Cascade Natural Gas Corporation Announces Fiscal 2001 Second Quarter and Six Months Results

Apr 16, 2001, 01:00 ET from Cascade Natural Gas Corporation

    SEATTLE, April 16 /PRNewswire/ -- Cascade Natural Gas Corporation
 (NYSE:   CGC) reported second quarter earnings of $9 million or $0.81 per share
 compared to second quarter 2000 results of $9.9 million or $0.89 per share.
 Despite weather that was essentially the same, higher natural gas prices and
 energy conservation awareness in the face of West Coast electric shortages
 lowered consumption and reduced operating margins by $1.7 million compared to
 the quarter last year. For the six months ended March 31, 2001, net earnings
 available to common shareholders were $17.4 million or $1.57 per share,
 compared to $17.5 million or $1.58 per share for the six months ended March
 31, 2000.
     While the second quarter was disappointing, the Company remains confident
 in reaching its full year earnings growth target of 6%, due in large part to
 expected increases in usage by electric generating customers this summer and
 additional revenues from off-system pipeline capacity transactions.
     Residential and commercial margin declined 6.7% or $817,000 from the
 second quarter of fiscal year 2000. Residential consumption was down 16%
 contributing to lower margins of $1.7 million. Consumption declined due to 36%
 higher average prices charged customers to recover the higher cost of the
 natural gas supplies and to the barrage of appeals for energy conservation
 stemming from the current shortage of electric generation capacity on the West
 Coast. Somewhat offsetting the consumption decline was $722,000 of new margin
 from the addition of 6,600 residential customers, a 4.2% increase and higher
 commercial margins of $215,000.
     In the industrial category, margins were lower by $650,000. Electric
 generation customers used 33% more gas than the quarter last year, which
 contributed $349,000 of additional margin, while consumption by industrial
 customers other than electric generators was down 28%, reducing margins by
 $1 million. Some non-generating industrial customers curtailed operations and
 cut back on energy use throughout the winter to save costs. Others (including
 some electric generators) switched to alternative fuels from December to
 February, when Canadian spot market prices in the Pacific Northwest were at
 stratospheric levels.
     In contrast to the negative impacts of the western electricity crisis to
 date, opportunities arising from that crisis are expected to benefit results
 for the remainder of the fiscal year. Contracts dealing with off-system
 interstate pipeline capacity over the next two years are expected to add
 substantial revenue. In addition, Cascade electric generation customers are
 planning to operate existing plants at higher levels than previously
 anticipated for the remainder of the year and are working hard to bring
 additional facilities on line this summer.
     Year to date capital expenditures, net of contributions in aid of
 construction, were $8.6 million. The fiscal year 2001 capital budget is
 $25.4 million for the full year. Expenditures during the second half of the
 year are expected to bring the total close to the original budget by fiscal
 year-end.
     The Company previously announced its declaration of a quarterly $0.24 per
 share dividend on common stock, payable May 15, 2001 to shareholders of record
 at the close of business April 13, 2001. There was also an announcement of a
 new 5-year contract with the International Chemical Workers' Union Council who
 represent approximately 204 Cascade employees.
     Statements contained in this report that are not historical in nature are
 forward-looking statements within the meaning of the Private Securities
 Litigation Reform Act 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, performance issues with key natural gas suppliers, the
 capital-intensive nature of the Company's business, regulatory issues,
 including the need for adequate and timely rate relief to recover increased
 capital and operating costs resulting from customer growth and to sustain
 dividend levels, the weather, increasing competition brought on by
 deregulation 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 requirements, and economic
 conditions, particularly in the Company's service area.
     Cascade Natural Gas Corporation is a local distribution company providing
 natural gas service to over 194,000 customers in the states of Washington and
 Oregon.
 
