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.

Link to this page: