Attached files
| file | filename |
|---|---|
| EX-99.2 - UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF REH AS OF SEPTEMBER 30, - Genie Energy Ltd. | f8k110216a1ex99ii_genie.htm |
| EX-99.1 - AUDITED FINANCIAL STATEMENTS OF RETAIL ENERGY HOLDINGS, LLC AS OF AND FOR THE YE - Genie Energy Ltd. | f8k110216a1ex99i_genie.htm |
| EX-23.1 - CONSENT OF BAKER TILLY VIRCHOW KRAUSE, LLP - Genie Energy Ltd. | f8k110216a1ex23i_genie.htm |
| 8-K/A - AMENDMENT NO. 1 TO CURRENT REPORT - Genie Energy Ltd. | f8k110216a1_genieenergy.htm |
Exhibit 99.3
GENIE
ENERGY LTD.
INDEX TO UNAUDITED PROFORMA FINANCIAL INFORMATION
| Page | ||
| Proforma Condensed Consolidated Financial Statements – Basis of Presentation | 2 | |
| Proforma Condensed Consolidated Balance Sheet as of September 30, 2016 | 3 | |
| Proforma Condensed Consolidated Statement of Operations for the nine months ended September 30, 2016 | 4 | |
| Proforma Condensed Consolidated Statement of Operations for the year ended December 31, 2015 | 5 | |
| Notes and Management’s Assumptions to Proforma Condensed Consolidated Financial Information | 6 | |
| 1 |
GENIE
ENERGY LTD.
PROFORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
BASIS OF PRESENTATION
(unaudited)
The proforma condensed consolidated balance sheet as of September 30, 2016, and the proforma condensed consolidated statements of operations for the nine months ended September 30, 2016, and for the year ended December 31, 2015, are based on the historical financial statements of the Registrant.
The proforma condensed consolidated balance sheet as of September 30, 2016, is presented as if the acquisition of Retail Energy Holdings, LLC (REH) and the payment of the purchase price therefor by the Registrant as described in item 2.01 of this Form 8-K/A occurred in its entirety on September 30, 2016. As set forth in Item 2.01 of this Form 8-K/A, the acquisition was consummated as of November 2, 2016.
The proforma condensed consolidated statements of operations for the nine months ended September 30, 2016, and for the year ended December 31, 2015, are presented as if the acquisition of REH and the payment of the purchase price therefor by the Registrant occurred on January 1, 2015 The proforma condensed consolidated financial statements should be read in conjunction with the historical financial statements and notes related thereto appearing in the Registrant’s Form 10-K for the year ended December 31, 2015, and its Form 10-Q for the nine-months ended September 30, 2016.
Preparation of the proforma information was based on assumptions considered appropriate by the Registrant’s management. The proforma financial information is unaudited and is not necessarily indicative of the results which would have occurred if the transactions described above had been consummated on January 1, 2015 for the proforma condensed consolidated statements of operations and on September 30, 2016 for the proforma condensed consolidated balance sheet, nor does it purport to represent the future financial position and the results of operations for future periods. In management’s opinion, all adjustments necessary to reflect the effects of the transactions listed above have been made.
| 2 |
GENIE
ENERGY LTD.
PROFORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF SEPTEMBER 30, 2016
(in thousands, except per share data)
(unaudited)
| Historical | Adjustments | Proforma | ||||||||||
| Assets | ||||||||||||
| Current assets: | ||||||||||||
| Cash and cash equivalents | $ | 42,301 | $ | (10,706 | ) | (A) | $ | 31,595 | ||||
| Restricted cash—short-term | 10,315 | 27 | (B) | 10,342 | ||||||||
| Trade accounts receivable, net | 33,121 | 4,641 | (B) | 37,762 | ||||||||
| Inventory | 6,841 | 6,841 | ||||||||||
| Prepaid expenses | 7,488 | 81 | (B) | 7,569 | ||||||||
| Other current assets | 4,920 | 4,920 | ||||||||||
| Total current assets | 104,986 | 99,029 | ||||||||||
| Property and equipment, net | 1,471 | 118 | (B) | 1,589 | ||||||||
| Goodwill | 3,663 | 8,918 | (C) | 12,581 | ||||||||
| Restricted cash—long-term | 1,199 | 1,199 | ||||||||||
| Deferred income tax assets, net | 1,642 | 1,642 | ||||||||||
| Other assets | 5,007 | 1,609 | (B) | 6,616 | ||||||||
