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spk00: Good morning, ladies and gentlemen, and welcome to VIA Renewables Incorporated Third Quarter 2022 Earnings Conference Call. My name is Melissa, and I will be your operator for today. At this time, all participants are in a listen-only mode. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded for replay purposes, and this call will be posted on Via Renewables website. I would now like to turn the conference over to Mr. Stephen Rapale with Via Renewables. Please go ahead.
spk01: Thank you, Melissa. Good morning and welcome to Via Renewables third 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 and 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.
spk02: Thank you, Stephen. I want to welcome everyone to today's earning call. I'll begin by providing a summary of results from the third quarter, and then our CFO, Mike Brahas, will provide more details on the financial results. In the third quarter, we reported an adjusted EBITDA of $15.1 million compared to $22 million in the third quarter of 2021. The decrease is mainly contributed or attributable to a reduction in G&A in 2021. The largest factors were legal accrual reductions and a 1.1 payroll tax credit taken in the third quarter of 2021. Additionally, we had a half million add back from the winter storm, URI, in the third quarter of 2021. The decrease is partially due to a $1.4 million increase in customer acquisition spend. VIA spent $1.7 million in customer acquisition spend compared to $0.3 million in the third quarter of 2021. VIA remains dedicated to growing organically as well as through strategic acquisitions. We're pleased to announce that in the third quarter we entered into an agreement to acquire approximately 18,700 RCEs in Florida gas market, and we're excited to expand our footprint in Florida. Historically, our book has been more heavily weighted in the Northeast and Mid-Atlantic regions. We believe that geographical diversification will continue to add to the stability and the predictability of our cash flow. That concludes my prepared remarks, and now I'll turn the call over to Mike for his financial view and review. Mike?
spk03: Thank you, Keith. Good morning. In the third quarter, we achieved $15.1 million in adjusted EBITDA compared to last year's third quarter of $22 million. Retail gross margin for the quarter was $30.5 million compared with $30.9 million last year. In our retail electricity segment, gross margin was $28.5 million compared to $28.2 million in the third quarter of last year. This was due to an increase in unit margins offset by a decrease in volume year over year. In our retail natural gas segment, gross margin was $1.9 million compared to $2.7 million in the third quarter last year. This decrease was attributable to lower unit margins partially offset by higher volumes. G&A expenses of $16.3 million were higher compared to $9.7 million in the third quarter last year, primarily due to a reduction in legal accruals and a $1.1 million payroll tax credit, both occurring in 2021. In addition, sales and marketing expenses have increased due to ramping up sales. Total RCEs in the third quarter were $336,000 compared to $368,000 in 2021. Additionally, our attrition of 4% is up from 2.4% year over year. This increase is a result of rising commodity prices around the country. Our net loss for the quarter was $4.9 million, or a loss of 18 cents per fully diluted share, compared to net income of $34.7 million, or income of 82 cents per share, per fully diluted share for the third quarter of 2021. The decrease is mainly related to a $42.1 million decrease in our mark-to-market gains. We had a mark-to-market loss this quarter of $15.5 million compared to a mark-to-market gain of $26.6 million a year ago. Interest expense increased to $2.0 million compared to $1.3 million in the third quarter of 2021. The decrease in net income is partially offset by a decrease in income tax. We had a benefit of $48,000 in 2022 compared with the expense of $7 million in the third quarter of 2021, and a decrease in depreciation and amortization expense to $3.3 million compared to $5 million in third quarter of 2021. On September 15th and October 17th, we paid the quarterly cash dividends on our Class A common stock and Series A preferred stock, respectively. On October 20th, we announced third quarter dividends of 18.125 cents per share on our common stock to be paid on December 15th and 66.6107 cents per share of preferred stock to be paid on January 17th. That's all I have.
spk02: Back to you, Keith. Thanks, Mike. I want to thank all of our employees for their care and dedication to growing and supporting VIA and to our suppliers for their continued support. I also want to thank our VIA customers for choosing us as their energy provider. We're excited about the future, and we look forward to connecting with you on our next call. Thank you.
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