UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-Q
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Delaware
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46-5453215
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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Title of each class
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Trading Symbols(s)
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Name of exchange on which registered
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Class A common stock, par value $0.01 per share
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SPKE
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The NASDAQ Global Select Market
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8.75% Series A Fixed-to-Floating Rate
Cumulative Redeemable Perpetual Preferred Stock, par value $0.01 per share |
SPKEP
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The NASDAQ Global Select Market
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•
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potential risks and uncertainties relating to the ultimate impact of COVID-19, including the geographic spread, the severity of the disease, the duration of the COVID-19 outbreak, actions that may be taken by governmental authorities to contain the COVID-19 outbreak or to treat its impact, and the potential negative impacts of COVID-19 on the global economy and financial markets;
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•
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changes in commodity prices;
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•
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the sufficiency of risk management and hedging policies and practices;
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•
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the impact of extreme and unpredictable weather conditions, including hurricanes and other natural disasters;
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•
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federal, state and local regulations, including the industry's ability to address or adapt to potentially restrictive new regulations that may be enacted by public utility commissions;
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•
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our ability to borrow funds and access credit markets;
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•
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restrictions in our debt agreements and collateral requirements;
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•
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credit risk with respect to suppliers and customers;
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•
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changes in costs to acquire customers as well as actual attrition rates;
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•
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accuracy of billing systems;
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•
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our ability to successfully identify, complete, and efficiently integrate acquisitions into our operations;
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•
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significant changes in, or new changes by, the independent system operators ("ISOs") in the regions we operate;
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•
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competition; and
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•
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the "Risk Factors" in our Annual Report Form 10-K for the year ended December 31, 2019, in "Item 1A— Risk Factors" of this Report, and in our other public filings and press releases.
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March 31, 2020
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December 31, 2019
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||||
Assets
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||||
Current assets:
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||||
Cash and cash equivalents
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$
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54,466
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$
|
56,664
|
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Restricted cash
|
1,005
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|
|
1,004
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||
Accounts receivable, net of allowance for doubtful accounts of $5,935 at March 31, 2020 and $4,797 at December 31, 2019
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79,801
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113,635
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||
Accounts receivable—affiliates
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2,937
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|
2,032
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Inventory
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264
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2,954
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Fair value of derivative assets
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15
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464
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Customer acquisition costs, net
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6,759
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8,649
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Customer relationships, net
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12,676
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13,607
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Deposits
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6,327
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|
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6,806
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Renewable energy credit asset
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32,504
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24,204
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Other current assets
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10,161
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6,109
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Total current assets
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206,915
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236,128
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Property and equipment, net
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3,297
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3,267
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Fair value of derivative assets
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—
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106
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||
Customer acquisition costs, net
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9,072
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9,845
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Customer relationships, net
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14,748
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17,767
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Deferred tax assets
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30,333
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29,865
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Goodwill
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120,343
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120,343
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Other assets
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4,924
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|
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5,647
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Total assets
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$
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389,632
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$
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422,968
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Liabilities, Series A Preferred Stock and Stockholders' Equity
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|
||||
Current liabilities:
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|
||||
Accounts payable
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$
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34,654
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$
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48,245
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Accounts payable—affiliates
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934
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|
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1,009
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Accrued liabilities
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35,891
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37,941
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Renewable energy credit liability
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37,918
