Delaware | 001-36559 | 46-5453215 | ||
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification Number) |
• | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
• | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
• | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
• | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Exhibit No. | Description |
99.1 | Press Release of Spark Energy, Inc. dated March 8, 2018 |
Exhibit No. | Description |
99.1 |
Spark Energy, Inc. | ||
By: | /s/ Gil Melman | |
Name: | Gil Melman | |
Title: | Vice President, General Counsel and Corporate Secretary |
• | Achieved record Net Income, Retail Gross Margin and Adjusted EBITDA for full year 2017 |
• | Recorded $102.9 million in Adjusted EBITDA, $224.5 million in Retail Gross Margin, and $76.3 million in Net Income for the year ended 2017, representing year-over-year increases of 26%, 23%, and 16%, respectively |
• | Recorded $28.9 million in Adjusted EBITDA, $66.2 million in Retail Gross Margin, and $47.5 million in Net Income for the fourth quarter, representing year-over-year increases of 17%, 13%, and 97%, respectively |
• | Total RCE count increased 35% year-over-year to a record 1,042,000 as of December 31, 2017 |
• | Overall attrition of 4.3% for the year ended December 31, 2017 |
• | Closed three acquisitions in 2017 |
• | Two new acquisitions announced thus far in 2018 with a total of approximately 80,000 RCEs |
• | Expanded the senior credit facility to $200.0 million in commitments |
• | Continue to simplify, streamline, and optimize the organization |
• | Engaged Morgan Stanley as financial advisor to evaluate strategic alternatives |
($ in thousands) | December 31, 2017 | ||
Cash and cash equivalents | $ | 29,419 | |
Senior Credit Facility Availability (1) | 12,501 | ||
Subordinated Debt Availability (2) | $ | 25,000 | |
Total Liquidity | $ | 66,920 |
• | changes in commodity prices and the sufficiency of risk management and hedging policies; |
• | extreme and unpredictable weather conditions, and the impact of hurricanes and other natural disasters; |
• | federal, state and local regulation, including the industry's ability to address or adapt to potentially restrictive new regulations that may be enacted by the New York Public Service Commission; |
• | our ability to borrow funds and access credit markets and restrictions in our debt agreements and collateral requirements; |
• | credit risk with respect to suppliers and customers; |
• | changes in costs to acquire customers and actual customer attrition rates; |
• | accuracy of billing systems; |
• | whether our majority stockholder or its affiliates offer us acquisition opportunities on terms that are commercially acceptable to us; |
• | ability to successfully identify and complete, and efficiently integrate acquisitions into our operations; |
• | competition; and |
• | the “Risk Factors” in our latest Annual Report on Form 10-K, and in our quarterly reports, other public filings and press releases. |
December 31, 2017 | December 31, 2016 | ||||||||||
Assets | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | 29,419 | $ | 18,960 | |||||||
Accounts receivable, net of allowance for doubtful accounts of $4.0 million and $2.3 million as of December 31, 2017 and 2016, respectively | 158,814 | 112,491 | |||||||||
Accounts receivable—affiliates | 3,661 | 2,624 | |||||||||
