November 9, 2015 - 5:32 PM EST
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Gas Natural Inc. Reports 2015 Third Quarter Results

Also reports stipulation filed by PUCO Staff

CLEVELAND, Nov. 9, 2015 /PRNewswire/ -- Gas Natural Inc. (NYSE MKT: EGAS) (the "Company"), a holding company operating local natural gas utilities serving approximately 69,000 customers in six states, reported financial results for the third quarter and nine-month period ended September 30, 2015.  As previously announced, the Company completed the sale of its Wyoming operations on July 1, 2015 for $16 million and the divested unit is reported as discontinued operations. 

The Company also reported that a Stipulation and Recommendation between Gas Natural Inc.'s Ohio utilities and Commission Staff of the Public Utilities Commission of Ohio ("PUCO") was filed with the PUCO on Friday, October 30, 2015.  The PUCO has the final authority regarding all settlement stipulations filed by the Staff.  The Stipulation is subject to approval by the PUCO and can be found at this link: http://dis.puc.state.oh.us/DocumentRecord.  

The Company reported a loss from continuing operations of $2.3 million, or $0.22 per share, for the third quarter, compared with a loss of $1.5 million, or $0.14 per share, for the third quarter of 2014.  On a year-to-date basis, income from continuing operations was $0.4 million, or $0.04 per share, compared with $1.5 million, or $0.15 per share, for the first nine months of 2014. 

Adjusted loss from continuing operations, a non-GAAP number, was $1.4 million, or $0.13 per share, for the third quarter, compared with an adjusted loss from continuing operations of $1.2 million, or $0.11 per share in the third quarter of 2014.  Adjustments to loss from continuing operations for the 2015 third quarter excludes, net of tax, $0.4 million of non-recurring professional and legal fees, $0.2 million of incremental regulatory and other expenses, and a $0.3 million asset impairment charge. 

On a year-to-date basis, adjusted income from continuing operations, a non-GAAP number, was
$2.7 million, or $0.25 per share, compared with $3.2 million, or $0.31 per share, for the first nine months of 2014.  The 2015 year-to-date adjusted results excludes, net of tax, $1.1 million of non-recurring professional and legal fees, $0.6 million of incremental regulatory and other expenses, $0.5 million of goodwill and asset impairment charges.  See attached table for a reconciliation of GAAP (loss) income from continuing operations to non-GAAP adjusted income (loss) from continuing operations for the 2015 third quarter and year-to-date periods.

Mr. Gregory J. Osborne, Gas Natural's President and Chief Executive Officer, commented, "We have made significant progress on many fronts this year which include the following: 

  • Completed the divestiture of our non-core Wyoming assets (announced July 1, 2015)
  • Added approximately 1,000 new customers in our core markets in the quarter
  • Received a positive outcome with the Montana PSC, allowing us to dividend funds from our Montana-based subsidiary to the corporate level. 

He continued, "And, there were several additional developments in the last several weeks that bode well for our future. 

  • Most recently, we entered into a stipulation with the PUCO Staff that, subject to final approval by the Commission, will address the issues raised by last year's investigative regulatory audit of our Ohio utilities. 
  • We just completed the sale of our former corporate headquarters building which monetized another non-core asset. 
  • We also secured interim financing that provides us with greater liquidity during the low-cash flow months of summer before the colder weather sets in.  Historically, we generate significant cash during the cold weather months and replenish our cash reserves. 
  • We are awaiting regulatory approvals on the pending sales of our Kentucky and Pennsylvania utilities. 

All of these accomplishments set the stage for us to focus our energy and resources on growing our strong core business, implementing systems and processes to strengthen our operational performance and building a culture of continuous improvement."

Natural Gas Operations Segment Review

The Natural Gas Operations segment reported $11.4 million in revenue for the 2015 third quarter, a decrease of $1.2 million, or 9%, from the prior-year quarter, which was primary attributable to lower gas prices passed on to customers in its Ohio, Montana and North Carolina markets.  The decrease was partially offset by a $0.4 million increase in revenue from the Company's Maine market, which was the result of continued customer growth and the Loring Pipeline which became operational in September 2014.