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33,120
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Fair value of derivative liabilities
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26,450
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19,943
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Other current liabilities
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1,741
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1,697
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Total current liabilities
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137,588
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141,955
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Long-term liabilities:
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Fair value of derivative liabilities
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1,832
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495
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Long-term portion of Senior Credit Facility
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95,000
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123,000
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Other long-term liabilities
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197
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217
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Total liabilities
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234,617
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265,667
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Commitments and contingencies (Note 12)
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Series A Preferred Stock, par value $0.01 per share, 20,000,000 shares authorized, 3,707,256 shares issued and 3,607,571 shares outstanding at March 31, 2020 and 3,707,256 shares issued and 3,677,318 shares outstanding at December 31, 2019
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88,282
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90,015
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Stockholders' equity:
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Common Stock:
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Class A common stock, par value $0.01 per share, 120,000,000 shares authorized, 14,494,981 shares issued and 14,395,535 shares outstanding at March 31, 2020 and 14,478,999 shares issued and 14,379,553 shares outstanding at December 31, 2019
|
145
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|
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145
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|
||
Class B common stock, par value $0.01 per share, 60,000,000 shares authorized, 20,800,000 shares issued and outstanding at March 31, 2020 and 20,800,000 shares issued and outstanding at December 31, 2019
|
209
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|
|
209
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Additional paid-in capital
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52,710
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51,842
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Accumulated other comprehensive loss
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(40
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)
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(40
|
)
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Retained earnings
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814
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|
1,074
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Treasury stock, at cost, 99,446 shares at March 31, 2020 and December 31, 2019
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(2,011
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)
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(2,011
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)
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Total stockholders' equity
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51,827
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51,219
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Non-controlling interest in Spark HoldCo, LLC
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14,906
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16,067
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Total equity
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66,733
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67,286
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Total liabilities, Series A Preferred Stock and Stockholders' equity
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$
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389,632
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$
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422,968
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Three Months Ended March 31,
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||||||
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2020
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2019
|
||||
Revenues:
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||||
Retail revenues
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$
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166,360
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$
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240,154
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Net asset optimization revenues
|
321
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2,552
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Total Revenues
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166,681
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242,706
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Operating Expenses:
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|
||||
Retail cost of revenues
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118,823
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195,255
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General and administrative
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25,676
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29,476
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Depreciation and amortization
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8,796
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12,155
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Total Operating Expenses
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153,295
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236,886
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Operating income
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13,386
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|
5,820
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|
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Other (expense)/income:
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|
||||
Interest expense
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(1,553
|
)
|
|
(2,223
|
)
|
||
Interest and other income
|
160
|
|
|
189
|
|
||
Total other expenses
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(1,393
|
)
|
|
(2,034
|
)
|
||
Income before income tax expense
|
11,993
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|
|
3,786
|
|
||
Income tax expense
|
1,925
|
|
|
1,041
|
|
||
Net income
|
$
|
10,068
|
|
|
$
|
2,745
|
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Less: Net income attributable to non-controlling interests
|
5,589
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|
|
1,963
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|
||
Net income attributable to Spark Energy, Inc. stockholders
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$
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4,479
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|
|
$
|
782
|
|
Less: Dividend on Series A Preferred Stock
|
1,500
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|
|
2,027
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|
||
Net income (loss) attributable to stockholders of Class A common stock
|
$
|
2,979
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|
|
$
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(1,245
|
)
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Other comprehensive income (loss), net of tax:
|
|
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|
||||
Currency translation loss
|
$
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—
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$
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(35
|
)
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Other comprehensive loss
|
—
|
|
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(35
|
)
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Comprehensive income
|
$
|
10,068
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|
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$
|
2,710
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Less: Comprehensive income attributable to non-controlling interests
|
5,589
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|
|
1,943
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|
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Comprehensive income attributable to Spark Energy, Inc. stockholders
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$