Inventory | 4,470 | 3,752 | |||||||||
Fair value of derivative assets | 31,191 | 8,344 | |||||||||
Customer acquisition costs, net | 22,123 | 18,834 | |||||||||
Customer relationships, net | 18,653 | 12,113 | |||||||||
Prepaid assets | 1,028 | 1,361 | |||||||||
Deposits | 7,701 | 7,329 | |||||||||
Other current assets | 19,678 | 12,175 | |||||||||
Total current assets | 296,738 | 197,983 | |||||||||
Property and equipment, net | 8,275 | 4,706 | |||||||||
Fair value of derivative assets | 3,309 | 3,083 | |||||||||
Customer acquisition costs, net | 6,949 | 6,134 | |||||||||
Customer relationships, net | 34,839 | 21,410 | |||||||||
Deferred tax assets | 24,185 | 54,109 | |||||||||
Goodwill | 120,154 | 79,147 | |||||||||
Other assets | 11,500 | 8,658 | |||||||||
Total Assets | 505,949 | 375,230 | |||||||||
Liabilities, Series A Preferred Stock and Stockholders' Equity | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | 77,510 | $ | 52,309 | |||||||
Accounts payable—affiliates | 4,622 | 3,775 | |||||||||
Accrued liabilities | 33,679 | 36,619 | |||||||||
Fair value of derivative liabilities | 1,637 | 680 | |||||||||
Current portion of Senior Credit Facility | 7,500 | 51,287 | |||||||||
Current payable pursuant to tax receivable agreement—affiliates | 5,937 | — | |||||||||
Current contingent consideration for acquisitions | 4,024 | 11,827 | |||||||||
Current portion of note payable | 13,443 | 15,501 | |||||||||
Convertible subordinated notes to affiliates | — | 6,582 | |||||||||
Other current liabilities | 2,675 | 5,476 | |||||||||
Total current liabilities | 151,027 | 184,056 | |||||||||
Long-term liabilities: | |||||||||||
Fair value of derivative liabilities | 492 | 68 | |||||||||
Payable pursuant to tax receivable agreement—affiliates | 26,355 | 49,886 | |||||||||
Long-term portion of Senior Credit Facility | 117,750 | — | |||||||||
Subordinated debt—affiliate | — | 5,000 | |||||||||
Contingent consideration for acquisitions | 626 | 10,826 | |||||||||
Other long-term liabilities | 172 | 1,658 | |||||||||
Long-term portion of note payable | 7,051 | — | |||||||||
Total liabilities | $ | 303,473 | $ | 251,494 | |||||||
Commitments and contingencies (Note 13) | |||||||||||
Series A Preferred Stock, par value $0.01 per share, 20,000,000 shares authorized, 1,704,339 shares issued and outstanding at December 31, 2017 and zero shares issued and outstanding at December 31, 2016 | 41,173 | — | |||||||||
Stockholders' equity: | |||||||||||
Common Stock (1) : | |||||||||||
Class A common stock, par value $0.01 per share, 120,000,000 shares authorized, 13,235,082 issued and 13,135,636 outstanding at December 31, 2017 and 12,993,118 issued and outstanding at December 31, 2016 | 132 | 130 | |||||||||
Class B common stock, par value $0.01 per share, 60,000,000 shares authorized, 21,485,126 issued and outstanding at December 31, 2017 and 20,449,484 issued and outstanding at December 31, 2016 | 216 | 206 | |||||||||
Additional paid-in capital (1) | 26,914 | 25,272 |
Accumulated other comprehensive (loss)/income | (11 | ) | 11 | ||||||||
Retained earnings | 11,008 | 4,711 | |||||||||
Treasury stock, at cost, 99,446 shares at December 31, 2017 and zero shares at December 31, 2016 | (2,011 | ) | — | ||||||||
Total stockholders' equity | 36,248 | 30,330 | |||||||||
Non-controlling interest in Spark HoldCo, LLC | 125,055 | 93,406 | |||||||||