Revenue for the first nine months of 2015 was $77.4 million, a decrease of $10.9 million, or 12.4%, with the change largely driven by lower gas prices passed on to customers and warmer weather on a year-to-date basis in the Ohio, Montana and North Carolina markets.  Additionally, revenue for the year-to-date period in the North Carolina market was unfavorably impacted by $0.5 million for adjustments to sales volumes used in the unbilled revenue calculation in the 2015 second quarter.  These decreases were partially offset by a $1.6 million increase in revenue in the Company's Maine market based on higher volumes due to customer growth, including from the Loring pipeline, and colder weather.

Natural Gas Operations Income Statement




Three Months Ended September 30,


Nine Months Ended September 30,

($ in thousands)


2015


2014


2015


2014










Natural Gas Operations









Operating revenues


$      11,355


$      12,543


$      77,403


$      88,327

Gas Purchased


4,583


5,739


45,919


56,258

Gross Margin


6,772


6,804


31,484


32,069

Operating expenses


9,310


8,120


26,294


24,223

Operating (loss) income


(2,538)


(1,316)


5,190


7,846

Other income


151


369


493


620

(Loss) income before interest and taxes

(2,387)


(947)


5,683


8,466

Interest expense


(621)


(586)


(1,912)


(1,895)

(Loss) income before income taxes


(3,008)


(1,533)


3,771


6,571

Income tax benefit (expense)


1,105


653


(1,429)


(2,381)

            Net (loss) income


$       (1,903)


$          (880)


$       2,342


$       4,190










 

Gross margin for the third quarter of 2015 was $6.8 million, relatively unchanged from the prior-year period as $0.2 million in increased sales volumes and Loring Pipeline revenue in the Maine market were offset by $0.2 million of adjustments of additional disallowed gas costs in Ohio that were mandated by the PUCO.  On a year-to-date basis, gross margin decreased by $0.6 million to $31.5 million primarily due to the PUCO gas cost adjustments in Ohio that took place in the second and third quarters, and warmer weather in the Montana market.  These decreases were partially offset by increased sales volume in the Maine market and revenue from the Loring Pipeline.   

Operating expenses increased by $1.2 million, or 14.7%, in the quarter to $9.3 million.  The increase in quarterly operating expenses was attributable to a $0.4 million impairment charge related to the pending sale of the Company's former headquarters building, higher corporate cost allocations and payroll expenses, property tax increases and higher outside and professional services costs.  Depreciation and amortization expense decreased slightly due to lower capital expenditures.  Year-to-date operating expenses were $26.3 million, $2.1 million, or 8.5%, higher than the prior-year period.  The increase reflects the same factors affecting operating expenses in the 2015 third quarter, as well as an impairment charge of $0.4 million related to the pending sale of the Company's Kentucky utility operations and a $0.2 million increase in depreciation and amortization expense as amortization of a regulatory asset not present last year offset lower depreciation expense.           

The segment reported a 2015 third quarter net loss of $1.9 million compared with a net loss of
$0.9 million in the 2014 third quarter.  For the first nine months of 2015, net income for the segment was $2.3 million compared with $4.2 million for the prior-year period. 

Other Operating Segments

The Marketing and Production Operations segment was near breakeven in the third quarter of 2015, reflecting improvement from a $0.1 million loss in the prior-year period.  Revenue increased by
$0.7 million to $1.7 million for the third quarter of 2015, compared with the same period in 2014 while gross margin decreased by $0.1 million to $0.1 million.  The combination of higher volume and significantly lower operating expenses in the quarter offset most of the impact of lower pricing.  For the first nine months of 2015, the segment had a net loss of $0.1 million, a $0.8 million improvement from a $0.9 million net loss in the prior-year period, as a $1.6 million reduction in operating expenses more than offset the effect of lower volume.

Net loss from continuing operations for the Corporate and Other Operations segment in the 2015 third quarter was a $0.3 million loss compared with a $0.5 million loss in the prior-year quarter.  The segment also reported net income from discontinued operations of $3.4 million in the quarter, compared with breakeven in the prior year.  For the first nine months of 2015, the segment recorded a net loss from continuing operations of $1.8 million, approximating the loss in the prior-year period.  Net income from discontinued operations for the year-to-date period was $4.0 million, compared with $0.6 million in the prior year. 

