/NOT FOR DISTRIBUTION IN THE UNITED STATES OR OVER UNITED STATES WIRE SERVICES/
- 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 noted.
"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
-- 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
-- Maintained initial C$0.0833 per unit monthly distribution
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
-- 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
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 $20.9million, 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
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
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
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 sign.
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
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.
Michael Fallquist Chief Executive Officer (203) 663-7545
Roop Bhullar Chief Financial Officer (203) 883-9900
Philip Dale TMX Equicom email@example.com (416) 815-0700 ext. 253
SOURCE: Crius Energy Trust
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