Total equity | 161,303 | 123,736 | |||||||||
Total liabilities, Series A Preferred Stock and stockholders' equity | $ | 505,949 | $ | 375,230 |
Year Ended December 31, | |||||||||||||||||
2017 (1) | 2016 (2) | 2015 (3) | |||||||||||||||
Revenues: | |||||||||||||||||
Retail revenues | 798,772 | 547,283 | 356,659 | ||||||||||||||
Net asset optimization (expense)/revenues (4) | (717 | ) | (586 | ) | 1,494 | ||||||||||||
Total Revenues | 798,055 | 546,697 | 358,153 | ||||||||||||||
Operating Expenses: | |||||||||||||||||
Retail cost of revenues (5) | 552,167 | 344,944 | 241,188 | ||||||||||||||
General and administrative (6) | 101,127 | 84,964 | 61,682 | ||||||||||||||
Depreciation and amortization | 42,341 | 32,788 | 25,378 | ||||||||||||||
Total Operating Expenses | 695,635 | 462,696 | 328,248 | ||||||||||||||
Operating income | 102,420 | 84,001 | 29,905 | ||||||||||||||
Other (expense)/income: | |||||||||||||||||
Interest expense | (11,134 | ) | (8,859 | ) | (2,280 | ) | |||||||||||
Change in Tax Receivable Agreement liability | 22,267 | — | — | ||||||||||||||
Interest and other income | 256 | 957 | 324 | ||||||||||||||
Total other expenses | 11,389 | (7,902 | ) | (1,956 | ) | ||||||||||||
Income before income tax expense | 113,809 | 76,099 | 27,949 | ||||||||||||||
Income tax expense | 37,528 | 10,426 | 1,974 | ||||||||||||||
Net income | $ | 76,281 | $ | 65,673 | $ | 25,975 | |||||||||||
Less: Net income attributable to non-controlling interests | 57,427 | 51,229 | 22,110 | ||||||||||||||
Net income attributable to Spark Energy, Inc. stockholders | $ | 18,854 | $ | 14,444 | $ | 3,865 | |||||||||||
Less: Dividend on Series A preferred stock | 3,038 | — | — | ||||||||||||||
Net income attributable to stockholders of Class A common stock | $ | 15,816 | $ | 14,444 | $ | 3,865 | |||||||||||
Other comprehensive loss, net of tax: | |||||||||||||||||
Currency translation loss | $ | (59 | ) | $ | 41 | $ | — | ||||||||||
Other comprehensive loss | (59 | ) | 41 | — | |||||||||||||
Comprehensive income | $ | 76,222 | $ | 65,714 | $ | 25,975 | |||||||||||
Less: Comprehensive income attributable to non-controlling interests | 57,390 | 51,259 | 22,110 | ||||||||||||||
Comprehensive income attributable to Spark Energy, Inc. stockholders | $ | 18,832 | $ | 14,455 | $ | 3,865 |
(4) | Net asset optimization revenues includes asset optimization (expense)/revenues—affiliates of $1,334, $154 and $1,101 for the years ended December 31, 2017, 2016 and 2015, respectively, and asset optimization revenues—affiliates cost of revenues of $53, $1,633 and $11,285 for the years ended December 31, 2017, 2016 and 2015, respectively. |
(5) | Retail cost of revenues includes retail cost of revenues—affiliates of $0, $9 and $17 for the years December 31, 2017, 2016 and 2015, respectively. |
Issued Shares of Class A Common Stock (1) | Issued Shares of Class B Common Stock (1) | Treasury Stock | Class A Common Stock (1) | Class B Common Stock (1) | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | Additional Paid-In Capital (1) | Retained Earnings (Deficit) | Total Stockholders' Equity | Non-controlling Interest (1) | Total Equity | ||||||||||||||||||||||||||||||||||
Balance at 12/31/2014: | 6,000 | 21,500 | — | $ | 60 | $ | 216 | $ | — | $ | — | $ | 9,158 | $ | (775 | ) | $ | 8,659 | $ | 15,458 | $ | 24,117 | |||||||||||||||||||||||
