Press Releases – Page 17

Spark Energy, Inc. Announces Closing of Provider Acquisition and Date for Earnings Release

Posted on August 1, 2016October 19, 2021 by Kira Jordan

HOUSTON, Aug. 01, 2016 (GLOBE NEWSWIRE) — Spark Energy, Inc. (NASDAQ:SPKE), a Delaware corporation (“Spark” or the “Company”), announced today that the Company has completed its acquisition of Provider Power (“Provider”). Spark expects the acquisition to be immediately accretive to earnings.

“We are happy to welcome the Provider companies into Spark,” said Nathan Kroeker, Spark’s President and Chief Executive Officer. “Provider gives us an additional 121,000 RCEs, primarily in Maine and New Hampshire, and includes nine utilities new to Spark. Closing Provider, as well as the pending acquisition of the Major Companies that we expect to close later this quarter, demonstrate Spark’s continued execution of our goal to grow aggressively and responsively through meaningful acquisitions.”

“We are very excited to be joining the Spark family,” added Kevin B. Dean, Managing Member of Provider. “Combining our operations with Spark will allow us to realize efficiencies and synergies to better serve our customers in the Northeast as we continue to grow our business.”

Earnings Conference Call and Webcast

Spark also announced that it plans to release earnings for the quarter ended June 30, 2016, on Thursday, August 11, 2016. The Company will host a conference call to discuss second quarter 2016 results on Thursday, August 11, 2016 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.cfm. 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 18 states and serves 75 utility territories. Spark offers its customers a variety of product and service choices, including stable and predictable energy costs and green product alternatives.

Contact: Spark Energy, Inc.

Investors:

Andy Davis, 832-200-3727

Media:

Eric Melchor, 281-833-4151

Source: Spark Energy, Inc.

Spark Energy, Inc. Announces Second Quarter Dividend, Provides Preliminary Second Quarter Results

Posted on July 20, 2016October 19, 2021 by Kira Jordan

HOUSTON, July 20, 2016 (GLOBE NEWSWIRE) — Spark Energy, Inc. (NASDAQ:SPKE), a Delaware corporation (“Spark”), announced today that its Board of Directors has declared a quarterly cash dividend for the second quarter of 2016 in the amount of $0.3625 per share of common stock. This amount represents an annualized dividend of $1.45 per share. The second quarter dividend will be paid on September 13, 2016 to holders of record on August 29, 2016.

Spark also announced today preliminary financial results for the three months ended June 30, 2016. While still finalizing results, Spark expects to record Adjusted EBITDA of between $10.0 and $12.0 million for the second quarter.

“The second quarter far exceeded our expectations,” said Nathan Kroeker, Spark’s President and Chief Executive Officer. “We look forward to discussing our strong financial results on our second quarter earnings call in early August. In addition, we plan on providing updated guidance on the call, which will be significantly higher than previously announced.”

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 16 states and serves 66 utility territories. Spark offers its customers a variety of product and service choices, including stable and predictable energy costs and green product alternatives.

Cautionary Note 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. The estimate of Adjusted EBITDA in this press release is subject to change based on finalization of financial results for the quarter ended June 30, 2106. These statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), can be identified by the use of forward-looking terminology including “may,” “should,” “likely,” “will,” “believe,” “expect,” “anticipate,” “estimate,” “continue,” “plan,” “intend,” “project,” or other similar words. All statements, other than statements of historical fact included in this 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 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 report are subject to risks and uncertainties. Important factors which 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,
finalization of Spark’s financial reporting for the quarter ended June 30, 2016,
extreme and unpredictable weather conditions,
the sufficiency of risk management and hedging policies,
customer concentration,
federal, state and local regulation, including the industry’s ability to prevail on its challenge to the New York Public Service Commission’s order enacting new regulations that sought to impose significant new restrictions on retail energy providers operating in New York,
key license retention,
increased regulatory scrutiny and compliance costs,
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,
level of indebtedness,
changes in costs to acquire customers,
actual customer attrition rates,
actual bad debt expense in non-POR markets,
accuracy of internal billing systems,
ability to successfully navigate entry into new markets,
whether our majority stockholder or its affiliates offers us acquisition opportunities on terms that are commercially acceptable to us,
ability to successfully and efficiently integrate acquisitions into our operations,
competition, and
other factors discussed in “Risk Factors” in our Form 10-K for the year ended December 31, 2015 and in our other public filings and press releases.

You should review the risk factors and other factors noted throughout our Report on Form 10-K for the year ended December 31, 2015 and the Form 10-Q for the quarter ended March 31, 2016, both of which are filed with the Securities and Exchange Commission, which 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 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.

Reconciliation of Spark’s estimate of Adjusted EBITDA for the quarter ended June 30, 2016 to the relevant GAAP line items is not being provided as Spark is not providing preliminary guidance for net income (loss), net cash provided by operating activities, or the reconciling items between these GAAP financial measures and Adjusted EBITDA. Accordingly, a reconciliation to net income (loss) or net cash provided by operating activities is not available without unreasonable effort.

Contact:  Spark Energy, Inc.

Investors:
Andy Davis, 832-200-3727

Media:
Eric Melchor, 281-833-4151

Source: Spark Energy, Inc.

Spark Energy, Inc. Reports First Quarter 2016 Financial Results, Announces Acquisition of Major Energy and Provider Power

Posted on May 4, 2016October 19, 2021 by Kira Jordan

HOUSTON, May 04, 2016 (GLOBE NEWSWIRE) — Spark Energy, Inc. (NASDAQ:SPKE), a Delaware corporation (“Spark”), today reported financial results for the quarter ended March 31, 2016.

For the first quarter of 2016, Adjusted EBITDA was $21.1 million and Retail Gross Margin was $39.6 million, compared to Adjusted EBITDA of $10.2 million and Retail Gross Margin of $27.9 million for the first quarter of 2015.

“We are extremely excited with our record first quarter results,” said Nathan Kroeker, Spark Energy, Inc.’s President and Chief Executive Officer. “We continued to achieve enhanced margins in both our retail electricity and retail natural gas segments while producing improvements in our attrition.

“We are also pleased to announce today two significant pending acquisitions, Major Energy (“Major”) and Provider Power (“Provider”). We expect these two transactions to add approximately $30.0 million of annual Adjusted EBITDA, excluding integration costs which are expected to be complete by the end of this year. Collectively, we anticipate these transactions will add approximately 335,000 RCEs to our portfolio, bringing our total RCE count to approximately 750,000. These acquisitions will provide us access to two new states, Maine and New Hampshire, and 24 new utilities. We expect to close both of these transactions early in the third quarter.”

First Quarter 2016 Highlights

$21.1 million in Adjusted EBITDA and $39.6 million in Retail Gross Margin
Invested $2.3 million in organic customer acquisitions
Consistently strong unit margins across both retail natural gas and electricity segments
RCE Attrition reduced to 4.3%
Paid fourth quarter dividend of $0.3625 per share of Class A common stock on March 14, 2016
Declared first quarter dividend of $0.3625 per share of Class A common stock payable on June 14, 2016

Acquisition of Major Energy

Spark announced today that Spark and National Gas & Electric, LLC (“NGE”), an affiliate, have entered into a purchase and sale agreement for the acquisition of Major Energy, a retail energy business with approximately 210,000 RCEs. NGE closed on the acquisition of Major Energy on April 15, 2016 and has since been preparing the company as a dropdown to Spark. Major Energy serves electricity and natural gas customers in eight states and adds fifteen new utilities to Spark’s footprint. Spark intends on leveraging the Major management team’s retail energy expertise and knowledge to further enhance an already highly efficient and profitable business model which they have built.