Adjusted EBITDA

Adjusted earnings from continuing operations before interest, taxes, depreciation, amortization, accretion, and non-recurring expenses ("Adjusted EBITDA"), a non-GAAP financial measure, was
$0.5 million and $0.6 million, respectively, in the third quarters of 2015 and 2014.  On a year-to-date basis, the same measure was $12.6 million for both 2015 and 2014.  The Company believes that, when used in conjunction with measures prepared in accordance with U.S. generally accepted accounting principles ("GAAP"), Adjusted EBITDA, which is a non-GAAP measure, helps in the understanding of its operating performance.  See the attached tables for important disclosures regarding the Company's use of Adjusted EBITDA, as well as a reconciliation of GAAP (loss) income from continuing operations to Adjusted EBITDA.

Balance Sheet and Cash Management

Cash and cash equivalents as of September 30, 2015 were $3.9 million, an increase of $2.3 million from December 31, 2014.     

Cash provided by operating activities of continuing operations in the first nine months of 2015 was
$12.2 million, a $3.6 million increase from the prior-year period.  The improvement was primarily related to fluctuations in working capital partially offset by the decrease in net income from continuing operations. 

Capital expenditures for the first nine months of 2015 were $8.3 million compared with $16.3 million in the prior-year period.  Total capital expenditures for 2015 are expected to be approximately $11 million to $12 million.  Capital investments are focused on the growth of the Company's Natural Gas Operations segment, as well as ongoing construction activities in all of the Company's utility service areas to support expansion, maintenance and enhancements of its gas pipeline systems. This includes systems in its North Carolina and Maine markets to meet high customer demand in these underserved markets.

Mr. Osborne concluded, "I believe we have accomplished a great amount in the 18 months that new leadership had been in place.  We have strengthened our regulatory relationships, executed our asset rationalization program, implemented operational improvements and focused investments in our markets with the highest and most profitable growth potential.  In particular, we have had positive results from our Maine operations where the Loring Pipeline, activated just over a year ago, is generating profits and customer numbers are growing in this underserved market.  We expect we will further benefit as Maine has historically been our coldest weather market.  Our purpose and focus is on driving earnings power and increasing shareholder value."

Webcast and Conference Call

Gas Natural will host a conference call and live webcast Tuesday, November 10th at 1:00 p.m. Eastern Time.  During the conference call and webcast, management will review the financial and operating results for the third quarter and discuss Gas Natural's corporate strategies and outlook.  A question-and-answer session will follow.  The teleconference can be accessed by calling (201) 689-8471.  The webcast can be monitored on the Company's website at investor.egas.net.

A telephonic replay will be available from 4:00 p.m. Eastern Time on the day of the teleconference through Tuesday, November 17, 2015.  To listen to a replay of the call, dial (858) 384-5517 and enter the conference ID number 13621136.  An archive of the webcast will be available on the Company's website at investor.egas.net/past events and will include a transcript, once available.

About Gas Natural Inc.

Gas Natural Inc., a holding company, distributes and sells natural gas to end-use residential, commercial, and industrial customers.  It distributes approximately 26 billion cubic feet of natural gas to approximately 69,000 customers through regulated utilities operating in Montana, Ohio, Pennsylvania, Maine, North Carolina and Kentucky.  The Company's other operations include interstate pipeline, natural gas production, and natural gas marketing.  The Company's Montana public utility was originally incorporated in 1909.  Its strategy for growth is to expand throughput in its markets, while looking for acquisitions that are either adjacent to its existing utilities or in under saturated markets.  Gas Natural Inc. regularly posts information on its website at www.egas.net.

Safe Harbor Regarding Forward-Looking Statements

The Company is including the following cautionary statement in this release to make applicable and to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 for any forward-looking statements made by, or on behalf of, Gas Natural Inc. Forward-looking statements are all statements other than statements of historical fact, including, without limitation, those that are identified by the use of the words "anticipates," "estimates," "expects," "intends," "plans," "predicts," "believes" and similar expressions. Such statements are inherently subject to a variety of risks and uncertainties that could cause actual results to differ materially from those expressed. Factors that may affect forward-looking statements and the Company's business generally include but are not limited to the Company's ability to successfully integrate the operations of the companies it has recently acquired and consummate additional acquisitions, the Company's continued ability to make dividend payments, the Company's ability to implement its business plan, fluctuating energy commodity prices, the possibility that regulators may not permit the Company to pass through all of its increased costs to its customers, changes in the utility regulatory environment, wholesale and retail competition, the Company's ability to satisfy its debt obligations, including compliance with financial covenants, weather conditions, litigation risks, and various other matters, many of which are beyond the Company's control, the risk factors and cautionary statements made in the Company's public filings with the Securities and Exchange Commission, and other factors that the Company is currently unable to identify or quantify, but may exist in the future. Gas Natural Inc. expressly undertakes no obligation to update or revise any forward-looking statement contained herein to reflect any change in Gas Natural Inc.'s expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.