Stock based compensation | — | — | — | — | — | — | — | 2,165 | — | 2,165 | — | 2,165 | |||||||||||||||||||||||||||||||||
Restricted stock unit vesting | 238 | — | — | 2 | — | — | — | 185 | — | 187 | — | 187 | |||||||||||||||||||||||||||||||||
Contribution from NuDevco | — | — | — | — | — | — | — | 129 | — | 129 | — | 129 | |||||||||||||||||||||||||||||||||
Consolidated net income (2) | — | — | — | — | — | — | — | — | 3,865 | 3,865 | 22,110 | 25,975 | |||||||||||||||||||||||||||||||||
Beneficial conversion feature | — | — | — | — | — | — | — | 789 | — | 789 | — | 789 | |||||||||||||||||||||||||||||||||
Distributions paid to Class B non-controlling unit holders | — | — | — | — | — | — | — | — | — | — | (15,587 | ) | (15,587 | ) | |||||||||||||||||||||||||||||||
Dividends paid to Class A common shareholders | — | — | — | — | — | — | — | — | (4,456 | ) | (4,456 | ) | — | (4,456 | ) | ||||||||||||||||||||||||||||||
Balance at 12/31/2015: | 6,238 | 21,500 | — | $ | 62 | $ | 216 | $ | — | $ | — | $ | 12,426 | $ | (1,366 | ) | $ | 11,338 | $ | 21,981 | $ | 33,319 | |||||||||||||||||||||||
Stock based compensation | — | — | — | — | — | — | 2,270 | — | 2,270 | — | 2,270 | ||||||||||||||||||||||||||||||||||
Restricted stock unit vesting | 305 | — | — | 4 | — | — | — | 1,058 | — | 1,062 | — | 1,062 | |||||||||||||||||||||||||||||||||
Excess tax benefit related to restricted stock vesting | — | — | — | — | — | — | — | 186 | — | 186 | — | 186 | |||||||||||||||||||||||||||||||||
Consolidated net income (3) | — | — | — | — | — | — | — | — | 14,444 | 14,444 | 51,229 | 65,673 |
Foreign currency translation adjustment for equity method investee | — | — | — | — | — | — | 11 | — | — | 11 | 30 | 41 | |||||||||||||||||||||||||||||||||
Beneficial conversion feature | — | — | — | — | — | — | — | 243 | — | 243 | — | 243 | |||||||||||||||||||||||||||||||||
Distributions paid to non-controlling unit holders | — | — | — | — | — | — | — | — | — | — | (34,931 | ) | (34,931 | ) | |||||||||||||||||||||||||||||||
Net contribution of the Major Energy Companies | — | — | — | — | — | — | — | — | — | — | 3,873 | 3,873 | |||||||||||||||||||||||||||||||||
Dividends paid to Class A common stockholders | — | — | — | — | — | — | — | — | (8,367 | ) | (8,367 | ) | — | (8,367 | ) | ||||||||||||||||||||||||||||||
Proceeds from disgorgement of stockholder short-swing profits | — | — | — | — | — | — | — | 1,605 | — | 1,605 | — | 1,605 | |||||||||||||||||||||||||||||||||
Tax impact from tax receivable agreement upon exchange of units of Spark HoldCo, LLC to shares of Class A Common Stock | — | — | — | — | — | — | — | 4,768 | — | 4,768 | — | 4,768 | |||||||||||||||||||||||||||||||||
Exchange of shares of Class B common stock to shares of Class A common stock | 6,450 | (6,450 | ) | — | 64 | (64 | ) | — | — | 2,716 | — | 2,716 | (2,716 | ) | — | ||||||||||||||||||||||||||||||
Issuance of Class B Common Stock | — | 5,400 | — | — | 54 | — | — | — | — | 54 | 53,940 | 53,994 | |||||||||||||||||||||||||||||||||
Balance at 12/31/2016: | 12,993 | 20,450 | — | $ | 130 | $ | 206 | $ | — | $ | 11 | $ | 25,272 | $ | 4,711 | $ | 30,330 | $ | 93,406 | $ | 123,736 | ||||||||||||||||||||||||
Stock based compensation | — | — | — | — | — | — | — | 2,754 | — | 2,754 | — | 2,754 | |||||||||||||||||||||||||||||||||
Restricted stock unit vesting | 242 | — | — | 2 | — | — | — | 1,052 | — | 1,054 | — | 1,054 | |||||||||||||||||||||||||||||||||