Spark will be issuing $40.0 million of shares to NGE as consideration for the upfront purchase price for Major. In addition, there are assumed liabilities and earnouts over the next three years that are subject to performance metrics. A special committee of the Board of Directors, consisting solely of independent directors, approved this transaction.

Acquisition of Provider Power

Spark announced today that it has entered into a purchase and sale agreement for the acquisition of all retail business operations of Provider Power, LLC, representing approximately 125,000 RCEs. The business being acquired serves electricity customers primarily in Maine and New Hampshire and includes nine new utilities to Spark.

The purchase price is $28.0 million, plus an earn-out that is subject to performance metrics for the first year. The Company is financing the purchase price payable at closing through the issuance of 900,000 shares to Retailco, LLC for a total of $18.0 million. A special committee of the Board of Directors, consisting solely of independent directors, approved the sale of equity by the Company to Retailco, LLC.

Please see the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2016, for a more detailed description of the Major and Provider acquisitions and the financing of the Provider acquisition.

Summary First Quarter 2016 Financial Results

For the quarter ended March 31, 2016, Spark reported Adjusted EBITDA of $21.1 million compared to Adjusted EBITDA of $10.2 million for the quarter ended March 31, 2015. This increase of $10.9 million is primarily attributable to increased Retail Gross Margin in our electricity and natural gas segments and decreased customer acquisition costs, partially offset by increased general and administrative expenses due to our increased RCE count following our Oasis and CenStar acquisitions in the third quarter of last year.

For the quarter ended March 31, 2016, Spark reported Retail Gross Margin of $39.6 million compared to Retail Gross Margin of $27.9 million for the quarter ended March 31, 2015. This increase of $11.7 million is primarily attributable to expanded natural gas unit margins and increased retail electricity volumes. Favorable supply costs across several of our markets were a key driver of these elevated unit margins in the first quarter.

Net income for the quarter ended March 31, 2016 was $15.7 million compared to net income of $12.9 million for the quarter ended March 31, 2015. Earnings per share (EPS) variance analysis is not included, as management does not view EPS as a valuable metric given the unpredictability of the unrealized gains and losses on the hedge portfolio, as well as other non-cash items including non-cash compensation and amortization of customer acquisition costs and customer relationships in excess of current period customer acquisition costs.

2016 Financial Guidance

With our record first quarter results, we are highly confident in achieving our initial 2016 guidance range of $44.0 million to $48.0 million. With the pending acquisitions and our updated projections, we are currently re-evaluating our guidance to reflect these positive changes.

Liquidity and Capital Resources

(in thousands)	March 31, 2016
Cash and cash equivalents	$	2,949
Senior Credit Facility Working Capital Line Availability⁽¹⁾		33,348
Senior Credit Facility Acquisition Line Availability⁽²⁾		6,428
Total Liquidity	$	42,725
⁽¹⁾ Subject to Senior Credit Facility borrowing base restrictions.
⁽²⁾ Subject to Senior Credit Facility covenant restrictions.

Conference Call and Webcast

Spark will host a conference call to discuss first quarter 2016 results on Thursday, May 5, 2016 at 10:00 AM Central Time (11:00 AM Eastern).

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 16 states and serves 66 utility territories. Spark offers its customers a variety of product and service choices, including stable and predictable energy costs and green product alternatives.

Cautionary Note 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 statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), can be identified by the use of forward-looking terminology including “may,” “should,” “likely,” “will,” “believe,” “expect,” “anticipate,” “estimate,” “continue,” “plan,” “intend,” “project,” or other similar words. All statements, other than statements of historical fact included in this 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 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.

changes in commodity prices,
extreme and unpredictable weather conditions,
the sufficiency of risk management and hedging policies,
customer concentration,
federal, state and local regulation, including the industry’s ability to prevail on its challenge to the New York Public Service Commission’s order enacting new regulations that sought to impose significant new restrictions on retail energy providers operating in New York,
key license retention,
increased regulatory scrutiny and compliance costs,
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,
level of indebtedness,
changes in costs to acquire customers,
actual customer attrition rates,
actual bad debt expense in non-POR markets,
accuracy of internal billing systems,
ability to successfully navigate entry into new markets,
whether our majority stockholder or its affiliates offers us acquisition opportunities on terms that are commercially acceptable to us,
competition, and
other factors discussed in “Risk Factors” in our Form 10-K for the year ended December 31, 2015 and in our other public filings and press releases.


SPARK ENERGY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS AS OF MARCH 31, 2016 AND DECEMBER 31, 2015
(in thousands)
(unaudited)

	March 31, 2016		December 31, 2015
Assets
Current assets:
Cash and cash equivalents	$	2,949	$	4,474
Accounts receivable, net of allowance for doubtful accounts of $2.8 million and $1.9 million as of March 31, 2016 and December 31, 2015		53,968		59,936
Accounts receivable—affiliates		2,112		1,840
Inventory		181		3,665
Fair value of derivative assets		240		605
Customer acquisition costs, net		13,026		13,389
Customer relationships, net		5,698		6,627
Prepaid assets ⁽¹⁾		1,597		700
Deposits		7,073		7,421
Other current assets		4,537		4,023
Total current assets		91,381		102,680
Property and equipment, net		4,755		4,476
Customer acquisition costs, net		2,381		3,808
Customer relationships, net		5,512		6,802
Non-current deferred tax assets		34,531		23,380
Goodwill		18,379		18,379
Other assets		2,501		2,709
Total assets	$	159,440	$	162,234
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	23,207	$	29,732
Accounts payable—affiliates		3,910		1,962
Accrued liabilities		11,885		12,245
Fair value of derivative liabilities		9,719		10,620
Current portion of Senior Credit Facility		10,306		27,806
Current payable pursuant to tax receivable agreement—affiliates		1,407		–
Other current liabilities		2,878		1,823
Total current liabilities		63,312		84,188
Long-term liabilities:
Fair value of derivative liabilities		546		618
Long-term payable pursuant to tax receivable agreement—affiliates		29,592		20,713
Long-term portion of Senior Credit Facility		13,266		14,592
Non-current deferred tax liability		854		853
Convertible subordinated notes to affiliate		6,466		6,339
Other long-term liabilities		1,723		1,612
Total liabilities		115,759		128,915
Stockholders’ equity:
Common Stock:
Class A common stock, par value $0.01 per share, 120,000,000 shares authorized, 4,118,623 issued and outstanding at March 31, 2016 and 3,118,623 issued and outstanding at December 31, 2015		41		31
Class B common stock, par value $0.01 per share, 60,000,000 shares authorized, 9,750,000 issued and outstanding at March 31, 2016 and 10,750,000 issued and outstanding at December 31, 2015		98		108
Preferred Stock:
Preferred stock, par value $0.01 per share, 20,000,000 shares authorized, zero issued and outstanding at March 31, 2016 and December 31, 2015		–		–
Additional paid-in capital		16,600		12,565
Retained earnings (deficit)		1,314		(1,366	)
Total stockholders’ equity		18,053		11,338
Non-controlling interest in Spark HoldCo, LLC		25,628		21,981
Total equity		43,681		33,319
Total liabilities and stockholders’ equity	$	159,440	$	162,234
⁽¹⁾ Prepaid assets includes prepaid assets—affiliates of $99 and $210 as of March 31, 2016 and December 31, 2015, respectively.