For more information, contact:

Gas Natural Inc.

Investor Relations

James E. Sprague, Chief Financial Officer

Deborah K. Pawlowski or Karen L. Howard, Kei Advisors LLC

Phone: (216) 202-1564

Phone:  (716) 843-3908 / (716) 843-3942

Email:  [email protected]

Email:  [email protected] / [email protected]

 

FINANCIAL TABLES FOLLOW.

 


Gas Natural Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

(Unaudited)



Three Months Ended
September 30,


Nine Months Ended
September 30,


2015


2014


2015


2014

REVENUES








Natural gas operations

$ 11,355,099


$ 12,542,698


$77,402,612


$88,327,066

Marketing and production

1,728,716


1,072,273


5,460,246


7,284,543

Total revenues

13,083,815


13,614,971


82,862,858


95,611,609

COST OF SALES








Natural gas purchased

4,583,203


5,739,430


45,918,641


56,257,668

Marketing and production

1,639,912


860,900


5,018,370


6,538,023

Total cost of sales

6,223,115


6,600,330


50,937,011


62,795,691

GROSS MARGIN

6,860,700


7,014,641


31,925,847


32,815,918

OPERATING EXPENSES








Distribution, general, and administrative

6,806,138


6,321,270


19,792,959


19,018,069

Maintenance

256,483


295,762


871,714


920,308

Depreciation and amortization

1,790,111


1,830,287


5,327,327


5,178,270

Accretion

-


9,255


21,077


36,533

Provision for doubtful accounts

34,713


7,626


133,041


829,814

Taxes other than income

1,014,908


901,329


3,023,365


2,861,724

Total operating expenses

9,902,353


9,365,529


29,169,483


28,844,718

OPERATING (LOSS) INCOME

(3,041,653)


(2,350,888)


2,756,364


3,971,200

Loss from unconsolidated affiliate

-


-


-


(977)

Other income, net

277,402


408,821


593,429


617,656

Gain on sale of marketable securities



183,371




183,371

Acquisition expense

-


-


-


(7,197)

Interest expense

(811,765)


(764,367)


(2,566,866)


(2,334,435)

(Loss) income before income taxes

(3,576,016)


(2,523,063)


782,907


2,429,618

Income tax benefit (expense)

1,312,049


1,008,494


(342,191)


(901,141)

(LOSS) INCOME FROM CONTINUING OPERATIONS

(2,263,967)


(1,514,569)


440,716


1,528,477

Discontinued operations, net of tax

3,394,981


34,825


4,044,776


581,652

NET INCOME (LOSS)

$  1,131,014


$(1,479,744)


$ 4,485,492


$ 2,110,129









Basic weighted shares outstanding

10,494,130


10,487,511


10,490,736


10,475,213

Dilutive effect of stock options

1,134


-


1,173


-

Diluted weighted shares outstanding

10,495,264


10,487,511


10,491,909


10,475,213









BASIC AND DILUTED EARNINGS (LOSS) PER SHARE:








Continuing operations

$         (0.22)


$         (0.14)


$          0.04


$          0.15

Discontinued operations

0.32


-


0.39


0.05

Net income (loss) per share

$           0.10


$         (0.14)


$          0.43


$          0.20









Dividends declared per common share

$         0.135


$         0.135


$        0.270


$        0.405

 


Gas Natural Inc. and Subsidiaries

Condensed Consolidated Balance Sheets



September 30,


December 31,


2015


2014


(unaudited)



ASSETS




CURRENT ASSETS




Cash and cash equivalents

$         3,904,154


$         1,585,926

Accounts receivable




Trade, less allowance for doubtful accounts of $272,367
and $370,909, respectively

4,403,443


12,095,535

Related parties

164,302


250,101

Unbilled gas

2,260,541


7,630,852

Note receivable, current portion

726


2,070

Inventory




Natural gas

5,733,778


5,301,895

Materials and supplies

2,324,890


2,300,990

Prepaid income taxes

434,100


431,681

Regulatory assets, current

2,713,255


4,097,822

Deferred tax asset

578,033


635,195

Prepayments and other

2,064,654


986,941

Assets held for sale

3,647,248


802,436

Discontinued operations

-


11,653,934

Total current assets

28,229,124


47,775,378





PROPERTY, PLANT AND EQUIPMENT




Property, plant and equipment

192,675,626


187,566,638

Less accumulated depreciation, depletion and amortization

(48,637,868)


