/NOT FOR DISTRIBUTION IN THE UNITED STATES OR OVER UNITED STATES WIRE
SERVICES/
TORONTO, May 14, 2014 /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, 2014. All figures in U.S. dollars unless otherwise
noted.
"The severe weather experienced across much of the U.S. in the first
three months of 2014 had an industry-wide impact which caused multiple
market participants to exit, either voluntarily or by defaulting on
wholesale energy obligations," said Michael Fallquist, CEO of Crius
Energy Trust. "Like many of our peers, we had a difficult quarter with
negative earnings and a net loss in customers. However, while others
have exited the market in these challenging times, we believe the
market conditions have created tremendous opportunities for growth,
both organically and through acquisition. Our financial strength, with
more than $46 million of cash and availability, enables us to make
investments that capitalize on the market opportunities.
"Subsequent to quarter-end, we completed an acquisition that mitigates
the customer attrition in the first quarter, expanded our strategic
partnership with Frontier Communications and launched a new solar brand
to capture market share in the growing solar market. Together, we
expect these initiatives will result in positive results in both the
first half of the year and long-term."
Q1 2014 Highlights
-
Sold 1.3 million MWh of electricity, 2.9 million MMBtu of natural gas
and solar systems with total generation capacity of 1,760 KW compared
to 1.3 million MWh of electricity and 1.7 million MMBtu of natural gas
for the prior comparable period.
-
Ended quarter with 587,532 electricity and natural gas customers, down
from 615,373 as at December 31, 2013, representing a net loss of 27,841
customers, or -4.5% net quarter-over-quarter growth compared to net
customer adds of 48,568 or 9.1% net quarter-over-quarter growth in the
prior comparable period.
-
Revenue of $177.6 million, compared to $119.0 million in the prior
comparable period.
-
Gross margin of $19.1 million, representing 10.7% of revenue compared to
$20.9 million in the prior comparable period, representing 17.5% of
revenue.
-
Adjusted EBITDA of $(4.3) million, representing -2.4% of revenue
compared to $5.5 million in the prior comparable period, representing
4.7% of revenue.
-
Distributions paid in the quarter of $7.9 million compared to $11.5
million for the prior comparable period.
-
Total cash and availability of $46.8 million, consisting of $15.3
million of cash and cash equivalents, no long-term debt and
availability under the credit facility with Macquarie Energy of $31.5
million. This compares to $28.2 million in the prior comparable period,
consisting of $24.6 million of cash and cash equivalents and
availability under the credit facility with Macquarie Energy of $3.6
million.
-
Expanded our working capital facility with Macquarie Energy LLC from
$25.0 million to $60.0 million, with the base interest rate remaining
unchanged at LIBOR plus 5.5%. By more than doubling the working
capital available to our business, the expansion significantly improves
the financial capacity of the Company and allows us to take advantage
of organic and acquisitive opportunities that arise in the market while
also supporting distributions to our unit holders.
Highlights Subsequent to Quarter-End
-
Launched a new stand-alone solar brand, Citra Solar™, to focus on
capturing value in the fast-growing solar sector and complement the
company's portfolio of energy brands, product offerings and
distribution channels. Citra Solar™ services are initially being
offered through the company's strategic marketing partnership channel
-
Executed the acquisition of a portfolio of approximately 40,000 electric
and natural gas customers from Superior Plus Energy Services, a
division of Superior Plus Corp. (TSX: SPB), for a purchase price of up
to $120 per customer. The acquisition strengthens our geographic
footprint in New York and Pennsylvania and furthers the ongoing
diversification of our customer mix by increasing the company's
commercial and fixed-price product customers. Pro-forma customer
count, adjusting for the acquisition, is approximately 627,500
representing an increase of 2% over December 31, 2013.
Review of Financial Results
Revenue for the period ending March 31, 2014 was $177.6 million, a 49.2%
increase from $119.0 reported in the first quarter of 2013.
Electricity revenue for the quarter ended March 31, 2014 was $151.1
million, representing an increase of 38.5% from $109.1 million for the
quarter ended March 31, 2013, primarily as a result of 30.9% higher
average retail rates per unit combined with the 5.8% increase in
volume. Electricity revenues for the quarter ended March 31, 2014
accounted for 85% of total revenue representing a decrease from 91.7%
for the quarter ended March 31, 2013.
Natural gas revenue for the quarter ended March 31, 2014 was $24.7
million representing an increase of 178.8% from $8.9 million for the
quarter ended March 31, 2013, primarily as a result of 58.8% higher
average retail rate per unit combined with 75.6% increase in volume.