Consolidated net income (4) | — | — | — | — | — | — | — | — | 18,854 | 18,854 | 57,427 | 76,281 | |||||||||||||||||||||||||||||||||
Foreign currency translation adjustment for equity method investee | — | — | — | — | — | — | (22 | ) | — | — | (22 | ) | (37 | ) | (59 | ) | |||||||||||||||||||||||||||||
Distributions paid to non-controlling unit holders | — | — | — | — | — | — | — | — | — | — | (33,800 | ) | (33,800 | ) | |||||||||||||||||||||||||||||||
Net contribution by NG&E | — | — | — | — | — | — | — | — | — | — | 274 | 274 | |||||||||||||||||||||||||||||||||
Dividends paid to Class A common stockholders | — | — | — | — | — | — | — | — | (9,519 | ) | (9,519 | ) | — | (9,519 | ) | ||||||||||||||||||||||||||||||
Dividends to Preferred Stock | — | — | — | — | — | — | — | — | (3,038 | ) | (3,038 | ) | — | (3,038 | ) | ||||||||||||||||||||||||||||||
Proceeds from disgorgement of stockholder short-swing profits | — | — | — | — | — | — | — | 708 | — | 708 | — | 708 | |||||||||||||||||||||||||||||||||
Tax receivable agreement liability true-up | — | — | — | — | — | — | — | (2,872 | ) | — | (2,872 | ) | — | (2,872 | ) | ||||||||||||||||||||||||||||||
Conversion of Convertible Subordinated Notes to Class B Common Stock | — | 1,035 | — | — | 10 | — | — | — | — | 10 | 7,785 | 7,795 | |||||||||||||||||||||||||||||||||
Treasury Stock | — | — | (99 | ) | — | — | (2,011 | ) | — | — | — | (2,011 | ) | — | (2,011 | ) |
Balance at 12/31/2017: | 13,235 | 21,485 | (99 | ) | $ | 132 | $ | 216 | $ | (2,011 | ) | $ | (11 | ) | $ | 26,914 | $ | 11,008 | $ | 36,248 | $ | 125,055 | $ | 161,303 |
Year Ended December 31, | ||||||||||||||||||||
2017 (1) | 2016 (2) | 2015 (3) | ||||||||||||||||||
Cash flows from operating activities: | ||||||||||||||||||||
Net income | $ | 76,281 | $ | 65,673 | $ | 25,975 | ||||||||||||||
Adjustments to reconcile net income to net cash flows provided by operating activities: | ||||||||||||||||||||
Depreciation and amortization expense | 42,666 | 48,526 | 25,378 | |||||||||||||||||
Deferred income taxes | 28,584 | 3,382 | 1,340 | |||||||||||||||||
Change in Tax Receivable Agreement liability | (22,267 | ) | — | — | ||||||||||||||||
Stock based compensation | 5,058 | 5,242 | 3,181 | |||||||||||||||||
Amortization of deferred financing costs | 1,035 | 668 | 412 | |||||||||||||||||
Change in fair value of Earnout liabilities | (7,898 | ) | (297 | ) | — | |||||||||||||||
Accretion on fair value of Earnout liabilities | 4,108 | 5,060 | — | |||||||||||||||||
Excess tax benefit related to restricted stock vesting | 179 | — | — | |||||||||||||||||
Bad debt expense | 6,550 | 1,261 | 7,908 | |||||||||||||||||
(Gain) loss on derivatives, net | (5,008 | ) | (22,407 | ) | 18,497 | |||||||||||||||
Current period cash settlements on derivatives, net | (19,598 | ) | (24,427 | ) | (23,948 | ) | ||||||||||||||
Accretion of discount to convertible subordinated notes to affiliate | 1,004 | — | — | |||||||||||||||||
Other | (5 | ) | (407 | ) | (1,320 | ) | ||||||||||||||
Changes in assets and liabilities: | ||||||||||||||||||||
Decrease in restricted cash | — | — | 707 | |||||||||||||||||
(Increase) decrease in accounts receivable | (32,361 | ) | (12,088 | ) | 7,876 | |||||||||||||||
Increase in accounts receivable—affiliates | (1,459 | ) | (118 | ) | (608 | ) | ||||||||||||||
(Increase) decrease in inventory | (718 | ) | 542 | 4,544 | ||||||||||||||||