(45,555,553)

PROPERTY, PLANT, & EQUIPMENT, NET

144,037,758


142,011,085





OTHER ASSETS




Notes receivable, less current portion

32,502


90,345

Regulatory assets, non-current

1,653,750


2,055,404

Debt issuance costs, net of amortization

713,198


1,079,447

Goodwill

15,872,247


16,155,672

Customer relationships, net of amortization

2,707,486


2,927,500

Restricted cash

1,897,672


1,897,677

Other assets

14,360


11,404

Total other assets

22,891,215


24,217,449

    TOTAL ASSETS

$     195,158,097


$     214,003,912

 


Gas Natural Inc. and Subsidiaries

Condensed Consolidated Balance Sheets



September 30,


December 31,


2015


2014


(unaudited)



LIABILITIES AND CAPITALIZATION




CURRENT LIABILITIES




Checks in excess of amounts on deposit

$             34,504


$           194,524

Line of credit

15,750,000


28,760,799

Accounts payable




Trade

6,174,579


14,115,367

Related parties

62,943


170,319

Notes payable, current portion

521,321


542,201

Contingent consideration, current

671,638


671,638

Derivative instruments

31,290


3,023,271

Accrued liabilities

4,920,853


4,860,663

Accrued liabilities - related parties

99,150


111,133

Customer deposits, current

400,522


634,090

Obligation under capital lease, current

199,517


188,224

Regulatory liability, current

1,065,596


925,175

Build-to-suit liability

7,408,163


5,597,287

Other current liabilities

959,695


940,643

Liabilities held for sale

262,513


61,416

Discontinued operations

20,139


544,432

Total current liabilities

38,582,423


61,341,182





LONG-TERM LIABILITIES




Deferred investment tax credits

97,396


113,193

Deferred tax liability

13,166,934


10,538,394

Asset retirement obligation

1,217,595


1,196,518

Customer advances for construction

1,026,700


993,681

Regulatory liability, non-current

1,210,816


1,089,850

Customer deposits

949,540


949,540

Obligation under capital lease, less current

1,475,197


1,674,714

Contingent consideration, less current

-


75,362

Total long-term liabilities

19,144,178


16,631,252

NOTES PAYABLE, less current portion

39,335,068


39,720,860

COMMITMENTS AND CONTINGENCIES




STOCKHOLDERS' EQUITY




Preferred stock; $0.15 par value; 1,500,000 shares authorized, no shares issued or outstanding

-


-

Common stock; $0.15 par value;
      Authorized: 30,000,000 and 30,000,000 shares, respectively;
      Issued: 10,501,263 and 10,487,511 shares, respectively;
      Outstanding: 10,501,263 and 10,487,511 shares, respectively

1,574,690


1,573,127

Capital in excess of par value

63,958,752


63,826,341

Retained earnings

32,562,986


30,911,150

Total stockholders' equity

98,096,428


96,310,618

TOTAL CAPITALIZATION

137,431,496


136,031,478

TOTAL LIABILITIES AND CAPITALIZATION

$      195,158,097


$      214,003,912

 


Gas Natural Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(Unaudited)



Nine months ended September 30,


2015


2014

CASH FLOWS FROM OPERATING ACTIVITIES




Net income

$ 4,485,492


$ 2,110,129

Less income from discontinued operations

4,044,776


581,652

Income from continuing operations

440,716


1,528,477





Adjustments to reconcile income from continuing operations to net cash provided by operating activities:




Depreciation and amortization

5,327,327


5,178,270

Accretion

21,077


36,533

Amortization of debt issuance costs

517,379


304,177

Provision for doubtful accounts

133,041


829,814

Stock based compensation

133,974


312,100

Loss on goodwill and asset impairments

803,518


-

Gain on sale of marketable securities

-


(183,371)

(Gain) loss on sale of assets

(34,812)


10,635

Loss from unconsolidated affiliate

-


977

Unrealized holding gain on contingent consideration

(75,362)


(3,000)

Change in fair value of derivative financial instruments

(119,596)


(8,419)

Investment tax credit

(15,797)


(15,797)