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4,479
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|
$
|
767
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|
|
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|
||||
Net income (loss) attributable to Spark Energy, Inc. per share of Class A common stock
|
|
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|
||||
Basic
|
$
|
0.21
|
|
|
$
|
(0.09
|
)
|
Diluted
|
$
|
0.20
|
|
|
$
|
(0.09
|
)
|
|
|
|
|
|
|||
Weighted average shares of Class A common stock outstanding
|
|
|
|
|
|||
Basic
|
14,381
|
|
|
14,135
|
|
||
Diluted
|
14,784
|
|
|
14,135
|
|
||
|
|
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|
THREE MONTHS ENDED MARCH 31, 2020
|
|||||||||||||||||||||||||||||||||
|
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, 2019
|
14,479
|
|
20,800
|
|
(99
|
)
|
$
|
145
|
|
$
|
209
|
|
$
|
(2,011
|
)
|
$
|
(40
|
)
|
$
|
51,842
|
|
$
|
1,074
|
|
$
|
51,219
|
|
$
|
16,067
|
|
$
|
67,286
|
|
Impact of adoption of ASC 326
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(633
|
)
|
(633
|
)
|
—
|
|
(633
|
)
|
|||||||||
Balance at January 1, 2020
|
14,479
|
|
20,800
|
|
(99
|
)
|
145
|
|
209
|
|
(2,011
|
)
|
(40
|
)
|
51,842
|
|
441
|
|
50,586
|
|
16,067
|
|
66,653
|
|
|||||||||
Stock based compensation
|
—
|
|
—
|
|
—
|
|
|
|
—
|
|
—
|
|
—
|
|
1,329
|
|
—
|
|
1,329
|
|
—
|
|
1,329
|
|
|||||||||
Restricted stock unit vesting
|
16
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(39
|
)
|
—
|
|
(39
|
)
|
—
|
|
(39
|
)
|
|||||||||
Consolidated net income
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
4,479
|
|
4,479
|
|
5,589
|
|
10,068
|
|
|||||||||
Distributions paid to non-controlling unit holders
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(7,172
|
)
|
(7,172
|
)
|
|||||||||
Dividends paid to Class A common stockholders ($0.18125 per share)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(2,606
|
)
|
(2,606
|
)
|
—
|
|
(2,606
|
)
|
|||||||||
Dividends paid to Preferred Stockholders
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(1,500
|
)
|
(1,500
|
)
|
—
|
|
(1,500
|
)
|
|||||||||
Changes in ownership interest
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(422
|
)
|
—
|
|
(422
|
)
|
422
|
|
—
|
|
|||||||||
Balance at March 31, 2020
|
14,495
|
|
20,800
|
|
(99
|
)
|
$
|
145
|
|
$
|
209
|
|
$
|
(2,011
|
)
|
$
|
(40
|
)
|
$
|
52,710
|
|
$
|
814
|
|
$
|
51,827
|
|
$
|
14,906
|
|
$
|
66,733
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THREE MONTHS ENDED MARCH 31, 2019
|
|||||||||||||||||||||||||||||||||
|
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, 2018
|
14,178
|
|
20,800
|
|
(99
|
)
|
$
|
142
|
|
$
|
209
|
|
$
|
(2,011
|
)
|
$
|
2
|
|
$
|
46,157
|
|
$
|
1,307
|
|
$
|
45,806
|
|
$
|
44,488
|
|
$
|
90,294
|
|
Stock based compensation
|
63
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1,071
|
|
—
|
|
1,071
|
|
—
|
|
1,071
|
|
|||||||||
Consolidated net income
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
782
|
|
782
|
|
1,963
|
|
2,745
|
|
|||||||||
Foreign currency translation adjustment for equity method investee
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(14
|
)
|
—
|
|
—
|
|
(14
|
)
|
(21
|
)
|
(35
|
)
|
|||||||||
Distributions paid to non-controlling unit holders
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(3,770
|
)
|
(3,770
|
)
|
|||||||||
Dividends paid to Class A common stockholders ($0.18125 per share)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(2,564
|
)
|
—
|
|
(2,564
|
)
|
—
|
|
(2,564
|
)
|
|||||||||
Changes in ownership interest
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1,059
|
|
—
|
|
1,059
|
|
(1,059
|
)
|
—
|
|
|||||||||
Dividends to Preferred Stockholders
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(2,027
|
)
|
(2,027
|
)
|
—
|
|
(2,027
|
)
|
|||||||||
Proceeds from disgorgement of stockholder short-swing profits
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
46
|
|
—
|
|
46
|
|
—
|
|
46
|
|
|||||||||
Acquisition of Customers from Affiliate
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(10
|
)
|
(10
|
)
|
|||||||||
Balance at March 31, 2019
|
14,241
|
|
20,800
|
|
(99
|
)
|
$
|
142
|
|
$
|
209
|
|
$
|
(2,011
|
)
|
$
|
(12
|
)
|
$
|
45,769
|
|
$
|
62
|
|
$
|
44,159
|
|
$
|
41,591
|
|
$
|
85,750
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income
|
$
|
10,068
|
|
|
$
|
2,745
|
|
Adjustments to reconcile net loss to net cash flows provided by operating activities:
|
|
|
|
||||
Depreciation and amortization expense
|
8,796
|
|
|
12,159
|
|
||
Deferred income taxes
|
(468
|
)
|
|
59
|
|
||
Stock based compensation
|
1,324
|
|
|
1,172
|
|
||
Amortization of deferred financing costs
|
250
|
|
|
268
|
|
||
Bad debt expense
|
2,355
|
|
|
3,849
|
|
||
Loss on derivatives, net
|
24,587
|
|
|
19,541
|
|
||
Current period cash settlements on derivatives, net
|
(16,293
|
)
|
|
(7,106
|
)
|
||
Other
|
—
|
|
|
(137
|
)
|
||
Changes in assets and liabilities:
|
|
|
|
||||
Decrease in accounts receivable
|
30,847
|
|
|
16,129
|
|
||
Increase in accounts receivable—affiliates
|
(905
|
)
|
|
(73
|
)
|
||
Decrease in inventory
|
2,690
|
|
|
3,643
|
|
||
Increase in customer acquisition costs
|
(1,345
|
)
|
|
(5,789
|
)
|
||
Increase in prepaid and other current assets
|
(11,967
|
)
|
|
(5,692
|
)
|
||
Decrease (increase) in other assets
|
289
|
|
|
(102
|
)
|
||
Decrease in accounts payable and accrued liabilities
|
(10,892
|
)
|
|
(11,322
|
)
|
||
Decrease in accounts payable—affiliates
|
(75
|
)
|
|
(18
|
)
|
||
Increase in other current liabilities
|
149
|
|
|
390
|
|
||
Increase in other non-current liabilities
|
(21
|
)
|
|
333
|
|
||
Net cash provided by operating activities
|
39,389
|
|
|
30,049
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Purchases of property and equipment
|
(536
|
)
|
|
(254
|
)
|
||
Acquisition of Customers from Affiliate
|
—
|
|
|
(5,869
|
)
|
||
Net cash used in investing activities
|
(536
|
)
|
|
(6,123
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Buyback of Series A Preferred Stock
|
(1,222
|
)
|
|
—
|
|
||
Borrowings on notes payable
|
75,000
|
|
|
64,500
|
|
||
Payments on notes payable
|
(103,000
|
)
|
|
(93,500
|
)
|
||
Payments on the Verde promissory note
|
—
|
|
|
(1,036
|
)
|
||
Proceeds from disgorgement of stockholders short-swing profits
|
—
|
|
|
46
|
|
||
Restricted stock vesting
|
(39
|
)
|
|
—
|
|
||
Payment of dividends to Class A common stockholders
|
(2,606
|
)
|
|
(2,564
|
)
|
||
Payment of distributions to non-controlling unitholders
|
(7,172
|
)
|
|
(3,770
|
)
|
||
Payment of Preferred Stock dividends
|
(2,011
|
)
|
|
(2,027
|
)
|
||
Payment to affiliates for acquisition of customer book
|
—
|
|
|
(10
|
)
|
||
Net cash used in financing activities
|
(41,050
|
)
|
|
(38,361
|
)
|
||
Decrease in Cash, cash equivalents and Restricted cash
|
(2,197
|
)
|
|
(14,435
|
)
|
||
Cash, cash equivalents and Restricted cash—beginning of period
|
57,668
|
|
|
49,638
|
|
||
Cash, cash equivalents and Restricted cash—end of period
|
$
|
55,471
|
|
|
$
|
35,203
|
|
Supplemental Disclosure of Cash Flow Information:
|
|
|
|
||||
Non-cash items:
|
|
|
|
|
|
||
Property and equipment purchase accrual
|
$
|
55
|
|
|
$
|
2
|
|
Cash paid during the period for:
|
|
|
|
||||
Interest
|
$
|
1,327
|
|
|
$
|
2,099
|
|
Taxes
|
$
|
465
|
|
|
$
|
(3,147
|
)
|
|
Reportable Segments
|
||||||||||||||||||||||
|
Three Months Ended March 31, 2020
|
|
Three Months Ended March 31, 2019
|
||||||||||||||||||||
|
Retail Electricity
|
|
Retail Natural Gas
|
|
Total Reportable Segments
|
|
Retail Electricity
|
|
Retail Natural Gas
|
|
Total Reportable Segments
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Primary markets (a)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
New England
|
$
|
46,593
|
|
|
$
|
7,054
|
|
|
$
|
53,647
|
|
|
$
|
76,234
|
|
|
$
|
8,528
|
|
|
$
|
84,762
|
|
Mid-Atlantic
|
45,842
|
|
|
15,804
|
|
|
61,646
|
|
|
66,811
|
|
|
21,369
|
|
|
88,180
|
|
||||||
Midwest
|
14,989
|
|
|
13,607
|
|
|
28,596
|
|
|
22,107
|
|
|
20,489
|
|
|
42,596
|
|
||||||
Southwest
|
14,344
|
|
|
8,127
|
|
|
22,471
|
|
|
16,940
|
|
|
7,676
|
|
|
24,616
|
|
||||||
|
$
|
121,768
|
|
|
$
|
44,592
|
|
|
$
|
166,360
|
|
|
$
|
182,092
|
|
|
$
|
58,062
|
|
|
$
|
240,154
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Customer type
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Commercial
|
$
|
40,015
|
|
|
$
|
15,517
|
|
|
$
|
55,532
|
|
|
$
|
67,235
|
|
|
$
|
19,867
|
|
|
$
|
87,102
|
|
Residential
|
93,228
|
|
|
33,363
|
|
|
126,591
|
|
|
124,768
|
|
|
41,095
|
|
|
165,863
|
|
||||||
Unbilled revenue (b)
|
(11,475
|
)
|
|
(4,288
|
)
|
|
(15,763
|
)
|
|
(9,911
|
)
|
|
(2,900
|
)
|
|
(12,811
|
)
|
||||||
|
$
|
121,768
|
|
|
$
|
44,592
|
|
|
$
|
166,360
|
|
|
$
|
182,092
|
|
|
$
|
58,062
|
|
|
$
|
240,154
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Customer credit risk
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
POR
|
$
|
84,913
|
|
|
$
|
23,037
|
|
|
$
|
107,950
|
|
|
$
|
128,937
|
|
|
$
|
28,979
|
|
|
$
|
157,916
|
|
Non-POR
|
36,855
|
|
|
21,555
|
|
|
58,410
|
|
|
53,155
|
|
|
29,083
|
|
|
82,238
|
|
||||||
|
$
|
121,768
|
|
|
$
|
44,592
|
|
|
$
|
166,360
|
|
|
$
|
182,092
|
|
|
$
|
58,062
|
|
|
$
|
240,154
|
|
|
|
|
|
|
|
|
|
|
|
|
|
•
|
New England - Connecticut, Maine, Massachusetts, New Hampshire;
|
•
|
Mid-Atlantic - Delaware, Maryland (including the District of Colombia), New Jersey, New York and Pennsylvania;
|
•
|
Midwest - Illinois, Indiana, Michigan and Ohio; and
|
•
|
Southwest - Arizona, California, Colorado, Florida, Nevada, and Texas.