SPARK ENERGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2016 AND 2015
(in thousands, except per share data)
(unaudited)

	Three Months Ended March 31,
		2016			2015
Revenues:
Retail revenues ⁽¹⁾	$	110,019		$	99,874
Net asset optimization revenues ⁽²⁾		527			1,929
Total Revenues		110,546			101,803
Operating Expenses:
Retail cost of revenues ⁽³⁾		68,800			69,085
General and administrative ⁽⁴⁾		17,380			14,704
Depreciation and amortization		6,789			4,278
Total Operating Expenses		92,969			88,067
Operating income		17,577			13,736
Other (expense)/income:
Interest expense		(753	)		(381	)
Interest and other income		(95	)		135
Total other expenses		(848	)		(246	)
Income before income tax expense		16,729			13,490
Income tax expense		988			561
Net income	$	15,741		$	12,929
Less: Net income attributable to non-controlling interests		11,568			10,520
Net income attributable to Spark Energy, Inc. stockholders	$	4,173		$	2,409

⁽¹⁾ Retail revenues includes retail revenues—affiliates of $0 for each of the three months ended March 31, 2016 and 2015.
⁽²⁾ Net asset optimization revenues includes asset optimization revenues—affiliates of $113 and $489 for the three months ended March 31, 2016 and 2015, respectively, and asset optimization revenues—affiliates cost of revenues of $1,258 and $3,093 for the three monthsended March 31, 2016 and 2015, respectively.
⁽³⁾ Retail cost of revenues includes retail cost of revenues—affiliates of less than $100 for each of the three months ended March 31, 2016 and 2015.
⁽⁴⁾ General and administrative includes general and administrative expense—affiliates of $4.4 million and $0 for the three months ended March 31, 2016 and 2015.

SPARK ENERGY, INC.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE THREE MONTHS ENDED MARCH 31, 2016
(in thousands)
(unaudited)

	Issued Shares of Class A Common Stock	Issued Shares of Class B Common Stock			Issued Shares of Preferred Stock	Class A Common Stock		Class B Common Stock			Additional Paid In Capital		Retained Earnings (Deficit)			Total Stockholders Equity			Non- controlling Interest			Total Equity
Balance at December 31, 2015	3,119		10,750		–	$	31	$	108		$	12,565	$	(1,366	)	$	11,338		$	21,981		$	33,319
Stock based compensation	–		–		–		–		–			220		–			220			–			220
Consolidated net income	–		–		–		–		–			–		4,173			4,173			11,568			15,741
Beneficial conversion feature	–		–		–		–		–			63		–			63			–			63
Distributions paid to non-controlling unit holders	–		–		–		–		–			–		–			–			(5,876	)		(5,876	)
Dividends paid to Class A common stockholders	–		–		–		–		–			–		(1,493	)		(1,493	)		–			(1,493	)
Tax impact from tax receivable agreement upon exchange of units of Spark HoldCo, LLC to shares of Class A Common Stock	–		–		–		–		–			1,707		–			1,707			–			1,707
Exchange of shares of Class B common stock to shares of Class A common stock	1,000		(1,000	)	–		10		(10	)		2,045		–			2,045			(2,045	)		–
Balance at March 31, 2016	4,119		9,750		–	$	41	$	98		$	16,600	$	1,314		$	18,053		$	25,628		$	43,681

SPARK ENERGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2016 AND 2015
(in thousands)
(unaudited)

	Three Months Ended March 31,
		2016			2015
Cash flows from operating activities:
Net income	$	15,741		$	12,929
Adjustments to reconcile net income to net cash flows provided by operating activities:
Depreciation and amortization expense		6,789			4,278
Deferred income taxes		841			(159	)
Stock based compensation		618			550
Amortization of deferred financing costs		117			50
Change in fair value of CenStar Earnout		1,000			–
Bad debt expense		907			2,947
Loss on derivatives, net		9,749			1,305
Current period cash settlements on derivatives, net		(10,457	)		(4,191	)
Accretion of discount to convertible subordinated notes to affiliate		35			–
Interest paid in kind – subordinated convertible notes		155			–
Loss on equity method investment in eRex Spark		80			–
Changes in assets and liabilities:
Decrease in restricted cash		–			707
Decrease in accounts receivable		5,060			1,924
(Increase) decrease in accounts receivable—affiliates		(273	)		207
Decrease in inventory		3,484			7,521
Increase in customer acquisition costs		(2,305	)		(5,629	)
(Increase) decrease in prepaid and other current assets		(1,180	)		2,621
Decrease (increase) in intangible assets—customer acquisitions		–			(676	)
Increase in other assets		265			–
Decrease in accounts payable and accrued liabilities		(7,340	)		(6,226	)
Increase in accounts payable—affiliates		1,949			415
Increase in other current liabilities		156			673
Increase in other non-current liabilities		111			–
Net cash provided by operating activities		25,502			19,246
Cash flows from investing activities:
Purchases of property and equipment		(665	)		(441	)
Investment in eRex joint venture		(168	)		–
Net cash used in investing activities		(833	)		(441	)
Cash flows from financing activities:
Borrowings on the Senior Credit Facility		–			3,000
Payments on the Senior Credit Facility		(18,825	)		(16,000	)
Payment of dividends to Class A common stockholders		(1,493	)		(1,088	)
Payment of distributions to non-controlling unitholders		(5,876	)		(3,897	)
Net cash used in financing activities		(26,194	)		(17,985	)
(Decrease) increase in cash and cash equivalents		(1,525	)		820
Cash and cash equivalents—beginning of period		4,474			4,359
Cash and cash equivalents—end of period	$	2,949		$	5,179
Supplemental Disclosure of Cash Flow Information:
Non cash items:
Property and equipment purchase accrual	$	57		$	19
Tax impact from tax receivable agreement upon exchange of units of Spark HoldCo, LLC to shares of Class A Common Stock	$	1,707		$	–
Cash paid during the period for:
Interest	$	539		$	366
Taxes	$	842		$	–

SPARK ENERGY, INC.
OPERATING SEGMENT RESULTS
FOR THE THREE MONTHS ENDED MARCH 31, 2016 AND 2015
(in thousands, except per unit operating data)
(unaudited)

	Three Months Ended March 31,
		2016		2015
Retail Natural Gas Segment
Total Revenues	$	48,613	$	57,354
Retail Cost of Revenues		22,500		33,466
Less: Net Asset Optimization Revenues		527		1,929
Less: Net Gains on non-trading derivatives, net of cash settlements		1,430		3,647
Retail Gross Margin—Gas	$	24,156	$	18,312
Volume of Gas (MMBtu)		6,112,431		6,564,045
Retail Gross Margin—Gas ($/MMBtu)	$	3.95	$	2.79
Retail Electricity Segment
Total Revenues	$	61,933	$	44,449
Retail Cost of Revenues		46,300		35,619
Less: Net Gains (Losses) on non-trading derivatives, net of cash settlements		227		(732	)
Retail Gross Margin—Electricity	$	15,406	$	9,562
Volume of Electricity (MWh)		586,677		372,851
Retail Gross Margin—Electricity ($/MWh)	$	26.26	$	25.65

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 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 year 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 relationships (representing those customer acquisitions through acquisitions of business or portfolios of customers). 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 a company’s 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 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, its most directly comparable financial measure calculated and presented in accordance with GAAP.

