Gas Natural Inc. Reports 2014 Third Quarter Results
Total full service distribution throughput volume up 11% in quarter
MENTOR, Ohio, Nov. 13, 2014 /PRNewswire/ -- Gas Natural Inc. (NYSE MKT: EGAS) ("Gas Natural" or the "Company"), a holding company operating local natural gas utilities serving approximately 67,000 customers in six states, reported financial results for the third quarter and nine-month period ended September 30, 2014. As a result of the Company's previously signed agreements to sell its Wyoming operations which serve 6,700 customers, these operations are now reported as discontinued.
Adjusted loss from continuing operations, a non-GAAP number, was $1.1 million, or $0.11 per share, for the third quarter. The adjustment excludes non-recurring professional and legal fees of approximately $0.4 million after taxes. GAAP loss from continuing operations was $1.5 million, or $0.14 per share, for the third quarter, compared with loss from continuing operations of $0.9 million, or $0.08 per share, for third quarter of 2013. See attached table on page 12 for a reconciliation of GAAP (loss) income from continuing operations to non-GAAP adjusted (loss) income from continuing operations.
On a year-to-date basis, adjusted income from continuing operations, a non-GAAP number was $2.9 million, or $0.28 per share, for the third quarter. The adjustment excludes $0.7 million of unusual professional and legal fees as well as a $0.7 million bad debt charge, all after taxes. GAAP income from continuing operations for the first nine months of 2014 was $1.5 million, or $0.15 per share, compared with $3.1 million, or $0.34 per share, for the same period last year. See attached table on page 12 for a reconciliation of GAAP (loss) income from continuing operations to adjusted (loss) income from continuing operations.
Gregory J. Osborne, Gas Natural's President and Chief Executive Officer noted, "While the results for the quarter are disheartening, we are, none-the-less, making measurable progress focused on transparency, customer growth and strategic alignment, such as the following:
- The Public Utility Commission of Ohio audit is winding down and will be completed by year-end. The results of the audit are expected from the PUCO in January 2015. We have been pleased with the progress we are making with the Commission and its staff.
- The progress of the Loring Pipeline conversion in Maine provides more natural gas service to the region. We also initiated service to Lincoln Paper and Tissue, one of our largest and newest industrial customers, which provides a base load for the Loring Pipeline.
- The announced sale of our Wyoming operations will provide valuable capital to invest in our operations to drive growth.
We are continuing to work on improving productivity while expanding our customer base. In addition, the strategic rationalization of our assets enables us to better focus our resources on areas of large customer concentration and opportunities for growth. We expect this focus to help drive earnings power as well."
Natural Gas Operations Segment Review
The Company added 589 new customers during the quarter and 1,118 new customers year-to-date. The Natural Gas Operations segment reported a $1.0 million, or 9%, revenue growth in the quarter on increased natural gas prices, which are passed on to customers, along with higher sales volumes.
Natural Gas Operations Income Statement |
||||||||
($ in thousands) |
Three Months Ended |
Nine Months Ended |
||||||
2014 |
2013 |
2014 |
2013 |
|||||
Natural Gas Operations |
||||||||
Operating revenues |
$ 12,543 |
$ 11,500 |
$ 88,327 |
$ 64,779 |
||||
Gas purchased |
5,739 |
4,681 |
56,258 |
36,426 |
||||
Gross margin |
6,804 |
6,819 |
32,069 |
28,353 |
||||
Operating expenses |
8,120 |
7,279 |
24,223 |
21,043 |
||||
Operating (loss) income |
(1,316) |
(460) |
7,846 |
7,310 |
||||
Other income |
369 |
290 |
620 |
582 |
||||
Income before interest and taxes |
(947) |
(170) |
8,466 |
7,892 |
||||
Interest expense |
(586) |
(665) |
(1,895) |
(1,930) |
||||
Income before income taxes |
(1,533) |
(835) |
6,571 |
5,962 |
||||
Income tax expense |
653 |
395 |
(2,381) |
(2,175) |
||||
Net (loss) income |
$ (880) |
$ (440) |
$ 4,190 |
$ 3,787 |
On a year-to-date basis, the first nine months' revenue was up $23.5 million, or 36%, due to increased gas prices passed onto customers and higher sales volumes from the customer growth, magnified by the colder weather in the first three months of the 2014 period.
Gross margin for the third quarter of 2014 was $6.8 million and remained relatively unchanged from the prior-year period due to lower volume in certain jurisdictions. On a year-to-date basis, gross margin increased $3.7 million to $32.1 million mostly as a result of customer growth, magnified by colder weather in all markets during the first quarter of the year.