|
|
The Company
|
Affiliated Owners
|
||
March 31, 2020
|
41.07
|
%
|
58.93
|
%
|
December 31, 2019
|
41.04
|
%
|
58.96
|
%
|
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
|
|
|
|
||||
Net income allocated to non-controlling interest
|
$
|
6,085
|
|
|
$
|
993
|
|
Income tax expense (benefit) allocated to non-controlling interest
|
496
|
|
|
(970
|
)
|
||
Net income attributable to non-controlling interest
|
$
|
5,589
|
|
|
$
|
1,963
|
|
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Net income attributable to Spark Energy, Inc. stockholders
|
$
|
4,479
|
|
|
$
|
782
|
|
Less: Dividend on Series A preferred stock
|
1,500
|
|
|
2,027
|
|
||
Net income (loss) attributable to stockholders of Class A common stock
|
$
|
2,979
|
|
|
$
|
(1,245
|
)
|
|
|
|
|
||||
Basic weighted average Class A common shares outstanding
|
14,381
|
|
|
14,135
|
|
||
Basic income (loss) per share attributable to stockholders
|
$
|
0.21
|
|
|
$
|
(0.09
|
)
|
|
|
|
|
||||
Net income (loss) attributable to stockholders of Class A common stock
|
$
|
2,979
|
|
|
$
|
(1,245
|
)
|
Effect of conversion of Class B common stock to shares of Class A common stock
|
—
|
|
|
—
|
|
||
Diluted net income (loss) attributable to stockholders of Class A common stock
|
$
|
2,979
|
|
|
$
|
(1,245
|
)
|
|
|
|
|
||||
Basic weighted average Class A common shares outstanding
|
14,381
|
|
|
14,135
|
|
||
Effect of dilutive Class B common stock
|
—
|
|
|
—
|
|
||
Effect of dilutive restricted stock units
|
403
|
|
|
—
|
|
||
Diluted weighted average shares outstanding
|
14,784
|
|
|
14,135
|
|
||
|
|
|
|
||||
Diluted income (loss) per share attributable to stockholders
|
$
|
0.20
|
|
|
$
|
(0.09
|
)
|
|
March 31, 2020
|
December 31, 2019
|
||||
Assets
|
|
|
||||
Current assets:
|
|
|
||||
Cash and cash equivalents
|
$
|
54,196
|
|
$
|
56,598
|
|
Accounts receivable
|
79,801
|
|
113,635
|
|
||
Other current assets
|
69,419
|
|
64,476
|
|
||
Total current assets
|
203,416
|
|
234,709
|
|
||
Non-current assets:
|
|
|
||||
Goodwill
|
120,343
|
|
120,343
|
|
||
Other assets
|
36,787
|
|
37,826
|
|
||
Total non-current assets
|
157,130
|
|
158,169
|
|
||
Total Assets
|
$
|
360,546
|
|
$
|
392,878
|
|
|
|
|
||||
Liabilities
|
|
|
||||
Current liabilities:
|
|
|
||||
Accounts payable and accrued liabilities
|
$
|
70,482
|
|
$
|
86,097
|
|
Other current liabilities
|
80,107
|
|
65,863
|
|
||
Total current liabilities
|
150,589
|
|
151,960
|
|
||
Long-term liabilities:
|
|
|
||||
Long-term portion of Senior Credit Facility
|
95,000
|
|
123,000
|
|
||
Other long-term liabilities
|
2,029
|
|
712
|
|
||
Total long-term liabilities
|
97,029
|
|
123,712
|
|
||
Total Liabilities
|
$
|
247,618
|
|
$
|
275,672
|
|
•
|
Forward contracts, which commit us to purchase or sell energy commodities in the future;
|
•
|
Futures contracts, which are exchange-traded standardized commitments to purchase or sell a commodity or financial instrument;
|
•
|
Swap agreements, which require payments to or from counterparties based upon the differential between two prices for a predetermined notional quantity; and
|
•
|
Option contracts, which convey to the option holder the right but not the obligation to purchase or sell a commodity.
|
•
|
Forward electricity and natural gas purchase contracts for retail customer load;
|
•
|
Renewable energy credits; and
|
•
|
Natural gas transportation contracts and storage agreements.
|
Commodity
|
Notional
|
|
March 31, 2020
|
|
December 31, 2019
|
||
Natural Gas
|
MMBtu
|
|
4,510
|
|
|
6,130
|
|
Natural Gas Basis
|
MMBtu
|
|
5
|
|
|
42
|
|
Electricity
|
MWh
|
|
4,678
|
|
|
6,015
|
|
Commodity
|
Notional
|
|
March 31, 2020
|
|
December 31, 2019
|
||
Natural Gas
|
MMBtu
|
|
154
|
|
|
204
|
|
Natural Gas Basis
|
MMBtu
|
|
—
|
|
|
—
|
|
|
|
|
|
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Loss on non-trading derivatives, net
|
$
|
(24,533
|
)
|
|
$
|
(19,803
|
)
|
(Loss) gain on trading derivatives, net
|
(54
|
)
|
|
262
|
|
||
Loss on derivatives, net
|
(24,587
|
)
|
|
(19,541
|
)
|
||
Current period settlements on non-trading derivatives (1)
|
16,609
|
|
|
8,125
|
|
||
Current period settlements on trading derivatives
|
(1
|
)
|
|
(100
|
)
|
||
Total current period settlements on derivatives
|
$
|
16,608
|
|
|
$
|
8,025
|
|
|
March 31, 2020
|
||||||||||||||||||
Description
|
Gross Assets
|
|
Gross
Amounts Offset |
|
Net Assets
|
|
Cash
Collateral Offset |
|
Net Amount
Presented |
||||||||||
Non-trading commodity derivatives
|
$
|
2,647
|
|
|
$
|
(2,632
|
)
|
|
$
|
15
|
|
|
$
|
—
|
|
|
$
|
15
|
|
Trading commodity derivatives
|
2
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total Current Derivative Assets
|
2,649
|
|
|
(2,634
|
)
|
|
15
|
|
|
—
|
|
|
15
|
|
|||||
Non-trading commodity derivatives
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Trading commodity derivatives
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total Non-current Derivative Assets
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total Derivative Assets
|
$
|
2,649
|
|
|
$
|
(2,634
|
)
|
|
$
|
15
|
|
|
$
|
—
|
|
|
$
|
15
|
|
|
March 31, 2020
|
||||||||||||||||||
Description
|
Gross
Liabilities |
|
Gross
Amounts Offset |
|
Net
Liabilities |
|
Cash
Collateral Offset |
|
Net Amount
Presented |
||||||||||
Non-trading commodity derivatives
|
$
|
(39,814
|
)
|
|
$
|
11,809
|
|
|
$
|
(28,005
|
)
|
|
$
|
1,555
|
|
|
$
|
(26,450
|
)
|
Trading commodity derivatives
|
(126
|
)
|
|
126
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total Current Derivative Liabilities
|
(39,940
|
)
|
|
11,935
|
|
|
(28,005
|
)
|
|
1,555
|
|
|
(26,450
|
)
|
|||||
Non-trading commodity derivatives
|
(2,634
|
)
|
|
796
|
|
|
(1,838
|
)
|
|
6
|
|
|
(1,832
|
)
|
|||||
Trading commodity derivatives