The GAAP measures most directly comparable to Adjusted EBITDA are net income and net cash provided by operating activities. The GAAP measure most directly comparable to Retail Gross Margin is operating income. Our non-GAAP financial measures of Adjusted EBITDA and Retail Gross Margin should not be considered as alternatives to net income, net cash provided by operating activities, or operating income. 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 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,
		2016			2015
Reconciliation of Adjusted EBITDA to Net Income:
Net income	$	15,741		$	12,929
Depreciation and amortization		6,789			4,278
Interest expense		753			381
Income tax expense		988			561
EBITDA		24,271			18,149
Less:
Net, Losses on derivative instruments		(9,749	)		(1,305	)
Net, Cash settlements on derivative instruments		11,272			4,191
Customer acquisition costs		2,305			5,629
Plus:
Non-cash compensation expense		618			550
Adjusted EBITDA	$	21,061		$	10,184

	Three Months Ended March 31,
		2016			2015
Reconciliation of Adjusted EBITDA to net cash provided by operating activities:
Net cash provided by operating activities	$	25,502		$	19,246
Amortization of deferred financing costs		(117	)		(50	)
Bad debt expense		(907	)		(2,947	)
Interest expense		753			381
Income tax expense		988			561
Changes in operating working capital
Accounts receivable, prepaids, current assets		(3,607	)		(4,783	)
Inventory		(3,484	)		(7,521	)
Accounts payable and accrued liabilities		5,391			5,811
Other		(3,458	)		(514	)
Adjusted EBITDA	$	21,061		$	10,184
Cash Flow Data:
Cash flows provided by operating activities	$	25,502		$	19,246
Cash flows used in investing activities	$	(833	)	$	(441	)
Cash flows used in financing activities	$	(26,194	)	$	(17,985	)

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,
		2016			2015
Reconciliation of Retail Gross Margin to Operating Income:
Operating income	$	17,577		$	13,736
Depreciation and amortization		6,789			4,278
General and administrative		17,380			14,704
Less:
Net asset optimization revenues		527			1,929
Net, Losses on non-trading derivative instruments		(9,620	)		(1,200	)
Net, Cash settlements on non-trading derivative instruments		11,277			4,115
Retail Gross Margin	$	39,562		$	27,874

Contact: Spark Energy, Inc.

Investors:

Andy Davis, 832-200-3727

Media:

Jenn Korell, 281-833-4151

Source: Spark Energy, Inc.

Spark Energy, Inc. to Present First Quarter 2016 Financial Results on Thursday, May 5, 2016

Posted on May 2, 2016October 19, 2021 by Kira Jordan

HOUSTON, May 02, 2016 (GLOBE NEWSWIRE) — Spark Energy, Inc. (NASDAQ:SPKE), a Delaware corporation (“Spark”), announced today that it plans to present its First Quarter 2016 financial results in a conference call and webcast on Thursday, May 5, 2015 at 10:00 AM Central (11:00 AM Eastern).

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 16 states and serves 66 utility territories. Spark offers its customers a variety of product and service choices, including stable and predictable energy costs and green product alternatives.

Contact:  Spark Energy, Inc.

Investors:
Andy Davis, 832-200-3727

Media:
Jenn Korell, 281-833-4151

Source: Spark Energy, Inc.

Spark Energy, Inc. Announces First Quarter Dividend

Posted on April 21, 2016October 19, 2021 by Kira Jordan

HOUSTON, April 21, 2016 (GLOBE NEWSWIRE) — Spark Energy, Inc. (NASDAQ:SPKE), a Delaware corporation (“Spark”), announced today that its Board of Directors has declared a quarterly cash dividend for the first quarter of 2016 in the amount of $0.3625 per share of common stock. This amount represents an annualized dividend of $1.45 per share. The first quarter dividend will be paid on June 14, 2016 to holders of record on May 31, 2016.

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 16 states and serves 66 utility territories. Spark offers its customers a variety of product and service choices, including stable and predictable energy costs and green product alternatives.

Contact:  Spark Energy, Inc.

Investors:
Andy Davis, 832-200-3727

Media:
Jenn Korell, 281-833-4151

Source: Spark Energy, Inc.

Spark Energy, Inc. Announces Pricing of Secondary Offering of Class A Common Stock by Selling Stockholder

Posted on March 30, 2016October 19, 2021 by Kira Jordan

HOUSTON, March 30, 2016 (GLOBE NEWSWIRE) — Spark Energy, Inc. (NASDAQ:SPKE), a Delaware corporation (“Spark”), announced today the pricing of an underwritten secondary public offering of 1.5 million shares of its Class A common stock held by Retailco, LLC (the “Selling Stockholder”), at a price to the public of $18.00 per share. The offering is expected to close on April 4, 2016, subject to customary closing conditions.

Spark will not receive any proceeds from the proposed secondary offering. In connection with the offering, the underwriters have a 30-day option to purchase up to an additional 225,000 shares, or 15%, in the offering from the Selling Stockholder.

FBR Capital Markets & Co. is serving as sole book-running manager, Janney Montgomery Scott LLC, Wunderlich Securities, Inc. and Ladenburg Thalmann & Co. Inc. are serving as lead managers and USCA Securities LLC and Drexel Hamilton, LLC are serving as co-managers of the offering.

The Class A common stock will be issued and sold pursuant to an effective shelf registration statement on Form S-3 previously filed with the Securities and Exchange Commission. When available, copies of the prospectus supplement for the offering may be obtained on the website of the Securities and Exchange at www.sec.gov, or by contacting:

FBR Capital Markets & Co.
Attention: Syndicate Prospectus Department
1300 North 17th Street, Suite 1400, Arlington, Virginia 22209
Telephone: 703-312-9726, Email: prospectuses@fbr.com

This press release is for informational purposes only and shall not constitute an offer to sell or a solicitation of an offer to buy the securities, 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. The offering of these securities 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 (the “Securities Act”).

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 16 states and serves 66 utility territories. Spark offers its customers a variety of product and service choices, including stable and predictable energy costs and green product alternatives.

Cautionary Note Regarding Forward-Looking Statements

Spark Energy, Inc.

Investors:
Andy Davis, 832-200-3727

Media:
Jenn Korell, 281-833-4151

Source: Spark Energy, Inc.

Spark Energy, Inc. Announces Launch of Secondary Offering of Class A Common Stock by Selling Stockholder

Posted on March 29, 2016October 19, 2021 by Kira Jordan

HOUSTON, March 29, 2016 (GLOBE NEWSWIRE) — Spark Energy, Inc. (NASDAQ:SPKE), a Delaware corporation (“Spark”), announced today the launch of an underwritten secondary public offering of 1.5 million shares of its Class A common stock held by Retailco, LLC (the “Selling Stockholder”). The offering is expected to close on April 4, 2016, subject to customary closing conditions.

FBR Capital Markets & Co.
Attention: Syndicate Prospectus Department
1300 North 17th Street, Suite 1400, Arlington, Virginia 22209
Telephone: 703-312-9726, Email: prospectuses@fbr.com

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 16 states and serves 66 utility territories. Spark offers its customers a variety of product and service choices, including stable and predictable energy costs and green product alternatives.