 
                        Cascade Natural Gas Corporation
          Financial Highlights - (Thousands, except per share amounts)
                           Second Quarter Fiscal 2001
 
                                                 Fiscal Year 2001
 
                                            Three Months Ended          Year
                                                                      to Date
                                     Dec 31   Mar 31    Jun 30 Sep 30   Mar 31
 
 
     Revenues                       $104,965  $124,728                $229,693
     Operating Margin                 29,620    30,795                  60,415
     Cost of Operations               13,674    14,172                  27,846
 
     Operating Income (Loss)          15,946    16,623      0       0   32,569
     Interest and Other                2,726     2,472                   5,198
     Income Taxes                      4,825     5,165                   9,990
 
     Net Earnings (Loss)               8,395     8,986      0       0   17,381
 
     Preferred Dividends                   0         0                       0
 
     Net Earnings (Loss) Available
      to Common Shareholders          $8,395    $8,986     $0      $0  $17,381
 
 
     Common Shares Outstanding:
      End of Period                   11,045    11,045                  11,045
      Average                         11,045    11,045                  11,045
 
     Net Earnings (Loss) Per Share     $0.76     $0.81                   $1.57
 
     Dividends Paid per share          $0.24     $0.24                   $0.48
 
     Capital Expenditures (net)       $5,255    $3,349                  $8,604
 
     Book Value Per Share             $11.31    $11.88                  $11.88
 
     Market Closing Price             $18.81    $20.35                  $20.35
 
     Customers (End of Period)           193       194                     194
 
     Gas Deliveries (Therms):
      Residential & Commercial        87,708    92,974                 180,682
      Industrial & Other             355,147   343,413                 698,560
 
     Degree Days
      Normal                           1,998     2,288                   4,286
      Actual                           2,308     2,345                   4,653
 
     Colder (warmer) than normal         16%        2%                      9%
 
 
 
                                      Fiscal Year 2000
 
                               Three Months Ended              Year     Year
                                                              Ended   to Date
                           Dec 31  Mar 31   Jun 30  Sep 30    Sep 30  Mar 31
 
     Revenues             $73,791 $88,830  $41,563 $37,752  $241,936 $162,621
     Operating Margin      27,608  32,492   16,068  13,826    89,994   60,100
     Cost of Operations    13,016  14,244   13,444  14,293    54,997   27,260
 
     Operating Income
      (Loss)               14,592  18,248    2,624   (467)    34,997   32,840
     Interest and Other     2,559   2,709    2,692   2,612    10,572    5,268
     Income Taxes           4,392   5,672     (23)   (990)     9,051   10,064
 
     Net Earnings (Loss)    7,641   9,867     (45) (2,089)    15,374   17,508
 
     Preferred Dividends        1       1        1       1         4        2
 
     Net Earnings (Loss)
      Available
      to Common
      Shareholders         $7,640  $9,866   ($46) ($2,090)   $15,370  $17,506
 
 
     Common Shares
      Outstanding:
       End of Period       11,045  11,045   11,045  11,045    11,045   11,045
       Average             11,045  11,045   11,045  11,045    11,045   11,045
 
     Net Earnings (Loss)
      Per Share             $0.69   $0.89  ($0.00) ($0.19)     $1.39    $1.58
 
     Dividends Paid
      per share             $0.24   $0.24     0.24    0.24     $0.96    $0.48
 
     Capital Expenditures
      (net)                $2,990  $4,050    4,076   4,821   $15,937   $7,040
 
     Book Value Per Share  $10.81  $11.46    11.22   10.79    $10.79   $11.46
 
     Market Closing Price  $16.13  $16.13    16.69   17.50    $17.50   $16.13
 
     Customers
      (End of Period)         185     187      185     185       185      187
 
     Gas Deliveries
      (Therms):
       Residential &
        Commercial         79,432  98,443   30,910  19,782   228,567  177,875
       Industrial & Other 358,102 322,967  287,644 377,275 1,345,988  681,069
 
     Degree Days
       Normal               2,002   2,367      982     318     5,669    4,369
       Actual               1,944   2,361      765     302     5,372    4,305
 
     Colder (warmer)
      than normal             (3%)    (0%)   (22%)     (5%)      (5%)     (1%)
 
 
     CONTACT:  J. D. Wessling of Cascade Natural Gas Corporation, 206-624-3900.
 
