Good day, and welcome to Genie Energy's First Quarter 2020 Earnings Call. All participants would be in a listen-only mode. [Operator Instructions] In it's presentation, Genie Energy's management team will discuss financial and operational results for the three month period ended March 31, 2020. Any forward-looking statements made during this conference call, either in the prepared remarks or in the Q&A session, whether general or specific in nature, are subject to risks and uncertainties that may cause actual results to differ materially from those which the company anticipates. These risks and uncertainties include, but are not limited to, specific risks and uncertainties discussed in the reports that Genie Energy files periodically with the SEC. Genie Energy assumes no obligation either to update any forward-looking statements that they have made or may make or to update the factors that may cause actual results to differ materially from those that they forecast. During their remarks, management may make reference to adjusted EBITDA and pro forma results for its Genie Retail Energy International segment, both are non-GAAP measures. Management believes that Genie Energy's measure of adjusted EBITDA, and Genie Retail Energy International's pro forma results provide useful information to both management and investors that supplement Genie Energy's or the relevant segment core operating results. The Genie Energy earnings release includes a reconciliation of adjusted EBITDA to net income and of the pro forma Genie Retail Energy International's results to GAAP measures, is available on the Investor Relations page of the Genie Corporation website, www.genie.com. The earnings release has also been filed on a Form 8-K with the SEC. After today's presentation by Genie Energy's management, there will be an opportunity to ask questions. [Operator Instructions] I would now like to turn the conference call over to Mr. Michael Stein, Genie Energy's Chief Executive Officer. Mr. Stein, the floor is yours, sir.

Thank you, operator. Welcome to Genie Energy's First Quarter 2020 Earnings Call. Today, we will discuss our operational and financial results for the three months ended March 31, 2020. Avi Goldin, our Chief Financial Officer, will follow my discussion with a deeper dive into the quarter's financial results. Following Avi's remarks, we will be glad to take your questions. My remarks today will focus on our operational results. I will also review the effects of the restrictions imposed, due to the COVID-19 pandemic, which had its first full month of impact in April following the quarter close. Finally, I'll touch on some of our promising growth opportunities. Genie Energy achieved very strong first quarter results. Robust growth in our customer base and strong electricity margins here in the US helped us achieve record levels of revenue and gross profit. Our global customer base surpassed both the 400,000 RCE and 500,000 meter milestones, powered by expansion in both our domestic markets and overseas books. Here in the US, Genie Retail Energy added a net 20,000 RCEs and 15,000 meters during the quarter. The RCE over meter ratio has increased from our historical levels, reflecting our recent focus on adding high-quality, high consumption meters. GRE closed the quarter serving 330,000 RCEs comprising 384,000 meters. Overseas, where more of our customer base resides in apartments and average consumption is significantly lower, GRE International added 7,000 RCEs and 20,000 meters to close the quarter serving 72,000 RCEs comprising 148,000 meters. By March 31, we had increased our global customer base to 401,000 RCEs served and 532,000 meters. During the trailing 12 months, we increased our RCEs served by 20% or just over 68,000 and increased global meters served by 33% or 133,000 meters. Part of our success, growing our customer base is attributable to…

Thank you, Michael, and thanks to everyone on the call for joining us this afternoon. My remarks today will cover our financial results for the three months ended March 31, 2020. Throughout my remarks, I compare the first quarter 2020 results to the first quarter of 2019, focusing on the year-over-year rather than sequential comparisons removes from consideration the seasonal factors that are characteristic of our retail energy business. The first quarter includes the peak heating season and is typically characterized by relatively high levels of electricity consumption, the highest level of natural gas consumption of any quarter of the year. The first quarter's financial results were strong and included record levels of revenue and gross profit. As the timing of events were skewed toward the second half of March, the COVID-19 pandemic did not significantly impact our first quarter financial results. Consolidated revenue in the first quarter increased $17.4 million to $104.1 million. $12.7 million of the increase was contributed by our Genie Energy Services division. Revenue jumped to $18 million on the fulfilment of outstanding solar panel orders by our Prism Solar subsidiary. Going forward, we do not anticipate comparable order volumes or revenue. And as Michael indicated, we are taking steps to reduce costs and position that business for the future. Genie Retail Energy contributed $79.1 million in revenue, an increase of $2.6 million, compared to the year ago quarter. Robust growth in our electric meter customer base over the past 12 months drove a 17% increase in kilowatt hours sold, more than offsetting a slight decrease in per unit revenue. This was partially offset by a decline in revenue contribution from the gas book as we experienced lower consumption and pricing per therm. At Genie Retail Energy International, revenue totalled $7 million, an increase of $2.1…

Thank you, sir. [Operator Instructions] And the first question we have will come from Aaron Shafter of Great Mountain Capital Management. Please go ahead.