Cautionary Note Regarding Forward-Looking Statements

Spark Energy, Inc.

Investors:
Andy Davis, 832-200-3727

Media:
Jenn Korell, 281-833-4151

Source: Spark Energy, Inc.

Spark Energy, Inc. Reports Full Year and Fourth Quarter 2015 Financial Results, Provides 2016 Update

Posted on March 23, 2016October 19, 2021 by Kira Jordan

HOUSTON, March 23, 2016 (GLOBE NEWSWIRE) — Spark Energy, Inc. (NASDAQ:SPKE), a Delaware corporation (“Spark”), today reported financial results for the year ended December 31, 2015.

For 2015, Adjusted EBITDA was $36.9 million and Retail Gross Margin was $113.6 million on revenue of $358.2 million, compared to Adjusted EBITDA of $11.3 million and Retail Gross Margin of $76.9 million for 2014. Spark invested $19.9 million in organic customer acquisition costs in 2015 compared to $26.2 million in 2014.

For the fourth quarter of 2015, Adjusted EBITDA was $16.3 million and Retail Gross Margin was $34.4 million on revenue of $94.8 million, compared to Adjusted EBITDA of $5.0 million and Retail Gross Margin of $26.8 million for the fourth quarter of 2014.

“We are very pleased with our 2015 results,” said Nathan Kroeker, Spark Energy, Inc.’s President and Chief Executive Officer. “With continued enhanced margins in our retail electricity and retail natural gas segments, along with three transactions during the year, we delivered $36.9 million in Adjusted EBITDA in 2015, along with $113.6 million of Retail Gross Margin. In terms of customer count, we were able to grow by 9%, and on an RCE basis, we grew by 27%. As we move through the first quarter of 2016, we continue to see strong results.”

2015 Highlights

$36.9 million in Adjusted EBITDA and $113.6 million in Retail Gross Margin
Invested $19.9 million in organic customer acquisitions
Closed CenStar Energy and Oasis Energy transactions
Completed book purchase of approximately 26,000 Entrust Energy customers
Consistently strong unit margins across both retail natural gas and electricity segments
Increased customer count from 318,000 to 347,000
Increased RCE count from 326,000 to 415,000
Amended and restated existing senior credit facility
Paid annual dividend of $1.45 per share of Class A common stock

Summary Full Year 2015 Financial Results

For the year ended December 31, 2015, Spark reported Adjusted EBITDA of $36.9 million on $358.2 million of revenue compared to Adjusted EBITDA of $11.3 million for the year ended December 31, 2014. This increase of $25.6 million is primarily attributable to increased Retail Gross Margin and decreased customer acquisition spending, partially offset by increased general and administrative expenses.

For the year ended December 31, 2015, Spark reported Retail Gross Margin of $113.6 million compared to Retail Gross Margin of $76.9 million for the year ended December 31, 2014. This increase of $36.7 million is primarily attributable to increased unit margins in both our retail electricity and retail natural gas segments, which were positively impacted by expanded spot margins from the overall lower commodity price environment, and increased volume in our retail electricity segment, which was primarily driven by our CenStar and Oasis acquisitions.

Net income for the year ended December 31, 2015 was $26.0 million, or $1.06 of diluted earnings per share of Class A common stock (“EPS”). An unrealized gain on the hedge portfolio valuation of our future supply positions positively impacted net income by $1.0 million and EPS by $0.07. Net income and EPS for the year ended December 31, 2014 were $(4.3) million and $(0.02), respectively.

Summary Fourth Quarter 2015 Financial Results

For the quarter ended December 31, 2015, Spark reported Adjusted EBITDA of $16.3 million on $94.8 million of revenue compared to Adjusted EBITDA of $5.0 million for the quarter ended December 31, 2014. This increase of $11.3 million is primarily attributable to increased Retail Gross Margin in our electricity segment, decreased customer acquisition costs, and earnings from our CenStar Energy and Oasis Energy acquisitions, partially offset by increased general and administrative expenses.

For the quarter ended December 31, 2015, Spark reported Retail Gross Margin of $34.4 million compared to Retail Gross Margin of $26.8 million for the quarter ended December 31, 2014. This increase of $7.6 million is primarily attributable to expanded retail electricity and retail natural gas unit margins and increased retail electricity volumes. Favorable supply costs across several of our markets were a key driver of these elevated unit margins in the fourth quarter.

Net income and EPS for the quarter ended December 31, 2015 were $3.1 million and $(0.01), respectively. An unrealized loss on the hedge portfolio valuation of our future supply positions negatively impacted net income by $(3.6) million and EPS by $(0.09). Net income and EPS for the quarter ended December 31, 2014 were $(11.4) million and $(0.37), respectively.

M&A Update

We successfully acquired and integrated two stock purchases in 2015, as well as a book of customers, and we continue to evaluate additional M&A opportunities. In 2015, our founder implemented a “drop-down strategy” pursuant to which our affiliate would acquire retail energy providers which could potentially be offered to us. This drop-down strategy affords the Company access to opportunities that might not otherwise be available to us due to our size and availability of capital. As a part of this strategy, we acquired Oasis Energy from an affiliate in the third quarter. Both the Oasis and CenStar acquisitions have exceeded our expectations in terms of customer growth and profitability.

2016 Financial Guidance

Financial guidance is reaffirmed for 2016, consisting of Adjusted EBITDA in the range of $44 million to $48 million, based upon projected customer acquisition costs of $13 million to $17 million. Our 2016 financial guidance does not include the benefit of any potential M&A transactions in 2016 and assumes that any potential effect from the recent New York Public Service Commission order will not significantly affect our 2016 earnings guidance (see below).

Recent New York State Public Service Commission Order

On February 23, 2016, the New York Public Service Commission (NYPSC) issued an order enacting new restrictions on retail energy providers (REPs) operating in New York. A temporary restraining order to block implementation of the NYPSC’s order has been granted until April 14, 2016. Although the Company believes that the NYPSC and the REPs will reach a mutually beneficial resolution, it is difficult to predict the outcome at this time. As of December 31, 2015, customers potentially affected by the New York order represented approximately 10% of the Company’s RCEs.

Liquidity and Capital Resources

(in thousands)	December 31, 2015
Cash and cash equivalents	$	4,474
Senior Credit Facility Working Capital Line Availability⁽¹⁾		15,950
Senior Credit Facility Acquisition Line Availability⁽²⁾		5,102
Total Liquidity	$	25,526
⁽¹⁾ Subject to Senior Credit Facility borrowing base restrictions.
⁽²⁾ Subject to Senior Credit Facility covenant restrictions.

Conference Call and Webcast

Spark will host a conference call to discuss full year 2015 results on Thursday, March 24, 2016 at 10:00 AM Central Time (11:00 AM Eastern).

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 16 states and serves 66 utility territories. Spark offers its customers a variety of product and service choices, including stable and predictable energy costs and green product alternatives.