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total Non-current Derivative Liabilities
|
(2,634
|
)
|
|
796
|
|
|
(1,838
|
)
|
|
6
|
|
|
(1,832
|
)
|
|||||
Total Derivative Liabilities
|
$
|
(42,574
|
)
|
|
$
|
12,731
|
|
|
$
|
(29,843
|
)
|
|
$
|
1,561
|
|
|
$
|
(28,282
|
)
|
|
December 31, 2019
|
||||||||||||||||||
Description
|
Gross Assets
|
|
Gross
Amounts Offset |
|
Net Assets
|
|
Cash
Collateral Offset |
|
Net Amount
Presented |
||||||||||
Non-trading commodity derivatives
|
$
|
570
|
|
|
$
|
(275
|
)
|
|
$
|
295
|
|
|
$
|
—
|
|
|
$
|
295
|
|
Trading commodity derivatives
|
170
|
|
|
(1
|
)
|
|
169
|
|
|
—
|
|
|
169
|
|
|||||
Total Current Derivative Assets
|
740
|
|
|
(276
|
)
|
|
464
|
|
|
—
|
|
|
464
|
|
|||||
Non-trading commodity derivatives
|
333
|
|
|
(227
|
)
|
|
106
|
|
|
—
|
|
|
106
|
|
|||||
Trading commodity derivatives
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total Non-current Derivative Assets
|
333
|
|
|
(227
|
)
|
|
106
|
|
|
—
|
|
|
106
|
|
|||||
Total Derivative Assets
|
$
|
1,073
|
|
|
$
|
(503
|
)
|
|
$
|
570
|
|
|
$
|
—
|
|
|
$
|
570
|
|
|
December 31, 2019
|
||||||||||||||||||
Description
|
Gross
Liabilities |
|
Gross
Amounts Offset |
|
Net
Liabilities |
|
Cash
Collateral Offset |
|
Net Amount
Presented |
||||||||||
Non-trading commodity derivatives
|
$
|
(34,434
|
)
|
|
$
|
12,859
|
|
|
$
|
(21,575
|
)
|
|
$
|
1,632
|
|
|
$
|
(19,943
|
)
|
Trading commodity derivatives
|
(194
|
)
|
|
194
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total Current Derivative Liabilities
|
(34,628
|
)
|
|
13,053
|
|
|
(21,575
|
)
|
|
1,632
|
|
|
(19,943
|
)
|
|||||
Non-trading commodity derivatives
|
(1,951
|
)
|
|
1,422
|
|
|
(529
|
)
|
|
34
|
|
|
(495
|
)
|
|||||
Trading commodity derivatives
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total Non-current Derivative Liabilities
|
(1,951
|
)
|
|
1,422
|
|
|
(529
|
)
|
|
34
|
|
|
(495
|
)
|
|||||
Total Derivative Liabilities
|
$
|
(36,579
|
)
|
|
$
|
14,475
|
|
|
$
|
(22,104
|
)
|
|
$
|
1,666
|
|
|
$
|
(20,438
|
)
|
|
Estimated useful
lives (years) |
|
March 31, 2020
|
|
December 31, 2019
|
||||
Information technology
|
2 – 5
|
|
$
|
22,595
|
|
|
$
|
22,005
|
|
Furniture and fixtures
|
2 – 5
|
|
1,802
|
|
|
1,802
|
|
||
Total
|
|
|
24,397
|
|
|
23,807
|
|
||
Accumulated depreciation
|
|
|
(21,100
|
)
|
|
(20,540
|
)
|
||
Property and equipment—net
|
|
|
$
|
3,297
|
|
|
$
|
3,267
|
|
|
March 31, 2020
|
|
December 31, 2019
|
||||
Goodwill
|
$
|
120,343
|
|
|
$
|
120,343
|
|
Customer relationships—Acquired
|
|
|
|
||||
Cost
|
$
|
64,083
|
|
|
$
|
64,083
|
|
Accumulated amortization
|
(42,760
|
)
|
|
(40,231
|
)
|
||
Customer relationships—Acquired & Non-Compete Agreements, net
|
$
|
21,323
|
|
|
$
|
23,852
|
|
Customer relationships—Other
|
|
|
|
||||
Cost
|
$
|
17,056
|
|
|
$
|
17,056
|
|
Accumulated amortization
|
(10,955
|
)
|
|
(9,534
|
)
|
||
Customer relationships—Other, net
|
$
|
6,101
|
|
|
$
|
7,522
|
|
Trademarks
|
|
|
|
||||
Cost
|
$
|
7,570
|
|
|
$
|
8,502
|
|
Accumulated amortization
|
(2,139
|
)
|
|
(2,794
|
)
|
||
Trademarks, net
|
$
|
5,431
|
|
|
$
|
5,708
|
|
|
Goodwill
|
|
Customer Relationships— Acquired & Non-Compete Agreements
|
|
Customer Relationships— Other
|
|
Trademarks
|
||||||||
Balance at December 31, 2019
|
$
|
120,343
|
|
|
$
|
23,852
|
|
|
$
|
7,522
|
|
|
$
|
5,708
|
|
Additions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Amortization
|
—
|
|
|
(2,529
|
)
|
|
(1,421
|
)
|
|
(277
|
)
|
||||
Balance at March 31, 2020
|
$
|
120,343
|
|
|
$
|
21,323
|
|
|
$
|
6,101
|
|
|
$
|
5,431
|
|
Year ending December 31,
|
|
||
2020 (remaining nine months)
|
$
|
10,490
|
|
2021
|
13,142
|
|
|
2022
|
6,194
|
|
|
2023
|
605
|
|
|
2024
|
404
|
|
|
> 5 years
|
2,020
|
|
|
Total
|
$
|
32,855
|
|
|
March 31, 2020
|
|
December 31, 2019
|
||||
Long-term debt:
|
|
|
|
||||
Senior Credit Facility (1) (2)
|
95,000
|
|
|
123,000
|
|
||
Total long-term debt
|
95,000
|
|
|
123,000
|
|
||
Total debt
|
$
|
95,000
|
|
|
$
|
123,000
|
|
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Senior Credit Facility
|
$
|
911
|
|
|
$
|
1,442
|
|
Verde promissory note
|
—
|
|
|
141
|
|
||
Letters of credit fees and commitment fees
|
392
|
|
|
368
|
|
||
Amortization of deferred financing costs
|
250
|
|
|
268
|
|
||
Subordinated debt
|
—
|
|
|
4
|
|
||
Interest Expense
|
$
|
1,553
|
|
|
$
|
2,223
|
|
•
|
Minimum Fixed Charge Coverage Ratio. We must maintain a minimum fixed charge coverage ratio of not less than 1.25 to 1.00. The Fixed Charge Coverage Ratio is defined as the ratio of (a) Adjusted EBITDA to (b) the sum of consolidated (with respect to the Company and the Co-Borrowers) interest expense (other than interest paid-in-kind in respect of certain subordinated debt but including interest in respect of that certain promissory note made by CenStar Energy Corp. ("CenStar") in connection with the permitted acquisition from Verde Energy USA Holdings, LLC), letter of credit fees, commitment fees, acquisition earn-out payments (excluding earnout payments funded with proceeds from newly issued preferred or common equity), distributions, the aggregate amount of repurchases of our Class A common stock, Series A Preferred Stock, or commitments for such purchases, taxes and scheduled amortization payments. The Senior Credit Facility permits, upon satisfaction of a Step-Down Condition, for the Company to elect to reduce the minimum required Fixed Charge Coverage Ratio from 1.25 to 1.00 to 1.10 to 1.00 for a period of one year. A Step-Down Condition is defined as the consummation by the Company of share buybacks of its Series A Preferred Stock under the Repurchase Program with an aggregate purchase price not less than $10.0 million.