Hi. First, congratulations on your record setting quarter. Question about the financials, the increase in the SG&A expense. Is that primarily due to customer acquisition or a combination? Or is there something else entirely?

Hi, Aaron. Thanks.

Hi, Aaron.

We're not sitting together this time, so it's harder to co-ordinate between the two of us.

I understand.

So, sorry for the mix up. I guess I'll start and then if Avi has anything, to jump in and add, I hope he will. First of all, thanks, Aaron, for joining the call and for the good wishes. Hope everyone in your family; all your loved ones are healthy and safe. The SG&A expense primarily is a function of selling costs, increased commissions on the higher meter acquisition numbers, compared to a year ago. There is some bad debt expense in there, which we saw in the first quarter. And that's pretty much it.

Okay. And then, you mentioned Afek and that you still hope to complete the testing by the first half of this year. Is that going to be a pressure test on the well? And if so, wouldn't that take close to a month? So when -- can you give any more guidance on that?

Yes. So we did expect to have -- we expected to have already been able to do it.

Great.

We had a scheduled time to do it with the Army, before the COVID pandemic, kind of, changed everything. That said, it was really only delayed a few weeks. So we do expect to at least start the test before quarter end, if we do it quickly enough and we get the right personnel on the spot to do the analysis. Things are moving a little bit more quickly in Israel in terms of recovery from COVID than it is in a lot of the world. So if we're able to do that quickly, we may have some results before the end of the quarter or at least, hopefully, by the time we release second quarter earnings.

Okay. And I realize that you -- I saw the -- and you mentioned the sharp increase in your working capital. I didn't see anything about any share buybacks. I'm looking at your results and the share price and thinking that if -- maybe if I was in management, I would consider to bargain. Are you considering doing any more share buybacks? I know, on the last call, you said that you were looking to increase your working capital and that it might -- share buybacks might take a back seat, but I'm wondering if that has changed?

So we still have approval from the Board to buyback more shares if we decide the prices are right. We wanted to return more capital to shareholders in general, which is part of the reason why we increased the dividend, and we feel very confident about our short-term and long-term future. So I guess -- I'll leave it at that. It's always on the table.

Okay. And there was a note in the release about, you had to post additional cash collateral in support of certain hedge positions at GRE. Was that due to increased customers? Was that due to increased volatility and so increased margin demands? Is that combination, something else? I was wondering if you could explain upon that.

It was mostly as a result of the volatility, but I'll have Avi to elaborate if he thinks it needs to be elaborated on.

Sure. So it's -- as you pointed out, it's a little bit of a combination of a number of factors. As you're aware, the energy markets moved down pretty materially over the last six months. So some of the positions we've had on in support of our fixed rate book required some mark-to-market until those roll off in support of the customers that they were put on for. And that's -- we expect there to be sort of an ongoing level of requirement, just given the size of our fixed rate book now, but it wasn't usually large for a relatively short period.

Okay, that's all my questions. I hope to talk to you next call and everyone is all good and healthy.

Thank you.

Thank you.

[Operator Instructions] Next, we have Kevin Naire [ph], Private Investor.

Gentlemen, can you hear me? Hello?

Yes, we can hear you.

We can.

Just a few questions about -- you said you suspended the door-to-door sales. How effective is that? How many meters were they bringing in? And then also with that, I'm kind of curious, how do they operate? Do they -- when they go out, do they know who they're going to, what they're paying, who their current customer? Do they have like a head up or knowing what they have to beat? Or how does the mechanics actually work in that section?

Hi Kevin, good to connect. So the door-to-door or the face-to-face customer acquisition channel is our biggest channel, generally speaking. It happens to also be one of the largest channels in the industry in general. So while we're seeing -- while we had to seize door-to-door sometime toward the end of March, and therefore, we're not doing any face-to-face marketing in all of April. So even that -- even though our net meter acquisition took a major hit in that regard. On the flip side, we also saw our attrition rate come down significantly in April for the same reason that our competitors weren't going door-to-door and weren't marketing on a face-to-face level. And actually, modestly, we did warn in the earnings release that we may see some net attrition over the COVID pandemic period depending on how long that lasts. But specifically in April, we actually saw an overall modest increase in the US business in terms of meters and RCE acquisition growth. Did that answer your question?

Did you hear the second part of my question? I was curious, do they --

Sorry, yes, the second part of your question was that, just how does the -- mechanically, how does the door-to- door selling process work?

Yes. Do they know what they're going against? Do they know what they're bidding against? It's one of my questions really.

Yes. So typically, we educate the door-to-door customers about our competition. Our competition is very often or mostly the local utility transmission delivery companies. So they're armed with relative pricing, as well as, obviously, the customer themselves are able to tell the vendors what they're able to pay.

Thank you, sir.

Well, this concludes our question-and-answer session and the conference call. Thank you all for attending today's presentation. At this time, you may disconnect your lines. Thank you, everyone. Take care, and have a very great day.