Cautionary Note 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 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 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 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.

changes in commodity prices,
extreme and unpredictable weather conditions,
the sufficiency of risk management and hedging policies,
customer concentration,
federal, state and local regulation, including the industry’s ability to prevail on its challenge to the New York Public Service Commission’s order enacting new regulations that sought to impose significant new restrictions on retail energy providers operating in New York,
key license retention,
increased regulatory scrutiny and compliance costs,
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,
level of indebtedness,
changes in costs to acquire customers,
actual customer attrition rates,
actual bad debt expense in non-POR markets,
accuracy of internal billing systems,
ability to successfully navigate entry into new markets,
whether our majority shareholder or its affiliates offers us acquisition opportunities on terms that are commercially acceptable to us,
competition, and
other factors discussed in “Risk Factors” in our Form 10-K for the year ended December 31, 2014, our Form 10-Q for the quarter ended September 30, 2015 and in our other public filings and press releases.

You should review the risk factors and other factors disclosed throughout our Report on Form 10-K for the year ended December 31, 2014 and the Form 10-Q for the quarter ended September 30, 2015, both of which are filed with the Securities and Exchange Commission, which 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 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.
CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2015 AND DECEMBER 31, 2014
(in thousands)

	December 31, 2015			December 31, 2014
Assets
Current assets:
Cash and cash equivalents	$	4,474		$	4,359
Restricted cash		–			707
Accounts receivable, net of allowance for doubtful accounts of $1.9 million and $8.0 million as of December 31, 2015 and 2014, respectively		59,936			63,797
Accounts receivable—affiliates		1,840			1,231
Inventory		3,665			8,032
Fair value of derivative assets		605			216
Customer acquisition costs, net		13,389			12,369
Customer relationships, net		6,627			486
Prepaid assets ⁽¹⁾		700			1,236
Deposits		7,421			10,569
Other current assets		4,023			2,987
Total current assets		102,680			105,989
Property and equipment, net		4,476			4,221
Customer acquisition costs, net		3,808			2,976
Customer relationships, net		6,802			1,015
Deferred tax assets		23,380			24,047
Goodwill		18,379			–
Other assets		2,709			149
Total Assets	$	162,234		$	138,397
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	29,732		$	38,210
Accounts payable—affiliates		1,962			1,017
Accrued liabilities		12,245			7,195
Fair value of derivative liabilities		10,620			11,526
Current portion of Senior Credit Facility		27,806			33,000
Current deferred tax liability		853			–
Other current liabilities		1,823			1,868
Total current liabilities		85,041			92,816
Long-term liabilities:
Fair value of derivative liabilities		618			478
Payable pursuant to tax receivable agreement—affiliates		20,713			20,767
Long-term portion of Senior Credit Facility		14,592			–
Convertible subordinated notes to affiliates		6,339			–
Other long-term liabilities		1,612			219
Total liabilities		128,915			114,280
Stockholders’ equity:
Common Stock:
Class A common stock, par value $0.01 per share, 120,000,000 shares authorized, 3,118,623 issued and outstanding at December 31, 2015 and 3,000,000 issued and outstanding at December 31, 2014		31			30
Class B common stock, par value $0.01 per share, 60,000,000 shares authorized, 10,750,000 issued and outstanding at December 31, 2015 and 2014		108			108
Preferred Stock:
Preferred stock, par value $0.01 per share, 20,000,000 shares authorized, zero issued and outstanding at December 31, 2015 and 2014		–			–
Additional paid-in capital		12,565			9,296
Retained deficit		(1,366	)		(775	)
Total stockholders’ equity		11,338			8,659
Non-controlling interest in Spark HoldCo, LLC		21,981			15,458
Total equity		33,319			24,117
Total Liabilities and Stockholders’ Equity	$	162,234		$	138,397
⁽¹⁾ Prepaid assets includes prepaid assets—affiliates of $210 as of December 31, 2015. See Note 13 “Transactions with Affiliates” for further discussion.

SPARK ENERGY, INC.
COMBINED AND CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) FOR THE YEARS ENDED DECEMBER 31, 2015, 2014 and 2013
(in thousands, except per share data)

	Year Ended December 31,
		2015			2014			2013
Revenues:
Retail revenues ⁽¹⁾	$	356,659		$	320,558		$	316,776
Net asset optimization revenues ⁽²⁾		1,494			2,318			314
Total Revenues		358,153			322,876			317,090
Operating Expenses:
Retail cost of revenues ⁽³⁾		241,188			258,616			233,026
General and administrative ⁽⁴⁾		61,682			45,880			35,020
Depreciation and amortization		25,378			22,221			16,215
Total Operating Expenses		328,248			326,717			284,261
Operating income (loss)		29,905			(3,841	)		32,829
Other (expense)/income:
Interest expense		(2,280	)		(1,578	)		(1,714	)
Interest and other income		324			263			353
Total other expenses		(1,956	)		(1,315	)		(1,361	)
Income (loss) before income tax expense		27,949			(5,156	)		31,468
Income tax expense (benefit)		1,974			(891	)		56
Net income (loss)	$	25,975		$	(4,265	)	$	31,412
Less: Net income (loss) attributable to non-controlling interests		22,110			(4,211	)		–
Net income (loss) attributable to Spark Energy, Inc. stockholders	$	3,865		$	(54	)	$	31,412
Other comprehensive income (loss):
Deferred gain from cash flow hedges		–			–			2,620
Reclassification of deferred loss from cash flow hedges into net income		–			–			(84	)
Comprehensive income (loss)	$	25,975		$	(4,265	)	$	33,948

Net income (loss) attributable to Spark Energy, Inc. per common share
Basic	$	1.26		$	(0.02	)
Diluted	$	1.06		$	(0.02	)

Weighted average commons shares outstanding
Basic		3,064			3,000
Diluted		3,327			3,000
⁽¹⁾ Retail revenues includes retail revenues—affiliates of $0, $2,170 and $4,022 for the years ended December 31, 2015, 2014 and 2013, respectively.
⁽²⁾ Net asset optimization revenues includes asset optimization revenues—affiliates of $1,101, $12,842 and $14,940 for the years ended December 31, 2015, 2014 and 2013, respectively, and asset optimization revenues—affiliates cost of revenues of $11,285, $30,910 and $15,928 for the years ended December 31, 2015, 2014 and 2013, respectively.
⁽³⁾ Retail cost of revenues includes retail cost of revenues—affiliates of $17, $13 and $55 for the years December 31, 2015, 2014 and 2013, respectively.
⁽⁴⁾ General and administrative includes general and administrative expense—affiliates of $0, less than $100 and less than $100 for the years ended December 31, 2015, 2014 and 2013, respectively.