Increase in customer acquisition costs | (25,874 | ) | (21,907 | ) | (19,869 | ) | ||||||||||||||
Decrease in prepaid and other current assets | 1,915 | 71 | 10,845 | |||||||||||||||||
(Increase) decrease in other assets | (465 | ) | 1,321 | (1,101 | ) | |||||||||||||||
Increase in customer relationships and trademarks | — | — | (2,776 | ) | ||||||||||||||||
Increase (decrease) in accounts payable and accrued liabilities | 14,831 | 14,831 | (13,307 | ) | ||||||||||||||||
Increase in accounts payable—affiliates | 51 | 458 | 944 | |||||||||||||||||
(Decrease) increase in other current liabilities | (1,210 | ) | 2,364 | (645 | ) | |||||||||||||||
(Decrease) increase in other non-current liabilities | (1,487 | ) | 45 | 1,898 | ||||||||||||||||
Net cash provided by operating activities | 63,912 | 67,793 | 45,931 | |||||||||||||||||
Cash flows from investing activities: | ||||||||||||||||||||
Purchases of property and equipment | (1,704 | ) | (2,258 | ) | (1,766 | ) | ||||||||||||||
Acquisitions of CenStar and Oasis | — | — | (39,847 | ) | ||||||||||||||||
Acquisition of Major Energy Companies and Provider Companies | (1,853 | ) | (31,641 | ) | — | |||||||||||||||
Acquisitions of Perigee and other customers | (11,759 | ) | — | — | ||||||||||||||||
Acquisition of the Verde Companies | (69,538 | ) | — | — | ||||||||||||||||
Payment of CenStar Earnout | — | (1,343 | ) | — | ||||||||||||||||
Payment of the Major Energy Companies Earnout | (7,403 | ) | — | — | ||||||||||||||||
Payment of the Provider Companies Earnout | (5,500 | ) | — | — | ||||||||||||||||
Contribution to equity method investment | — | (1,102 | ) | (330 | ) | |||||||||||||||
Net cash used in investing activities | (97,757 | ) | (36,344 | ) | (41,943 | ) | ||||||||||||||
Cash flows from financing activities: | ||||||||||||||||||||
Proceeds from issuance of Series A Preferred Stock, net of issuance costs paid | 40,241 | — | — | |||||||||||||||||
Borrowings on notes payable | 206,400 | 79,048 | 59,224 | |||||||||||||||||
Payments on notes payable | (152,939 | ) | (66,652 | ) | (49,826 | ) | ||||||||||||||
Issuance of convertible subordinated notes to affiliate | — | — | 7,075 | |||||||||||||||||
Restricted stock vesting | (3,091 | ) | (1,183 | ) | (432 | ) | ||||||||||||||
Contributions from NuDevco | — | — | 129 | |||||||||||||||||
Proceeds from issuance of Class B common stock | — | 13,995 | — | |||||||||||||||||
Proceeds from disgorgement of stockholders short-swing profits | 1,129 | 941 | — | |||||||||||||||||
Excess tax benefit related to restricted stock vesting | — | 185 | — | |||||||||||||||||
Payment of dividends to Class A common shareholders | (9,519 | ) | (8,367 | ) | (4,456 | ) |
Payment of distributions to non-controlling unitholders | (33,800 | ) | (34,930 | ) | (15,587 | ) | ||||||||||||||
Payment of dividends to Preferred Stock | (2,106 | ) | — | — | ||||||||||||||||
Purchase of Treasury Stock | (2,011 | ) | — | — | ||||||||||||||||
Net cash provided by (used in) financing activities | 44,304 | (16,963 | ) | (3,873 | ) | |||||||||||||||
Increase in Cash and cash equivalents and Restricted Cash | 10,459 | 14,486 | 115 | |||||||||||||||||
Cash and cash equivalents and Restricted cash—beginning of period | 18,960 | 4,474 | 4,359 | |||||||||||||||||
Cash and cash equivalents and Restricted cash—end of period | 29,419 | 18,960 | 4,474 | |||||||||||||||||
