Cascade Natural Gas Corporation Announces Fiscal Year 2002 Third Quarter Earnings.Business Editors SEATTLE--(BUSINESS WIRE)--July 16, 2002 Cascade A connected series of devices or images. It often implies that the second and subsequent device takes over after the previous one is used up. For example, cascading tapes in a dual-tape backup system means the second tape is written after the first one is full. Natural Gas Corporation (NYSE NYSE See: New York Stock Exchange :CGC CGC Canine Good Citizen (AKC Dog Title) CGC Commission Géologique du Canada (Geological Survey of Canada) CGC Confédération Générale des Cadres (French labor union) ) reported a loss of $2.5 million, or ($0.22) per share for the fiscal third quarter ended June June: see month. 30, 2002 compared to earnings of $2.1 million, or $0.19 per share, for the third quarter ended June 30, 2001. Year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. earnings were $13.3 million, or $1.20 per share, compared to $1.76 for fiscal 2001. Affecting the year-to-year comparisons was $0.14 per share of earnings from a one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. off-system interstate in·ter·state adj. Involving, existing between, or connecting two or more states. n. One of a system of highways extending between the major cities of the 48 contiguous United States. Noun 1. pipeline capacity sale in the third quarter last year, and in the current third quarter a one-time charge of $0.16 per share related to cancellation of a gas supply contract. As a result of the third quarter performance, the full fiscal year earnings are expected to be between $0.98 and $1.04 per share. Excluding the one-time third quarter charge the full fiscal year 2002 earnings are expected to be between $1.14 and $1.20 per share. Residential and commercial operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: were down in the quarterly comparison by $655,000. Lower per-customer consumption during the quarter reduced margins by $1 million primarily due to weather. Consumption in June was particularly disappointing. Partially offsetting the decline due to consumption was a $344,000 margin increase from the addition of 6,868 customers. For the nine-month period residential and commercial operating margins were lower by $1.9 million due to lower per customer consumption largely affected by 6% warmer winter weather. Excluding the above mentioned contract termination Defense procurement: the cessation or cancellation, in whole or in part, of work under a prime contract or a subcontract thereunder for the convenience of, or at the option of, the government, or due to failure of the contractor to perform in accordance with the terms of the contract (default). charge, operating margins from industrial customers were lower by almost $900,000 for the quarter and higher by $933,000 for the nine-month period. Factors influencing performance were: -- Operating margins from electric generation customers were down by $1 million compared to last year's third quarter and $1.2 million lower year to date. The slow economy, mild temperatures, and higher than normal availability of water for hydroelectric generation dramatically affected demand for gas-fired generation throughout the year but particularly during the third quarter. -- Operating margins from gas deliveries to industrial customers other than electric generators were up $192,000 for the quarter and $2.1 million year to date. The strong improvement in the early part of the fiscal year in large part reflected recovery from the depressed consumption levels following the West Coast energy crisis during the 2000-2001 winter season. -- Gas management and other services contributed margin improvements of $4,000 for the quarter and $1.7 million for the nine months. Included in this category are margins derived from agency fees on gas supplies purchased to serve certain customers who are committed to purchase these supplies to satisfy any of their gas needs. During the quarter ended June 30, the normal seasonality of many of these customers, amplified by the lingering affects of a slow economy, resulted in reduced gas consumption by the group. -- Total cost of operations decreased $350,000 for the quarter. Operating expense was $700,000 lower for the quarter primarily because of $900,000 in incentive compensation accruals in June of 2001. For the nine months the cost of operations was higher by $3 million compared to fiscal 2001. Major contributors to the increase are $2 million due to benefits expense and $860,000 from higher depreciation charges from higher asset balances. Net capital expenditures for the nine-month period were $14.2 million out of a total fiscal year budget of $22.8 million. Cash flow provided by operating activities was $40.0 million, an improvement of $61.1 million from the first nine months of fiscal 2001. The improvement is primarily from adjustment of customer rates to recover the higher gas cost experienced in the winter of 2000-2001. Cascade's financial position continues to remain strong with no short-term debt Short-term debt Debt obligations, recorded as current liabilities, requiring payment within the year. and $17 million invested in short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. securities. Short-term needs are buttressed but·tress n. 1. A structure, usually brick or stone, built against a wall for support or reinforcement. 