Via Transportation, Inc. · NYSE:VIA
Via Transportation — Spark Energy — Q2 2016 Earnings Presentation
29 slides from Via Transportation's earnings presentation, Aug 11, 2016
Slide 1: Investor Presentation August 2016
Investor Presentation August 2016
Slide 2: Safe Harbor Statement
1 Safe Harbor Statement This presentation contains forward-looking statements that are subject to a number of risks and uncertainties, many of which are beyond our control. These statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section
Slide 3: Spark Energy at a Glance
Spark Energy at a Glance Spark Energy, Inc. Independent Retail Energy Services Provider Headquartered: Houston, TX Founded: 1999 IPO: July 2014 Ticker / Exchange: SPKE / NASDAQ Global Select Market Market Capitalization: $366.2MM Long-Term Debt 18.4MM Enterprise Value: $384.6MM Annual Dividend: $1.4
Slide 4: Spark Energy Highlights
3 Spark Energy Highlights 2016 annual Adjusted EBITDA guidance of $75MM - $82MM Six acquisitions completed since IPO, creating significant shareholder value Recently closed Provider acquisition and pending Major Energy drop-down from sponsor adding approximately 330,000 RCEs, 24 new markets, a
Slide 5: Spark's Geographical Diversity: States and Utility Territories
4 Spark’s Geographical Diversity: 18 States and 75 Utility Territories Residential Customer Equivalents RCEs (In thousands) Electricity Percent Natural Gas Percent Total Percent East 155 60% 68 45% 223 55% Midwest 45 17% 49 32% 94 23% Southwest 58 23% 34 23% 92 22% Total 258 100% 151 100% 409 100% A
Slide 6: Customer Lifetime Value Strategy
5 Customer Lifetime Value Strategy Actively Managed Customer Base Drives Profitability Multi-channel sales Diverse sales geography Leverage analytics to determine market entry and product tailoring Contracted revenue model with subscription-like flow Sophisticated Customer Acquisition Model
Slide 7: Opportunities for Organic and M&A Growth
6 Opportunities for Organic and M&A Growth Natural Gas Electricity 43MM Eligible Customers1 12% Penetration <1% Spark Share 48MM Eligible Customers1 33% Penetration <1% Spark Share Only 12% of eligible natural gas customers and 33% of eligible electricity customers have made a competitive supplier c
Slide 8: Aligned Sponsor Provides Access to M&A Opportunities, Capital, and Other Services
7 Aligned Sponsor Provides Access to M&A Opportunities, Capital, and Other Services To Propel Growth Step 1 National Gas & Electric (NG&E) Acquires Target Company Step 2 Spark and NG&E capture synergies, de-risk and integrate Target Company while migrating operations to Retailco platform Step 3 Spar
Slide 9: Proven Track Record of Acquisitions and Integration
8 Proven Track Record of Acquisitions and Integration Recent Transactions ~65,000 RCEs 13 New Markets July 2015 ~40,000 RCEs 7 New Markets July 2015 ~2,000 Customers Connecticut December 2014 ~12,000 Customers Connecticut December 2014 ~26,000 Customers Northern California March 2015 ~121,000 RCEs 9
Slide 10: Multiple Brands and Sales Channels Enhance Our Ability to Acquire Customers Organically
9 Multiple Brands and Sales Channels Enhance Our Ability to Acquire Customers Organically • Multiple brands allow for brand positioning and winback strategies not previously available • Outsourced vendor relationships allow rapid scaling and low fixed costs while driving quality, efficiency and flex
Slide 11: Outsourcing of Customer Operations and I.T. Supports Growth Strategy
10 Outsourcing of Customer Operations and I.T. Supports Growth Strategy and Provides Cost Savings Delivered $5 million in annualized cost savings in first half of 2016 Provides scalability and supports Spark and NGE’s M&A strategy Contractual terms and service level penalties derisk operating
Slide 12: Portfolio Diversification
63% 37% 11 Portfolio Diversification 62% 38% Fixed 61% Variable 39% Commercial Residential Both product and customer mix, combined with geographic diversification supports stable cash flow Commodity Product Customer Based on RCEs as of June 30, 2016 Electricity Gas
Slide 13: Conservative Capitalization Minimizes Risk
12 Conservative Capitalization Minimizes Risk Leverage Ratio1 Long-Term Debt2 $18.4MM TTM Adjusted EBITDA $53.8MM Leverage Ratio 0.3x $107.5 million syndicated credit facility $82.5 million working capital line (eliminates need for costly credit sleeve) $11.9 million drawn on $25.0 million acq
Slide 14: Managing Commodity Price Risk
