Good day, and welcome to Genie Energy's First Quarter 2020 Earnings Call. All participants would be in a listen-only mode. In its presentation, Genie Energy's management team will discuss financial and operational results for the three month period ended March 31, 2020. Any forward-looking statements made during this conference call, either in the prepared remarks or in the Q&A session, whether general or specific in nature, are subject to risks and uncertainties that may cause actual results to differ materially from those which the company anticipates. These risks and uncertainties include, but are not limited to, specific risks and uncertainties discussed in the reports that Genie Energy files periodically with the SEC. Genie Energy assumes no obligation either to update any forward-looking statements that they have made or may make or to update the factors that may cause actual results to differ materially from those that they forecast. During their remarks, management may make reference to adjusted EBITDA and pro forma results for its Genie Retail Energy International segment, both are non-GAAP measures. Management believes that Genie Energy's measure of adjusted EBITDA and Genie Retail Energy International's pro forma results provide useful information to both management and investors that supplement Genie Energy's or the relevant segment's core operating results. The Genie Energy earnings release includes a reconciliation of adjusted EBITDA to net income and of the pro forma Genie Retail Energy International's results to GAAP measures, which is available on the Investor Relations page of the Genie Corporation website. The earnings release has also been filed on a Form 8-K with the SEC. After today's presentation by Genie Energy's management, there will be an opportunity to ask questions. I would now like to turn the conference call over to Mr. Michael Stein, Genie Energy's Chief Executive Officer. Mr. Stein, the floor is yours, sir.

Thank you, operator. Welcome to Genie Energy's First Quarter 2020 Earnings Call. Today, we will discuss our operational and financial results for the three months ended March 31, 2020. Avi Goldin, our Chief Financial Officer, will follow my discussion with a deeper dive into the quarter's financial results. Following Avi's remarks, we will be glad to take your questions. My remarks today will focus on our operational results. I will also review the effects of the restrictions imposed due to the COVID-19 pandemic, which had its first full month of impact in April following the quarter close. Finally, I'll touch on some of our promising growth opportunities. Genie Energy achieved very strong first quarter results. Robust growth in our customer base and strong electricity margins here in the US helped us achieve record levels of revenue and gross profit. Our global customer base surpassed both the 400,000 RCE and 500,000 meter milestones, powered by expansion in both our domestic markets and overseas books. Here in the US, Genie Retail Energy added a net 20,000 RCEs and 15,000 meters during the quarter. The RCE over meter ratio has increased from our historical levels, reflecting our recent focus on adding high-quality, high consumption meters. GRE closed the quarter serving 330,000 RCEs comprising 384,000 meters. Overseas, where more of our customer base resides in apartments and average consumption is significantly lower, GRE International added 7,000 RCEs and 20,000 meters to close the quarter serving 72,000 RCEs comprising 148,000 meters. By March 31, we had increased our global customer base to 401,000 RCEs served and 532,000 meters. During the trailing 12 months, we increased our RCEs served by 20% or just over 68,000 and increased global meters served by 33% or 133,000 meters. Part of our success in growing our customer base is attributable to improvements in our domestic customer churn profile that we have achieved over the past couple of years. We have put into place initiatives across our business to mitigate churn, including customer service processes, acquisition, and offering mix. Customer churn in the first quarter decreased again to 4.7% per month from 5.3% per month in the first quarter of 2019. For additional perspective, our average churn over the past 12 months is 5.4% versus 6.6% in the 12 months preceding. At Genie Energy Services, our Prism Solar unit delivered most of its outstanding orders to JP Morgan Chase. As the solar market continues to evolve, we've begun to right-size overhead and streamline Prism's operations. Diversity, meanwhile, continues to progress toward profitability after delivering the most successful year in its history in 2019. At GOGAS, we still hope to complete the final well test in Northern Israel as early as the close of the second quarter. We have reduced cost and overhead to the bare minimum in the interim. Turning now to the impact of the coronavirus. Due to the timing of the impact, COVID-19 and associated public health measures did not significantly affect customer acquisition activities this quarter. We suspended all door-to-door customer acquisition towards the end of March, at about the same time as most, if not all, other retail providers who use that channel. We then pivoted to focus more resources on our other acquisition channels. In April, after the quarter closed, the near-term impact of the pandemic became clear. With quarantines in place in all of our markets, we nevertheless had a strong month highlighted by three developments. First, we benefited from an increase in per-meter electricity consumption, compared to the seasonally adjusted averages. Residential customers, who comprise the great majority of our book, are spending more time at home and consequently using more electricity. Second, the suspension of door-to-door customer acquisition across all of our geographic markets reduced our customer acquisition expense in April. Door-to-door is typically our most expensive acquisition channel in the US, and the alternative channels that we have transitioned to have lower costs. And finally, because one of the most potent drivers of the customer churn is door-to-door customer activity engaged in by our competitors, the industry-wide suspension of door-to-door programs further reduced our churn rate in April. On the downside, the rate of gross customer additions here in the US has slowed somewhat, and the UK and Japan have virtually stopped. The pandemic's impact on customer acquisition is evolving rapidly, but we may see net meter attrition in the coming months. In addition, we are closely monitoring the margin strength of the meters we have been adding through alternative channels. Overall, the near-term impact of the pandemic has demonstrated the resilience of our business. We have made rapid adjustments to the evolving marketplace, and our steps are bearing fruit. That said, like almost all businesses, we will do better over the long-term when our customers are prospering. But we are well positioned to meet the challenges ahead and pursue our growth opportunities. Historically, Genie Energy's growth has been driven primarily by access to new markets. We are fortunate to have recently entered the large and dynamic electricity market in Texas, and our customer acquisition program there is performing well. We've already added approximately 10,000 in our seasonal Lone Star State. Outside of Texas, we are looking at entering several new utility territories in the second quarter and later in the year, two new states, Michigan and Georgia. Overseas, through our Finnish-based REP Lumo, we entered the electricity market in Sweden last month and have only just begun to scratch the surface of our two largest international markets, the UK and Japan. To wrap up, the first quarter was exceptional with robust RCE and meter growth, lower churn, and as Avi will detail, strong financial results. We have taken decisive action to calibrate our operations to address the early challenges of the pandemic and have abundant opportunities for growth, particularly in new markets. As a result, our outlook remains positive. Our geographically diversified markets, liquid balance sheet, and very low level of long-term debt put us in a great position to build on the first quarter's momentum. Genie's Board of Directors has been vigilant about returning value to shareholders. Last year, in addition to paying $0.30 in aggregate dividends to our common stockholders, we repurchased $5.6 million of common stock. Today, in light of the resilience of our business, its underlying strength and the abundant growth opportunities, Genie's Board of Directors has increased our quarterly dividend to $0.085, a 13% increase.

