EGR Commerce Energy Grp.,

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/

Copyright