The increase in operating expenses for the quarter and year-to-date periods was $0.8 million and $3.2 million, respectively. These expenses included higher than usual legal and consulting fees for increased regulatory proceedings in all markets and higher corporate allocations for increased accounting costs for the establishment of new control processes and changes in auditors. Depreciation expense increased $0.4 million and $1.0 million for the quarter and nine months ending September 30, 2014, respectively, reflecting continued capital investments for growth.
Other Operating Segments
The Marketing and Production segment reported a net loss of $0.1 million for the third quarter of 2014, relatively unchanged from the prior-year period. On a year-to-date basis, the first nine months' net loss of the Marketing and Production segment was $0.9 million compared with net income of $0.3 million for the prior-year period. Year-to-date general and administrative expenses for the segment included a $1.1 million bad debt charge resulting from a ruling against the Company in a large industrial customer's Chapter 11 bankruptcy proceedings.
Adjusted EBITDA
Adjusted earnings from continuing operations before interest, taxes, depreciation, amortization, accretion, and non-recurring expenses ("Adjusted EBITDA") for the third quarter of 2014 was $0.7 million compared with Adjusted EBITDA of $0.6 million for the same period of the prior year. On a year-to-date basis Adjusted EBITDA was $12.2 million, or 12.8% of revenue, compared with $11.2 million, or 15.4% of revenue in the prior-year period. The Company believes that, when used in conjunction with measures prepared in accordance with U.S. generally accepted accounting principles ("GAAP"), Adjusted EBITDA, which is a non-GAAP measure, helps in the understanding of its operating performance. See the attached tables on page 12 for important disclosures regarding the Company's use of Adjusted EBITDA, as well as a reconciliation of GAAP (loss) income from continuing operations to Adjusted EBITDA.
Balance Sheet and Cash Management
Cash and cash equivalents as of September 30, 2014 were $1.1 million, down $2.1 million and $11.6 million from the balances at June 30, 2014 and December 31, 2013, respectively.
Cash provided by operating activities was $8.6 million in the first nine months of 2014 compared with $13.6 million in the prior-year period. The decrease was the result of lower net income, increases in natural gas inventory purchases and regulatory assets and a decrease in accounts payable.
Capital expenditures for the first nine months of 2014 were $16.3 million compared with $15.4 million in the 2013 period. Total capital expenditures for 2014 are expected to be approximately $19.5 million. Capital investments are focused on the growth of the Company's Natural Gas Operations segment, specifically including the active expansion of systems in North Carolina and Maine to meet the high customer interest in natural gas service in those service areas.
Mr. Osborne concluded, "While 2014 has been a major transition period for the Company, there have been measurable outcomes of our efforts and we are nearing conclusion of others.
- We added new talent to our Board of Directors with Michael R. Winter, who brings extensive utility experience to the Board.
- The Board has approved a change to our dividend payment schedule to a typical quarterly payment.
- We are making progress with operational efficiencies and regulatory relationships since Kevin Degenstein's return as our Chief Operating Officer and Chief Compliance Officer.
As we approach 2015, we expect that our efforts will begin to generate positive results and in the long-term, we believe we will continue to build a quality natural gas utility that will drive enhanced shareholder value."
About Gas Natural Inc.
Gas Natural Inc., a holding company, distributes and sells natural gas to end-use residential, commercial, and industrial customers. It distributes approximately 35 billion cubic feet of natural gas to approximately 67,000 customers through regulated utilities operating in Montana, Ohio, Pennsylvania, Maine, North Carolina and Kentucky. The Company's other operations include interstate pipeline, natural gas production, and natural gas marketing. The Company's Montana public utility was originally incorporated in 1909. Its strategy for growth is to expand throughput in the Maine and North Carolina markets, while looking for acquisitions that are either adjacent to its existing utilities or in under saturated markets.
Gas Natural Inc. regularly posts information on its website at www.egas.net.
