VIASP - NASDAQ

Good morning, ladies and gentlemen. Welcome to the Via Renewables, Inc. First Quarter 2022 Earnings Conference Call. My name is Kyle, and I will be your operator for today. At this time all participants are in a listen only mode. [Operator Instructions]. As a reminder, this conference is being recorded for replay purposes, and this call will be posted on Via Renewables, Inc.'s website. I would now like to turn the conference over to Mr. Stephen Rabalais with Via Renewables, Inc. Please go ahead.

Thank you. Good morning, and welcome to Via Renewables First Quarter 2022 Earnings Call. This call is also being broadcast via webcast, which can be located in the Investor Relations section of our website at viarenewables.com. With us today from management is our CEO, Keith Maxwell; and our CFO, Mike Barajas. Please note that today's discussion may contain forward-looking statements, which are based on assumptions that we believe to be reasonable as of this date. Actual results may differ materially. We urge everyone to review the Safe Harbor statement in yesterday's earnings release, as well as the risk factors in our SEC filings. We undertake no obligation to update these statements as a result of future events, except as required by law. In addition, we will refer to both GAAP and non-GAAP financial measures. For information regarding our non-GAAP financial measures and reconciliations to the most directly comparable GAAP measures, please refer to yesterday's earnings release. With that, I'll turn the call over to Keith Maxwell, our CEO.

Thank you, Stephen. I want to welcome everyone to today's earnings call. I'll begin by providing a summary of results for the first quarter, and then our CFO, Mike Barajas, will provide more details on the financials. In the first quarter, we've reported an adjusted EBITDA of $10.8 million. Although our RCE count has grown since first quarter of 2021, we have both higher power and gas volume. The decrease in the gross margin year-over-year is attributed to the rising commodity prices, which have compressed our margins since last year. The decrease can also be attributed to the increased acquisition spend as we ramp up our organic sales channel. In 2022, Via is focused on growth. We aim to have our organic sales channels ramped up in the coming year, and we're exploring new product offerings such as a search protection plan in Texas, which is looking to expand into other states and smart home systems, which has been received very well. Additionally, our attrition has decreased in comparison to the first quarter of 2021. As always, we continue to evaluate potential tuck-in acquisition opportunities, and we'll continue to do so as these opportunities arise. Our goal is to grow our book and drive long-term sustainable value for our shareholders. That concludes my prepared remarks. And now I'll turn the call over to Mike for his financial review. Mike?

Thank you, Keith. Good morning. In the first quarter we achieved $10.8 million in adjusted EBITDA compared to last year's first quarter of $32.7 million. Retail gross margin for the quarter was $28.8 million compared with $50 million last year. In our Retail Electricity segment, gross margin was $17.2 million compared to $30.6 million in the first quarter last year. This was due to lower unit margins driven by increasing commodity prices, slightly offset by an increase in volume year-over-year. In our Retail Natural Gas segment, gross margin was $11.6 million compared to $19.4 million in the first quarter of last year. This decrease was also attributable to lower unit margins, partially offset by an increase in volume. G&A expenses of $14.9 million were higher compared to $12.7 million in the first quarter last year, primarily due to increases in sales and marketing expenses, cost reserves, and employee expenses in 2022 as we ramp up our segments. Total RCEs in the first quarter were $387,000 compared to $367,000 in the first quarter of 2021. Additionally, our attrition of 3.7% is down from 4.2% year-over-year. Our net income for the quarter was $31 million or income of $0.70 per fully diluted share compared to a net loss of $27.6 million or a loss of $0.66 per fully diluted share for the first quarter of 2021. The increase is mainly due to a $64.9 million loss incurred in the first quarter of 2021 for winter storm Uri, partially offset by higher income tax expense in 2022. We had a mark-to-market gain this quarter of $31.9 million compared to a mark-to-market gain of $5.8 million a year ago. Income tax expense increased to $6 million in the first quarter of 2022 compared with a benefit of $1.5 million in 2021 due to the winter storm Uri's impact to our bottom line last year. On March 15 and April 15, we paid the quarterly cash dividends on our Class A common stock and Series A preferred stock, respectively. On April 21, we announced first quarter dividend of $0.18125 per share on our common stock to be paid on June 15 and $0.47639 per share of preferred stock to be paid on July 15. That's all I have. Back to you, Keith.

Thanks, Mike. I want to thank our employees for their care and dedication to growing and supporting Via, and our suppliers for their continued support. I also want to thank Via customers for choosing us as their energy provider. We're excited about the future and look forward to connecting with you on our next call. Thanks.