Spark Power Posts Strong Earnings Growth in the First Quarter - Seite 2

• In the first quarter, Spark Power officially launched "Let's Grow Better," its new 3-year strategy for 2023-2025, throughout the organization with the first wave of initiatives focused on the new go-to-market strategy, as well as maturing Spark's US operations. This strategy is designed to drive intentional growth, to create sustainable and long-term value for shareholders as a fully integrated platform company.
• The Company is continuing its enterprise-wide technology and business process integration initiative, Project Darwin, with the successful completion of the second migration of its Renewables US business in the first quarter of the year. This has resulted in all US operating companies being brought onto one platform with standardized processes and operating protocols. The new system is expected to provide an improved customer experience, operational efficiencies in both the field and back office, and the creation of a scalable platform to support future growth.
• The first go-live of the new Enterprise Resource Planning (ERP) software installation occurred in September 2022.
• The final integration of the Canadian business is currently being planned and is on track to be completed by the end of the year.
• Following the divestiture of Bullfrog Power Inc. in Q4 2022, formerly the Sustainability Solutions Segment, the Company completed the transition plan to decouple and migrate the IT systems to the buyer as well as back-office support as part of a transition services agreement. This work was substantially completed by the end of the quarter.
• The Company worked with its lender to revise the financial covenants per the amended and restated credit facility signed on November 30, 2022, to reflect the divestiture of Bullfrog Power from historical comparatives, as well as the impact of higher interest rates over the last six months. The new terms of the amendment come into effect in Q2 2023 and include an option to extend the maturity date into 2025. The revised covenants are as follows:
  • Minimum fixed charge coverage ratio of 0.85 for the quarter ended June 30, 2023, increasing to 1.05 and 1.15 for the quarters ending September 30 and December 31, 2023, respectively, and 1.25 for each fiscal quarter thereafter; and
  • Maximum total debt to EBITDA ratio based on the most recently completed four fiscal quarters of 4.25:1.00 for the quarter ending June 30, 2023, decreasing to 3.75:1:00 for each quarter thereafter.

Financial Outlook