/NOT FOR DISTRIBUTION IN THE UNITED STATES OR OVER UNITED STATES WIRE
- Customer growth up 9% from Q4 and 27% year-over-year -
TORONTO, May 14, 2013 /CNW/ - Crius Energy Trust (TSX: KWH.UN) ("Crius Energy" or the "Trust"), today announced its financial results
for the three-month period ended March 31, 2013. The Trust commenced
operations on November 13, 2012 with the acquisition of a 26.8%
ownership interest in Crius Energy, LLC (the "Company") by the Trust's
wholly-owned subsidiary. All figures in U.S. dollars unless otherwise
"The first quarter was highlighted by continued strong organic customer
growth." said Michael Fallquist, President and CEO of Crius Energy
Trust. "We believe the kind of growth we are experiencing is not only
a testament to our multi- channel sales approach, but is also
indicative of future revenue growth, which will support future
distributions. After challenging market conditions in January and
February, March and April have returned to normal levels and we are
encouraged with our outlook for the remainder of the year. We are
continuing to execute on our organic growth strategy and are currently
evaluating acquisition opportunities in the marketplace."
Q1 2013 Operational and Financial Highlights
Residential customer equivalents ("RCEs") totaled 583,132 at the end of
the first quarter, up 9.1% quarter-over-quarter and 26.5%
Revenue of $119.0 million.
Sold 1.3 million MWh of electricity and 1.7 million Mmbtu.
Gross margin of $20.9 million or 17.5% of revenue.
Adjusted EBITDA of $5.5 million or 4.7% of revenue.
Net income of $29.6 million.
Grew the number of new sales associates in the network marketing channel
by more than 4,400.
Acquired the residential and small commercial customer accounts from PNE
Energy Supply LLC, located in New Hampshire, through its wholly-owned
subsidiary FairPoint Energy, LLC.
Cash balance of $24.6 million and no long term debt as of March 31,
Maintained initial C$0.0833 per unit monthly distribution level.
Highlights Subsequent to Quarter-End
Announced a three-year extension of the exclusive marketing relationship
with Cincinnati Bell Inc. (NYSE: CBB), effective April, 12, 2013, to
continue to market natural gas and green electricity through the brand
Cincinnati Bell Energy.
Created a new role of Vice President of Risk Management to provide a
dedicated resource responsible for gross margin realization and
overseeing forecasting, pricing and procurement.
Completed a thorough search process to select a leading third party
provider of energy forecasting services, streamlining the forecasting
system beginning in the second quarter of 2013.
Review of Financial Results
The Trust commenced operations on November 13, 2012. Accordingly, no
financial results from the previous fiscal first quarter are available
for comparative purposes.
Revenue for the period ending March 31, 2013 was $119.0 million.
Revenue was in line with management's expectations. Revenue is a
reflection of good customer growth in the fourth quarter of 2012 and in
the first quarter of 2013.
Revenue from electricity sales during the period was $109.1 million
based on volumes of 1.3 million MWh, accounting for 91.7% of total
revenue. Revenue from natural gas sales during the period was $8.9
million based on volumes of 1.7 million Mmbtu, and accounted for 7.5%
of total revenue. Fee revenue consists of sign-up fees and other
monthly fees received from independent contractors in the network
marketing channel. For the period ending March 31, 2013, fee revenue
was $1.0 million and accounted for 0.8% of total revenue.
First quarter 2013 gross margin was $20.9 million, representing 17.5% of
revenue. On a monthly basis, gross margin was 16.7% of revenue in
January, 7.3% of revenue in February and 28.1% of revenue in March. As
indicated in connection with December 31, 2012 results, the first
quarter 2013 financial results were impacted by challenging market
conditions and differences between forecasted electricity volumes and
actual electricity volumes, known as volumetric risk.
While the Company's business is always subject to volumetric risk,
management has taken a number of steps to help limit future volatility
in earnings which include: (1) creating a dedicated role of Vice
President of Risk Management responsible for gross margin realization,
which includes overseeing forecasting, pricing and energy procurement,
and (2) completing a thorough search process to select a leading third
party provider of energy forecasting services that will streamline the
forecasting system starting in the second quarter of 2013. Together
with these changes and a return to typical market conditions as evident
in March's gross margins, management is confident that the second
quarter's gross margins will return to its typical levels.
Selling expenses amounted to $7.0 million or 5.9% of revenue for the
period ending March 31, 2013. These costs consist of upfront customer
acquisition commissions of $4.0 million (amounting to $38.70 per
customer acquired) and residual based commissions of $3.0 million.