13 Managing Commodity Price Risk Proven hedging strategy that has been refined over Spark Energy’s 17 year history Demonstrated ability to “weather the storm” through up-and-down commodity markets, extreme weather events, and down economies Disciplined risk management supports aggressive growt
Slide 15: Creating Shareholder Value
14 Creating Shareholder Value -25% 25% 75% 125% 175% Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Spark Energy, Inc. NASDAQ Composite Russell 2000 As of August 4, 2016 99% Total Shareholder Return since January 2015 Total Shareholder Return assumes an investment of $100 on January 1, 2015 and al
Slide 16: Key Investment Highlights
Key Investment Highlights Proven Track Record of Accretive Acquisitions and Integrations 6 Transactions in the last eighteen months Consistent Organic Growth ~3% Organic customer growth last three years (CAGR) Conservative Capitalization and Risk Management 0.3x Leverage Ratio Committed to the Divid
Slide 17: Investor Relations Contact Information
Investor Relations Contact Information Investor Relations Spark Energy, Inc. 12140 Wickchester Lane, Suite 100 Houston, TX 77079 http://ir.sparkenergy.com/ Contact: Andy Davis ir@sparkenergy.com 832-200-3727 16
Slide 18: Appendix
Appendix
Slide 19: How Spark Energy Serves its Customers
18 How Spark Energy Serves its Customers Delivering Electricity Delivering Natural Gas POWER GENERATION SPARK ENERGY SPARK ENERGY DISTRIBUTION DISTRIBUTION PRODUCTION TRANSPORTATION TRANSMISSION Green and Renewable Products Stable and Predictable Energy Costs Potential Cost Savings Our Value Proposi
Slide 20: Spark by the Numbers
19 Spark by the Numbers $36.9 $78.5 $5.4 $11.5 $- $5.0 $10.0 $15.0 $- $25.0 $50.0 $75.0 $100.0 2015 2016E 2Q15 2Q16 Adjusted EBITDA ($MM) ($ in millions) 2015 20161 2Q15 2Q16 Revenue $358.2 - $70.2 $76.2 Retail Gross Margin $113.6 - $24.7 $29.1 Adjusted EBITDA $36.9 $78.5 $5.4 $11.5 Customer Acquisi
Slide 21: Proven Leadership
20 Proven Leadership Robert Lane • Vice President and Chief Financial Officer • Former CFO of Emerge Energy Services LP (NYSE:EMES) • Experienced in M&A, integration and capital markets throughout the energy sector • Certified Public Accountant and Chartered Financial Analyst Jason Garrett • Executi
Slide 22: Board of Directors
21 Board of Directors W. Keith Maxwell III • Chairman of the Board of Directors Mr. Maxwell serves as non-executive Chairman of the Board of Directors, and was appointed to this position in connection with the IPO. Mr. Maxwell also serves as Chief Executive Officer of NuDevco Partners, LLC and Natio
Slide 23: Up-C Structure
22 Up-C Structure Public Spark Energy, Inc. Sponsor Spark HoldCo Operating Subsidiaries Class A Common Stock 6,493,152 Shares1,2 • Publicly traded • 100% of economic interest in Spark Energy, Inc. Class B Common Stock 8,224,742 Shares1 • Not publicly traded • No economic rights 1Shares as of August
Slide 24: Spark in the Community
23 Spark in the Community Through our work with the Arbor Day Foundation, we are able to extend our environmental efforts far beyond green energy. We help Lemonade Day introduce youth to the concept of starting and operating their own lemonade stand businesses while teaching the real-world skills th
Slide 25: Appendix: Reg. G Schedules
Appendix: Reg. G Schedules
Slide 26: Reg. G: Adjusted EBITDA Reconciliation (Table A-1)
25 Reg. G ($ in thousands) 2015 2Q15 2Q16 Net income (loss) $25,975 $4,039 $10,738 Depreciation and amortization 25,378 6,038 6,244 Interest expense 2,280 234 619 Income tax expense 1,974 458 4,736 EBITDA 55,607 10,769 22,337 Less: Net, Gains (losses) on derivative instruments (18,497) (4,874) 5,410
Slide 27: Reg. G: Adjusted EBITDA Reconciliation (Table A-2)
26 Reg. G ($ in thousands) 2015 2Q15 2Q16 Net cash provided by operating activities $45,931 $16,447 $18,112 Amortization and write off of deferred financing costs (412) (51) (118) Allowance for doubtful accounts and bad debt expense (7,908) (1,232) 445 Interest expense 2,280 234 619 Income tax expen
Slide 28: Reg. G: Retail Gross Margin Reconciliation (Table A-3)
27 Reg. G ($ in thousands) 2015 2Q15 2Q16 Operating income (loss) $29,905 $4,545 $15,899 Depreciation and amortization 25,378 6,038 6,244 General and administrative 61,682 13,712 16,199 Less: Net asset optimization revenue 1,494 (67) (676) Net, Gains (losses) on non-trading derivative instruments (1
Slide 29: Reg. G Adjusted EBITDA definition
28 Reg. G Adjusted EBITDA We define “Adjusted EBITDA” as EBITDA less (i) customer acquisition costs incurred in the current period, (ii) net gain (loss) on derivative instruments, and (iii) net current period cash settlements on derivative instruments, plus (iv) non-cash compensation expense and (v)