| Total assets | $ | 117,968 | $ | 122,656 | ||||||||
| Liabilities and stockholders’ equity | ||||||||||||
| Current liabilities: | ||||||||||||
| Revolving line of credit | $ | — | $ | 739 | (B) | $ | 739 | |||||
| Trade accounts payable | 11,942 | 2,509 | (B) | 14,451 | ||||||||
| Accrued expenses | 17,194 | 1,440 | (B) | 18,634 | ||||||||
| AMSO, LLC retirement obligations | 964 | 964 | ||||||||||
| Advances from customers | 687 | 687 | ||||||||||
| Income taxes payable | 2,367 | 2,367 | ||||||||||
| Due to IDT Corporation | 61 | 61 | ||||||||||
| Energy hedging contracts | 1,142 | 1,142 | ||||||||||
| Other current liabilities | 1,287 | 1,287 | ||||||||||
| Total current liabilities | 35,644 | 40,332 | ||||||||||
| Other liabilities | 911 | 911 | ||||||||||
| Total liabilities | 36,555 | 41,243 | ||||||||||
| Commitments and contingencies | ||||||||||||
| Equity: | ||||||||||||
| Genie Energy Ltd. stockholders’ equity: | ||||||||||||
| Preferred stock, $.01 par value; authorized shares—10,000: Series 2012-A, designated shares—8,750; at liquidation preference, consisting of 2,322 shares issued and outstanding | 19,743 | 19,743 | ||||||||||
| Class A common stock, $.01 par value; authorized shares— 35,000; 1,574 shares issued and outstanding | 16 | 16 | ||||||||||
| Class B common stock, $.01 par value; authorized shares—200,000; 23,274 shares issued and 23,073 shares outstanding | 233 | 233 | ||||||||||
| Additional paid-in capital | 126,256 | 126,256 | ||||||||||
| Treasury stock, at cost, consisting of 201 shares of Class B common stock | (1,599 | ) | (1,599 | ) | ||||||||
| Accumulated other comprehensive income | 1,538 | 1,538 | ||||||||||
| Accumulated deficit | (48,901 | ) | (48,901 | ) | ||||||||
| Total Genie Energy Ltd. stockholders’ equity | 97,286 | 97,286 | ||||||||||
| Noncontrolling interests: | ||||||||||||
| Noncontrolling interests | (14,206 | ) | (14,206 | ) | ||||||||
| Receivable for issuance of equity | (1,667 | ) | (1,667 | ) | ||||||||
| Total noncontrolling interests | (15,873 | ) | (15,873 | ) | ||||||||
| Total equity | 81,413 | 81,413 | ||||||||||
| Total liabilities and stockholders’ equity | $ | 117,968 | $ | 122,656 | ||||||||
| 3 |
GENIE
ENERGY LTD.
PROFORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2016
(in thousands, except per share data)
(unaudited)
| Historical | Adjustments | Proforma | ||||||||||
| Revenues: | ||||||||||||
| Electricity | $ | 138,494 | $ | 28,620 | (D) | $ | 167,114 | |||||
| Natural gas | 20,913 | 20,913 | ||||||||||
| Other | 1,186 | 1,186 | ||||||||||
| Total revenues | 160,593 | 189,213 | ||||||||||
| Cost of revenues | (98,223 | ) | (23,953 | ) | (D) | (122,176 | ) | |||||
| Gross profit | 62,370 | 67,037 | ||||||||||
| Operating expenses, (gains) and losses: | ||||||||||||
| Selling, general and administrative | 46,888 | 4,448 | (D) | 51,336 | ||||||||
| Research and development | 210 | 210 | ||||||||||
| Exploration | 4,439 | 4,439 | ||||||||||
| Write-off of capitalized exploration costs | 41,041 | 41,041 | ||||||||||
| Gain on consolidation of AMSO, LLC | (1,262 | ) | (1,262 | ) | ||||||||
| Equity in the net loss of AMSO, LLC | 222 | 222 | ||||||||||
| Loss from operations | (29,168 | ) | (28,949 | ) | ||||||||
| Interest income | 257 | 4 | (D) | 261 | ||||||||
| Other income, net | 171 | (45 | ) | (D) | 126 | |||||||
| Loss before income taxes | (28,740 | ) | (28,562 | ) | ||||||||
| Provision for income taxes | (2,165 | ) | (E) | (2,165 | ) | |||||||
| Net loss | (30,905 | ) | (30,727 | ) | ||||||||
| Net loss attributable to noncontrolling interests | 7,198 | 7,198 | ||||||||||
| Net loss attributable to Genie Energy Ltd. | (23,707 | ) | (23,529 | ) | ||||||||
| Dividends on preferred stock | (1,111 | ) | (1,111 | ) | ||||||||
| Net loss attributable to Genie Energy Ltd. common stockholders. | $ | (24,818 | ) | (24,640 | ) | |||||||
| Basic and diluted loss per share attributable to Genie Energy Ltd. common stockholders | $ | (1.09 | ) | $ | (1.08 | ) | ||||||
| Weighted-average number of shares used in calculation of basic and diluted loss per share | 22,800 | 22,800 | ||||||||||
| 4 |
GENIE
ENERGY LTD.
PROFORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2015
(in thousands, except per share data)
(unaudited)
| Historical | Adjustments | Proforma | ||||||||||
| Revenues: | ||||||||||||
| Electricity | $ | 170,283 | $ | 30,109 | (D) | $ | 200,392 | |||||
| Natural gas | 40,757 | 40,757 | ||||||||||
| Other | 2,016 | 2,016 | ||||||||||
| Total revenues | 213,056 | 243,165 | ||||||||||
| Cost of revenues | (146,409 | ) | (26,663 | ) | (D) | (173,072 | ) | |||||
| Gross profit | 66,647 | 70,093 | ||||||||||
| Operating expenses, (gains) and losses: | ||||||||||||
| Selling, general and administrative | 66,011 | 6,231 | (D) | 72,242 | ||||||||
| Research and development | 1,985 | 1,985 | ||||||||||
| Exploration | 6,583 | 6,583 | ||||||||||
| Equity in the net loss of AMSO, LLC | 397 | 397 | ||||||||||
| Loss from operations | (8,329 | ) | (11,114 | ) | ||||||||
| Interest income | 411 | 1 | (D) | 412 | ||||||||
| Other expense, net | (193 | ) | 164 | (D) | (29 | ) | ||||||
| Loss before income taxes | (8,111 | ) | (10,731 | ) | ||||||||
| Provision for income taxes | (525 | ) | (E) | (525 | ) | |||||||
| Net loss | (8,636 | ) | (11,256 | ) | ||||||||
| Net loss attributable to noncontrolling interests | 1,179 | 1,179 | ||||||||||
| Net loss attributable to Genie Energy Ltd. | (7,457 | ) | (10,077 | ) | ||||||||
| Dividends on preferred stock | (1,481 | ) | (1,481 | ) | ||||||||
| Net loss attributable to Genie Energy Ltd. common stockholders. | $ | (8,938 | ) | $ | (11,558 | ) | ||||||
| Basic and diluted loss per share attributable to Genie Energy Ltd. common stockholders | $ | (0.40 | ) | $ | (0.52 | ) | ||||||
| Weighted-average number of shares used in calculation of basic and diluted loss per share | 22,135 | 22,135 | ||||||||||
| 5 |
GENIE
ENERGY LTD.
NOTES AND MANAGEMENT’S ASSUMPTIONS
TO THE PROFORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
| 1. | The following is a description of the proforma adjustments to the historical condensed consolidated financial statements: |
| (A) | The net decrease in cash and cash equivalents consists of the following: |
| (i) | The cash payment for the acquisition (including for the net working capital balance of REH) of REH of $10.9 million; less |
| (ii) | The consolidation of $0.2 million of cash held by REH on September 30, 2016. |
| (B) | Reflects the consolidation of assets and liabilities of REH as if the sale was consummated on September 30, 2016. |
| (C) |
The net increase in goodwill represents the excess purchase price over the fair value of net assets acquired. This preliminary purchase price allocation to goodwill has been used to prepare proforma adjustment in the proforma balance sheet as of September 30, 2016. The final purchase price allocation hasn’t been completed yet and will be determined when the Registrant has completed the detailed valuations and necessary calculations. The final allocation could differ materially from the preliminary allocation used in the proforma adjustment. The final allocation may include changes in allocations to intangible assets, as well as goodwill and other changes to assets and liabilities. |
| (D) | Reflects the consolidation of the results of operations of REH as if the acquisition was consummated on January 1, 2015. |
| (E) | Prior to its acquisition, REH was not a taxable entity and was disregarded for federal income tax purposes. Also, losses of REH would have not impacted the provision for income taxes, as the income tax benefit from the losses of REH would have been substantially reserved for in the valuation allowance. Therefore, no provision or liability for federal or state income taxes has been made. |
| 2. | In the historical consolidated statement of operations of the Registrant for the year ended December 31, 2015, $2.4 million previously included in “Financing fees” have been reclassified to “Cost of revenues”. Also, in the historical statement of operations of the Registrant for the year ended December 31, 2015, Pennsylvania gross receipt tax previously recorded as a reduction to electricity revenue instead of as cost of revenues have been were adjusted to correct the classification by reflecting additional revenue and cost of revenues in the amount of $2.9 million. |
6