|
•
|
Maximum Total Leverage Ratio. We must maintain a ratio of total indebtedness (excluding eligible subordinated debt and letter of credit obligations) to Adjusted EBITDA of no more than 2.50 to 1.00.
|
•
|
Maximum Senior Secured Leverage Ratio. We must maintain a Senior Secured Leverage Ratio of no more than 1.85 to 1.00. The Senior Secured Leverage Ratio is defined as the ratio of (a) all indebtedness of the loan parties on a consolidated basis that is secured by a lien on any property of any loan party (including the effective amount of all loans then outstanding under the Senior Credit Facility) plus 50% of the effective amount of letter of credit obligations attributable to performance standby letters of credit to (b) Adjusted EBITDA.
|
•
|
Level 1—Quoted prices in active markets for identical assets and liabilities. Instruments categorized in Level 1 primarily consist of financial instruments such as exchange-traded derivative instruments.
|
•
|
Level 2—Inputs other than quoted prices recorded in Level 1 that are either directly or indirectly observable for the asset or liability, including quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in inactive markets, inputs other than quoted prices that are observable for the asset or liability, and inputs that are derived from observable market data by correlation or other means. Instruments categorized in Level 2 primarily include non-exchange traded derivatives such as over-the-counter commodity forwards and swaps and options.
|
•
|
Level 3—Unobservable inputs for the asset or liability, including situations where there is little, if any, observable market activity for the asset or liability.
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
March 31, 2020
|
|
|
|
|
|
|
|
||||||||
Non-trading commodity derivative assets
|
$
|
—
|
|
|
$
|
15
|
|
|
$
|
—
|
|
|
$
|
15
|
|
Trading commodity derivative assets
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total commodity derivative assets
|
$
|
—
|
|
|
$
|
15
|
|
|
$
|
—
|
|
|
$
|
15
|
|
Non-trading commodity derivative liabilities
|
$
|
—
|
|
|
$
|
(28,282
|
)
|
|
$
|
—
|
|
|
$
|
(28,282
|
)
|
Trading commodity derivative liabilities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total commodity derivative liabilities
|
$
|
—
|
|
|
$
|
(28,282
|
)
|
|
$
|
—
|
|
|
$
|
(28,282
|
)
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
December 31, 2019
|
|
|
|
|
|
|
|
||||||||
Non-trading commodity derivative assets
|
$
|
—
|
|
|
$
|
401
|
|
|
$
|
—
|
|
|
$
|
401
|
|
Trading commodity derivative assets
|
—
|
|
|
169
|
|
|
—
|
|
|
169
|
|
||||
Total commodity derivative assets
|
$
|
—
|
|
|
$
|
570
|
|
|
$
|
—
|
|
|
$
|
570
|
|
Non-trading commodity derivative liabilities
|
$
|
(1,666
|
)
|
|
$
|
(18,772
|
)
|
|
$
|
—
|
|
|
$
|
(20,438
|
)
|
Trading commodity derivative liabilities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total commodity derivative liabilities
|
$
|
(1,666
|
)
|
|
$
|
(18,772
|
)
|
|
$
|
—
|
|
|
$
|
(20,438
|
)
|
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Reconciliation of Retail Gross Margin to Income before taxes
|
|
|
|
||||
Income before income tax expense
|
$
|
11,993
|
|
|
$
|
3,786
|
|
Interest and other income
|
(160
|
)
|
|
(189
|
)
|
||
Interest expense
|
1,553
|
|
|
2,223
|
|
||
Operating income
|
13,386
|
|
|
5,820
|
|
||
Depreciation and amortization
|
8,796
|
|
|
12,155
|
|
||
General and administrative
|
25,676
|
|
|
29,476
|
|
||
Less:
|
|
|
|
||||
Net asset optimization revenues
|
321
|
|
|
2,552
|
|
||
Net, loss on non-trading derivative instruments
|
(24,533
|
)
|
|
(19,803
|
)
|
||
Net, Cash settlements on non-trading derivative instruments
|
16,609
|
|
|
8,125
|
|
||
Retail Gross Margin
|
$
|
55,461
|
|
|
$
|
56,577
|
|
Three Months Ended March 31, 2020
|
|||||||||||||||||||
|
Retail
Electricity |
|
Retail
Natural Gas |
|
Corporate
and Other |
|
Eliminations
|
|
Consolidated
|
||||||||||
Total Revenues
|
$
|
121,768
|
|
|
$
|
44,592
|
|
|
$
|
321
|
|
|
$
|
—
|
|
|
$
|
166,681
|
|
Retail cost of revenues
|
100,383
|
|
|
18,440
|
|
|
—
|
|
|
—
|
|
|
118,823
|
|
|||||
Less:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net asset optimization expenses
|
—
|
|
|
—
|
|
|
321
|
|
|
—
|
|
|
321
|
|
|||||
Net, loss on non-trading derivative instruments
|
(24,386
|
)
|
|
(147
|
)
|
|
—
|
|
|
—
|
|
|
(24,533
|
)
|
|||||
Current period settlements on non-trading derivatives
|
14,965
|
|
|
1,644
|
|
|
—
|
|
|
—
|
|
|
16,609
|
|
|||||
Retail Gross Margin
|
$
|
30,806
|
|
|
$
|
24,655
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
55,461
|
|
Total Assets at March 31, 2020
|
$
|
2,622,259
|
|
|
$
|
862,873
|
|
|
$
|
336,218
|
|
|
$
|
(3,431,718
|
)
|
|
$
|
389,632
|
|
Goodwill at March 31, 2020
|
$
|
117,813
|
|
|
$
|
2,530
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
120,343
|
|
Three Months Ended March 31, 2019
|
|||||||||||||||||||
|
Retail
Electricity |
|
Retail
Natural Gas |
|
Corporate
and Other |
|
Eliminations
|
|
Consolidated
|
||||||||||
Total revenues
|
$
|
182,092
|
|
|
$
|
58,062
|
|
|
$
|
2,552
|
|
|
$
|
—
|
|
|
$
|
242,706
|
|
Retail cost of revenues
|
165,888
|
|
|
29,367
|
|
|
—
|
|
|
—
|
|
|
195,255
|
|
|||||
Less:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net asset optimization revenues
|
—
|
|
|
—
|
|
|
2,552
|
|
|
—
|
|
|
2,552
|
|
|||||
Net, (loss) gain on non-trading derivative instruments
|
(21,942
|
)
|
|
2,139
|
|
|
—
|
|
|
—
|
|
|
(19,803
|
)
|
|||||
Current period settlements on non-trading derivatives
|
8,173
|
|
|
(48
|
)
|
|
—
|
|
|
—
|
|
|
8,125
|
|
|||||
Retail Gross Margin
|
$
|
29,973
|
|
|
$
|
26,604
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
56,577
|
|
Total Assets at December 31, 2019
|
$
|
2,524,884
|
|
|
$
|
820,601
|
|
|
$
|
341,411
|
|
|
$
|
(3,263,928
|
)
|
|
$
|
422,968
|
|
Goodwill at December 31, 2019
|
$
|
117,813
|
|
|
$
|
2,530
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
120,343
|
|
•
|
Retail Electricity Segment. In this segment, we purchase electricity supply through physical and financial transactions with market counterparties and ISOs and supply electricity to residential and commercial consumers pursuant to fixed-price and variable-price contracts. For the three months ended March 31, 2020 and 2019, approximately 73% and 76%, respectively, of our retail revenues were derived from the sale of electricity.