Supplemental Disclosure of Cash Flow Information: | ||||||||||||||||||||
Non-cash items: | ||||||||||||||||||||
Issuance of Class B common stock to affiliates for Major Energy Companies acquisition | — | 40,000 | — | |||||||||||||||||
Contingent consideration—earnout obligations incurred in connection with the Provider Companies and Major Energy Companies acquisitions | — | 18,936 | — | |||||||||||||||||
Assumption of legal liability in connection with the Major Energy Companies acquisition | — | 5,000 | — | |||||||||||||||||
Net contribution of the Major Energy Companies | — | 3,873 | — | |||||||||||||||||
Net contribution by NG&E in excess of cash | 274 | — | — | |||||||||||||||||
Installment consideration incurred in connection with the Provider Companies acquisition | — | 1,890 | — | |||||||||||||||||
Installment consideration incurred in connection with the Verde Companies acquisition and Verde Earnout Termination Note | 19,994 | — | — | |||||||||||||||||
Tax benefit from tax receivable agreement | (1,802 | ) | 31,490 | (64 | ) | |||||||||||||||
Liability due to tax receivable agreement | 4,674 | (26,722 | ) | (55 | ) | |||||||||||||||
Property and equipment purchase accrual | 91 | (32 | ) | 45 | ||||||||||||||||
CenStar Earnout accrual | — | — | 500 | |||||||||||||||||
Cash paid during the period for: | ||||||||||||||||||||
Interest | $ | 5,715 | $ | 2,280 | $ | 1,661 | ||||||||||||||
Taxes | $ | 11,205 | $ | 7,326 | $ | 216 |
Year Ended December 31, | |||||||||||||||
2017 | 2016 | 2015 | |||||||||||||
(in thousands, except volume and per unit operating data) | |||||||||||||||
Retail Electricity Segment | |||||||||||||||
Total Revenues | $ | 657,561 | $ | 417,229 | $ | 229,490 | |||||||||
Retail Cost of Revenues | 477,012 | 286,795 | 170,684 | ||||||||||||
Less: Net Asset Optimization Revenues | (5 | ) | — | — | |||||||||||
Less: Net Gains (Losses) on non-trading derivatives, net of cash settlements | 22,086 | 12,298 | (1,449 | ) | |||||||||||
Retail Gross Margin (1) —Electricity | $ | 158,468 | $ | 118,136 | $ | 60,255 | |||||||||
Volumes—Electricity (MWhs) | 6,755,663 | 4,170,593 | 2,075,479 | ||||||||||||
Retail Gross Margin (2) —Electricity per MWh | $ | 23.46 | $ | 28.33 | $ | 29.03 | |||||||||
Retail Natural Gas Segment | |||||||||||||||
Total Revenues | $ | 140,494 | $ | 129,468 | 128,663 | ||||||||||
Retail Cost of Revenues | 75,155 | 58,149 | 70,504 | ||||||||||||
Less: Net Asset Optimization Revenues | (712 | ) | (586 | ) | 1,494 | ||||||||||
Less: Net Gains (Losses) on non-trading derivatives, net of cash settlements | 10 | 7,672 | 3,305 | ||||||||||||
Retail Gross Margin (1) —Gas | $ | 66,041 | $ | 64,233 | $ | 53,360 | |||||||||
Volumes—Gas (MMBtus) | 18,203,684 | 16,819,713 | 14,786,681 | ||||||||||||
Retail Gross Margin (2) —Gas per MMBtu | 3.63 | 3.82 | 3.61 |
• | 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. |
Year Ended December 31, | Quarter Ended December 31, | ||||||||||||||||
(in thousands) | 2017 | 2016 | 2017 | 2016 | |||||||||||||
Reconciliation of Adjusted EBITDA to Net Income: | |||||||||||||||||
Net income | 76,281 | 65,673 | $ | 47,536 | $ | 24,137 | |||||||||||
Depreciation and amortization | 42,341 | 32,788 | 11,906 | 9,451 | |||||||||||||
Interest expense | 11,134 | 8,859 | 2,374 | 6,004 | |||||||||||||
Income tax expense | 37,528 | 10,426 | 32,263 | 3,574 | |||||||||||||
EBITDA (1) | 167,284 | 117,746 | 94,079 | 43,166 | |||||||||||||
