Commerce Energy Group, Inc. Posts Profits for the Second Fiscal
Quarter and Year to Date COSTA MESA, Calif., March 16
/PRNewswire-FirstCall/ -- Today Commerce Energy Group, Inc.
(AMEX:EGR), a leading independent U.S. electricity and natural gas
marketing company, announced its financial results for the second
fiscal quarter and six months ending January 31, 2005. Results for
second quarter of fiscal 2005 For the second quarter of fiscal
2005, the Company reported net income of $1.4 million (earnings per
share of $0.04), as compared with the prior year's second quarter,
which was a net loss of $7.7 million (loss per share of $0.28).
Revenues for the second quarter of fiscal 2005 were $61.0 million,
an increase as compared to $47.0 million in the second quarter of
fiscal 2004. The increase in revenues of $14.0 million was
primarily due to the sale of a portion of the Pennsylvania energy
supply for $9.3 million. In the Company's major markets, Michigan
retail energy sales increased by $3.3 million, California retail
sales decreased by $3.9 million while California excess supply
sales increased by $2.3 million. In Pennsylvania, retail sales
decreased by $1.1 million and excess supply sales increased by $3.6
million. All market comparisons are based on the second quarter of
fiscal 2005 versus the second quarter of fiscal 2004. Operating
income in the second quarter of fiscal 2005 was $1.3 million as
compared to an operating loss in the second quarter of fiscal 2004
of $4.6 million. For the second quarter of fiscal 2005, general and
administrative costs were $10.0 million, an increase of $4.2
million, or 72%, as compared to $5.8 million in the second quarter
of fiscal 2004. The increase was primarily attributable to a $3.6
million reserve for potential employment related settlements and
severance of $0.5 million. The Company's financial results do not
reflect the acquired assets of ACN Energy, Inc., which occurred on
February 9, 2005 after the end of the second quarter. Consolidated
financial results inclusive of ACN Energy will first be reflected
in the next fiscal quarter's earnings release. "Our financial
results reflect a major turn around compared to last year's
results," stated Peter Weigand, President of Commerce Energy Group.
"While we are pleased with the progress that has resulted in
returning the Company to profitability, we are not resting at this
point," added Weigand. Year to Date results for the six months
ended January 31, 2005 The Company reported net income of $0.3
million (earnings per share of $0.01) for the six months ended
January 31, 2005, as compared with a net loss of $8.8 million (loss
per share of $0.32) for the comparable period in fiscal 2004.
Revenues for the six months ended January 31, 2005 were $119.5
million an increase compared to $105.4 million in the six months
ended January 31, 2004. Operating income in the six months ended
January 31, 2005 was $1.4 million as compared to an operating loss
in the same period in the prior year of $6.9 million. Gross profit
improved by $1.3 million, or 18%, to $8.9 million year to date
compared to $7.6 million for the same period in the prior year. At
January 31, 2005, the Company had total assets of $104.9 million,
stockholders' equity of $73.7 million, unrestricted cash,
restricted cash and deposits of $61.0 million and no long-term
debt. The Company believes its liquidity is adequate to meet its
current operating obligations. For more information, visit
http://www.commerceenergygroup.com/. About Commerce Energy Group,
Inc. Commerce Energy Group, Inc. (AMEX:EGR) is a holding company
with operations under wholly owned subsidiaries Commonwealth Energy
Corporation (soon to be renamed Commerce Energy, Inc.), Skipping
Stone, Inc., and Utilihost, Inc. Commonwealth Energy is a FERC
licensed unregulated retail marketer of natural gas and electricity
to homeowners, commercial and industrial consumers, and
institutional customers in 9 states. Skipping Stone is an energy
consulting firm serving utilities, pipelines, merchant trading, and
technology companies. Utilihost provides outsourced energy
transaction and data management services for municipalities,
government facilities, power generators and energy merchant
customers. For more information, contact: Investor Relations Verna
Ray (714) 259-2500 Commerce Energy Group, Inc. 600 Anton Boulevard,
Suite 2000 Costa Mesa, California 92626 1-800-ELECTRIC(C) Forward
Looking Statements Certain statements contained within this press
release including, without limitation, statements containing the
words "believe," "anticipate," "expect," "estimate," "await,"
"continue," "intend," "plan" and similar expressions, are
forward-looking statements that involve risks and uncertainties.