|
•
|
Retail Natural Gas Segment. In this segment, we purchase natural gas supply through physical and financial transactions with market counterparties and supply natural gas to residential and commercial consumers pursuant to fixed-price and variable-price contracts. For the three months ended March 31, 2020 and 2019, approximately 27% and 24%, respectively, of our retail revenues were derived from the sale of natural gas.
|
|
|
|
|
|
|
RCEs:
|
|
|
|
|
|
(In thousands)
|
December 31, 2019
|
Additions
|
Attrition
|
March 31, 2020
|
% Increase (Decrease)
|
Retail Electricity
|
533
|
16
|
(89)
|
460
|
(14)%
|
Retail Natural Gas
|
139
|
5
|
(19)
|
125
|
(10)%
|
Total Retail
|
672
|
21
|
(108)
|
585
|
(13)%
|
•
|
New England - Connecticut, Maine, Massachusetts and New Hampshire;
|
•
|
Mid-Atlantic - Delaware, Maryland (including the District of Columbia), New Jersey, New York and Pennsylvania;
|
•
|
Midwest - Illinois, Indiana, Michigan and Ohio; and
|
•
|
Southwest - Arizona, California, Colorado, Florida, Nevada and Texas.
|
|
Three Months Ended March 31,
|
||||||
(in thousands)
|
2020
|
|
2019
|
||||
Adjusted EBITDA
|
$
|
30,300
|
|
|
$
|
25,063
|
|
Retail Gross Margin
|
$
|
55,461
|
|
|
$
|
56,577
|
|
•
|
our operating performance as compared to other publicly traded companies in the retail energy industry, without regard to financing methods, capital structure or historical cost basis;
|
•
|
the ability of our assets to generate earnings sufficient to support our proposed cash dividends;
|
•
|
our ability to fund capital expenditures (including customer acquisition costs) and incur and service debt; and
|
•
|
our compliance with financial debt covenants. (Refer to Note 9 "Debt" to Part I, Item 1 of this Report for discussion of the material terms of our Senior Credit Facility, including the covenant requirements for our Minimum Fixed Charge Coverage Ratio, Maximum Total Leverage Ratio, and Maximum Senior Secured Leverage Ratio.)
|
|
Three Months Ended March 31,
|
||||||
(in thousands)
|
2020
|
|
2019
|
||||
Reconciliation of Adjusted EBITDA to Net income:
|
|
|
|
||||
Net income
|
$
|
10,068
|
|
|
$
|
2,745
|
|
Depreciation and amortization
|
8,796
|
|
|
12,155
|
|
||
Interest expense
|
1,553
|
|
|
2,223
|
|
||
Income tax expense
|
1,925
|
|
|
1,041
|
|
||
EBITDA
|
22,342
|
|
|
18,164
|
|
||
Less:
|
|
|
|
||||
Net, loss on derivative instruments
|
(24,587
|
)
|
|
(19,541
|
)
|
||
Net cash settlements on derivative instruments
|
16,608
|
|
|
8,025
|
|
||
Customer acquisition costs
|
1,345
|
|
|
5,789
|
|
||
Plus:
|
|
|
|
|
|
||
Non-cash compensation expense
|
1,324
|
|
|
1,172
|
|
||
Adjusted EBITDA
|
$
|
30,300
|
|
|
$
|
25,063
|
|
|
Three Months Ended March 31,
|
||||||
(in thousands)
|
2020
|
|
2019
|
||||
Reconciliation of Adjusted EBITDA to net cash provided by operating activities:
|
|
|
|
||||
Net cash provided by operating activities
|
$
|
39,389
|
|
|
$
|
30,049
|
|
Amortization of deferred financing costs
|
(250
|
)
|
|
(268
|
)
|
||
Bad debt expense
|
(2,355
|
)
|
|
(3,849
|
)
|
||
Interest expense
|
1,553
|
|
|
2,223
|
|
||
Income tax expense
|
1,925
|
|
|
1,041
|
|
||
Changes in operating working capital
|
|
|
|
||||
Accounts receivable, prepaids, current assets
|
(17,975
|
)
|
|
(10,364
|
)
|
||
Inventory
|
(2,690
|
)
|
|
(3,643
|
)
|
||
Accounts payable and accrued liabilities
|
10,818
|
|
|
10,950
|
|
||
Other
|
(115
|
)
|
|
(1,076
|
)
|
||
Adjusted EBITDA
|
$
|
30,300
|
|
|
$
|
25,063
|
|
Cash Flow Data:
|
|
|
|
||||
Cash flows provided by operating activities
|
$
|
39,389
|
|
|
$
|
30,049
|
|
Cash flows used in investing activities
|
$
|
(536
|
)
|
|
$
|
(6,123
|
)
|
Cash flows used in financing activities
|
$
|
(41,050
|
)
|
|
$
|
(38,361
|
)
|
|
Three Months Ended March 31,
|
||||||
(in thousands)
|
2020
|
|
2019
|
||||
Reconciliation of Retail Gross Margin to Operating income:
|
|
|
|
||||
Operating income
|
$
|
13,386
|
|
|
$
|
5,820
|
|
Plus:
|
|
|
|
|
|
||
Depreciation and amortization
|
8,796
|
|
|
12,155
|
|
||
General and administrative expense
|
25,676
|
|
|
29,476
|
|
||
Less:
|
|
|
|
||||
Net asset optimization revenues
|
321
|
|
|
2,552
|
|
||
Loss on non-trading derivative instruments
|
(24,533
|
)
|
|
(19,803
|
)
|
||
Cash settlements on non-trading derivative instruments
|
16,609
|
|
|
8,125
|
|
||
Retail Gross Margin
|
$
|
55,461
|
|
|
$
|
56,577
|
|
Retail Gross Margin - Retail Electricity Segment
|
$
|
30,806
|
|
|
$
|
29,973
|
|
Retail Gross Margin - Retail Natural Gas Segment
|
$
|
24,655
|
|
|
$
|
26,604
|
|
(In Thousands)
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Revenues:
|
|
|
|
||||
Retail revenues
|
$
|
166,360
|
|
|
$
|
240,154
|
|
Net asset optimization (expense) revenues
|
321
|
|
|
2,552
|
|
||
Total Revenues
|
166,681
|
|
|
242,706
|
|
||
