margin —Gas per MMBtu	3.63			3.82				3.61

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)

	Year Ended December 31,				Quarter Ended December 31,
(in thousands)	2017		2016		2017			2016
Reconciliation of Adjusted EBITDA to Net Income:
Net income	76,281		65,673		$	47,536		$	24,137
Depreciation and amortization	42,341		32,788		11,906			9,451
Interest expense	11,134		8,859		2,374			6,004
Income tax expense	37,528		10,426		32,263			3,574
EBITDA ⁽¹⁾	167,284		117,746		94,079			43,166
Less:
Net, Gains (losses) on derivative instruments	5,008		22,407		39,233			19,520
Net, Cash settlements on derivative instruments	16,309		(2,146	)	(2,499		)	(5,573		)
Customer acquisition costs	25,874		24,934		7,232			9,717
Plus:					—
Non-cash compensation expense	5,058		5,242		1,035			1,215
Contract termination charge related to Major Energy Companies change of control	—		4,099		—			4,099
Change in Tax Receivable Agreement liability ⁽¹⁾	(22,267	)	—		$	(22,267	)	$	—
Adjusted EBITDA⁽²⁾	102,884		81,892		$	28,881		$	24,816

(1) Represents the change in the value of the Tax Receivable Agreement liability due to U.S. Tax Reform.
(2) Includes $9.6 million and $1.1 million related to the change in fair value as the result of the revaluation of the Major Earnout liability at December 31, 2017 and 2016.


	Year Ended December 31,						Quarter Ended December 31,
(in thousands)	2017			2016			2017			2016
Reconciliation of Adjusted EBITDA to net cash provided by operating activities:
Net cash provided by operating activities	$	63,912		$	67,793		$	88		$	6,150
Amortization of deferred financing costs	(1,035		)	(668		)	(285		)	(203		)
Allowance for doubtful accounts and bad debt expense	(6,550		)	(1,261		)	(3,114		)	(419		)
Interest expense	11,134			8,859			2,374			6,004
Income tax expense	37,528			10,426			32,263			3,574
Change in Tax Receivable Agreement liability ⁽¹⁾	(22,267		)	—			(22,267		)	—
Changes in operating working capital
Accounts receivable, prepaids, current assets	31,905			12,135			48,989			31,362
Inventory	718			542			(1,218		)	1,110
Accounts payable and accrued liabilities	(13,672		)	(17,653		)	(21,808		)	(23,507		)
Other	1,211			1,719			(6,141		)	745
Adjusted EBITDA	$	102,884		$	81,892		$	28,881		$	24,816
Cash Flow Data:
Cash flows provided by operating activity	$	63,912		$	67,793		$	88		$	6,150
Cash flows used in investing activity	(97,757		)	(36,344		)	(1,780		)	(2,169		)
Cash flows provided by (used in) financing activity	44,304			(16,963		)	19,862			(1,928		)

(1) 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)	2017			2016			2017			2016
Reconciliation of Retail Gross Margin to Operating Income:
Operating income	$	102,420		$	84,001		$	59,752		$	33,098
Depreciation and amortization	42,341			32,788			11,906			9,451
General and administrative	101,127			84,964			31,722			29,776
Less:
Net asset optimization (expenses) revenues	(717		)	(586		)	(36		)	(544		)
Net, Losses (gains) on non-trading derivative instruments	5,588			22,254			39,734			19,735
Net, Cash settlements on non-trading derivative instruments	16,508			(2,284		)	(2,508		)	(5,625		)
Retail Gross Margin	$	224,509		$	182,369		$	66,190		$	58,759
Retail Gross Margin – Retail Electricity Segment	$	158,468		$	118,136		$	42,339		$	35,910
Retail Gross Margin – Retail Natural Gas Segment	$	66,041		$	64,233		$	23,851		$	22,849

Contact: Spark Energy, Inc.

Investors:

Christian Hettick, 832-200-3727

ir@sparkenergy.com

Media:

Eric Melchor, 281-833-4151

Source: Spark Energy, Inc.

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

Posted on January 23, 2018October 19, 2021 by Kira Jordan

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

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

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

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

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

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

BB&T Capital Markets Attn: Prospectus Department 901 East Byrd Street, Suite 300 Richmond, VA 23219 Email: prospectusrequests@bbandtcm.com	Ladenburg Thalmann & Co. Attn: Syndicate Department 277 Park Avenue, 26th Floor New York, NY 10172 Email: prospectus@ladenburg.com

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

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

About Spark Energy, Inc.

Cautionary Note Concerning Forward Looking Statements

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

Contact: Spark Energy, Inc.

Investors:

Christian Hettick, 832-200-3727

Media:

Eric Melchor, 281-833-4151

Source: Spark Energy, Inc.

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

Posted on January 23, 2018October 19, 2021 by Kira Jordan

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

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

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

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

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

About Spark Energy, Inc.

Cautionary Note Concerning Forward Looking Statements

Contact: Spark Energy, Inc.

Investors:

Christian Hettick, 832-200-3727

Media:

Eric Melchor, 281-833-4151

Source: Spark Energy, Inc.

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

Posted on January 22, 2018October 19, 2021 by Kira Jordan

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

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

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

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

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

About Spark Energy, Inc.

Cautionary Note Regarding Forward-Looking Statements

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

Reconciliation of GAAP to Non-GAAP Measures

Adjusted EBITDA

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

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

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

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


APPENDIX TABLE A-1 ADJUSTED EBITDA RECONCILIATION (in thousands) (unaudited)

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

Adjusted EBITDA	$	100,000 – 105,000

Contact: Spark Energy, Inc.

Investors:

Christian Hettick, 832-200-3727

Media:

Eric Melchor, 281-833-4151

Source: Spark Energy, Inc.

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

Posted on January 18, 2018October 19, 2021 by Kira Jordan

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

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

About Spark Energy, Inc.

Contact: Spark Energy, Inc.

Investors:
Christian Hettick, 832-200-3727

Media:
Eric Melchor, 281-833-4151

Source: Spark Energy, Inc.

Spark Energy, Inc. Announces Buyout of Verde Earnout Obligations

Posted on January 15, 2018October 19, 2021 by Yanira Hernandez

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

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

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

About Spark Energy, Inc.

Cautionary Note Regarding Forward-Looking Statements

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

Contact: Spark Energy, Inc.

Investors:

Christian Hettick, 832-200-3727

Media:

Eric Melchor, 281-833-4151

Source: Spark Energy, Inc.