Via Renewables , Inc. (Ticker: VIA) has reported a year of organic growth and solid financial results for the fourth quarter and full-year 2023. The company achieved an adjusted EBITDA of $56.9 million, marking an increase from the previous year's $51.8 million. This rise is attributed to a higher retail gross margin, partially offset by lower power and natural gas volumes. Via Renewables also announced the suspension of the dividend on common stock to bolster the balance sheet and provide financial flexibility for strategic growth and weather-related impacts.
Key Takeaways
- Via Renewables experienced organic growth in 2023, diverging from its historical pattern of expansion through mergers and acquisitions.
- The company reported a decrease in average monthly attrition from 3.8% in 2022 to 3.4% in 2023.
- Adjusted EBITDA for the full-year 2023 rose to $56.9 million, up from $51.8 million in 2022.
- The dividend on common stock was suspended on April 19, 2023, to strengthen the balance sheet.
- Retail gross margin for the fourth quarter increased to $33.7 million, compared to $31.9 million in the same quarter of the previous year.
- Full-year retail gross margin reached $136.7 million in 2023, a significant rise from $114.8 million in 2022.
- The company ended the year with 335,000 RCEs, an increase from the previous year's 331,000 RCEs.
- Interest expenses went up due to increases in benchmark rates, and income tax expenses also rose due to an increase in net income.
Company Outlook
- Via Renewables plans to pursue strategic growth opportunities and prepare for potential future weather events.
- The company's focus on optimizing organic sales channels and reducing attrition is expected to continue.
Bearish Highlights
- Power and natural gas volumes decreased due to a lower RCE count at the beginning of the year and milder weather in the Northeast.
- Interest expenses increased from $7.2 million in 2022 to $9.3 million in 2023.
Bullish Highlights
- The company reported a net income of $26.1 million for the year, despite a $4.9 million mark-to-market loss.
- Via Renewables ended the year with an uptick in free web ads, primarily at the beginning of 2023.
Misses
- The company faced increases in net asset optimization, G&A expenses, and customer acquisition spending.
- Legal costs and sales and marketing expenses contributed to the increase in G&A expenses for 2023.
Q&A Highlights
- There were no specific questions or answers highlighted from the Q&A portion of the earnings call.
Via Renewables' focus on organic growth and strategic financial decisions has paved the way for a strong performance in 2023. The company's efforts to optimize sales channels and manage attrition have yielded positive results, as seen in the increased adjusted EBITDA and retail gross margin. While facing some challenges such as higher interest expenses and G&A costs, Via Renewables remains committed to strengthening its financial position and exploring opportunities for growth.
InvestingPro Insights
Via Renewables, Inc. (VIA) has demonstrated resilience and strategic acumen in its financial performance for 2023. Let's delve into some key metrics and insights from InvestingPro that can provide a deeper understanding of the company's current market position:
InvestingPro Data:
- The company's Market Cap stands at 78.36 million USD, reflecting its valuation in the market.
- VIA's Price/Book ratio for the last twelve months as of Q3 2023 is at 1.6, which can be indicative of how the market values the company's assets relative to its share price.
- Despite the suspension of dividends, the Dividend Yield as of 2023 was significant at 33.44%, showcasing the company's previous commitment to returning value to shareholders.
InvestingPro Tips:
- Via Renewables pays a significant dividend to shareholders, although it has been suspended for strategic reasons, it indicates a history of shareholder value.
- The company is trading at a low revenue valuation multiple, suggesting that its stock might be undervalued relative to its revenue generation capacity.
- With liquid assets exceeding short-term obligations, VIA appears to be in a good position to meet its immediate financial liabilities.
For investors and analysts seeking a more comprehensive analysis, InvestingPro offers additional tips on VIA. Currently, there are 6 more InvestingPro Tips available, which can be accessed by visiting https://www.investing.com/pro/VIA. These tips can provide further insights into the company's financial health, market performance, and growth potential.
To explore these valuable insights, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription at InvestingPro, unlocking a deeper level of financial analysis and data-driven decision-making.
Full transcript - Via Renewables (VIA) Q4 2023:
Operator: Good morning, ladies and gentlemen. Welcome to the Via Renewables, Inc. Fourth Quarter and Full-Year 2023 Earnings Conference Call. My name is Kevin, and I'll 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 (NASDAQ:VIA).'s website. I'd now like to turn the conference over to Mr. Stephen Rabalais with Via Renewables Inc. Please go ahead.