Deferred income taxes

2,685,702


1,243,512

Changes in assets and liabilities




Accounts receivable, including related parties

7,532,912


5,467,686

Unbilled gas

5,360,535


5,011,695

Natural gas inventory

(431,883)


(3,048,511)

Accounts payable, including related parties

(7,572,247)


(3,425,347)

Recoverable/refundable cost of gas purchases

(1,147,233)


(624,880)

Regulatory assets & liabilities

186,122


(2,401,250)

Prepayments and other

(1,101,642)


(560,351)

Other assets

(453,379)


(141,418)

Other liabilities

57,390


(912,571)

Net cash provided by operating activities of continuing operations

12,247,742


8,598,961





CASH FLOWS FROM INVESTING ACTIVITIES




Capital expenditures

(8,325,234)


(16,276,508)

Proceeds from sale of fixed assets

65,660


33,234

Proceeds from sale of marketable securities

-


421,875

Proceeds from note receivable

59,187


2,752

Restricted cash – capital expenditures fund

-


57,441

Customer advances for construction

33,335


15,303

Contributions in aid of construction

605,785


1,942,695

Net cash used in investing activities of continuing operations

(7,561,267)


(13,803,208)





CASH FLOWS FROM FINANCING ACTIVITIES




Proceeds from line of credit

13,750,000


16,450,000

Repayments of line of credit

(26,760,799)


(16,919,000)

Repayments of notes payable, including related parties

(5,406,672)


(3,429,702)

Proceeds from notes payable, including related parties

5,000,000


102,000

Repayments of build-to-suit

(1,371,434)


-

Payments of capital lease obligations

(188,224)


(177,570)

Debt issuance costs

(151,130)


(9,298)

Restricted cash – debt service fund

5


131,840

Exercise of stock options

-


45,761

Dividends paid

(2,833,656)


(4,242,608)

Net cash used in financing activities of continuing operations

(17,961,910)


(8,048,577)





DISCONTINUED OPERATIONS




Operating cash flows

1,288,242


1,907,389

Investing cash flows

14,305,421


(346,220)

Financing cash flows

-


53,892

Net cash  provided by discontinued operations

15,593,663


1,615,061





NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

2,318,228


(11,637,763)

Cash and cash equivalents, beginning of period

1,585,926


12,741,197





CASH AND CASH EQUIVALENTS, END OF PERIOD

$ 3,904,154


$  1,103,434

 

Gas Natural Inc. and Subsidiaries

Segments of Operations

(Unaudited)


Three Months Ended September 30, 2015


















Natural Gas


Marketing &


Corporate &




Operations


Production


Other


Consolidated










OPERATING REVENUE


$     11,356,319


$        1,885,718


$                  -


$    13,242,037

Intersegment eliminations


(1,220)


(157,002)


-


(158,222)

Total operating revenue


11,355,099


1,728,716


-


13,083,815










COST OF SALES


4,584,423


1,796,914


-


6,381,337

Intersegment eliminations


(1,220)


(157,002)


-


(158,222)

Total cost of sales


4,583,203


1,639,912


-


6,223,115










GROSS MARGIN


6,771,896


88,804


-


6,860,700










OPERATING EXPENSES


9,335,060


141,801


450,737


9,927,598

Intersegment eliminations


(25,245)


-


-


(25,245)

Total operating expenses


9,309,815


141,801


450,737


9,902,353










OPERATING LOSS


$     (2,537,919)


$           (52,997)


$    (450,737)


$    (3,041,653)










NET LOSS FROM CONTINUING OPERATIONS


$     (1,902,628)


$           (65,648)


$    (295,691)


$    (2,263,967)










DISCONTINUED OPERATIONS


-


-


3,394,981


3,394,981










NET (LOSS) INCOME


$     (1,902,628)


$           (65,648)


$  3,099,290


$     1,131,014

 


Three Months Ended September 30, 2014


















Natural Gas


Marketing &


Corporate &




Operations


Production


Other


Consolidated










OPERATING REVENUE


$      12,619,151


$        2,134,914


$                   -


$      14,754,065

Intersegment eliminations


(76,453)


(1,062,641)


-


(1,139,094)

Total operating revenue


12,542,698


1,072,273


-


13,614,971










COST OF SALES


5,815,883


1,923,541


-


7,739,424

Intersegment eliminations


(76,453)


(1,062,641)


-


(1,139,094)

