SEATTLE, Nov. 2 /PRNewswire/ -- Cascade Natural Gas Corporation
(NYSE: CGC) reported fiscal year 1999 earnings of $13.6 million, or $1.23 per
share, a 50% improvement compared to fiscal year 1998 results of $9.0 million
or $0.82 per share. Excluding unusual items, earnings for 1999 were $1.24.
Improvement was driven by increased operating margins and decreased cost of
operations. Significantly, reductions in cost of operations contributed
$0.08 per share.
    For the quarter ended September 30, a loss was reported of $1.7 million,
or $0.15 per share, which was a $300,000 improvement over the $2.0 million
loss, or $0.18 per share, reported in 1998. The Company historically reports a
seasonal loss in the quarter ended September 30.
    Operating margins for the year improved $5.8 million, with $6.9 million
attributed to residential and commercial revenues. Major factors influencing
residential and commercial were:

    -- Consumption per customer increases accounted for approximately
       $2.8 million of improvement. Residential consumption was 7% higher and
       commercial consumption was 3% higher. A major factor influencing
       consumption is weather. Temperatures in 1999 were approximately 10%
       colder than fiscal year 1998 although 2% warmer than normal.
    -- The addition of 8,480 customers, a 5.1% increase, added $2.4 million of
       margin.
    -- Service charge increases of $1.00 per month for Washington residential
       and commercial customers contributed $1.3 million. These service charge
       increases were offset by rate decreases to the large industrial
       customers in that state.
    -- Other revenue for various customer services accounted for $120,000 of
       margin improvement, additionally; there was $120,000 from higher
       commercial rates in Washington attributable to mix of customers.

    New industrial customers accounted for $800,000 of new industrial and
other margin. Higher deliveries to most industrial segments added an
additional $700,000 of improvement. Offsetting these improvements were the
$1.3 million rate reduction mentioned above, and a $600,000 reduction in
margin for the electric generation segment. One of the significant sources for
electric generation in the Northwest is hydroelectric. Electric utilities had
greater availability of hydroelectricity in fiscal 1999 compared to 1998 when
hydroelectric availability was extremely low. As hydroelectric generation
increases, generation from natural gas tends to decrease. Also affecting the
industrial margin comparison was a $500,000 reduction of spot-market gas
sales.
    Operating expenses were lower in fiscal year 1999 by $997,000, a 2.7%
decrease. The improvement resulted from several initiatives of management and
employees to more aggressively lower controllable expenses.  Depreciation and
amortization expense decreased $629,000, or 4.7%, essentially due to new
depreciation rates effective July 1, 1998. The new rates result from a
comprehensive study that brought Cascade's rates in line with industry
practice.
    Fiscal year 1999 capital expenditures were $17.2 million, $6.3 million
below budget and $6.6 million below 1998. Expenditures for system extension
and new customer connections were lower by $3.4 million because of improved
cost control and higher contributions from customers. Also, reduced purchases
of meters and regulators, a rescheduled reinforcement project, and rescheduled
gate station upgrades resulted in lower expenditures by $1.4 million. Finally,
technology and other general expenditures were lower by $1.2 million partially
due to lower Y2k and other contingency expenditures.
    Fourth quarter 1999 results compared to fourth quarter 1998 were
influenced by higher consumption per residential and commercial customer,
which contributed $418,000 of additional margin. There was also improvement of
$131,000 from service charge increases in Washington and $251,000 from the
addition of 8,500 new residential and commercial customers. Industrial and
other margins were lower by $545,000 compared to the 4th quarter 1998 when
hydroelectric supplies were low. Higher depreciation expense and
payroll/property taxes partially offset the margin increases.
    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,
misjudgments in assessing the Company's year 2000 compliance requirements and
risks, 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.
    The Company previously announced its declaration of a $0.24 per share
quarterly dividend on common stock, payable November 15, 1999 to shareholders
of record at the close of business October 15, 1999.
    Cascade Natural Gas Corporation is a local distribution company providing
natural gas service to over 178,000 customers in the states of Washington and
Oregon. The common stock is listed on the New York Stock Exchange with the
symbol CGC.
    CONTACT:  J. D. Wessling of Cascade Natural Gas Corporation, 206-624-3900.



