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spk01: Good morning and welcome to VIA Renewables' second quarter 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 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.
spk00: Thank you, Steven. I want to welcome everyone to today's earning call. I'll be providing a summary of results from the second quarter, and then our CFO, Mike Brawhaus, will provide more details on the financials. In the second quarter, we reported adjusted EBITDA of $12 million, which is a $1.3 million decrease from the prior year of $13.3 million. Highlights from the second quarter include increasing our income organically for the second quarter in a row, reducing our debt, and increasing our liquidity. We added 39,000 RCEs in the second quarter of 2023 compared to 16,000 RCEs in the second quarter of 2022. Our average quarterly attrition remained at 3.1 year over year. It's also important to note that the second quarter of 2022 included a $4.4 million add-back to adjusted EBITDA related to the winter storm, URIE. In the second half of the year, we continue to focus on customer growth, both in organic and mass market channels, as well as through potential inorganic acquisition. We will continue to work towards strengthening our balance sheet, which will include paying down our debt, conserving cash, and investing in future growth. This way, we can provide long-term shareholder value. That concludes my prepared remarks, and now I'll turn the call over to Mike for his financial review. Mike?
spk02: Thank you, Keith. Good morning. In the second quarter, we achieved $12 million in adjusted EBITDA compared to last year's second quarter of $13.3 million, which included a $4.4 million one-time add-back related to Winter Storm URI. Retail gross margin for the quarter was $30.7 million compared with $23.7 million last year, resulting from higher unit margins in both our retail electricity and natural gas segments. In our retail electricity segment, gross margin was $23 million compared to $16.7 million in the second quarter last year. This was due to higher unit margins partially offset by lower volumes year over year. In our retail natural gas segment, gross margin was $7.6 million compared to $7 million in the second quarter last year. This was due to both slightly higher unit margins and volumes year over year. G&A expenses of $16.7 million were higher compared to $13.6 million in the second quarter last year, primarily due to increased sales, marketing, and legal expenses, in part due to a $1.7 million legal expense reduction in 2022 as a result of settled litigation. These expenses were partially offset by a decrease in non-cash compensation. Total RCEs were 346,000 compared to 368,000 for the second quarter of 2022. Our attrition of 3.1% is flat to the second quarter of 2022, which resulted from a combination of lower attrition on our commercial book and higher attrition on our mass market book, partially due to increased sales efforts. Our net income for the quarter was $19.1 million or income of $1.67 per fully diluted share, compared to net income of $12.5 million or 92 cents per fully diluted share for the second quarter of 2022. The increase is mainly due to an increase in the mark to market on our hedges that we put in place to lock in margins on our retail contracts. We had a mark to market gain this quarter of $15.9 million compared to a mark to market gain of $3.7 million a year ago. The increase was partially offset by both an increase in G&A expenses and income tax expense. Income tax expense increased to $5.2 million in the second quarter of 2023 from $2.7 million in 2022. On July 17th, we paid the quarterly cash dividend on our Series A preferred stock. On July 19th, we declared a dividend in the amount of 75.922 cents per share on our preferred stock to be paid on October 16th. That's all I have. Back to you, Keith.
spk00: Thanks, Mike. I want to thank our employees for their care and dedication to growing and supporting VIA and our suppliers for their continued support. And I want to thank VIA's customers for choosing us as their interview provider. We are excited about the future and we look forward to connecting with you on our next call. Thank you.
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