2. Something resembling a buttress, as: a. The flared base of certain tree trunks. b. with a $50 million unused committed line of credit as well as $125 million registered with the S.E.C. and available for short and long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. public offerings. Supporting capital needs is the recently affirmed af·firm v. af·firmed, af·firm·ing, af·firms v.tr. 1. To declare positively or firmly; maintain to be true. 2. To support or uphold the validity of; confirm. v.intr. S & P rating of BBB BBB A medium grade assigned to a debt obligation by a rating agency to indicate an adequate ability to pay interest and repay principal. However, adverse developments are more likely to impair this ability than would be the case for bonds rated A and above. + with a stable outlook and Moody's Moody's Corporation (NYSE: MCO) is the holding company for Moody's Investors Service which performs financial research and analysis on commercial and government entities. The company also ranks the credit-worthiness of borrowers using a standardized ratings scale. Baa1 with a positive outlook. Currently the Company's debt to total capital ratio is a moderate 56%, the composite coupon rate Coupon rate In bonds, notes, or other fixed income securities, the stated percentage rate of interest, usually paid twice a year. is at 7.68%, and 45% of the debt matures in 20 years or more. The Company previously announced its declaration of a $0.24 per share quarterly dividend on common stock, payable Aug. 15, 2002, to shareholders of record at the close of business July 13, 2002. Cascade Natural Gas Corporation is a local distribution company providing natural gas service to over 200,000 customers in the states of Washington and Oregon Oregon, city, United States Oregon, city (1990 pop. 18,334), Lucas co., NW Ohio, a suburb adjacent to Toledo, on Lake Erie; inc. 1958. It is a port with railroad-owned and -operated docks. The city has industries producing oil, chemicals, and metal products. . Statements contained in this report that are not historical in nature are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Forward-looking statements are subject to risks and uncertainties that may cause actual future results to differ materially. Such risks and uncertainties with respect to the Company include, among others, its ability to successfully implement internal performance goals, competition from alternative forms of energy, consolidation in the energy industry, the failure or inability of key natural gas suppliers to honor As a verb, to accept a bill of exchange, or to pay a note, check, or accepted bill, at maturity. To pay or to accept and pay, or, where a credit so engages, to purchase or discount a draft complying with the terms of the draft. their commitments, the capital-intensive Capital-intensive Used to describe industries that require large investments in capital assets to produce their goods, such as the automobile industry. These firms require large profit margins and/or low costs of borrowing to survive. nature of the Company's business, regulatory issues, including the need for adequate and timely rate relief to recover increased capital and operating costs operating costs npl → gastos mpl operacionales resulting from customer growth and to sustain dividend levels, the weather, increasing competition brought on by deregulation Deregulation The reduction or elimination of government power in a particular industry, usually enacted to create more competition within the industry. Notes: Traditional areas that have been deregulated are the telephone and airline industries. initiatives at the federal and state regulatory levels, the potential loss of large volume industrial customers due to "bypass" or the shift by such customers to special competitive contracts at lower per unit margins, exposure to environmental cleanup The process of removing solid, liquid, and hazardous wastes, except for unexploded ordnance, resulting from the joint operation of US forces to a condition that approaches the one existing prior to operation as determined by the environmental baseline survey, if one was conducted. requirements, and economic conditions, particularly in the Company's service area.
Cascade Natural Gas Corporation
Financial Highlights - (Thousands, except per share amounts)
Third Quarter Fiscal 2002
Fiscal Year 2002
---------------------------------------------------
Three Months Ended
----------------------------------------- Year
to
Dec 31 Mar 31 Jun 30 Sep 30 Date
------ ------ ------ ------ ----
Revenues $102,761 $122,361 $56,815 $281,938
Operating Margin 28,643 33,456 14,253 76,352
Cost of Operations 15,911 15,282 14,890 46,082
--------- ---------- --------- ---------- ---------
Operating Income
(Loss) 12,732 18,174 (637) 30,270
Interest and Other 2,901 3,247 6,024 12,172
Income Taxes 3,588 5,448 (1,409) 7,628
--------- ---------- --------- ---------- ---------
Net Income (Loss) $ 6,243 $ 9,479 $(5,252) $ - $10,470
Common Shares
Outstanding:
End of Period 11,045 11,045 11,045 11,045
Average 11,045 11,045 11,045 11,045
Earnings (Loss)
Per Share
Basic $0.57 $0.86 ($0.48) $0.95
Diluted $0.56 $0.86 ($0.22) $1.20
Dividends Paid
per share $0.24 $ 0.24 $ 0.24 $0.72
Capital
Expenditures (net) $4,557 $ 5,240 $ 4,690 $14,487
Book Value
Per Share $11.34 $ 11.95 11.48 $11.95
Market Closing
Price $22.05 $ 21.22 $ 20.90 $21.22
Customers (End of
Period) 199 201 198 198
Gas Deliveries
(Therms):
Residential
& Commercial 79,412 98,713 36,655 214,781
Industrial
& Other 303,130 285,692 160,047 748,869
Degree Days
Normal 2,136 2,282 872 5,290
Actual 2,038 2,351 840 5,229
Colder (warmer)
than 5-year avg. (5%) 3% (4%) (1%)
Fiscal Year 2001
------------------------------------------------------
Three Months Ended
------------------------------------------ Year
Ended
Dec 31 Mar 31 Jun 30 Sep 30 Sep 30
------ ------ ------ ------ ------
Revenues $104,965 $124,728 $64,085 $42,036 $335,814
Operating Margin 29,620 30,795 21,125 13,492 95,032
Cost of Operations 13,674 14,172 15,244 14,958 58,048
--------- ---------- --------- ---------- ---------
Operating Income
(Loss) 15,946 16,623 5,881 (1,466) 36,984
Interest and Other 2,726 2,472 2,643 2,629 10,470
Income Taxes 4,825 5,165 1,182 (1,894) 9,278
--------- ---------- --------- ---------- ---------
Net Income (Loss) $ 8,395 $ 8,986 $ 2,056 $ (2,201) $17,236
Common Shares
Outstanding:
End of Period 11,045 11,045 11,045 11,045 11,045
Average 11,045 11,045 11,045 11,045 11,045
Earnings (Loss)
Per Share
Basic $0.76 $0.81 $0.19 ($0.20) $1.56
Diluted $0.76 $0.81 $0.19 ($0.20) $1.56
Dividends Paid
per share $0.24 $ 0.24 $ 0.24 $ 0.24 $0.96
Capital
Expenditures (net) $5,255 $ 3,349 $ 6,026 $ 8,063 $22,693
Book Value
Per Share $11.31 $ 11.88 $ 11.83 $ 11.01 $11.01
Market Closing
Price $18.81 $ 20.35 $ 21.30 $ 21.60 $17.50
Customers (End of
Period) 193 194 191 191 185
Gas Deliveries
(Therms):
Residential
& Commercial 87,708 92,974 38,000 19,922 238,604
Industrial
& Other 355,147 343,413 325,474 344,513 1,368,547
Degree Days
Normal 1,998 2,288 871 233 5,390
Actual 2,308 2,345 936 204 5,793
Colder (warmer)
than 5-year avg. 16% 2% 7% (12%) 7%
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