Stephen Rabalais: Thank you. Good morning, and welcome to Via Renewables' fourth quarter and full-year 2023 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.
Keith Maxwell: Thank you, Stephen. I want to welcome everyone to today's earnings call. I'll begin by providing a summary of our full-year results. And then our CFO, Mike Barajas, will provide more details on the financials. In 2023, Via was able to grow our books solely organically. Historically, we've grown our book in large part through M&A transactions. Over the past few years, our book has been purposely shrinking on the market consolidation and acquisition opportunities to become less attractive. Last year, we put a considerable amount of effort into optimizing our organic sales channels and stemming our attrition. We are also able to lower our average monthly attrition 3.4% compared with 3.8% in 2022. For the full-year of 2023, we reported adjusted EBITDA of $56.9 million up from $51.8 million in 2022. The increase was mainly due to the increase in retail gross margin. The gain in the unit margin was partly offset by a decrease in our power and natural gas volumes due to the starting of the year with lower RCE count and milder weather in the Northeast. In 2022, we also included a $4.4 million add back on adjusted EBITDA related to the 2021 winter storm, Yuri. In April 19, 2023, Via made the decision to suspend the dividend on the common stock in order to strengthen our balance sheet, and add financial flexibility that provides us with the availability to pursue strategic growth opportunities and provide us with added confidence in our ability and magnitudes and the impacts of the foreseeable future of weather events. This concludes my prepared remarks. Now I'll turn the call over to Mike for his financial review. Mike?
Mike Barajas: Thank you, Keith. Good morning. In the fourth quarter of 2023, we achieved $13.3 million in adjusted EBITDA compared to last year's fourth quarter of $12.6 million. Retail gross margin for the quarter was $33.7 million compared with $31.9 million last year. The increase in retail gross margin is mainly due to higher unit margins on our natural gas load. The increase is partially offset by lower natural gas volumes and lower electric unit margins. Electricity volumes were flat for the quarter. The increase in retail gross margin and a $0.8 million merger agreement expense add-back drove the increase in adjusted EBITDA. This was partially offset by increases in net asset optimization, G&A expenses and customer acquisition spend. Full-year adjusted EBITDA was up at $56.9 million compared to $51.8 million for 2022 and full-year retail gross margin was $136.7 million for 2023 compared to $114.8 million in 2022. The increase in adjusted EBITDA was due to higher gross margin year-over-year, partially offset by increases in net asset optimization, G&A expenses, customer acquisition spend and a nonrecurring $4.4 million add-back for winter storm, Yuri, taken in the second quarter of 2022. G&A for 2023 was approximately $68.9 million compared to $61.9 million for 2022. This increase was primarily the result of increases in sales and marketing expenses and legal costs. 2023 also included $1.6 million of costs related to Via Wireless, which were not significant in 2022. These were partially offset by a significant decrease in bad debt. We ended the year with 335,000 RCEs, up from 331,000 RCEs at the end of 2022, which was due to an increase in year-over-year sales and a decrease in attrition. For the year, we spent $6.7 million in customer acquisition costs compared to $5.9 million in the prior year, but also enjoyed an uptick in free web ads mainly in the beginning of 2023. Our monthly average customer attrition was 3.4% for the year compared to 3.8% in 2022. Interest expense for the year rose from $7.2 million in 2022 to $9.3 million in 2023, primarily because of increases in benchmark rates. Income tax expense of $11.1 million in 2023 was up from $6.5 million expense in 2022 due to an increase in net income. Our net income for the year was $26.1 million with a $4.9 million mark-to-market loss compared to net income of $11.2 million in 2022, which included an $18 million mark-to-market loss. Looking at our balance sheet. We had net debt of $54.4 million and total liquidity of $116 million at year-end 2023. On January 16, 2024, we paid the quarterly cash dividend on our Series A preferred stock. On January 17, we announced our fourth quarter dividend of $0.7596 per share of preferred stock to be paid on April 15. That's all I have. Back to you, Keith.
Keith Maxwell: Thanks, Mike. I want to thank our employees and our suppliers for their hard work in producing a good quarter and a strong year. I want to thank our Spark customers who are continuing to choose us as their energy provider, and I look forward to connecting with you soon on our next call. Thanks.
End of Q&A:
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