Safe Harbor Regarding Forward-Looking Statements
The Company is including the following cautionary statement in this release to make applicable and to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 for any forward-looking statements made by, or on behalf of, Gas Natural Inc. Forward-looking statements are all statements other than statements of historical fact, including, without limitation, those that are identified by the use of the words "anticipates," "estimates," "expects," "intends," "plans," "predicts," "believes" and similar expressions. Such statements are inherently subject to a variety of risks and uncertainties that could cause actual results to differ materially from those expressed. Factors that may affect forward-looking statements and the Company's business generally include but are not limited to the Company's ability to successfully integrate the operations of the companies it has recently acquired and consummate additional acquisitions, the Company's continued ability to make dividend payments, the Company's ability to implement its business plan, fluctuating energy commodity prices, the possibility that regulators may not permit the Company to pass through all of its increased costs to its customers, changes in the utility regulatory environment, wholesale and retail competition, the Company's ability to satisfy its debt obligations, including compliance with financial covenants, weather conditions, litigation risks, and various other matters, many of which are beyond the Company's control, the risk factors and cautionary statements made in the Company's public filings with the Securities and Exchange Commission, and other factors that the Company is currently unable to identify or quantify, but may exist in the future. Gas Natural Inc. expressly undertakes no obligation to update or revise any forward-looking statement contained herein to reflect any change in Gas Natural Inc.'s expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.
For more information, contact:
Gas Natural Inc. |
Investor Relations: |
James E. Sprague, Chief Financial Officer |
Deborah K. Pawlowski or Karen L. Howard, Kei Advisors LLC |
Phone: (440) 974-3770 |
Phone: (716) 843-3908 / (716) 843-3942 |
Email: [email protected] |
Email: [email protected] / [email protected] |
FINANCIAL TABLES FOLLOW.
Gas Natural Inc. and Subsidiaries Condensed Consolidated Statements of Operations |
|||||||
Three Months Ended |
Nine Months Ended |
||||||
2014 |
2013 |
2014 |
2013 |
||||
REVENUE |
|||||||
Natural gas operations |
$ 12,542,698 |
$ 11,500,163 |
$ 88,327,066 |
$ 64,779,596 |
|||
Marketing and production |
1,072,273 |
2,117,165 |
7,284,543 |
8,334,626 |
|||
Total revenue |
13,614,971 |
13,617,328 |
95,611,609 |
73,114,222 |
|||
COST OF SALES |
|||||||
Natural gas purchased |
5,739,430 |
4,681,265 |
56,257,668 |
36,426,083 |
|||
Marketing and production |
860,900 |
1,701,554 |
6,538,023 |
6,794,511 |
|||
Total cost of sales |
6,600,330 |
6,382,819 |
62,795,691 |
43,220,594 |
|||
GROSS MARGIN |
7,014,641 |
7,234,509 |
32,815,918 |
29,893,628 |
|||
OPERATING EXPENSES |
|||||||
Distribution, general, and administrative |
6,321,270 |
5,595,965 |
19,018,069 |
15,638,813 |
|||
Maintenance |
295,762 |
274,403 |
920,308 |
827,727 |
|||
Depreciation and amortization |
1,794,019 |
1,402,867 |
5,074,876 |
3,959,418 |
|||
Accretion |
45,523 |
44,411 |
139,927 |
130,530 |
|||
Provision for doubtful accounts |
7,626 |
13,558 |
829,814 |
37,115 |
|||
Taxes other than income |
901,329 |
944,411 |
2,861,724 |
2,606,160 |
|||
Total operating expenses |
9,365,529 |
8,275,615 |