 

SOURCE Cascade Natural Gas Corporation
    SEATTLE, April 16 /PRNewswire/ -- Cascade Natural Gas Corporation
 (NYSE:   CGC) reported second quarter earnings of $9 million or $0.81 per share
 compared to second quarter 2000 results of $9.9 million or $0.89 per share.
 Despite weather that was essentially the same, higher natural gas prices and
 energy conservation awareness in the face of West Coast electric shortages
 lowered consumption and reduced operating margins by $1.7 million compared to
 the quarter last year. For the six months ended March 31, 2001, net earnings
 available to common shareholders were $17.4 million or $1.57 per share,
 compared to $17.5 million or $1.58 per share for the six months ended March
 31, 2000.
     While the second quarter was disappointing, the Company remains confident
 in reaching its full year earnings growth target of 6%, due in large part to
 expected increases in usage by electric generating customers this summer and
 additional revenues from off-system pipeline capacity transactions.
     Residential and commercial margin declined 6.7% or $817,000 from the
 second quarter of fiscal year 2000. Residential consumption was down 16%
 contributing to lower margins of $1.7 million. Consumption declined due to 36%
 higher average prices charged customers to recover the higher cost of the
 natural gas supplies and to the barrage of appeals for energy conservation
 stemming from the current shortage of electric generation capacity on the West
 Coast. Somewhat offsetting the consumption decline was $722,000 of new margin
 from the addition of 6,600 residential customers, a 4.2% increase and higher
 commercial margins of $215,000.
     In the industrial category, margins were lower by $650,000. Electric
 generation customers used 33% more gas than the quarter last year, which
 contributed $349,000 of additional margin, while consumption by industrial
 customers other than electric generators was down 28%, reducing margins by
 $1 million. Some non-generating industrial customers curtailed operations and
 cut back on energy use throughout the winter to save costs. Others (including
 some electric generators) switched to alternative fuels from December to
 February, when Canadian spot market prices in the Pacific Northwest were at
 stratospheric levels.
     In contrast to the negative impacts of the western electricity crisis to
 date, opportunities arising from that crisis are expected to benefit results
 for the remainder of the fiscal year. Contracts dealing with off-system
 interstate pipeline capacity over the next two years are expected to add
 substantial revenue. In addition, Cascade electric generation customers are
 planning to operate existing plants at higher levels than previously
 anticipated for the remainder of the year and are working hard to bring
 additional facilities on line this summer.
     Year to date capital expenditures, net of contributions in aid of
 construction, were $8.6 million. The fiscal year 2001 capital budget is
 $25.4 million for the full year. Expenditures during the second half of the
 year are expected to bring the total close to the original budget by fiscal
 year-end.
     The Company previously announced its declaration of a quarterly $0.24 per
 share dividend on common stock, payable May 15, 2001 to shareholders of record
 at the close of business April 13, 2001. There was also an announcement of a
 new 5-year contract with the International Chemical Workers' Union Council who
 represent approximately 204 Cascade employees.
     Statements contained in this report that are not historical in nature are
 forward-looking statements within the meaning of the Private Securities
 Litigation Reform Act 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, performance issues with key natural gas suppliers, the
 capital-intensive nature of the Company's business, regulatory issues,
 including the need for adequate and timely rate relief to recover increased
 capital and operating costs resulting from customer growth and to sustain
 dividend levels, the weather, increasing competition brought on by
 deregulation 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 requirements, and economic
 conditions, particularly in the Company's service area.
     Cascade Natural Gas Corporation is a local distribution company providing
 natural gas service to over 194,000 customers in the states of Washington and
 Oregon.
 