                         Cascade Natural Gas Corporation
           Financial Highlights - (Thousands, except per share amounts)
                            Fourth Quarter Fiscal 1999


                                           Fiscal Year 1999

                                     Three Months Ended             Year
                                                                    Ended
                            Dec 31     Mar 31   Jun 30   Sep 30    Sep 30

    Revenues               $62,917    $71,118  $42,869   $31,706  $208,610
    Operating Margin        27,162     29,195   17,292    12,418    86,067
    Cost of Operations      13,724     13,791   13,501    12,712    53,728

    Operating Income
     (Loss)                 13,438     15,404    3,791     (294)    32,339
    Interest and Other       2,622      2,584    2,477     2,528    10,211
    Income Taxes             4,062      4,801      503   (1,291)     8,075

    Net Earnings (Loss)      6,754      8,019      811   (1,531)    14,053

    Preferred Dividends        123        119      121       120       483

    Net Earnings
     (Loss) Available
     to Common
     Shareholders           $6,631     $7,900     $690  $(1,651)   $13,570


    Common Shares
     Outstanding:
      End of Period         11,045     11,045   11,045    11,045    11,045
      Average               11,045     11,045   11,045    11,045    11,045

    Net Earnings (Loss)
     Per Share               $0.60      $0.72    $0.06   $(0.15)     $1.23

    Dividends Paid
     per share               $0.24      $0.24     0.24      0.24     $0.96

    Capital Expenditures
     (net)                  $6,038     $3,206    3,488     4,530   $17,262

    Book Value Per Share    $10.45     $10.92    10.75     10.33    $10.33

    Market Closing Price    $18.13     $14.94    19.00     17.88    $17.88

    Customers
     (End of Period)           177        179      178       177       177

    Gas Deliveries
     (Therms):
    Residential &
     Commercial             76,888     88,636   40,937    20,406   226,867
    Industrial & Other     347,585    281,395  240,793   286,768 1,156,541

    Degree Days
      Normal                 2,002      2,367      982       318     5,669
      Actual                 2,015      2,205    1,014       302     5,536

    Colder (warmer)
     than normal                1%       (7%)       3%      (5%)      (2%)



                         Cascade Natural Gas Corporation
           Financial Highlights - (Thousands, except per share amounts)
                            Fourth Quarter Fiscal 1999


                                        Fiscal Year 1998

                                      Three Months Ended              Year
                                                                     Ended
                            Dec 31    Mar 31     Jun 30    Sep 30    Sep 30

    Revenues               $60,984    $65,548   $36,995    $26,129 $189,656
    Operating Margin        25,543     26,947    15,468     12,279   80,237
    Cost of Operations      13,972     14,346    14,101     12,781   55,200

    Operating Income
     (Loss)                 11,571     12,601     1,367      (502)   25,037
    Interest and Other       2,484      2,415     2,400      2,500    9,799
    Income Taxes             3,405      3,817     (370)    (1,158)    5,694

    Net Earnings (Loss)      5,682      6,369     (663)    (1,844)    9,544

    Preferred Dividends        125        124       124        124      497

    Net Earnings (Loss)
     Available to Common
     Shareholders           $5,557     $6,245    $(787)   $(1,968)   $9,047


    Common Shares
     Outstanding:
      End of Period         11,006     11,045    11,045     11,045   11,045
      Average               10,980     11,018    11,045     11,045   11,000

    Net Earnings (Loss)
     Per Share               $0.51      $0.57   $(0.07)    $(0.18)    $0.82

    Dividends Paid
     per share               $0.24      $0.24     $0.24      $0.24    $0.96

    Capital Expenditures
     (net)                  $7,938     $5,647    $5,835     $4,360  $23,780

    Book Value Per Share    $10.47     $10.82    $10.51     $10.08   $10.08

    Market Closing Price    $18.75     $16.50    $15.63     $16.50   $16.50

    Customers (End of Period)  168        170       169        169      169

    Gas Deliveries
     (Therms):
    Residential &
     Commercial             72,228     81,116    35,303     17,684  206,331
    Industrial & Other     275,350    302,302   207,148    335,137
1,119,937

    Degree Days
      Normal                 2,002      2,367       982        318    5,669
      Actual                 1,980      2,109       797        144    5,030

    Colder (warmer)
     than normal              (1%)      (11%)     (19%)      (55%)    (11%)

Link to this page: