Via Renewables(VIA) - 2023 Q4 - Annual Report

Financial Performance - Total revenues for the year ended December 31, 2023, were $435.192 million, down from $460.493 million in 2022, indicating a decrease of about 5.5%[382]. - Retail revenues decreased to $439.360 million in 2023 from $462.815 million in 2022, a decline of approximately 5.1%[382]. - The net income attributable to Via Renewables, Inc. stockholders for 2023 was $4.356 million, compared to a net loss of $0.476 million in 2022, marking a significant turnaround[382]. - Operating income for 2023 was reported at $46.472 million, an increase from $24.761 million in 2022, reflecting a growth of approximately 87.5%[382]. - Net income for the year ended December 31, 2023, was $26,105 million, a significant increase from $11,203 million in 2022[389]. - Net cash provided by operating activities increased to $49,315 million in 2023, compared to $16,207 million in 2022[389]. - The company reported a gain on derivatives of $71,493 million in 2023, a turnaround from a loss of $17,821 million in 2022[389]. - The company’s depreciation and amortization expense decreased to $9,102 million in 2023 from $16,703 million in 2022[389]. - The total current liabilities decreased to $79.996 million in 2023 from $92.168 million in 2022, a reduction of about 13.2%[379]. - Via Renewables' cash and cash equivalents increased to $42.595 million in 2023 from $33.658 million in 2022, representing a growth of approximately 26.5%[379]. Debt and Financing - The company has $97.0 million of outstanding indebtedness and $24.3 million in issued letters of credit under its Senior Credit Facility as of December 31, 2023[146]. - The Senior Credit Facility will mature on June 30, 2025, and there is no assurance that the company will be able to negotiate a new credit arrangement on commercially reasonable terms[147]. - As of December 31, 2023, $97.0 million of variable rate indebtedness was outstanding under the Senior Credit Facility, with a 1% increase in interest rates resulting in additional annual interest expense of approximately $1.0 million[352]. - The company incurred $8,636 million in interest expenses during the year, compared to $5,561 million in 2022[389]. - The ability to pay dividends on Series A Preferred Stock depends on cash generated from operations, which fluctuates based on various factors[150]. - The company is dependent on distributions from Spark HoldCo to meet debt service and pay dividends, as it has no independent means of generating revenue[155]. Mergers and Acquisitions - A merger agreement was entered into on December 29, 2023, with Retailco for $11.00 per share for all Class A common stock[65]. - The merger is expected to close in the second quarter of 2024, subject to shareholder approval[70]. - The company has grown through strategic acquisitions and may continue to pursue such opportunities, but faces risks in realizing anticipated benefits from these acquisitions[116]. Regulatory and Market Risks - The company faces risks from increased regulations and monetary fines in the retail energy industry, which could adversely impact its business and financial condition[106][107]. - The company is subject to commodity price risk, with financial results largely dependent on the prices of natural gas and electricity, which are unpredictable and can fluctuate substantially[95]. - Weather conditions directly influence the demand for natural gas and electricity, affecting consumption and potentially leading to reduced margins or losses[97][98]. - The company partially relies on lead generators for telemarketing, facing increased regulatory restrictions that may impact sales lead costs[80]. - The company must retain licenses in the markets it operates in, with risks associated with potential revocation or non-renewal of these licenses[115]. Employee Relations and Compensation - As of December 31, 2023, the company employed 160 full-time employees, with a gender distribution of approximately 48% male and 52% female[86][87]. - The company has not experienced any strikes or work stoppages, indicating satisfactory employee relations[86]. - The company offers competitive compensation and benefits programs, including a 401(k) Plan and long-term incentive awards in the form of restricted stock units[88]. Shareholder and Stock Information - The company has issued a total of 3,567,543 shares of Series A Preferred Stock as of December 31, 2023[179]. - Holders of Series A Preferred Stock have extremely limited voting rights, with only Class A and Class B common stock carrying full voting rights[167]. - Mr. Maxwell holds approximately 65.0% of the combined voting power of Class A and Class B common stock, significantly influencing shareholder decisions[164]. - The trading price of Class A common stock and Series A Preferred Stock may be highly volatile and influenced by various external factors[158]. - Future sales of Class A common stock could dilute existing ownership and negatively impact market prices[176]. Cash Flow and Assets - The company recognized $2.2 million in gross derivative assets and $30.6 million in gross derivative liabilities as of December 31, 2023[367]. - The fair value of derivative liabilities increased to $19.141 million in 2023 from $16.132 million in 2022, reflecting an increase of about 18.6%[379]. - The company’s total cash used in investing activities was $1,435 million in 2023, down from $6,871 million in 2022[389]. - The balance of retained earnings as of December 31, 2023, was $40,002,000, compared to $42,871,000 in 2022, indicating a decrease of approximately 6.6%[386]. Internal Controls and Reporting - The company has remediated a previously disclosed material weakness in internal control over financial reporting as of December 31, 2023[359]. - Management concluded that internal control over financial reporting was effective as of December 31, 2023[358].