28,844,718 |
23,199,763 |
|||
OPERATING INCOME (LOSS) |
(2,350,888) |
(1,041,106) |
3,971,200 |
6,693,865 |
|||
Loss from unconsolidated affiliate |
- |
(980) |
(977) |
(5,007) |
|||
Other income, net |
408,821 |
305,956 |
617,656 |
713,265 |
|||
Gain on sale of marketable securities |
183,371 |
- |
183,371 |
- |
|||
Acquisition expense |
- |
(87,575) |
(7,197) |
(244,109) |
|||
Interest expense |
(764,367) |
(811,476) |
(2,334,435) |
(2,379,368) |
|||
Income (loss) before income taxes |
(2,523,063) |
(1,635,181) |
2,429,618 |
4,778,646 |
|||
Income tax benefit (expense) |
1,008,494 |
785,135 |
(901,141) |
(1,724,239) |
|||
INCOME (LOSS) FROM CONTINUING OPERATIONS |
(1,514,569) |
(850,046) |
1,528,477 |
3,054,407 |
|||
Discontinued operations, net of tax |
34,825 |
(154,292) |
581,652 |
402,062 |
|||
NET INCOME (LOSS) |
$ (1,479,744) |
$ (1,004,338) |
$ 2,110,129 |
$ 3,456,469 |
|||
Basic weighted shares outstanding |
10,487,511 |
10,054,558 |
10,475,213 |
8,974,584 |
|||
Dilutive effect of stock based compensation |
- |
- |
- |
903 |
|||
Diluted weighted shares outstanding |
10,487,511 |
10,054,558 |
10,475,213 |
8,975,487 |
|||
BASIC AND DILUTED EARNINGS (LOSS) PER SHARE: |
|||||||
Continuing operations |
$ (0.14) |
$ (0.08) |
$ 0.15 |
$ 0.34 |
|||
Discontinued operations |
- |
(0.02) |
0.05 |
0.05 |
|||
Net income (loss) per share |
$ (0.14) |
$ (0.10) |
$ 0.20 |
$ 0.39 |
|||
Weighted average dividends declared per common share |
$ 0.135 |
$ 0.139 |
$ 0.405 |
$ 0.341 |
|||
Gas Natural Inc. and Subsidiaries Condensed Consolidated Balance Sheets |
|||
September 30, |
December 31, |
||
2014 |
2013 |
||
(unaudited) |
|||
ASSETS |
|||
CURRENT ASSETS |
|||
Cash and cash equivalents |
$ 1,103,434 |
$ 12,741,197 |
|
Marketable securities |
- |
406,134 |
|
Accounts receivable |
|||
Trade, less allowance for doubtful accounts of $223,293 and $1,978,358, respectively |
6,039,891 |
12,305,657 |
|
Related parties |
219,918 |
146,225 |
|
Unbilled gas |
2,160,367 |
7,172,062 |
|
Note receivable, current portion |
1,938 |
1,938 |
|
Inventory |
|||
Natural gas |
7,892,795 |
4,996,065 |
|
Materials and supplies |
2,638,416 |
2,285,722 |
|
Prepaid income taxes |
707,191 |
727,427 |
|
Prepayments and other |
1,529,065 |
970,574 |
|
Recoverable cost of gas purchases |
1,927,177 |
1,209,982 |
|
Deferred tax asset |
750,471 |
1,225,032 |
|
Derivative instruments |
8,419 |
- |
|
Assets held for sale |
35,115 |
- |
|
Discontinued operations |
11,041,679 |
12,032,203 |
|
Total current assets |
36,055,876 |
56,220,218 |
|
PROPERTY, PLANT AND EQUIPMENT |
|||
Property, plant and equipment |
181,878,664 |
164,886,688 |
|
Less accumulated depreciation, depletion and amortization |
(44,752,830) |
(40,299,043) |
|
PROPERTY, PLANT AND EQUIPMENT, NET |
137,125,834 |
124,587,645 |
|
OTHER ASSETS |
|||
Note receivable, less current portion |
90,975 |
93,727 |
|
Regulatory assets |
|||
Deferred costs |
2,327,501 |
- |
|
Property taxes |
6,250 |
25,000 |
|
Income taxes |
296,819 |
296,819 |
|
Rate case costs |
97,734 |
130,228 |
|
Debt issuance costs, net of amortization |
1,093,245 |
1,388,124 |
|
Goodwill |
16,267,377 |
16,267,377 |
|
Customer relationships |
3,003,208 |
3,230,333 |
|
Investment in unconsolidated affiliate |
350,748 |
351,724 |
|
Restricted cash |
1,897,701 |
1,137,442 |
|
Other assets |
9,169 |
3,160 |
|
Total other assets |
25,440,727 |
22,923,934 |
|
TOTAL ASSETS |
$ 198,622,437 |
$ 203,731,797 |
Gas Natural Inc. and Subsidiaries Condensed Consolidated Balance Sheets |
|||
September 30, |
December 31, |
||
2014 |
2013 |
||
(unaudited) |
|||
LIABILITIES AND CAPITALIZATION |