Total cost of sales


5,739,430


860,900


-


6,600,330










GROSS MARGIN


6,803,268


211,373


-


7,014,641










OPERATING EXPENSES


8,146,216


372,682


873,202


9,392,100

Intersegment eliminations


(26,571)


-


-


(26,571)

Total operating expenses


8,119,645


372,682


873,202


9,365,529










OPERATING LOSS


$      (1,316,377)


$         (161,309)


$     (873,202)


$      (2,350,888)










NET LOSS FROM CONTINUING OPERATIONS


$         (879,952)


$         (108,248)


$     (526,369)


$      (1,514,569)










DISCONTINUED OPERATIONS


-


-


34,825


34,825










NET LOSS


$         (879,952)


$         (108,248)


$     (491,544)


$      (1,479,744)

 

Gas Natural Inc. and Subsidiaries

Segments of Operations, Continued

(Unaudited)


Nine Months Ended September 30, 2015


















Natural Gas


Marketing &


Corporate &




Operations


Production


Other


Consolidated










OPERATING REVENUE


$    77,419,693


$     8,916,218


$                     -


$     86,335,911

Intersegment eliminations


(17,081)


(3,455,972)


-


(3,473,053)

Total operating revenue


77,402,612


5,460,246


-


82,862,858










COST OF SALES


45,935,722


8,474,342


-


54,410,064

Intersegment eliminations


(17,081)


(3,455,972)


-


(3,473,053)

Total cost of sales


45,918,641


5,018,370


-


50,937,011










GROSS MARGIN


31,483,971


441,876


-


31,925,847










OPERATING EXPENSES


26,381,246


596,698


2,278,814


29,256,758

Intersegment eliminations


(87,275)


-


-


(87,275)

Total operating expenses


26,293,971


596,698


2,278,814


29,169,483










OPERATING INCOME (LOSS)


$      5,190,000


$       (154,822)


$     (2,278,814)


$       2,756,364










NET INCOME (LOSS) FROM CONTINUING OPERATIONS


$      2,342,145


$         (83,643)


$     (1,817,786)


$          440,716










DISCONTINUED OPERATIONS


-


-


4,044,776


4,044,776










NET INCOME (LOSS)


$      2,342,145


$         (83,643)


$       2,226,990


$       4,485,492

 


Nine Months Ended September 30, 2014
















Natural Gas


Marketing &


Corporate &




Operations


Production


Other


Consolidated










OPERATING REVENUE


$   88,568,864


$   13,136,479


$                      -


$   101,705,343

Intersegment eliminations


(241,798)


(5,851,936)


-


(6,093,734)

Total operating revenue


88,327,066


7,284,543


-


95,611,609










COST OF SALES


56,499,466


12,389,959


-


68,889,425

Intersegment eliminations


(241,798)


(5,851,936)


-


(6,093,734)

Total cost of sales


56,257,668


6,538,023


-


62,795,691










GROSS MARGIN


32,069,398


746,520


-


32,815,918










OPERATING EXPENSES


24,301,048


2,156,684


2,464,547


28,922,279

Intersegment eliminations


(77,561)


-


-


(77,561)

Total operating expenses


24,223,487


2,156,684


2,464,547


28,844,718










OPERATING INCOME (LOSS)


$     7,845,911


$    (1,410,164)


$    (2,464,547)


$       3,971,200










NET INCOME (LOSS) FROM CONTINUING OPERATIONS


$     4,189,646


$       (936,885)


$    (1,724,284)


$       1,528,477










DISCONTINUED OPERATIONS


-


-


581,652


581,652










NET INCOME (LOSS)


$     4,189,646


$       (936,885)


$    (1,142,632)


$       2,110,129

 

Gas Natural Inc. and Subsidiaries

Natural Gas Operations

Utility Throughput




Three Months Ended September 30,


Nine Months Ended September 30,

(in million cubic feet (MMcf))


2015


2014


2015


2014










Full Service Distribution









Energy West Montana (MT)


238


253


2,039


2,464

Frontier Natural Gas (NC)


152


168


668


762

Bangor Gas (ME)


124


192


1,254


1,261

Ohio Companies (OH)


299


292


2,592


2,646

Public Gas (KY)


4


14


92


101

            Total full service distribution

817


919


6,645


7,234










Transportation


2,342


1,871


8,106


7,865

Bucksport


124


2,018


537


4,778










Total volumes


3,283


4,809


15,288


19,877

 