SPARK ENERGY, INC.
COMBINED AND CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2015, 2014 and 2013
(in thousands)

Member’s Equity

Issued Shares of Class A Common Stock

Issued Shares of Class B Common Stock

Issued Shares of Preferred Stock

Class A Common Stock

Class B Common Stock

Accumulated Other Comprehensive Income

Additional Paid-In Capital

Retained Deficit

Total Stockholders’ Equity

Non-controlling Interest

Total Equity

Balance at 12/31/2012:

63,838

–

(2,536

)

–

61,302

Capital contributions from member

12,400

–

12,400

Distributions to member

(71,737

)

–

(71,737

)

Net income

31,412

–

31,412

Deferred gain from cash flow hedges

–

2,620

–

2,620

Reclassification of deferred loss from cash flow hedges into net income

–

(84

)

–

(84

)

Balance at 12/31/2013:

35,913

–

35,913

Capital contributions from member and liabilities retained by affiliate

54,201

–

54,201

Distributions to member

(61,607

)

–

(61,607

)

Net loss prior to the IPO

(21

)

–

(21

)

Balance prior to Corporate Reorganization and the IPO:

28,486

–

28,486

Reorganization Transaction:

Issuance of Class B common stock

(28,486

)

–

10,750

–

108

–

28,378

–

28,486

–

IPO Transactions:

IPO costs paid

–

(2,667

)

–

(2,667

)

–

(2,667

)

Issuance of Class A Common Stock, net of underwriters discount

–

3,000

–

50,190

–

50,220

–

50,220

Distribution of IPO proceeds and payment of note payable to affiliate

–

(47,604

)

–

(47,604

)

–

(47,604

)

Initial allocation of non-controlling interest of Spark Energy, Inc. effective on date of IPO

–

(22,232

)

–

(22,232

)

22,232

–

Tax benefit from tax receivable agreement

–

23,636

–

23,636

–

23,636

Liability due to tax receivable agreement

–

(20,915

)

–

(20,915

)

–

(20,915

)

Balance at inception of public company (8/1/2014):

–

3,000

10,750

–

108

–

8,786

–

8,924

22,232

31,156

Stock based compensation

–

510

–

510

–

510

Consolidated net loss subsequent to the IPO

–

(54

)

(54

)

(4,190

)

(4,244

)

Distributions paid to Class B non-controlling unit holders

–

(2,584

)

(2,584

)

Dividends paid to Class A common shareholders

–

(721

)

(721

)

–

(721

)

Balance at 12/31/2014:

–

3,000

10,750

–

108

–

9,296

(775

)

8,659

15,458

24,117

Stock based compensation

–

2,165

–

2,165

–

2,165

Restricted stock unit vesting

–

119

–

186

–

187

–

187

Contribution from NuDevco

–

129

–

129

–

129

Consolidated net income

–

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:

–

3,119

10,750

–

108

–

12,565

(1,366

)

11,338

21,981

33,319

SPARK ENERGY, INC.
COMBINED AND CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2015, 2014 AND 2013
(in thousands)

	Year Ended December 31,
		2015			2014			2013
Cash flows from operating activities:
Net income (loss)	$	25,975		$	(4,265	)	$	31,412
Adjustments to reconcile net income (loss) to net cash flows provided by operating activities:
Depreciation and amortization expense		25,378			22,221			16,215
Deferred income taxes		1,340			(1,064	)		–
Stock based compensation		3,181			858			–
Amortization and write off of deferred financing costs		412			631			678
Bad debt expense		7,908			10,164			3,101
Loss (gain) on derivatives, net		18,497			14,535			(6,567	)
Current period cash settlements on derivatives, net		(23,948	)		3,479			(1,040	)
Other		(1,320	)		–			–
Changes in assets and liabilities:
Decrease (increase) in restricted cash		707			(707	)		–
Decrease (increase) in accounts receivable		7,876			(11,283	)		6,338
(Increase) decrease in accounts receivable—affiliates		(608	)		5,563			13,369
Decrease (increase) in inventory		4,544			(3,711	)		(599	)
Increase in customer acquisition costs		(19,869	)		(26,191	)		(8,257	)
Decrease (increase) in prepaid and other current assets		10,845			(6,905	)		(1,917	)
(Increase) decrease in other assets		(1,101	)		(90	)		144
Increase in customer relationships and trademarks		(2,776	)		(1,545	)		–
(Decrease) increase in accounts payable and accrued liabilities		(13,307	)		1,449			(7,879	)
Increase in accounts payable—affiliates		944			1,017			–
(Decrease) increase in other current liabilities		(645	)		1,867			(518	)
Decrease (increase) in other non-current liabilities		1,898			(149	)		–
Net cash provided by operating activities		45,931			5,874			44,480
Cash flows from investing activities:
Acquisitions of CenStar and Oasis		(39,847	)		–			–
Purchases of property and equipment		(1,766	)		(3,040	)		(1,481	)
Contribution to equity method investment in eRex Spark		(330	)		–			–
Net cash used in investing activities		(41,943	)		(3,040	)		(1,481	)
Cash flows from financing activities:
Borrowings on notes payable		59,224			78,500			80,000
Payments on notes payable		(49,826	)		(44,000	)		(62,500	)
Issuance of convertible subordinated notes to affiliate		7,075			–			–
Restricted stock vesting		(432	)		–			–
Contributions from NuDevco		129			–			–
Deferred financing costs		–			(402	)		(532	)
Member contribution (distributions), net		–			(36,406	)		(59,337	)
Proceeds from issuance of Class A common stock		–			50,220			–
Distributions of proceeds from IPO to affiliate		–			(47,554	)		–
Payment of note payable to NuDevco		–			(50	)		–
IPO costs		–			(2,667	)		–
Payment of distributions to Class B non-controlling unit holders		(15,587	)		(2,584	)		–
Payment of dividends to Class A common shareholders		(4,456	)		(721	)		–
Net cash used in financing activities		(3,873	)		(5,664	)		(42,369	)
Increase (decrease) in cash and cash equivalents		115			(2,830	)		630
Cash and cash equivalents—beginning of period		4,359			7,189			6,559
Cash and cash equivalents—end of period	$	4,474		$	4,359		$	7,189
Supplemental Disclosure of Cash Flow Information:
Non cash items:
Issuance of Class B common stock	$	–		$	28,486		$	–
Liabilities retained by affiliate	$	–		$	29,000		$	–
Tax benefit from tax receivable agreement	$	(64	)	$	23,636		$	–
Liability due to tax receivable agreement	$	(55	)	$	20,767		$	–
Initial allocation of non-controlling interest	$	–		$	22,232		$	–
Property and equipment purchase accrual	$	45		$	19		$	–
CenStar Earnout accrual	$	500		$	–		$	–
Cash paid during the period for:
Interest	$	1,661		$	860		$	879
Taxes	$	216		$	85		$	195

SPARK ENERGY, INC.
OPERATING SEGMENT RESULTS
FOR THE YEARS ENDED DECEMBER 31, 2015, 2014 and 2013
(in millions, except per unit operating data)
(unaudited)

	Year Ended December 31,
		2015			2014			2013
Retail Natural Gas Segment
Total Revenues	$	128.7		$	146.5		$	125.2
Retail Cost of Revenues		70.5			109.2			83.1
Less: Net Asset Optimization Revenues		1.5			2.3			0.3
Less: Net Gains (Losses) on non-trading derivatives, net of cash settlements		3.3			(9.3	)		(0.6	)
Retail Gross Margin—Gas	$	53.4		$	44.3		$	42.4
Volumes—Gas (MMBtu’s)		14,786,681			15,724,708			16,598,751
Retail Gross Margin—Gas per MMBtu	$	3.61		$	2.82		$	2.55
Retail Electricity Segment
Total Revenues	$	229.5		$	176.4		$	191.9
Retail Cost of Revenues		170.7			149.5			149.9
Less: Net Gains (Losses) on non-trading derivatives, net of cash settlements		(1.4	)		(5.7	)		2.7
Retail Gross Margin—Electricity	$	60.2		$	32.6		$	39.3
Volumes—Electricity (MWh’s)		2,075,479			1,526,652			1,829,657
Retail Gross Margin—Electricity per MWh	$	29.03		$	21.37		$	21.48

Reconciliation of GAAP to Non-GAAP Measures

Adjusted EBITDA

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 a company’s 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 combined and 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.