Thank you, Michael, and thanks to everyone on the call for joining us this afternoon. My remarks today will cover our financial results for the three months ended March 31, 2020. Throughout my remarks, I will compare the first quarter 2020 results to the first quarter of 2019, focusing on the year-over-year rather than sequential comparisons, which removes from consideration the seasonal factors that are characteristic of our retail energy business. The first quarter includes the peak heating season and is typically characterized by relatively high levels of electricity consumption, as well as the highest level of natural gas consumption of any quarter of the year. The first quarter's financial results were strong and included record levels of revenue and gross profit. As the timing of events was skewed toward the second half of March, the COVID-19 pandemic did not significantly impact our first quarter financial results. Consolidated revenue in the first quarter increased $17.4 million to $104.1 million. $12.7 million of the increase was contributed by our Genie Energy Services division. Revenue jumped to $18 million on the fulfillment of outstanding solar panel orders by our Prism Solar subsidiary. Going forward, we do not anticipate comparable order volumes or revenue. As Michael indicated, we are taking steps to reduce costs and position that business for the future. Genie Retail Energy contributed $79.1 million in revenue, an increase of $2.6 million compared to the year-ago quarter. Robust growth in our electric meter customer base over the past 12 months drove a 17% increase in kilowatt hours sold, more than offsetting a slight decrease in per unit revenue. This was partially offset by a decline in revenue contribution from the gas book as we experienced lower consumption and pricing per therm. At Genie Retail Energy International, revenue totaled $7 million, an increase of $2.1 million from the year-ago quarter. The increase reflects customer base expansion at both Lumo and Finland and Genie Japan. As discussed in our earnings release, we account for the results of Orbit Energy, our joint venture operating in the UK, using the equity method, and its results of operations are not consolidated in our revenue, gross profit, or SG&A. Consolidated gross profit in the first quarter increased $3.3 million to $28.9 million, also a record for the company. GRE contributed $27.6 million of that total, an increase of $2.9 million from the year-ago quarter, predominantly reflecting the increase in kilowatt hours sold, a modest increase in margin per kilowatt hour, and a decrease in cost per therm sold. Increased rates of customer acquisition at GRE drove an increase in consolidated SG&A expense to $19.5 million in the first quarter, $3.7 million higher than the year-ago period. Equity and the net loss of investees, which is comprised of our investments in Orbit Energy and our minority stake in Atid, decreased to $379,000 from $797,000 in the first quarter of 2019, as we made no additional investments in either entity during the quarter. We now expect to provide Orbit with some additional growth capital later this year. Our consolidated income from operations came in at $9.2 million, compared to $9.8 million in the year-ago quarter, as the increase in customer acquisition expense narrowly offset the gain in gross profit. Adjusted EBITDA was $10.3 million, effectively even with the year-ago quarter. EPS was $0.20 per diluted share, $0.01 below the year-ago quarter. Our balance sheet remains very strong. At March 31, we reported $157.2 million in total assets, including $36.4 million in cash, cash equivalents, and restricted cash. Liabilities totaled $71.5 million, of which just $2.2 million were non-current. Net working capital totaled $51.5 million, an increase of $10.3 million from our total three months ago. Cash used in operating activities was $2.7 million in the first quarter of 2020, compared to cash provided by operating activities of $7 million in the year-ago period. The first quarter's operating cash flow is negatively impacted by the deliveries of Prism Solar, as we received payment for this activity upfront at the end of 2019, as well as the posting of cash collateral in support of certain hedge positions at GRE. To wrap up, the strong financial results this quarter reflect the impact of our sustained investment in meter acquisition over the past year. Looking ahead, and as Michael discussed, though the COVID-19 pandemic creates uncertainty, its impact is likely to be mixed in the near-term, with certain factors improving performance and others working against it. While the long-term holds greater uncertainty, we are confident that Genie is well-positioned to continue to realize value for shareholders. As Michael mentioned, supported by a strong outlook, the Board of Directors has approved an increase in the quarterly dividend to $0.085 a share, a 13% increase. The indicative annual dividend rate is now $0.34 per share. Now, I will turn the call back to the operator for Q&A.