|||
CURRENT LIABILITIES |
|||
Checks in excess of amounts on deposit |
$ 1,523,212 |
$ 842,443 |
|
Line of credit |
24,060,799 |
24,529,799 |
|
Accounts payable |
|||
Trade |
7,814,606 |
12,355,605 |
|
Related parties |
9 |
559,933 |
|
Notes payable, current portion |
542,156 |
3,502,190 |
|
Contingent consideration, current portion |
671,638 |
671,638 |
|
Accrued liabilities |
|||
Taxes other than income |
1,763,630 |
3,043,583 |
|
Vacation |
331,467 |
83,189 |
|
Employee benefit plans |
82,712 |
161,440 |
|
Interest |
359,156 |
169,581 |
|
Deferred payments received from levelized billing |
2,326,208 |
2,293,801 |
|
Customer deposits |
713,914 |
667,479 |
|
Related parties |
69,253 |
- |
|
Capital lease obligation, current portion |
188,224 |
177,570 |
|
Over-recovered gas purchases |
885,500 |
793,184 |
|
Build-to-suit liability |
4,148,469 |
- |
|
Other current liabilities |
1,308,544 |
1,464,646 |
|
Discontinued operations |
617,774 |
574,889 |
|
Total current liabilities |
47,407,271 |
51,890,970 |
|
LONG-TERM LIABILITIES |
|||
Deferred investment tax credits |
118,458 |
134,255 |
|
Deferred tax liability |
9,761,396 |
9,055,166 |
|
Asset retirement obligation |
2,166,280 |
2,026,353 |
|
Customer advances for construction |
996,416 |
987,265 |
|
Regulatory liability for income taxes |
83,161 |
83,161 |
|
Customer deposits |
949,540 |
- |
|
Capital lease obligation, less current portion |
1,674,714 |
1,862,938 |
|
Contingent consideration, less current portion |
10,362 |
13,362 |
|
Total long-term liabilities |
15,760,327 |
14,162,500 |
|
NOTES PAYABLE, less current portion |
39,856,427 |
40,198,552 |
|
COMMITMENTS AND CONTINGENCIES |
|||
STOCKHOLDERS' EQUITY |
|||
Preferred stock; $0.15 par value, 1,500,000 shares authorized, no shares issued or outstanding |
- |
- |
|
Common stock; $0.15 par value, Authorized: 15,000,000 shares: |
1,573,127 |
1,567,752 |
|
Capital in excess of par value |
63,821,456 |
63,468,969 |
|
Accumulated other comprehensive income |
- |
104,909 |
|
Retained earnings |
30,203,829 |
32,338,145 |
|
Total stockholders' equity |
95,598,412 |
97,479,775 |
|
TOTAL CAPITALIZATION |
135,454,839 |
137,678,327 |
|
TOTAL LIABILITIES AND CAPITALIZATION |
$ 198,622,437 |
$ 203,731,797 |
Gas Natural Inc. and Subsidiaries Condensed Consolidated Statements of Cash Flows |
|||
Nine Months Ended September 30, |
|||
2014 |
2013 |
||
CASH FLOWS FROM OPERATING ACTIVITIES |
|||
Net income |
$ 2,110,129 |
$ 3,456,469 |
|
Loss from discontinued operations |
581,652 |
402,062 |
|
Income from continuing operations |
1,528,477 |
3,054,407 |
|
Adjustments to reconcile income from continuing operations to net cash provided by operating activities: |
|||
Depreciation and amortization |
5,074,876 |
3,959,418 |
|
Accretion |
139,927 |
130,530 |
|
Amortization of debt issuance costs |
304,177 |
315,898 |
|
Provision for doubtful accounts |
829,814 |
37,115 |
|
Stock based compensation |
312,100 |
2,423 |
|
Gain on sale of marketable securities |
(183,371) |
- |
|
Loss (gain) on sale of assets |
10,635 |
(154,657) |
|
Loss from unconsolidated affiliate |
977 |
5,007 |
|
Unrealized holding (gain) loss on contingent consideration |
(3,000) |
215,000 |
|
Change in fair value of derivative financial instruments |
(8,419) |
- |
|
Investment tax credit |
(15,797) |
(15,797) |
|
Deferred income taxes |
1,243,512 |
2,467,689 |
|
Changes in assets and liabilities |
|||
Accounts receivable, including related parties |
5,467,686 |
5,394,354 |
|
Unbilled gas |
5,011,695 |
2,501,719 |
|
Natural gas inventory |
(3,048,511) |
(1,173,128) |
|
Accounts payable, including related parties |
(3,425,347) |
(2,398,156) |
|
Recoverable/refundable cost of gas purchases |
(624,880) |
(778,963) |
|
Regulatory assets |
(2,401,250) |
245,577 |
|
Prepayments and other |
(560,351) |
839,282 |
|
Other assets |
(141,418) |
(834,170) |
|
Other liabilities |
(912,571) |
(191,348) |
|
Net cash provided by operating activities of continuing operations |
8,598,961 |
13,622,200 |
|
CASH FLOWS FROM INVESTING ACTIVITIES |
|||
Capital expenditures |
(16,276,508) |
(15,357,615) |
|
Proceeds from sale of fixed assets |
33,234 |
958,448 |
|
Proceeds from sale of marketable securities |
421,875 |
- |
|
Proceeds from notes receivable |
2,752 |
5,657 |
|
Investment in unconsolidated affiliate |
- |
(35,000) |
|
Restricted cash – capital expenditures fund |
57,441 |
1,062,763 |
|
Customer advances for construction |
15,303 |
31,212 |
|
Contributions in aid of construction |
1,942,695 |
296,342 |
|
Net cash used in investing activities of continuing operations |
(13,803,208) |
(13,038,193) |
|
CASH FLOWS FROM FINANCING ACTIVITIES |
|||
Proceeds from lines of credit |
16,450,000 |
14,400,000 |
|
Repayments of lines of credit |
(16,919,000) |
(20,048,956) |
|
Proceeds from notes payable |
102,000 |
- |
|
Repayments of notes payable |
(3,429,702) |
(506,311) |
|
Payments of capital lease obligations |
(177,570) |
(167,518) |
|
Debt issuance costs |
(9,298) |
(7,492) |
|
Proceeds from issuance of common shares |
- |
15,943,051 |
|
Exercise of stock options |
45,761 |
159,500 |
|
Restricted cash – debt service fund |
131,840 |
749,326 |
|
Dividends paid |
(4,242,608) |
(3,598,449) |
|
Net cash provided by (used in) financing activities of continuing operations |
(8,048,577) |
6,923,151 |
|
DISCONTINUED OPERATIONS |
|||
Operating cash flows |
1,907,389 |
1,028,772 |
|
Investing cash flows |
(346,220) |
(338,827) |
|
Financing cash flows |
53,892 |
(134,552) |
|
Net cash provided by discontinued operations |
1,615,061 |
555,393 |
|
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS |
(11,637,763) |
8,062,551 |
|
Cash and cash equivalents, beginning of period |
12,741,197 |
3,202,643 |
|
CASH AND CASH EQUIVALENTS, END OF PERIOD |
$ 1,103,434 |
$ 11,265,194 |
Gas Natural Inc. and Subsidiaries Segments of Operations (Unaudited) |
||||||||
Three Months Ended September 30, 2014 |
||||||||
Natural Gas |
Marketing & |
Corporate & |
||||||
Operations |
Production |
Other |
Consolidated |
|||||
OPERATING REVENUES |
$ 12,544,151 |
$ 2,134,914 |
$ - |
$ 14,679,065 |
||||
Intersegment elimination |
(1,453) |
(1,062,641) |
- |
(1,064,094) |
||||
Total operating revenue |
12,542,698 |
1,072,273 |
- |
13,614,971 |
||||
COST OF SALES |
5,740,883 |
1,923,541 |
- |
7,664,424 |
||||
Intersegment elimination |
(1,453) |
(1,062,641) |
- |
(1,064,094) |
||||
Total cost of sales |
5,739,430 |
860,900 |
- |
6,600,330 |
||||
GROSS MARGIN |
$ 6,803,268 |
$ 211,373 |
$ - |
$ 7,014,641 |
||||
OPERATING EXPENSES |
8,146,216 |
372,682 |
873,202 |
9,392,100 |
||||
Intersegment elimination |
(26,571) |
- |
- |
(26,571) |
||||
Total operating expenses |
8,119,645 |
372,682 |
873,202 |
9,365,529 |
||||
OPERATING INCOME (LOSS) |
$ (1,316,377) |
$ (161,309) |
$ (873,202) |
$ (2,350,888) |
||||
DISCONTINUED OPERATIONS |
$ - |
$ - |
$ 34,825 |
$ 34,825 |
||||
NET INCOME (LOSS) |
$ (879,952) |
$ (108,248) |
$ (491,544) |
$ (1,479,744) |
||||
Three Months Ended September 30, 2013 |
||||||||
Natural Gas |
Marketing & |
Corporate & |
||||||
Operations |
Production |
Other |
Consolidated |
|||||
OPERATING REVENUES |
$ 11,502,306 |
$ 4,036,248 |
$ - |
$ 15,538,554 |
||||
Intersegment elimination |
