Good day and welcome to Genie Energy's Fourth Quarter and Full Year 2021 Earnings Call. All participants will be in a listen-only mode. [Operator Instructions] On this morning's call Michael Stein, Genie Energy's Chief Executive Officer; and Avi Goldin, Genie Energy's Chief Financial Officer will discuss operational and financial results for the three and 12-month periods ended December 31st, 2021. 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, a non-GAAP measure. Management believes that Genie Energy's measure of adjusted EBITDA provides useful information to both management and investors that supplement Genie Energy's core operating results. The Genie Energy earnings release includes a reconciliation of consolidated adjusted EBITDA to its nearest comparable GAAP measures, consolidated net income, and income from operations for all periods presented. In addition adjusted EBITDA for applicable segments are reconciled to their respective segment's income from operations for all periods presented. The Genie Energy earnings release is posted on the Investor Relations page of the Genie Corporation website, genie.com and has 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] Please note this event is being recorded. I will now turn the conference over to Michael Stein Genie Energy's Chief Executive Officer. Please go ahead Mr. Stein.

Thank you operator. Welcome to Genie Energy's fourth quarter and full year 2021 earnings call. Today I will go through a brief overview of our business and opportunities followed by a discussion of our fourth quarter results, Avi Goldin, our Chief Financial Officer will then provide a deeper dive into financial results, and then we will be glad to take your questions. During 2021, some portfolio management moves as well as some weather anomalies complicated our financial statements. These factors include the sale of our Japanese business and our orderly withdrawal from the UK market, which led to classifying our UK operations as discontinued, plus the impact of winter storm Uri last February. As a result, we will provide pro forma information in our investor presentation that will be posted on our website after the filing of our 10-K next week to give investors a view of how the existing businesses have performed historically as well as for future comparisons. Despite these factors, we grew revenue by 2% during the year and gross margin expanded by 220 basis points to 28.8%. We also finished the year with our strongest balance sheet in many years. In the meantime, I'm going to quickly review our businesses before I go into our fourth quarter results and outlook for 2022. Genie Energy owns a portfolio of assets that offer attractive investment opportunity within the energy space. And our diversification both as to our offerings and geographically reduces our risk profile, while providing upside opportunities as we saw in Q4. In the U.S. our Asset-light Genie Retail Energy business or GRE for short, has demonstrated a resilient ability to generate cash in a variety of market conditions. This business currently operates in 17 of 27 deregulated states plus Washington D.C. and our mid-to-long-term strategy is…

Thank you Michael, and thanks to everyone on the call for joining us this morning. My remarks today cover our financial results for the three and 12 months ended December 31, 2021 with a focus on the fourth quarter's results. When discussing the quarterly results, I compare the fourth quarter of 2021 to the fourth quarter of 2020 to remove from consideration the seasonal factors that are characteristic of our Retail Energy business. During the fourth quarter, we completed our withdrawal from the United Kingdom's retail energy market. Operating results, assets and liabilities of Orbit Energy are reflected as discontinued operations for all current and historical periods presented in our filings and in my remarks. Our fourth quarter and full year 2021 consolidated financial results were both strong, highlighted by increased revenue, gross profit, adjusted EBITDA and earnings per share compared to the year ago quarter and prior year respectively. The gains reflect our decision driven by volatility in energy markets and other factors to focus on near-term profitability and cash generation, as well as the inherent strength of our business model, which enabled us to pivot to changes in the marketplace, while maintaining prudent risk-managed strategies. Fourth quarter consolidated revenue increased 5.3% to $84.7 million. This revenue growth was generated primarily by Genie Retail Energy International where sales increased 64.3% to $15.5 million, reflecting the continued growth of our customer base, and an increase in power prices compared to the year ago quarter. At GRE, revenue decreased 2.9% to $67.9 million. The decline in electric meters served that Michael referred to and a slight decrease in electric consumption per meter more than offset a strong increase in revenue per kilowatt hour sold. Revenue for our renewables business increased by 19% to $1.3 million from $1.1 million. Full year 2021…

We will now begin the question-and-answer session. [Operator Instructions] Your first question for today is coming from Aaron Shafter with Great Mountain Capital Management. Aaron, your line is live.

Thanks, Operator. Congratulations on a strong quarter, especially the numbers from your international division. A month ago, you issued a press release announcing that you were resuming the dividend and you were going to be doing some preferred share buybacks. And I'm wondering, if you can shed any light on those – the preferred share buybacks. How you expect that to go? Do you intend to buyback all the preferred shares or just a certain amount over time depending upon conditions, or on any kind of schedule? Any light that you can shed on that specifically?

Hi, Aaron, thanks for the support and kind words. Yes, so the Board authorized us to buyback up to $1 million worth of preferred per quarter. Obviously, the Board always has the opportunity to change their minds either to stop doing that, or to increase it at any point in time. But the current authorization is that staged process. We did not yet, buy back any of the preferred. I think we mentioned in the earnings release that – or in one of our remarks can't remember that, we plan on starting that buyback in the second quarter.

All right. And you stated during the prepared remarks, your cash flow has been very strong your balance sheet is extremely strong, and especially your cash holdings. And I'm wondering besides looking for new opportunities, is there any possibility of an increase in the dividend?