Upfront customer commissions were higher than historical levels and
included $0.9 million in non-recurring sales promotions to drive
increased customer growth, which amounted to approximately $8.30 per
customer enrolled. General & Administrative expenses amounted to $8.3
million or 6.9% of revenue in the period and were impacted by
non-recurring technology integration costs of approximately $0.5
million in the quarter.
Adjusted EBITDA for the first quarter of 2013 was $5.5 million or 4.7%
of revenue. Adjusted EBITDA was impacted by the items affecting gross
margins as well as the combined impact of $1.4 million of non-recurring
Selling and General & Administrative expenses.
For the period ending March 31, 2013, net income was $29.6 million.
On March 31, 2013, the Trust had no long term debt and cash and working
capital balance of $24.6 million and $30.1 million, respectively. This
compares to a cash and working capital position of $30 million and
$40.5 million, respectively, at December 31, 2012.
The Trust's consolidated financial statements for the period ended March
31, 2013 and accompanying management's discussion and analysis ("MD&A")
have been filed with the securities regulators and are available via
SEDAR at www.sedar.com and are available on the Trust's website at www.criusenergytrust.ca.
Conference Call Notice
The Trust will hold a conference call to discuss its first quarter 2013
financial results today May 14, 2013 at 10:00 a.m. Eastern. Michael
Fallquist, Crius Energy's Chief Executive Officer, will host the call.
To access the conference call by telephone, dial 647-427-7450 or
1-888-231-8191. Please connect approximately 15 minutes prior to the
beginning of the call to ensure participation.
A live audio webcast of the conference call will be available at www.cnw.ca. Please connect at least 15 minutes prior to the conference call to
ensure adequate time for any software download that may be required to
join the webcast. The webcast will be archived at the above web site
for 30 days.
A taped rebroadcast will be available to listeners until 12 a.m. Eastern
on May 21, 2013. To access the rebroadcast, please dial 416-849-0833 or
1-855-859-2056 and enter passcode 60355313, followed by the number
About Crius Energy
Crius Energy has been established to provide investors with a stable and
consistent distribution-producing investment through the acquisition of
a 26.8% ownership interest in Crius Energy LLC (the "Company"). The
Company is one of the largest independent energy retailers operating in
the United States, with approximately 580,000 residential customer
equivalents. The Company serves residential and small to medium-size commercial
customers in the United States and markets its products through a
variety of sales channels and brand names. The Company currently sells
electricity in 11 states and the District of Columbia and natural gas
in five states.
Crius Energy intends to qualify as a "mutual fund trust" under the Income Tax Act (Canada) (the "Tax Act"). The Trust will not be a "SIFT trust" (as
defined in the Tax Act), provided that the Trust complies at all times
with its investment restriction which precludes the Trust from holding
any "non-portfolio property" (as defined in the Tax Act). Material
information pertaining to Crius Energy may be found on www.sedar.com or www.criusenergytrust.ca.
This news release contains forward-looking information that involves
substantial known and unknown risks and uncertainties, most of which
are beyond the control of Crius Energy, including, without limitation,
those listed under "Risk Factors" and "Forward-Looking Statements" in
Crius Energy's Annual Information Form dated March 28, 2013
(collectively, "forward-looking information"). Forward-looking
information in this news release includes, but is not limited to, Crius
Energy's objectives and status as a mutual fund trust and not a SIFT
trust, results of operations, financial position or cash flows,
customer revenues and margins, customer additions and renewals,
customer attrition, customer consumption levels, general and
administrative expenses, treatment under governmental regulatory
regimes, distributable cash and Crius Energy's expectations and
estimates regarding the payment of distributions to unitholders. Crius
Energy cautions investors of Crius Energy's securities about important
factors that could cause Crius Energy's actual results to differ
materially from those projected in any forward-looking statements
included in this news release. Any statements that express, or involve
discussions as to, expectations, beliefs, plans, objectives,
assumptions or future events or performance are not historical facts
and may be forward-looking and may involve estimates, assumptions and
uncertainties which could cause actual results or outcomes to differ
materially from those expressed in such forward-looking statements. No
assurance can be given that the expectations set out in this news
release will prove to be correct and accordingly, prospective investors
should not place undue reliance on these forward-looking statements.
These statements speak only as of the date of this news release and
Crius Energy does not assume any obligation to update or revise them to
reflect new events or circumstances.
SOURCE: Crius Energy Trust
For further information:
Chief Executive Officer
Chief Financial Officer
(416) 815-0700 ext. 253