Via Renewables, Inc. (NASDAQ:VIA) Q2 2022 Results Conference Call August 4, 2022 11:00 AM ET
Company Participants
Stephen Rabalais – Senior Manager, Financial Planning and Analysis
Keith Maxwell – Chief Executive Officer & Chairman of the Board of Directors
Mike Barajas – Chief Financial Officer
Operator
Good morning, ladies and gentlemen. Welcome to Via Renewables, Inc.’s Second Quarter 2022 Earnings Conference Call.
My name is Donna and I will be your operator for today. [Operator Instructions] As a reminder: This conference call is being recorded for replay purposes, and this call will be posted on Via Renewable Inc.’s website.
I would now like to turn the conference over to Mr. Stephen Rabalais with Via Renewable Inc.
Please go ahead.
Stephen Rabalais
Thank you. Good morning and welcome to Via Renewables’ Second 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’ll 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.
Keith Maxwell
Thank you, Stephen.
I want to welcome everyone to today’s earnings call. I’ll begin by providing a summary of results for the second quarter. And then our CFO, Mike Barajas, will provide more details on the financials.
In the second quarter, we reported an adjusted EBITDA of $13.3 million compared to $14.4 million in the second quarter of 2021. The decrease in year-over-year is attributed to the rising commodity prices and the higher customer acquisition spend, offset by a $4.4 million add-back related to Winter Storm Uri.
Via’s total RCE count increased compared to the second quarter of 2021 mainly due to several customer book acquisitions in the second half of 2021, along with the lower attrition this year in 2022.
We’re pleased to announce that, at the tail end of the second quarter, Via was able to close on a new $195 million credit facility. We want to thank our administrative agent, Woodforest National Bank; and the rest of our bank group for helping us close in on this new facility. The facility provides Via with additional operating flexibility, which will put us in a position to achieve our strategic initiatives.
That concludes my prepared remarks, and now I’ll turn the call over to Mike for his financial review.
Mike?
Mike Barajas
Thank you, Keith. Good morning.
In the second quarter, we achieved $13.3 million in adjusted EBITDA compared to last year’s second quarter of $14.4 million. Retail gross margin for the quarter was $23.7 million compared with $26.4 million last year.
In our retail electricity segment, gross margin was $16.7 million compared to $21.7 million in the second quarter last year. This was due to lower unit margins driven by increasing commodity prices and a slight decrease in volume year-over-year. In our retail natural gas segment, gross margin was $7 million compared to $4.8 million in the second quarter last year. This increase was attributable to higher volumes, partially offset by slightly lower unit margins.
G&A expenses of $13.6 million were higher compared to $10.7 million in the second quarter of last year primarily due to a $2.2 million payroll tax credit we received in 2021, an increase in bad debt and increases in our sales and marketing costs.
Total RCEs in the second quarter were 368,000 compared to 347,000 in the second quarter of 2021. Additionally, our attrition of 3.1% is down from 3.3% year-over-year.
Our net income for the quarter was $12.5 million or income of $0.18 per fully diluted share compared to net income of $24.8 million or income of $0.58 per fully diluted share for the second quarter of 2021. The decrease is related to additional G&A expenses, reduced gross margin offset by $9.6 million from ERCOT related to the PURA Subchapter N securitization financing, along with a $16 million decrease in our mark-to-market gains. We had a mark-to-market gain this quarter of $3.7 million compared to a mark-to-market gain of $19.7 million a year ago.
Lastly, income tax expense decreased to $2.7 million in the second quarter of 2022 compared with an expense of $3.7 million in 2021.
On June 15 and July 15, we paid the quarterly cash dividends on our Class A common stock and Series A preferred stock, respectively. On July 20, we announced second quarter dividends of $0.18125 per share on our common stock, to be paid on September 15; and $0.568125 per share of preferred stock, to be paid on October 17.
That’s all I have. Back to you, Keith.
Keith Maxwell
Thanks, Mike.
I want to thank the employees and the care and dedication to growing and supporting Via and our suppliers for their continued support. I also want to thank Via’s 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. Thank you.
Operator
Ladies and gentlemen, this concludes today’s event. You may disconnect your lines at this time, and enjoy the rest of your day.
Question-and-Answer Session
End of Q&A
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