So we did just approve the dividend, just reinstated dividend only a few weeks ago. So, I don't envision that, we're going to change it right away. But again, that's always up to the Board, and I'm sure, we'll be revisiting that and talking about it next quarter – as early as next quarter when we meet.

And finally, not really financially related but as the – have you considered doing some type of video call where you don't see us but we see you and we get to see what you look like in – when you're speaking. Something like a Zoom call or something or a one-way Zoom call?

It's a good idea. We're happy to do something like that. We'll consider it for future calls.

Okay. All right. Thanks and good luck.

Thanks, Aaron.

Your next question for today is coming from Jason Lustig with J. Goldman. Jason, your line is live.

Hey, Michael. Hey, Avi. Nice job. Great execution in the quarter. Can you talk about the growth in renewables a little bit? I mean, you talked about the backlog. And I think I heard – I think I heard that you have $15 million of revenue in the backlog already. Can you just talk a little bit about the cadence of that backlog and how it burns off throughout the year?

So the way the revenue in the renewables business mostly works is -- or let's say the way that the trajectory from sale to revenue recognition is as follows. We contract with the customer to build a solar array. Then we go for planning and permitting and start executing on the plan to actually build. We only recognize revenue in phases as we complete certain milestone portions of the project. So in my remarks when I said, we have a backlog of about 10 megawatts about $15 million in revenue what I was referring to is that in 2021, we came to an agreement with customers to build that. And now we are in various stages in 2022. We are in various stages of the process of building those. When exactly how that revenue comes whether it's more first quarter, more second quarter, more third quarter or fourth quarter is really just depending on too many factors to be able to get into now. But assuming we are able to construct in the time lines that we expect to construct those projects that revenue number should hold up.

Okay, great. And can you help me understand the gross margin and SG&A profile of these kinds of projects?

Sure. So I think what we saw in the fourth quarter, which was around mid-20s in the renewables for gross margin is something that we can expect to see going forward. SG&A is mostly salespeople, because all of the building of the project goes into cost of goods.

Okay. And then I guess if we take a step back, can you talk about some of the -- I think you alluded to this a little bit earlier but can you talk about some of the longer term plans within that segment. Talk a little bit about financing some of the projects and the community solar as well. Just want to better understand the various opportunities and perhaps even the growth profile that you're hoping to achieve as we think several years out into the future.

Yeah. So what we do or what we're looking to do in community solar we've done already a little bit is really two parts of the community solar or maybe three parts of the community solar value proposition. Number one is we're looking to lock in sites where we can build Community Solar projects in favorable jurisdictions. And when we lock in those sites, we have to follow that up with planning and permitting and engineering as well as locking in the incentives related to Community Solar. So we're on the development side of Community Solar. Number two is, we'll probably want to self-finance some of those Community Solar projects, the ones that we think are most in line with our return requirements. And then number three, we're actively involved in the customer acquisition side of the community solar business, because when a developer puts up an array of solar, they need to find the customers to consume the energy generated by the solar field. So that's kind of our business, our core business and we're looking for customers for electricity and natural gas. It's a very easy fit for us to be looking for customers to be the offtakers of that Community Solar. So those are the three parts of Community Solar we participate in. And it's -- I think we're on our way we're progressing and we think it will bring value over time.

Okay. And then just digging into the results a little bit. On the GRE side, I forgot the comment that you made in the third quarter call, but I had thought or expected that SG&A would have been down in the quarter, given that you were pulling back on customer acquisition I think you said. But I think it ticked up sequentially. Can you talk a little bit about what happened between the call at the time and then the end of the quarter that led to that change?

So this is Avi. Thanks for the question. So broadly speaking, customer acquisition is still a little bit challenging relative to where we had been kind of in the pre-COVID environment, just given the difficulty in some of our channels. But we have started to accelerate within the fourth quarter, putting more money back into the field to try to get more customers where we can. And as well as we're seeing some growth in some of our other channels, within the commercial channel as well. So what you saw in the fourth quarter was a calculated decision to try to accelerate the sales activity with the understanding that it's a little more expensive right now than it was in the pre-COVID environment to acquire customers.

Got it. Okay. And then can you reconcile that tick-up in spend with the decline in RCEs?

Yes. So the overall decline in RCEs is a function of both the aggregation deal that we alluded to in the remarks. Those are kind of onetime large baskets of customers that move off, as well as strategic decision within the fourth quarter to allow certain customer segments that aren't as profitable to not renew. So, as we've said, we take a very structured portfolio approach, where we see opportunity to add customers with good margins we'll look to add. And in situations where we think there's opportunity to take margin and let the base shrink a little bit, we're comfortable doing that as well, knowing that on the other side we'll be in a position to put the capital back to work growing the base again.

Right. That makes sense. How many aggregation customers were there in the quarter that rolled off?

Somewhere in the neighborhood of 40,000 customers.

Okay. All right. And then, I guess just lastly on the exit from the UK. What remaining items as we sit here today or I guess as of quarter end and also today, but what remaining items are there to exiting?

The company is currently in administration in the UK. We aren't -- the Genie parent is not incurring any new costs related to that to like exiting aside for whatever the administration is doing in order to close things out. We're just working with the administrators as best as we can to try to make that -- speed that up progress it and exit as soon as possible.

Okay. Thank you, very much for the time. Nice job.

Thank you, Jason.

Thank you, Jason.

This concludes our question-and-answer session and conference call. Thank you for attending today's presentation. You may now disconnect.