Heating Degree Days









Three Months Ended


Percent Colder (Warmer)





September 30,


2015 Compared to



Normal


2015


2014


Normal


2014












Great Falls, MT


354


319


325


(9.89)%


(1.85)%

Bangor, ME


152


134


235


(11.84)%


(42.98)%

Elkin, NC


30


48


63


60.00%


(23.81)%

Lancaster, OH


90


44


128


(51.11)%


(65.63)%

Jackson, KY


84


67


97


(20.24)%


(30.93)%

Weighted average

212


177


224


(16.62)%


(21.12)%
















Nine Months Ended


Percent Colder (Warmer)





September 30,


2015 Compared to



Normal


2015


2014


Normal


2014












Great Falls, MT


4,780


4,233


5,188


(11.44)%


(18.41)%

Bangor, ME


4,706


5,737


5,352


21.91%


7.19 %

Elkin, NC


2,484


2,657


2,856


6.96%


(6.97)%

Lancaster, OH


3,487


3,819


4,050


9.52%


(5.70)%

Jackson, KY


2,756


3,042


3,178


10.38%


(4.28)%

Weighted average

4,111


4,093


4,601


(0.43)%


(11.04)%












 

Gas Natural Inc. and Subsidiaries

Reconciliation of GAAP (Loss) Income from Continuing Operations to

Adjusted (Loss) Income from Continuing Operations(1)


(in thousands, except per share data)

Three Months Ended
September 30,


Nine Months Ended
September 30,


2015


2014


2015


2014


$

per diluted share


$

per diluted share


$

per diluted share


$

per diluted share

GAAP (loss) income from continuing operations

$(2,264)

$(0.22)


$(1,515)

$(0.14)


$   441

$0.04


$1,528

$0.15

     Add back after tax:












Customer bankruptcy write-off

-

-


-

-


-

-


673

0.06

Non-recurring legal and  professional fees

408

0.04


306

0.03


1,134

0.11


706

0.07

Non-recurring regulatory and
other expenses

241

0.02


135

0.01


626

0.06


384

0.04

Gain on marketable securities

-

-


(110)

(0.01)


-

-


(110)

-

Business combination impairments/adjustments

260

0.02


-

-


452

0.04


-

-

Non-GAAP adjusted (loss) income
from continuing operations(1)

$(1,356)

$(0.13)


$(1,183)

$(0.11)


$2,652

$0.25


$3,181

$0.31

 

Gas Natural Inc. and Subsidiaries

GAAP (Loss) Income from Continuing Operations to Adjusted EBITDA Reconciliation(1)





(in thousands)

Three Months Ended
September 30,


Nine Months Ended
September 30,



2015


2014


2015


2014









GAAP (loss) income from continuing operations

$(2,264)


$(1,515)


$     441


$  1,528

Add back:








Net interest expense

812


764


2,567


2,334

Income taxes

(1,312)


(1,008)


342


901

Depreciation, amortization and accretion

1,790


1,839


5,348


5,215

Customer bankruptcy write-off

-


-


-


1,056

Non-recurring legal and professional fees

644


510


2,014


1,123

Non-recurring regulatory and other
       expenses

380


225


1,111


610

Gain on marketable securities

-


(183)


-


(183)

Business combination impairments/adjustments

410


-


803


-

Non-GAAP Adjusted EBITDA(1)

$    460


$    632


$12,626


$12,584

 

(1)Non-GAAP Financial Measures:

The Company believes that, when used in conjunction with GAAP measures, Adjusted (Loss) Income from Continuing Operations and Adjusted EBITDA, or earnings before interest, taxes, depreciation, amortization, accretion and non-recurring charges which are non-GAAP measures, allow investors to view its performance in a manner similar to the methods used by management and provides additional insight into its operating results.  Adjusted (Loss) Income from Continuing Operations and Adjusted EBITDA are not calculated through the application of GAAP and are not the required form of disclosure by the Securities and Exchange Commission.  As such, these measures should not be considered as a substitute for the GAAP measure of net income and, therefore, should not be used in isolation of, but in conjunction with, the GAAP measure.  The use of any non-GAAP measure may produce results that vary from the GAAP measure and may not be comparable to a similarly defined non-GAAP measure used by other companies.

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/gas-natural-inc-reports-2015-third-quarter-results-300175241.html

SOURCE Gas Natural Inc.


Source: PR Newswire (November 9, 2015 - 5:32 PM EST)

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