Cascade Natural Gas Corporation Announces Fiscal Year 2004 Second Quarter and Year-to-Date Earnings.Business Editors SEATTLE--(BUSINESS WIRE)--April 19, 2004 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 earnings of $8.5 million or $0.76 per share for the fiscal second quarter ended March 31, 2004, a 25% improvement over the $6.8 million or $0.62 per share for the second quarter ended March 31, 2003. Earnings were positively affected by cost controls and higher residential and commercial per-customer consumption. A fiscal year 2003 second quarter charge of $865,000 for claims arising out of the termination of gas supply contracts adversely burdened the earlier period. Earnings for the six-month period were $16.4 million or $1.47 per share, compared to $13.5 million or $1.22 per share for the six months ended March 31, 2003. Second Quarter Results Total operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: (revenue minus gas costs and revenue taxes) were up $2.5 million over the quarter ended March 31, 2003. -- Residential and commercial operating margin increased $2.7 million in the most recent quarter. Higher per-customer consumption attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk , in large part, to 10% colder temperatures accounted for $1.7 million of the increase. The addition of 9,014 more residential and commercial customers, a 4.3% growth rate, added $907,000. -- Distribution service margins from electric generation customers were down for the quarter $596,000 or 24%. The decline can be attributed to the slow economy dampening the demand for electricity. -- Operating margin from distribution services for industrial customers other than electric generators improved by $250,000. Margin from gas management services and other was down by $620,000 (before a fiscal year 2003 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 of $865,000) due primarily to a decrease in gas sales margins and a decrease in the number of customers served from 61 to 40. Cost of Operations (operating expense Operating Expense The essential things that a company must purchase in order to maintain business. Notes: For example, the payment of employees wages are an operating expense. Also known as OPEX. , depreciation and amortization, and property and miscellaneous taxes) was $131,000 lower than in the quarter last year. Operating expense for the quarter was lower by $176,000. The major contributing factor was a reduction of benefits expense resulting from plan changes implemented in July July: see month. of 2003. Year-to-Date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. Results Year-to-date operating margin was up $3.7 million over the fiscal 2003 six-month period. Residential and commercial margin contributed to the increase, with $2.3 million due to 6.3% higher per-customer consumption levels and $1.7 million due to the addition of customers. A $427,000 increase in industrial distribution margin and a $475,000 favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. mark-to-market Mark-to-market Adjustment of the book value or collateral value of a security to reflect current market value. valuation for a swap and cap supporting fixed price natural gas sales to a group of industrial customers was offset by decreased revenue from electric generation customers, gas management services, and other. On a year-to-date basis, total cost of operations was lower than fiscal 2003 by $790,000. The favorable result stems from benefit expense savings partially offset by increases in labor expense, depreciation, and miscellaneous expense. Capital Expenditures Second quarter net capital expenditures were $9.7 million and for the six months expenditures were $19.9 million out of a total budget for the fiscal year of $35.0 million. The major expenditure continues to be the automated au·to·mate v. au·to·mat·ed, au·to·mat·ing, au·to·mates v.tr. 1. To convert to automatic operation: automate a factory. 2. meter-reading project started in July of 2003. This year $6.8 million has been expended ex·pend tr.v. ex·pend·ed, ex·pend·ing, ex·pends 1. To lay out; spend: expending tax revenues on government operations. See Synonyms at spend. 