Crius Energy Trust Reports Second Quarter 2013 Financial Results

/NOT FOR DISTRIBUTION IN THE UNITED STATES OR OVER UNITED STATES WIRE SERVICES/ 
- Higher Gross Margins and Continued Customer Growth - 
TORONTO, Aug. 7, 2013 /CNW/ - Crius Energy Trust(TSX: KWH.UN) ("Crius Energy" 
or the "Trust"), today announced its financial results for the three-month 
period ended June 30, 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 second quarter was highlighted by improved gross margin performance and 
continued organic growth in our customer base helped by the continued success 
of Viridian and the ramping up of our FTR Energy Services brand," said Michael 
Fallquist, President and CEO of Crius Energy Trust. "We were pleased with the 
improved gross margin performance in the period, particularly in April and 
May, which resulted in good financial results considering the operational 
challenges experienced and impact of seasonality on energy usage. 
Furthermore, our improved balance sheet will help to create more opportunities 
to invest in organic customer growth, strategic initiatives and positions us 
for acquisition opportunities in a market ready for consolidation. 
"We strengthened our management team with the addition of two highly 
experienced executives--Chaitu Parikh in the position of Chief Operating 
Officer and Seth Zuckerman as Senior Vice President of Finance—who are 
charged with streamlining operations and helping position the Company for 
long-term growth to support distributions. We believe attracting top 
industry talent combined with our continued success validates us as a market 
leader in the retail energy industry. Our unique go-to-market strategy, 
through a family of brands approach, is paramount to our success and will 
continue to differentiate us in the industry going forward." 
Q2 2013 Financial and Operational Highlights 


    --  Residential customer equivalents ("RCEs") totaled 595,899 at
        the end of the second quarter, up 2.2% quarter-over-quarter and
        20.2% year-over-year
    --  Sold 1.1 million MWh of electricity and 0.7 million MMBtu of
        natural gas
    --  Revenue of $113.9 million
    --  Gross margin of $27.6 million
    --  Gross margin as a percentage of revenue of 24.2%
    --  Adjusted EBITDA of $10.1 million, which accounted for 8.9% of
        revenue
    --  Total cash availability of $32.1 million, up from $28.2 million
        in the prior quarter, consisting of $18.5 million of cash, no
        long-term debt, and availability on the working capital line of
        credit with Macquarie Energy of $13.6 million as of June 30,
        2013
    --  Three-year extension of the exclusive marketing relationship
        with Cincinnati Bell Inc. (NYSE:CBB) to continue to market
        natural gas and electricity through the Cincinnati Bell Energy
        brand
    --  Appointed Seth Zuckerman as a Senior Vice President of
        Finance.  Mr. Zuckerman has over 15 years of experience in the
        retail energy industry, serving as the Chief Financial Officer
        of several energy retailers including Gateway Energy Services
        and Your Energy
    Highlights Subsequent to Quarter-End
    --  Appointed Chaitu Parikh to the position of Chief Operating
        Officer. Mr. Parikh has more than 16 years of experience in the
        retail energy industry, most recently serving as CEO/President
        of MXEnergy
    --  Launched Viridian Energy natural gas products in select markets
        in Maryland, Virginia and the District of Columbia
    --  Expanded the reach of the Public Power electricity brand in
        Pennsylvania, entering three new utility service areas
    --  FairPoint Energy celebrated its first anniversary of offering
        electricity products in Maine and New Hampshire.  The brand
        performed above expectations by achieving a penetration rate
        well in excess of 5% of FairPoint Communications' eligible
        customer base in the first year
    Review of Financial Results

Revenue for the quarter ending June 30, 2013 was $113.9 million, and was 
driven by robust customer growth in the first half of the year and higher 
retail rates.