Operating Expenses:
|
|
|
|
|
|
||
Retail cost of revenues
|
118,823
|
|
|
195,255
|
|
||
General and administrative expense
|
25,676
|
|
|
29,476
|
|
||
Depreciation and amortization
|
8,796
|
|
|
12,155
|
|
||
Total Operating Expenses
|
153,295
|
|
|
236,886
|
|
||
Operating income
|
13,386
|
|
|
5,820
|
|
||
Other (expense)/income:
|
|
|
|
|
|
||
Interest expense
|
(1,553
|
)
|
|
(2,223
|
)
|
||
Interest and other income
|
160
|
|
|
189
|
|
||
Total other expense
|
(1,393
|
)
|
|
(2,034
|
)
|
||
Income before income tax expense
|
11,993
|
|
|
3,786
|
|
||
Income tax expense
|
1,925
|
|
|
1,041
|
|
||
Net income
|
$
|
10,068
|
|
|
$
|
2,745
|
|
Other Performance Metrics:
|
|
|
|
||||
Adjusted EBITDA (1)
|
$
|
30,300
|
|
|
$
|
25,063
|
|
Retail Gross Margin (1)
|
$
|
55,461
|
|
|
$
|
56,577
|
|
Customer Acquisition Costs
|
$
|
1,345
|
|
|
$
|
5,789
|
|
Average Monthly RCE Attrition
|
5.7
|
%
|
|
5.4
|
%
|
Change in electricity volumes sold
|
$
|
(67.1
|
)
|
Change in natural gas volumes sold
|
(13.9
|
)
|
|
Change in electricity unit revenue per MWh
|
6.8
|
|
|
Change in natural gas unit revenue per MMBtu
|
0.4
|
|
|
Change in net asset optimization revenue
|
(2.2
|
)
|
|
Change in total revenues
|
$
|
(76.0
|
)
|
Change in electricity volumes sold
|
$
|
(56.0
|
)
|
Change in natural gas volumes sold
|
(7.6
|
)
|
|
Change in electricity unit cost per MWh
|
(5.2
|
)
|
|
Change in natural gas unit cost per MMBtu
|
(4.0
|
)
|
|
Change in value of retail derivative portfolio
|
(3.7
|
)
|
|
Change in retail cost of revenues
|
$
|
(76.5
|
)
|
|
Three Months Ended
March 31, |
||||||
|
2020
|
|
2019
|
||||
|
(in thousands, except volume and per unit operating data)
|
||||||
Retail Electricity Segment
|
|
|
|
||||
Total Revenues
|
$
|
121,768
|
|
|
$
|
182,092
|
|
Retail Cost of Revenues
|
100,383
|
|
|
165,888
|
|
||
Less: Net loss on non-trading derivatives, net of cash settlements
|
(9,421
|
)
|
|
(13,769
|
)
|
||
Retail Gross Margin (1) — Electricity
|
$
|
30,806
|
|
|
$
|
29,973
|
|
Volumes — Electricity (MWhs)
|
1,091,425
|
|
|
1,728,083
|
|
||
Retail Gross Margin (2) — Electricity per MWh
|
$
|
28.23
|
|
|
$
|
17.35
|
|
|
|
|
|
||||
Retail Natural Gas Segment
|
|
|
|
||||
Total Revenues
|
$
|
44,592
|
|
|
$
|
58,062
|
|
Retail Cost of Revenues
|
18,440
|
|
|
29,367
|
|
||
Less: Net gain on non-trading derivatives, net of cash settlements
|
1,497
|
|
|
2,091
|
|
||
Retail Gross Margin (1) — Gas
|
$
|
24,655
|
|
|
$
|
26,604
|
|
Volumes — Gas (MMBtus)
|
5,282,299
|
|
|
6,951,610
|
|
||
Retail Gross Margin (2) — Gas per MMBtu
|
$
|
4.67
|
|
|
$
|
3.83
|
|
Change in volumes sold
|
$
|
(11.0
|
)
|
Change in unit margin per MWh
|
11.8
|
|
|
Change in retail electricity segment retail gross margin
|
$
|
0.8
|
|
Change in volumes sold
|
$
|
(6.4
|
)
|
Change in unit margin per MMBtu
|
4.5
|
|
|
Change in retail natural gas segment retail gross margin
|
$
|
(1.9
|
)
|
($ in thousands)
|
March 31, 2020
|
||
Cash and cash equivalents
|
$
|
54,466
|
|
Senior Credit Facility Availability (1)
|
72,356
|
|
|
Subordinated Debt Facility Availability (2)
|
25,000
|
|
|
Total Liquidity
|
$
|
151,822
|
|
|
Three Months Ended March 31,
|
|
|
||||||||
|
2020
|
|
2019
|
|
Change
|
||||||
Net cash provided by operating activities
|
$
|
39,389
|
|
|
$
|
30,049
|
|
|
$
|
9,340
|
|
Net cash used in investing activities
|
$
|
(536
|
)
|
|
$
|
(6,123
|
)
|
|
$
|
5,587
|
|
Net cash used in financing activities
|
$
|
(41,050
|
)
|
|
$
|
(38,361
|
)
|
|
$
|
(2,689
|
)
|
Period
|
(a) Total Number of Shares Purchased
|
|
(b) Average Price Paid per Share
|
|
(c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1)
|
|
(d) Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs
|
|||||
January 1 - January 31, 2020
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
—
|
|
February 1 - February 29, 2020
|
2,822
|
|
|
25.00
|
|
|
2,822
|
|
|
—
|
|
|
March 1 - March 31, 2020
|
66,925
|
|
|
17.20
|
|
|
66,925
|
|
|
—
|
|
|
Total
|
69,747
|
|
|
$
|
17.51
|
|
|
69,747
|
|
|
—
|
|
Item 6. Exhibits
|
10.5
|
|
|
|
8-K
|
|
10.1
|
4/3/2020
|
001-36559
|
|
31.1*
|
|
|
|
|
|
|
|
|
|
31.2*
|
|
|
|
|
|
|
|
|
|
32**
|
|
|
|
|
|
|
|
|
|
101.INS*
|
|
|
XBRL Instance Document.
|
|
|
|
|
|
|
101.SCH*
|
|
|
XBRL Schema Document.
|
|
|
|
|
|
|
101.CAL*
|
|
|
XBRL Calculation Document.
|
|
|
|
|
|
|
101.LAB*
|
|
|
XBRL Labels Linkbase Document.
|
|
|
|
|
|
|
101.PRE*
|
|
|
XBRL Presentation Linkbase Document.
|
|
|
|
|
|
|
101.DEF*
|
|
|
XBRL Definition Linkbase Document.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Spark Energy, Inc.
|
||||
|
|
|
|||
|
|
|
|
|
|
May 6, 2020
|
|
|
/s/ James G. Jones II
|
||
|
|
|
James G. Jones II
|
||
|
|
|
Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)
|
1.
|
This Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|