2. installing the new features on customer meters, and project-to-date expenditures have been $10.4 million of a total project budget of $16 million. It is expected the project will be completed during the quarter ending December December: see month. 31, 2004. Year-to-date results are on track to meet earlier released earnings expectations of $1.35 to $1.40 for full fiscal year 2004. The Company previously announced its declaration of a $0.24 per share quarterly dividend on common stock, payable May 14, 2004 to shareholders of record at the close of business April 30, 2004. Cascade Natural Gas Corporation is a local distribution company providing natural gas service to approximately 215,000 customers in the states of Washington Washington, town, England Washington, town (1991 pop. 48,856), Sunderland metropolitan district, NE England. Washington was designated one of the new towns in 1964 to alleviate overpopulation in the Tyneside-Wearside area. 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 reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. 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)
Second Quarter Fiscal 2004
Fiscal Year 2004
----------------------------------------------------
Three Months Ended Year
----------------------------------------- to
Dec 31 Mar 31 Jun 30 Sep 30 Date
----------- ---------- -------- --------- ----------
Revenues $104,884 $119,454 $224,339
Operating
Margin 30,693 32,142 62,835
Cost of
Operations 15,129 15,618 30,747
----------- ---------- -------- --------- ----------
Operating
Income (Loss) 15,564 16,524 0 0 32,088
Interest and
Other 3,116 3,121 6,237
Income Taxes 4,543 4,892 9,436
----------- ---------- -------- --------- ----------
Net Income
(Loss) $7,905 $8,511 $ - $ - $16,415
Common Shares
Outstanding:
End of
Period 11,181 11,210 11,210
Average 11,158 11,196 11,177
Earnings
(Loss) Per
Share
Basic $0.71 $0.76 $1.47
Diluted $0.71 $0.76 $1.47
Dividends Paid
per share $0.24 $0.24 $0.48
Capital
Expenditures
(net) $10,216 $9,672 $19,888
Book Value Per
Share $10.61 $11.15 $11.15
Market Closing
Price $21.09 $21.79 $21.79
Active
Customers
(End of
Period) 216 218 218
Gas Deliveries
(Therms):
Residential
& Commercial 86,070 96,038 182,109
Industrial &
Other 260,887 223,894 484,780
Degree Days
5-Year
Average 2,084 2,264 4,348
Actual 2,106 2,249 4,355
Colder
(warmer) than
5-year avg. 1% (1%) 0%
Fiscal Year 2003
---------------------------------------------------------
Three Months Ended Year Year
------------------------------------- Ended to Date
Dec 31 Mar 31 Jun 30 Sep 30 Sep 30 Mar 31
--------- --------- -------- -------- --------- ---------
Revenues $100,496 $109,286 $53,793 $39,180 $302,755 $209,782
Operating
Margin 29,509 29,647 17,328 14,191 90,675 59,156
Cost of
Operations 15,789 15,749 17,249 15,597 64,384 31,538
--------- --------- -------- -------- --------- ---------
Operating
Income
(Loss) 13,720 13,898 79 (1,406) 26,291 27,618
Interest and
Other 3,199 3,112 3,197 2,946 12,454 6,311
Income Taxes 3,840 3,937 (1,138) (1,906) 4,733 7,777
--------- --------- -------- -------- --------- ---------
Net Income
(Loss) $6,681 $6,849 $(1,980) $(2,446) $9,104 $13,530
Common Shares
Outstanding:
End of
Period 11,045 11,071 11,101 11,132 11,132 11,071
Average 11,045 11,057 11,086 11,114 11,075 11,051
Earnings (Loss)
Per Share
Basic $0.61 $0.62 $(0.18) $(0.22) $0.82 $1.22
Diluted $0.60 $0.62 $(0.18) $(0.22) $0.82 $1.22
Dividends
Paid per
share $0.24 $0.24 $0.24 $0.24 $0.96 $0.48
Capital
Expenditures
(net) $5,524 $5,254 $6,063 $10,852 $27,693 $10,778
Book Value
Per Share $10.70 $11.10 $10.70 $10.11 $10.11 $11.10
Market
Closing
Price $20.00 $19.40 $19.10 $19.60 $19.60 $19.40
Active
Customers
(End of
Period) 207 209 207 206 206 209
Gas Deliveries
(Therms):
Residential
&
Commercial 79,638 84,967 37,465 20,741 222,811 164,605
Industrial
& Other 260,369 252,025 176,667 250,041 939,102 512,394
Degree Days
5-Year
Average 2,066 2,275 838 263 5,415 4,314
Actual 2,027 2,049 826 140 5,042 4,076
Colder (warmer)
than 5-year
avg. (2%) (10%) (1%) (41%) (7%) (6%)
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