(2,143) |
(1,919,083) |
- |
(1,921,226) |
||||
Total operating revenue |
11,500,163 |
2,117,165 |
- |
13,617,328 |
||||
COST OF SALES |
4,683,408 |
3,620,637 |
- |
8,304,045 |
||||
Intersegment elimination |
(2,143) |
(1,919,083) |
- |
(1,921,226) |
||||
Total cost of sales |
4,681,265 |
1,701,554 |
- |
6,382,819 |
||||
GROSS MARGIN |
$ 6,818,898 |
$ 415,611 |
$ - |
$ 7,234,509 |
||||
OPERATING EXPENSES |
7,304,083 |
604,673 |
392,044 |
8,300,800 |
||||
Intersegment elimination |
(25,185) |
- |
- |
(25,185) |
||||
Total operating expenses |
7,278,898 |
604,673 |
392,044 |
8,275,615 |
||||
OPERATING INCOME (LOSS) |
$ (460,000) |
$ (189,062) |
$ (392,044) |
$ (1,041,106) |
||||
DISCONTINUED OPERATIONS |
$ - |
$ - |
$ (154,292) |
$ (154,292) |
||||
NET INCOME (LOSS) |
$ (440,255) |
$ (129,525) |
$ (434,558) |
$ (1,004,338) |
||||
Gas Natural Inc. and Subsidiaries Segments of Operations, Continued |
||||||||
Nine Months Ended September 30, 2014 |
||||||||
Natural Gas |
Marketing & |
Corporate & |
||||||
Operations |
Production |
Other |
Consolidated |
|||||
OPERATING REVENUES |
$ 88,343,864 |
$ 13,136,479 |
$ - |
$ 101,480,343 |
||||
Intersegment elimination |
(16,798) |
(5,851,936) |
- |
(5,868,734) |
||||
Total operating revenue |
88,327,066 |
7,284,543 |
- |
95,611,609 |
||||
COST OF SALES |
56,274,466 |
12,389,959 |
- |
68,664,425 |
||||
Intersegment elimination |
(16,798) |
(5,851,936) |
- |
(5,868,734) |
||||
Total cost of sales |
56,257,668 |
6,538,023 |
- |
62,795,691 |
||||
GROSS MARGIN |
$ 32,069,398 |
$ 746,520 |
$ - |
$ 32,815,918 |
||||
OPERATING EXPENSES |
24,301,048 |
2,156,684 |
2,464,547 |
28,922,279 |
||||
Intersegment elimination |
(77,561) |
- |
- |
(77,561) |
||||
Total operating expenses |
24,223,487 |
2,156,684 |
2,464,547 |
28,844,718 |
||||
OPERATING INCOME (LOSS) |
$ 7,845,911 |
$ (1,410,164) |
$ (2,464,547) |
$ 3,971,200 |
||||
DISCONTINUED OPERATIONS |
$ - |
$ - |
$ 581,652 |
$ 581,652 |
||||
NET INCOME (LOSS) |
$ 4,189,646 |
$ (936,885) |
$ (1,142,632) |
$ 2,110,129 |
||||
Nine Months Ended September 30, 2013 |
||||||||
Natural Gas |
Marketing & |
Corporate & |
||||||
Operations |
Production |
Other |
Consolidated |
|||||
OPERATING REVENUES |
$ 64,797,098 |
$ 13,852,389 |
$ - |
$ 78,649,487 |
||||
Intersegment elimination |
(17,502) |
(5,517,763) |
- |
(5,535,265) |
||||
Total operating revenue |
64,779,596 |
8,334,626 |
- |
73,114,222 |
||||
COST OF SALES |
36,443,585 |
12,312,274 |
- |
48,755,859 |
||||
Intersegment elimination |
(17,502) |
(5,517,763) |
- |
(5,535,265) |
||||
Total cost of sales |
36,426,083 |
6,794,511 |
- |
43,220,594 |
||||
GROSS MARGIN |
$ 28,353,513 |
$ 1,540,115 |
$ - |
$ 29,893,628 |
||||
OPERATING EXPENSES |
21,114,497 |
1,109,762 |
1,046,918 |
23,271,177 |
||||
Intersegment elimination |
(71,414) |
- |
- |
(71,414) |
||||
Total operating expenses |
21,043,083 |
1,109,762 |
1,046,918 |
23,199,763 |
||||
OPERATING INCOME (LOSS) |
$ 7,310,430 |
$ 430,353 |
$ (1,046,918) |
$ 6,693,865 |
||||
DISCONTINUED OPERATIONS |
$ - |
$ - |
$ 402,062 |
$ 402,062 |
||||
NET INCOME (LOSS) |
$ 3,787,103 |
$ 297,808 |
$ (628,442) |
$ 3,456,469 |
Gas Natural Inc. and Subsidiaries Natural Gas Operations |
||||||||
Utility Throughput |
||||||||
Three Months Ended |
Nine Months Ended |
|||||||
(in million cubic feet (MMcf)) |
2014 |
2013 |
2014 |
2013 |
||||
Full Service Distribution Revenues |
||||||||
Residential |
355 |
291 |
3,662 |
2,960 |
||||
Commercial |
565 |
537 |
3,572 |
2,160 |
||||
Industrial |
- |
- |
- |
- |
||||
Total full service distribution |
920 |
828 |
7,234 |
5,120 |
||||
Transportation |
1,871 |
2,580 |
