Via Renewables(US:VIA)2023-08-03 14:28Company Operations - As of June 30, 2023, the company operated in 103 utility service territories across 20 states and the District of Columbia[149]. - The total number of residential customer equivalents (RCEs) increased by 2% from 339,000 on March 31, 2023, to 346,000 on June 30, 2023[153]. - The company added approximately 40,000 RCEs during the three months ended June 30, 2023, primarily through organic sales channels[159]. Revenue and Sales - For the three months ended June 30, 2023, approximately 81% of retail revenues were derived from electricity sales, while 19% came from natural gas sales[152]. - Total revenues for Q2 2023 were approximately $91.4 million, a decrease of about $5.7 million, or 6%, from $97.1 million in Q2 2022[193]. - Total revenues for the six months ended June 30, 2023 were approximately $223.3 million, a decrease of approximately $1.0 million, or less than 1%, compared to $224.3 million for the same period in 2022[200]. - Total revenues for the Retail Natural Gas Segment for the six months ended June 30, 2023 were approximately $70.2 million, an increase of approximately $14.1 million, or 25%, from approximately $56.1 million for the same period in 2022[220]. Financial Performance - Adjusted EBITDA for the three months ended June 30, 2023, was $12.0 million, compared to $13.3 million for the same period in 2022[172]. - Net income for Q2 2023 was $19.1 million, an increase of 52% from $12.5 million in Q2 2022[194]. - Retail Gross Margin for the three months ended June 30, 2023, was $30.7 million, up from $23.7 million in the same period in 2022[172]. - Retail gross margin for the Retail Electricity Segment for the six months ended June 30, 2023 was approximately $43.5 million, an increase of approximately $9.6 million, or 28%, from approximately $33.9 million for the same period in 2022[218]. Costs and Expenses - Retail cost of revenues decreased by approximately $15.8 million, or 26%, to $45.9 million in Q2 2023 from $61.7 million in Q2 2022[195]. - General and administrative expenses for the six months ended June 30, 2023 were approximately $33.9 million, an increase of approximately $5.4 million, or 19%, compared to $28.5 million for the same period in 2022[202]. - Customer acquisition costs for Q2 2023 were $1.5 million, slightly higher than $1.4 million in Q2 2022[194]. - Customer acquisition cost for the six months ended June 30, 2023 was approximately $3.3 million, an increase of approximately $0.7 million, or 27%, from approximately $2.6 million for the same period in 2022[204]. Cash Flow and Liquidity - As of June 30, 2023, the company had total liquidity of $86.3 million, consisting of $47.1 million in cash and cash equivalents, $19.3 million available under the Senior Credit Facility, and $20.0 million under the Subordinated Debt Facility[228][240]. - Net cash provided by operating activities for the six months ended June 30, 2023, was $34.7 million, an increase of $21.8 million compared to $12.9 million for the same period in 2022[231][232]. - Cash flows used in investing activities decreased by $4.4 million for the six months ended June 30, 2023, primarily due to a lack of customer acquisitions compared to the previous year[233]. - Cash flows used in financing activities decreased by $15.4 million for the six months ended June 30, 2023, mainly due to an increase in net borrowings of $45.0 million under the Senior Credit Facility[234]. Dividends and Shareholder Returns - The company temporarily suspended the quarterly cash dividend on Class A common stock to enhance financial flexibility and strengthen its balance sheet[151]. - The company paid $4.9 million in dividends to holders of the Series A Preferred Stock during the six months ended June 30, 2023, with an accrued amount of $2.6 million as of June 30, 2023[245][247]. - The company declared a dividend of $0.75922 per share for the Series A Preferred Stock for the second quarter of 2023, to be paid on October 16, 2023[248]. Credit and Risk Management - Credit loss expense for the three months ended June 30, 2023, was 2.4%, up from 1.8% in the same period in 2022[165]. - Approximately 53% of retail revenues for Q2 2023 were derived from territories where credit risk was with local regulated utility companies, compared to 57% in Q2 2022[261]. - Bad debt expense for non-POR market retail revenues was 2.4% for Q2 2023, up from 1.8% in Q2 2022, indicating an increase in customer delinquencies[264]. - Total exposure to wholesale counterparty credit risk was $0.8 million as of June 30, 2023, with $0.7 million being with non-investment grade counterparties or unsecured[265]. Market and Operational Challenges - The company experienced a 20% decrease in electricity volumes sold in Q2 2023 compared to Q2 2022[195]. - The increase in electricity unit revenue per MWh was 12.5% in Q2 2023 compared to Q2 2022[195]. - The company plans to continue its historical approach to include the financial impact of weather variability in the calculation of Retail Gross Margin[185]. - A 1.0% increase in interest rates would result in an additional annual interest expense of approximately $1.1 million based on variable rate indebtedness of $105.0 million[267].