 
                        Cascade Natural Gas Corporation
          Financial Highlights - (Thousands, except per share amounts)
                           Second Quarter Fiscal 2001
 
                                                 Fiscal Year 2001
 
                                            Three Months Ended          Year
                                                                      to Date
                                     Dec 31   Mar 31    Jun 30 Sep 30   Mar 31
 
 
     Revenues                       $104,965  $124,728                $229,693
     Operating Margin                 29,620    30,795                  60,415
     Cost of Operations               13,674    14,172                  27,846
 
     Operating Income (Loss)          15,946    16,623      0       0   32,569
     Interest and Other                2,726     2,472                   5,198
     Income Taxes                      4,825     5,165                   9,990
 
     Net Earnings (Loss)               8,395     8,986      0       0   17,381
 
     Preferred Dividends                   0         0                       0
 
     Net Earnings (Loss) Available
      to Common Shareholders          $8,395    $8,986     $0      $0  $17,381
 
 
     Common Shares Outstanding:
      End of Period                   11,045    11,045                  11,045
      Average                         11,045    11,045                  11,045
 
     Net Earnings (Loss) Per Share     $0.76     $0.81                   $1.57
 
     Dividends Paid per share          $0.24     $0.24                   $0.48
 
     Capital Expenditures (net)       $5,255    $3,349                  $8,604
 
     Book Value Per Share             $11.31    $11.88                  $11.88
 
     Market Closing Price             $18.81    $20.35                  $20.35
 
     Customers (End of Period)           193       194                     194
 
     Gas Deliveries (Therms):
      Residential & Commercial        87,708    92,974                 180,682
      Industrial & Other             355,147   343,413                 698,560
 
     Degree Days
      Normal                           1,998     2,288                   4,286
      Actual                           2,308     2,345                   4,653
 
     Colder (warmer) than normal         16%        2%                      9%
 
 
 
                                      Fiscal Year 2000
 
                               Three Months Ended              Year     Year
                                                              Ended   to Date
                           Dec 31  Mar 31   Jun 30  Sep 30    Sep 30  Mar 31
 
     Revenues             $73,791 $88,830  $41,563 $37,752  $241,936 $162,621
     Operating Margin      27,608  32,492   16,068  13,826    89,994   60,100
     Cost of Operations    13,016  14,244   13,444  14,293    54,997   27,260
 
     Operating Income
      (Loss)               14,592  18,248    2,624   (467)    34,997   32,840
     Interest and Other     2,559   2,709    2,692   2,612    10,572    5,268
     Income Taxes           4,392   5,672     (23)   (990)     9,051   10,064
 
     Net Earnings (Loss)    7,641   9,867     (45) (2,089)    15,374   17,508
 
     Preferred Dividends        1       1        1       1         4        2
 
     Net Earnings (Loss)
      Available
      to Common
      Shareholders         $7,640  $9,866   ($46) ($2,090)   $15,370  $17,506
 
 
     Common Shares
      Outstanding:
       End of Period       11,045  11,045   11,045  11,045    11,045   11,045
       Average             11,045  11,045   11,045  11,045    11,045   11,045
 
     Net Earnings (Loss)
      Per Share             $0.69   $0.89  ($0.00) ($0.19)     $1.39    $1.58
 
     Dividends Paid
      per share             $0.24   $0.24     0.24    0.24     $0.96    $0.48
 
     Capital Expenditures
      (net)                $2,990  $4,050    4,076   4,821   $15,937   $7,040
 
     Book Value Per Share  $10.81  $11.46    11.22   10.79    $10.79   $11.46
 
     Market Closing Price  $16.13  $16.13    16.69   17.50    $17.50   $16.13
 
     Customers
      (End of Period)         185     187      185     185       185      187
 
     Gas Deliveries
      (Therms):
       Residential &
        Commercial         79,432  98,443   30,910  19,782   228,567  177,875
       Industrial & Other 358,102 322,967  287,644 377,275 1,345,988  681,069
 
     Degree Days
       Normal               2,002   2,367      982     318     5,669    4,369
       Actual               1,944   2,361      765     302     5,372    4,305
 
     Colder (warmer)
      than normal             (3%)    (0%)   (22%)     (5%)      (5%)     (1%)
 
 
     CONTACT:  J. D. Wessling of Cascade Natural Gas Corporation, 206-624-3900.
 
 SOURCE Cascade Natural Gas Corporation