Hi. First, congratulations on your record-setting quarter. Question about the financials, the increase in the SG&A expense. Is that primarily due to customer acquisition or a combination? Or is there something else entirely?

Hi, Aaron. Thanks. We're not sitting together this time, so it's harder to coordinate between the two of us. So, sorry for the mix-up. I guess I'll start, and then if Avi has anything to jump in and add, I hope he will. First of all, thanks, Aaron, for joining the call and for the good wishes. Hope everyone in your family; all your loved ones are healthy and safe. The SG&A expense primarily is a function of selling costs, increased commissions on the higher meter acquisition numbers compared to a year ago. There is some bad debt expense in there, which we saw in the first quarter. And that's pretty much it.

Okay. You mentioned Afek and that you still hope to complete the testing by the first half of this year. Will this involve a pressure test on the well? If so, wouldn't that take around a month? Can you provide any additional guidance on that?

Yes, we anticipated being able to proceed with it already. We had a planned schedule with the Army, but then the COVID pandemic disrupted everything. However, the delay was only a few weeks. We expect to at least begin the test before the end of the quarter, provided we act quickly and have the right personnel available for the analysis. The recovery from COVID in Israel is progressing faster than in many other parts of the world. If we can move swiftly, we might even have some results by the end of the quarter or, at the very least, by the time we announce our second quarter earnings.

I noticed the significant rise in your working capital, but I didn't see any mention of share buybacks. Looking at your results and the share price, I would consider purchasing shares if I were in management. Are you planning any additional share buybacks? In the last call, you indicated that your focus was on increasing working capital and that share buybacks might not be a priority. Has that changed?

We still have approval from the Board to buy back more shares if we believe the prices are favorable. Our aim is to return more capital to shareholders, which is part of the reason we increased the dividend, and we feel very confident about our short-term and long-term outlook. It's always an option we can consider.

Okay. And there was a note in the release about, you had to post additional cash collateral in support of certain hedge positions at GRE. Was that due to increased customers? Was that due to increased volatility and thus increased margin demands? Is that a combination, something else? I was wondering if you could explain upon that.

It was mostly as a result of the volatility, but I'll have Avi elaborate if he thinks it needs to be elaborated on.

Sure. It's a combination of several factors. The energy markets have declined significantly over the last six months, which required us to adjust some of our positions that support our fixed rate book until they roll off for our customers. We anticipate ongoing needs for adjustments due to the size of our fixed rate book now, but the recent requirements were not unusually large for a relatively short period.

Okay, that's all my questions. I hope to talk to you next call and everyone is all good and healthy.

Thank you.

Thank you.

Next, we have Kevin Naire, Private Investor.

Gentlemen, can you hear me? Hello?

Yes, we can hear you.

We can.

I have a few questions regarding the suspension of door-to-door sales. How effective was that approach? How many meters were they bringing in? Additionally, I'm curious about their operation. When they go out, do they know who they are targeting, what the pricing is, and who their current customers are? Do they have any prior information about what they need to surpass, or how does the process work in that area?

Hi Kevin, it's great to connect. The door-to-door or face-to-face customer acquisition channel is our largest channel overall, and it's also one of the most significant channels in the industry. We had to stop door-to-door sales toward the end of March, which meant no face-to-face marketing during all of April. As a result, our net meter acquisition took a significant hit. However, we also noticed a substantial reduction in our attrition rate in April because our competitors were in the same situation, unable to engage in door-to-door marketing. We did mention in our earnings release that we might experience some net attrition during the COVID pandemic depending on its duration. Still, in April specifically, we actually experienced a modest increase in meter and RCE acquisition growth in the US business. Does that address your question?

Did you hear the second part of my question? I was curious, do they?

Sorry, yes, the second part of your question was about how the door-to-door selling process works.

Yes. Do they know what they're going against? Do they know what they're bidding against? It's one of my questions really.

Yes. So typically, we educate the door-to-door customers about our competition. Our competition is very often or mostly the local utility transmission delivery companies. So they're armed with relative pricing, as well as, obviously, the customer themselves are able to tell the vendors what they're able to pay.

Well, this concludes our question-and-answer session and the conference call. Thank you all for attending today's presentation. At this time, you may disconnect your lines. Thank you, everyone. Take care, and have a very great day.