These forward-looking statements are not guarantees of future
performance and involve certain risks, uncertainties and
assumptions that are difficult to predict. Actual outcomes and
results may differ materially from what is expressed in, or implied
by, such forward-looking statements. The risks and uncertainties
that could cause actual results to differ materially from those
expressed in, or implied by, the forward-looking statements
include, but are not limited to, the volatility of the energy
market, competition, operating hazards, uninsured risks, changes in
energy-related state legislation, failure of performance by
suppliers and transmitters, changes in general economic conditions,
increased or unexpected competition, failure to obtain regulatory
approvals, and other matters disclosed in Commerce Energy Group's
filings with the Securities and Exchange Commission. Further,
Commerce Energy undertakes no obligation to release publicly any
revisions to these forward-looking statements that may be made to
reflect events or circumstances that occur after the date hereof or
to reflect the occurrence of unanticipated events. Commerce Energy
Group, Inc. Consolidated Statements of Operations (In thousands,
except per share data) Three Months Ended January 31, Six Months
Ended January 31, 2005 2004 Change 2005 2004 Change Net revenue
$61,048 $47,038 30% $119,545 $105,434 13% Direct energy costs
48,926 43,783 12% 101,333 97,858 4% Gross profit 12,122 3,255 272%
18,212 7,576 140% Selling and marketing expenses 761 1,008 (25%)
1,715 1,978 (13%) General and administrative expenses 10,043 5,829
72% 15,050 11,347 33% Reorganization and initial public listing
expenses -- 1,028 -- -- 1,146 -- Income (loss) from operations
1,318 (4,610) -- 1,447 (6,895) -- Other income and expenses:
Initial formation litigation expenses (162) -- -- (1,601) (585)
174% Provision for impairment on investments -- (4,313) -- --
(4,313) -- Minority interest share of loss -- 351 -- -- 895 --
Interest income, net 215 151 42% 406 281 44% Total other income and
expenses 53 (3,811) -- (1,195) (3,722) -- Income (loss) before
benefit from income taxes 1,371 (8,421) 116% 252 (10,617) 102%
Benefit from income taxes -- 768 -- -- 1,842 -- Net income (loss)
$1,371 $(7,653) 118% $252 $(8,775) 103% Income (loss) per share --
basic $0.04 $(0.28) 114% $0.01 $(0.32) 103% Income (loss) per share
-- diluted $0.04 $(0.28) 114% $0.01 $(0.32) 103% Consolidated
Balance Sheets (in thousands) January 31, 2005 July 31, 2004 Assets
Cash and cash equivalents $49,983 $54,065 Account receivable, net
32,272 31,119 Income taxes refund receivable 4,430 4,423 Deferred
income tax asset 74 74 Prepaid expenses and other current assets
1,278 5,141 Total current assets 88,037 94,822 Restricted cash and
cash equivalents 4,333 4,008 Deposits 6,699 5,445 Investments 91 96
Property and equipment, net 2,253 2,613 Goodwill and other
intangible assets 3,504 3,839 Total assets $104,917 $110,823
Liabilities and Stockholders' Equity Accounts payable $23,251
$30,576 Accrued liabilities 8,004 6,141 Total current liabilities
31,255 36,717 Stockholders' equity Common stock 60,594 60,796
Unearned restricted stock compensation (208) (256) Retained
earnings 13,818 13,566 Other comprehensive loss (542) -- Total
stockholders' equity 73,662 74,106 Total liabilities and
stockholders' equity $104,917 $110,823 DATASOURCE: Commerce Energy
Group, Inc. CONTACT: Investor Relations, Verna Ray of Commerce
Energy Group, Inc., +1-714-259-2500, Web site:
http://www.commerceenergygroup.com/
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