Natural gas revenues for the quarter ended March 31, 2014 accounted for
13.9% of total revenue representing an increase from 7.5% for the
quarter ended March 31, 2013.
Fee revenue consisting of sign-up fees and other monthly fees received
from independent contractors in the network marketing channel for the
quarter ended March 31, 2014 was $0.9 million representing a decrease
of 8.0% from $1.0 million for the quarter ended March 31, 2013,
reflecting lower promotional enrolment fees offered. Fee revenue for
the quarter ended March 31, 2014 accounted for 0.5% of total revenue
representing a decrease from 0.8% for the quarter ended March 31, 2013.
Solar revenue of $0.9 million, accounting for 0.5% of total revenue; the
launch of solar products was in September 2013, and as such, there are
no revenues in the prior comparative period. Solar revenues in the
quarter represented solar systems with total generation capacity of
1,760 KW compared to 1,816 KW in the year ending December 31, 2013 from
the time of launch in late September 2013.
For the quarter ended March 31, 2014 gross margin was $19.1 million
representing a decrease of 8.5% from $20.9 million for the quarter
ended March 31, 2013. Gross margin for the quarter ended March 31, 2014
was 10.7% of total revenue representing a decrease from 17.5% for the
quarter ended March 31, 2013.
Adjusted EBITDA for the first quarter of 2014 was -$4.3 million
representing -2.4% of revenue compared to $5.5 million in the first
quarter of 2013, representing 4.7% of revenue. Adjusted EBITDA was
impacted by lower gross margins, which were the direct result of the
record low temperatures experienced in the first quarter caused by the
"polar vortex", which drove energy prices to record levels as a result
of higher consumer demand and supply disruptions resulting from natural
gas pipeline constraints and unexpected generation outages. The
Company made a strategic choice to manage customer retail rate
increases to reflect the incremental costs borne and to cap price
increases to reasonable levels and apply the increases on a staggered
basis such that cost recovery and migration to higher rates occur over
time in order to mitigate customer attrition.
As of March 31, 2014, the Trust had total cash and availability of $46.8
million, consisting of $15.3 million of cash and cash equivalents, no
long-term debt and availability under the credit facility with
Macquarie Energy of $31.5 million which increased from $27.5 million as
at December 31, 2013.
The Trust's consolidated financial statements for the period ended March
31, 2014 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 2014
financial results today May 14, 2014 at 10:00 a.m. Eastern.
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. ET on
May 21, 2014. To access the rebroadcast, please dial 416-849-0833 or
1-855-859-2056 and enter passcode 30761057, followed by the number
sign.
About Crius Energy
Crius Energy Trust was established to provide investors with a
distribution-producing investment through the acquisition of a 26.8%
ownership interest in Crius Energy. With more than 585,000 residential
customer equivalents, Crius Energy is a comprehensive energy solutions
partner that provides electricity, natural gas and solar products to
residential and commercial customers. Crius Energy connects with energy
customers through an innovative family-of-brands strategy and
multi-channel marketing approach. This unique combination creates
multiple access points to a broad suite of energy products and services
that make it easier for consumers to make informed decisions about
their energy needs. Crius Energy currently sells energy products in 19
states and the District of Columbia with plans to continue expanding
its geographic reach.
Crius Energy Trust 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.
Caution Regarding Forward-Looking Statements
This press release contains "forward-looking statements" within the
meaning of applicable Canadian securities laws, including (but not
limited to) statements about the Board's belief that the Bid may
represent a responsible investment of funds on hand. A statement is
forward-looking when it uses what Crius knows and expects today to make
a statement about the future. Forward-looking statements may include
words such as anticipate, assumption, believe, could, expect, goal,
guidance, intend, may, objective, outlook, plan, seek, should, strive,
target and will. These statements relate to future events or future
performance and reflect current assumptions, expectations and estimates
of management regarding growth, results of operations, performance,
business prospects and opportunities, Canadian economic environment and
liability to attract and retain customers. Such forward-looking
statements reflect current assumptions, expectations and estimates of
management and are based on information currently available to Crius as
at the date of this press release.
Forward-looking statements are subject to certain risks and
uncertainties, and should not be read as guarantees of future
performance or results and actual results may differ materially from
the conclusion, forecast or projection stated in such forward-looking
statements. These risks, uncertainties and other factors include but
are 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. Such assumptions, expectations, estimates, risks and
uncertainties are discussed under "Risk Factors" and "Forward-Looking
Statements" in Crius Energy Trust's Annual Information Form dated March
26, 2014. Consequently, we cannot guarantee that any forward-looking
statements will materialize. Readers should not place any undue
reliance on such forward-looking statements.
SOURCE Crius Energy Trust