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.

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,
		2015			2014			2015			2014
Reconciliation of Adjusted EBITDA to Net Income (Loss):
Net income (loss)	$	25,975		$	(4,265	)	$	3,132		$	(11,394	)
Depreciation and amortization		25,378			22,221			7,505			11,897
Interest expense		2,280			1,578			865			428
Income tax expense (benefit)		1,974			(891	)		374			(1,668	)
EBITDA		55,607			18,643			11,876			(737	)
Less:
Net, Losses on derivative instruments		(18,497	)		(14,535	)		(12,379	)		(14,797	)
Net, Cash settlements on derivative instruments		20,547			(3,479	)		7,660			3,773
Customer acquisition costs		19,869			26,191			2,144			5,825
Plus:
Non-cash compensation expense		3,181			858			1,807			496
Adjusted EBITDA	$	36,869		$	11,324		$	16,258		$	4,958

	Year Ended December 31,						Quarter Ended December 31,
		2015			2014			2015			2014
Reconciliation of Adjusted EBITDA to net cash provided by (used in) operating activities:
Net cash provided by operating activities	$	45,931		$	5,874		$	6,256		$	(6,091	)
Amortization of deferred financing costs		(412	)		(631	)		(117	)		(51	)
Allowance for doubtful accounts and bad debt expense		(7,908	)		(10,164	)		(1,826	)		(6,191	)
Interest expense		2,280			1,578			865			428
Income tax expense (benefit)		1,974			(891	)		375			(1,668	)
Changes in operating working capital
Accounts receivable, prepaids, current assets		(18,820	)		13,332			10,640			24,725
Inventory		4,544			3,711			7,522			(1,627	)
Accounts payable and accrued liabilities		13,008			(2,466	)		(753	)		(7,505	)
Other		(3,728	)		981			(6,704	)		2,938
Adjusted EBITDA	$	36,869		$	11,324		$	16,258		$	4,958
Cash Flow Data:
Cash flows provided by (used in) operating activity	$	45,931		$	5,874		$	6,256		$	(6,091	)
Cash flows (used in) provided by investing activity	$	(41,943	)	$	(3,040	)	$	876		$	(826	)
Cash flows (used in) provided by financing activity	$	(3,873	)	$	(5,664	)	$	(10,013	)	$	8,793

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

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

	Year Ended December 31,						Quarter Ended December 31,
		2015			2014			2015			2014
Reconciliation of Retail Gross Margin to Operating Income (Loss):
Operating income (loss)	$	29,905		$	(3,841	)	$	4,374		$	(12,786	)
Depreciation and amortization		25,378			22,221			7,505			11,897
General and administrative		61,682			45,880			17,773			17,386
Less:
Net asset optimization revenues		1,494			2,318			177			637
Net, Losses on non-trading derivative instruments		(18,423	)		(8,713	)		(12,547	)		(14,560	)
Net, Cash settlements on non-trading derivative instruments		20,279			(6,289	)		7,636			3,670
Retail Gross Margin	$	113,615		$	76,944		$	34,386		$	26,750

Contact: Spark Energy, Inc.

Investors:
Andy Davis, 832-200-3727

Media:
Jenn Korell, 281-833-4151

Source: Spark Energy, Inc.

Spark Energy, Inc. Changes Full Year and Fourth Quarter 2015 Conference Call Date to March 24, 2016

Posted on March 4, 2016October 19, 2021 by Kira Jordan

HOUSTON, March 04, 2016 (GLOBE NEWSWIRE) — Spark Energy, Inc. (NASDAQ:SPKE), a Delaware corporation (“Spark”), announced today that it has changed the date of its Full Year and Fourth Quarter 2015 conference call to Thursday, March 24 at 10:00 AM Central (11:00 AM Eastern), from the previously scheduled March 29 date. Spark is in a position to file its Form 10-K for the year ended December 31, 2015 earlier than previously anticipated.

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 16 states and serves 66 utility territories. Spark offers its customers a variety of product and service choices, including stable and predictable energy costs and green product alternatives.

Contact:  Spark Energy, Inc.

Investors:
Andy Davis, 832-200-3727

Media:
Jenn Korell, 281-833-4151

Source: Spark Energy, Inc.

National Gas & Electric, LLC Reaches Agreement to Acquire Retail Energy Companies With Over 500,000 Customers

Posted on February 2, 2016October 8, 2021 by Brittney Sanchez

HOUSTON, Feb. 02, 2016 (GLOBE NEWSWIRE) — National Gas & Electric, LLC (“NG&E”) has entered into agreements for the purchase of retail energy companies with over 500,000 of combined residential customer equivalents (RCEs). Contingent upon closing, along with the previously announced acquisitions dated November 24, 2015, NG&E could house over 600,000 RCEs that are within a similar geographic footprint to its affiliate, Spark Energy, Inc.

“It is truly an exciting and dynamic time in the retail energy space,” said W. Keith Maxwell III, NG&E’s CEO. “With these potential acquisitions at NG&E, we are creating a customer book of significant scale that provides a long-term source of potential dropdowns to Spark.”

NG&E intends to fund these acquisitions with a combination of the sale of a portion of Spark Common Stock held by NG&E’s parent and the leveraging of the parent’s balance sheet. NG&E’s parent, which currently owns over 10.0 million shares of Spark stock, intends to begin sales in the first quarter of 2016. NG&E hopes to close on these potential acquisitions in the first half 2016.

Spark Energy, Inc. (“Spark”) (NASDAQ:SPKE) an affiliated company, successfully closed on its first dropdown acquisition of Oasis Power, from the parent-level on July 31, 2015. While NG&E intends to offer these customers to Spark, there is no assurance that such a transaction will be completed as it remains subject to negotiation of definitive agreements and necessary board approvals.

About National Gas & Electric, LLC

NG&E is wholly owned by W. Keith Maxwell III, who is also the Founder and Chairman of Spark Energy. NG&E is working alongside Spark to develop a strategy that maximizes Spark’s ability to aggressively pursue additional growth through M&A while also serving as a retail holding company for the de-risking of acquired books of customers.

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 16 states and serves 66 utility territories. Spark offers its customers a variety of product and service choices, including stable and predictable energy costs and green product alternatives.

Forward-Looking Statements

This press release includes “forward-looking statements” as defined by the Securities and Exchange Commission. All statements, other than statements of historical fact, included herein that address activities, events, developments or transactions that NG&E or Spark expect, believe or anticipate will or may occur in the future are forward-looking statements. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from expectations, including the negotiation and execution of definitive agreements and the parties’ ability to consummate such agreements, required approvals by regulatory agencies, the possibility that the anticipated benefits from such activities, events, developments or transactions cannot be fully realized, the possibility that costs or difficulties related thereto will be greater than expected, the impact of competition, and other risk factors included in Spark’s reports filed with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates. Except as required by law, neither NG&E nor Spark intend to update or revise its forward-looking statements, whether as a result of new information, future events or otherwise.

National Gas & Electric, LLC

Michael Tsang, VP of Finance & Capital Markets
832-320-2917

Spark Energy, Inc.

Investors:
Andy Davis, 832-200-3727

Media:
Jenn Korell, 281-833-4151

Source: National Gas & Electric, LLC