Revenue from electricity sales during the period was $108.6 million based on 
volume of 1,132,102 MWh, accounting for 95.4% of total revenue. Revenue from 
natural gas sales was $4.3 million based on volume of 719,216 MMbtu, 
accounting for 3.7% of total revenue. Fee revenue consists of sign-up fees and 
other monthly fees received from independent contractors in the network 
marketing channel. Fee revenue for the period was $1.0 million, accounting for 
0.9% of total revenue.

Gross margin for the period was $27.6 million, representing 24.2% of revenue. 
Monthly gross margins were 24.3% in April, 26.9% in May and 22.1% in June. 
Gross margins returned to more typical levels during the period, although the 
June gross margin percentage was lower than expected due to hedging losses 
resulting from lower-than-forecasted electricity usage due to unusually cool 
weather and lower wholesale prices in the month. Management's ability to 
limit future volatility in earnings was enhanced by the first-quarter addition 
of a new executive-level position charged with gross margin realization, 
including responsibility for price forecasting and energy procurement. Gross 
margin realization also benefitted from input from a third-party provider of 
energy forecasting services. Management expects the Company to realize the 
full impact of these additions to its forecasting capacity in the third 
quarter of 2013.

Adjusted EBITDA for the period was $10.1 million, or 8.9% of revenue. Adjusted 
EBITDA was negatively impacted by an estimated $0.9 million due to 
lower-than-normal electricity volumes in June, $0.9 million as a result of 
customer rate increases not implemented as part of the transition of billing 
systems in April 2013, and $1.9 million related to non-recurring expenses 
stemming from the investment in the integration of pre-IPO legacy IT 
platforms. This integration has taken longer than anticipated, and is 
expected to continue into the third quarter of the year. However, management 
is confident this non-recurring IT investment will generate cost savings, 
streamline processes and promote long-term organic growth.

The Company's balance sheet improved in the period with total cash 
availability increasing to $32.1 million. The total cash availability consists 
of $18.5 million in cash, no long-term debt and availability of $13.6 million 
under the Company's working capital facility.

The Company continued to grow its customer base in the second quarter, 
increasing RCEs by 2.2% over the first quarter and by 20.2% on a 
year-over-year basis. Overall customer growth was dampened by 
higher-than-typical attrition driven primarily by the higher rates charged 
during the period at the Public Power brand, which is marketed through 
traditional door-to-door and telemarketing channels.

Management made meaningful progress in ramping up the FTR Energy Services 
brand, which enrolled over 2,000 customers during the quarter and is now 
licensed to enroll customers in New York, Ohio, Illinois and Indiana. The 
Company also completed its first year of marketing under the FairPoint Energy 
brand, which is marketed through a partnership agreement with FairPoint 
Communications (NYSE: FRP), in Maine and New Hampshire. FairPoint Energy 
achieved customer penetration well in excess of the 5% target of Fairpoint 
Communications' addressable customer base during its first year of operations.

The Company's Viridian Energy brand added more than 35,000 customers and 3,800 
independent contractors to its network marketing channel. The second and third 
quarters are historically weaker periods for customer and contractor additions 
for the network marketing industry due to the summer season. Sales efforts for 
the network marketing channel will ramp up again in September at the company's 
annual convention, PowerUp!®, in Washington D.C. Management sees the 
higher-usage, higher-retention Viridian marketing channel as a key source of 
long-term revenue growth that will help support distributions in the future.

The Trust's consolidated financial statements for the period ended June 30, 
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 second quarter 2013 
financial results today August 7, 2013 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. Eastern on 
August 14, 2013. To access the rebroadcast, please dial 416-849-0833 or 
1-855-859-2056 and enter passcode 22862548, 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 590,000 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 seven states and the District of 
Columbia.

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.

Forward-Looking Statements

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 unit holders. 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

Frank Condron TMX Equicom fcondron@tmxequicom.com (416) 815-0700 ext. 233

SOURCE: Crius Energy Trust

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CO: Crius Energy Trust
ST: Ontario
NI: ERN CONF 

-0- Aug/07/2013 11:00 GMT