Less: | |||||||||||||||||
Net, Gains (losses) on derivative instruments | 5,008 | 22,407 | 39,233 | 19,520 | |||||||||||||
Net, Cash settlements on derivative instruments | 16,309 | (2,146 | ) | (2,499 | ) | (5,573 | ) | ||||||||||
Customer acquisition costs | 25,874 | 24,934 | 7,232 | 9,717 | |||||||||||||
Plus: | — | ||||||||||||||||
Non-cash compensation expense | 5,058 | 5,242 | 1,035 | 1,215 | |||||||||||||
Contract termination charge related to Major Energy Companies change of control | — | 4,099 | — | 4,099 | |||||||||||||
Change in Tax Receivable Agreement liability (2) | (22,267 | ) | — | $ | (22,267 | ) | $ | — | |||||||||
Adjusted EBITDA (1) | 102,884 | 81,892 | $ | 28,881 | $ | 24,816 |
Year Ended December 31, | Quarter Ended December 31, | ||||||||||||||||
(in thousands) | 2017 | 2016 | 2017 | 2016 | |||||||||||||
Reconciliation of Adjusted EBITDA to net cash provided by operating activities: | |||||||||||||||||
Net cash provided by (used in) operating activities | $ | 63,912 | $ | 67,793 | $ | 88 | $ | 6,150 | |||||||||
Amortization of deferred financing costs | (1,035 | ) | (668 | ) | (285 | ) | (203 | ) | |||||||||
Allowance for doubtful accounts and bad debt expense | (6,550 | ) | (1,261 | ) | (3,114 | ) | (419 | ) | |||||||||
Interest expense | 11,134 | 8,859 | 2,374 | 6,004 | |||||||||||||
Income tax expense | 37,528 | 10,426 | 32,263 | 3,574 | |||||||||||||
Change in Tax Receivable Agreement liability (1) | (22,267 | ) | — | (22,267 | ) | — | |||||||||||
Changes in operating working capital | |||||||||||||||||
Accounts receivable, prepaids, current assets | 31,905 | 12,135 | 48,989 | 31,362 | |||||||||||||
Inventory | 718 | 542 | (1,218 | ) | 1,110 | ||||||||||||
Accounts payable and accrued liabilities | (13,672 | ) | (17,653 | ) | (21,808 | ) | (23,507 | ) | |||||||||
Other | 1,211 | 1,719 | (6,141 | ) | 745 | ||||||||||||
Adjusted EBITDA | $ | 102,884 | $ | 81,892 | $ | 28,881 | $ | 24,816 | |||||||||
Cash Flow Data: | |||||||||||||||||
Cash flows provided by operating activity | $ | 63,912 | $ | 67,793 | $ | 88 | $ | 6,150 | |||||||||
Cash flows used in investing activity | (97,757 | ) | (36,344 | ) | (1,780 | ) | (2,169 | ) | |||||||||
Cash flows provided by (used in) financing activity | 44,304 | (16,963 | ) | 19,862 | (1,928 | ) |
Year Ended December 31, | Quarter Ended 31, | ||||||||||||||
(in thousands) | 2017 | 2016 | 2017 | 2016 | |||||||||||
Reconciliation of Retail Gross Margin to Operating Income: | |||||||||||||||
Operating income | $ | 102,420 | $ | 84,001 | $ | 59,752 | $ | 33,098 | |||||||
Depreciation and amortization | 42,341 | 32,788 | 11,906 | 9,451 | |||||||||||
General and administrative | 101,127 | 84,964 | 31,722 | 29,776 | |||||||||||
Less: | |||||||||||||||
Net asset optimization (expenses) revenues | (717 | ) | (586 | ) | (36 | ) | (544 | ) | |||||||
Net, Losses (gains) on non-trading derivative instruments | 5,588 | 22,254 | 39,734 | 19,735 | |||||||||||
Net, Cash settlements on non-trading derivative instruments | 16,508 | (2,284 | ) | (2,508 | ) | (5,625 | ) | ||||||||
Retail Gross Margin | $ | 224,509 | $ | 182,369 | $ | 66,190 | $ | 58,759 | |||||||
Retail Gross Margin - Retail Electricity Segment | $ | 158,468 | $ | 118,136 | $ | 42,339 | $ | 35,910 | |||||||
Retail Gross Margin - Retail Natural Gas Segment | $ | 66,041 | $ | 64,233 | $ | 23,851 | $ | 22,849 |