7,865 |
8,482 |
||||
Bucksport |
2,018 |
3,672 |
4,778 |
10,545 |
||||
Total Volumes |
4,809 |
7,080 |
19,877 |
24,147 |
Heating Degree Days |
||||||||||
Three Months Ended |
Percent Colder (Warmer) |
|||||||||
September 30, |
2014 Compared to |
|||||||||
Normal |
2014 |
2013 |
Normal |
2013 |
||||||
Great Falls, MT |
359 |
325 |
190 |
(9.47%) |
71.05% |
|||||
Bangor, ME |
230 |
235 |
249 |
2.17% |
(5.62%) |
|||||
Elkin, NC |
88 |
63 |
67 |
(28.41%) |
(5.97%) |
|||||
Youngstown, OH |
183 |
193 |
189 |
5.46% |
2.12% |
|||||
Jackson, KY |
84 |
97 |
91 |
15.48% |
6.59% |
|||||
Nine Months Ended |
Percent Colder (Warmer) |
|||||||||
September 30, |
2014 Compared to |
|||||||||
Normal |
2014 |
2013 |
Normal |
2013 |
||||||
Great Falls, MT |
4,758 |
5,188 |
4,382 |
9.04% |
18.39% |
|||||
Bangor, ME |
4,784 |
5,352 |
5,006 |
11.87% |
6.91% |
|||||
Elkin, NC |
3,048 |
2,856 |
1,750 |
(6.30%) |
63.20% |
|||||
Youngstown, OH |
4,111 |
4,604 |
4,082 |
11.99% |
12.79% |
|||||
Jackson, KY |
2,756 |
3,178 |
2,997 |
15.31% |
6.04% |
Gas Natural Inc. and Subsidiaries |
|||||||||||
(in thousands) |
Three Months Ended |
Nine Months Ended |
|||||||||
2014 |
2013 |
2014 |
2013 |
||||||||
$ |
per diluted share |
$ |
per diluted share |
$ |
per diluted share |
$ |
per diluted share |
||||
GAAP (loss) income from continuing operations |
$ (1,515) |
$(0.14) |
$ (850) |
$(0.08) |
$1,528 |
$ 0.15 |
$3,054 |
$ 0.34 |
|||
Add back after tax: |
|||||||||||
Bad debt charge |
689 |
0.07 |
|||||||||
Non-recurring legal fees |
260 |
0.02 |
398 |
0.04 |
|||||||
Non-recurring professional and |
138 |
0.01 |
326 |
0.03 |
|||||||
Non-GAAP adjusted (loss) income from continuing operations |
$(1,117) |
$(0.11) |
$ (850) |
$(0.08) |
$2,941 |
$ 0.29 |
$3,054 |
$ 0.34 |
Gas Natural Inc. and Subsidiaries |
|||||||
(in thousands) |
Three Months Ended |
Nine Months Ended |
|||||
2014 |
2013 |
2014 |
2013 |
||||
GAAP (loss) income from continuing operations |
$ (1,515) |
$ (850) |
$ 1,528 |
$ 3,054 |
|||
Add back: |
|||||||
Net interest expense |
764 |
811 |
2,334 |
2,379 |
|||
Income taxes |
(1,008) |
(785) |
901 |
1,724 |
|||
Depreciation, amortization and |
1,840 |
1,447 |
5,215 |
4,090 |
|||
Bad debt charge |
1,100 |
||||||
Non-recurring legal fees |
415 |
635 |
|||||
Non-recurring professional and other |
220 |
520 |
|||||
Non-GAAP Adjusted EBITDA(1) |
$ 716 |
$ 623 |
$ 12,233 |
$ 11,247 |
|||
Sales |
$ 13,615 |
$ 13,617 |
$ 95,612 |
$ 73,114 |
|||
Non-GAAP EBITDA Margin |
5.3% |
4.6% |
12.8% |
15.4% |
(1)Non-GAAP Financial Measures:
The Company believes that, when used in conjunction with GAAP measures, Adjusted (Loss) Income from Continuing Operations and Adjusted EBITDA, or earnings before interest, taxes, depreciation, amortization, accretion and non-recurring charges which are non-GAAP measures, allow investors to view its performance in a manner similar to the methods used by management and provides additional insight into its operating results. Adjusted (Loss) Income from Continuing Operations and Adjusted EBITDA are not calculated through the application of GAAP and are not the required form of disclosure by the Securities and Exchange Commission. As such, these measures should not be considered as a substitute for the GAAP measure of net income and, therefore, should not be used in isolation of, but in conjunction with, the GAAP measure. The use of any non-GAAP measure may produce results that vary from the GAAP measure and may not be comparable to a similarly defined non-GAAP measure used by other companies.
SOURCE Gas Natural Inc.
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